Focus Question: Why are defined and enforced property rights essential to a market economy?
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Norway, one of the world's richest country; average per capita income $84,290 |
Market Economy
The market economy is characterized by the voluntary exchange of goods and services in the absence of any government intervention or centralized planning.
Click Here for information discussing Market Economies
Property rights
A property right is the exclusive authority to determine how and by whom a particular resource is used.
- More broadly, property rights may be seen as a bundle of separate and distinct rights over a particular good — including at least the right of personal use, the right to demand compensation as a prerequisite for its use by other people, and the right to transfer any or all of these rights to others (either permanently by sale or temporarily through some form of contractual arrangement).
- Property rights may be exercised by governments through their designated officials (public ownership or public property) as well as by private individuals and other sorts of non-governmental organizations (private property). (as defined by "A Glossary of Political Economy Terms")
In an economy with little to no regulation, it is crucial that an individual or business rights are clearly stated so that they are recognized in any case of a discrepancy.
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Burundi, the world's poorest nation; average per capita income $170 |
What Makes Countries Rich or Poor? Jared Diamond, The New York Review of Books, June 7, 2012.
Reviewing a new book by Daron Acemoglu and James A. Robinson entitled Why Nations Fail, Jared Diamond points out that nations succeed economically because of the presence of "good institutions" which may be defined as "laws and practices that motivate people to work hard, become economically productive, and thereby enrich both themselves and their countries" (p. 70).
Click Here for review and overview of Why Nations Fail
Diamond further lists the specific institutions that motivate people economically:
- protection of private property rights
- predictable enforcement of contracts
- opportunities to invest and retain control of money
- open exchange of currency
Click here for a link that lists nations that have the best (or the worst) property protection policies. Notice how many of the nations listed as among the worst are also well known for their serious economic problems.
Click here for a classroom activity game which simulates the role of property rights in the classroom.
Click here for a video lecture discussing property rights in a market economy.
Click here for a link to a John Stossel Interview with Peruvian Economist Hernando de Soto, who describes the importance of individual property rights.
In many nations, property rights are denied to women, making it difficult for them to prosper independently. Click here for a color coded map of the world showing the areas where women have more and less property rights.
An interesting video on a discussion of women's property in India:
Do women in India have adequate property rights?
Click here for an interesting essay discussing African Americans and their historically denied property rights.
Click here for an explanation of Japanese-American agricultural property seizure during World War II.
Native Americans and Reservations
See a short video on poverty on Native American reservations
Poverty on Native American Reservations
Lakota in America- Reservations
Video- The Lakota People
PROPERTY RIGHTS IN AFRICA
Property rights and laws in Africa are among the least enforced in the world. See Title to Come
an article about the lack of rights of indigenous people in Africa- The Economist.
PROPERTY REFORM IN CHINA
Click Here to learn about land reform in China after the 1949 Revolution.
Challenges to Personal Property Rights:
Click Here for NPR podcast detailing Woody Guthrie's subliminal messaging in This Land is Your Land
Zomia: A section of southern Asia where communities lived as nomadic people without property rights until 1945
Click Here for Yale Professor James Scott's view on Zomia
Click Here for Mellon Lecture by James Scott
Works Cited:
All videos can be found at youtube.com
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