Larissa Katz has written a provocative article: "Governing Through Owners:" How and Why Formal Property Rights Enhance State Power. (Abstract here.) Her title is, to say the least, counter-intuitive. How can formalizing property rights actually increase state power? Isn't the opposite the case? That is, isn't legally recognized property a "buffer" between the individual and state power?
At first I thought that Katz was going to elaborate on a conclusion I reached nearly a decade ago in The Puritan Revolution and the Law of Contracts. (Check it out here.) In my article I concluded that Puritan theology had little to do with the reception of contract law by the English common law courts in the late 16th and early 17th centuries. However, the social practices of competing religious groups throughout Europe--the Reformed (including Puritans), Lutheran, and Catholic--made for more disciplined societies. The Reformation-inspired disciplinary focus of the leading religious traditions of early modern Europe in turn created value that the states of early modern Europe co-opted through increased taxes and disciplined soldiery.
But I was largely wrong about Katz's contention. She argues that legal recognition and protection of property permits the civil government to shift what would otherwise be seen as state functions to discreet property owners. An example: the requirement in most municipalities that property owners clear the sidewalks along public rights-of-way. Were there no property owners, Katz suggests, clearing snow would be seen as a governmental function.
Katz agrees that a regime of legally protected private property enhances the power of the individual vis-a-vis the state when compared to a regime of state ownership. See, for example, North Korea. But individual power is not increased, she claims, when we compare a regime of formal private property with one of informal private property. And Katz also agrees that powerful owners in formal private property regimes can give even the state a run for its money when it comes to the balance of power. See Robert Caro's masterful account of the diversion of the New York Thruway in The Power Broker.
Katz's thesis is straightforward:
This initial criticism of Katz may be correct but it is beside her point. Hers is not a normative argument but a descriptive one, one that is intended to rebut what she sees as a simplistic model of law and development. All the libertarian political theory in the world hasn't stopped the state from offloading if not creating legally enforceable responsibilities onto property owners.
Why might property owners wish to submit to the imposition of affirmative legal duties? Because they see it as a fair trade. As long as the costs of state-imposed duties don't exceed the benefits of state enforcement of the right to exclude others from property, owners will submit to the cost. Property owners and the state are locked in a symbiotic marriage of convenience.
All in all a fascinating piece that has lots of food for thought.
At first I thought that Katz was going to elaborate on a conclusion I reached nearly a decade ago in The Puritan Revolution and the Law of Contracts. (Check it out here.) In my article I concluded that Puritan theology had little to do with the reception of contract law by the English common law courts in the late 16th and early 17th centuries. However, the social practices of competing religious groups throughout Europe--the Reformed (including Puritans), Lutheran, and Catholic--made for more disciplined societies. The Reformation-inspired disciplinary focus of the leading religious traditions of early modern Europe in turn created value that the states of early modern Europe co-opted through increased taxes and disciplined soldiery.
But I was largely wrong about Katz's contention. She argues that legal recognition and protection of property permits the civil government to shift what would otherwise be seen as state functions to discreet property owners. An example: the requirement in most municipalities that property owners clear the sidewalks along public rights-of-way. Were there no property owners, Katz suggests, clearing snow would be seen as a governmental function.
Katz agrees that a regime of legally protected private property enhances the power of the individual vis-a-vis the state when compared to a regime of state ownership. See, for example, North Korea. But individual power is not increased, she claims, when we compare a regime of formal private property with one of informal private property. And Katz also agrees that powerful owners in formal private property regimes can give even the state a run for its money when it comes to the balance of power. See Robert Caro's masterful account of the diversion of the New York Thruway in The Power Broker.
Katz's thesis is straightforward:
When the state formalizes property rights, it acquires a mechanism for pressing owners into its service at low marginal cost: it is able to convert an established system of property rights into a network of local offices. Governing through owners is an alternative to governing through bureaucracy or license.Note her initial assumption: the state formalizes property rights. My libertarian-leaning readers will take immediate umbrage.While the state protects property rights, they would say, it doesn't create them; property rights are pre-political. Thus, it appears that Katz is conflating formalization with creation.
This initial criticism of Katz may be correct but it is beside her point. Hers is not a normative argument but a descriptive one, one that is intended to rebut what she sees as a simplistic model of law and development. All the libertarian political theory in the world hasn't stopped the state from offloading if not creating legally enforceable responsibilities onto property owners.
Why might property owners wish to submit to the imposition of affirmative legal duties? Because they see it as a fair trade. As long as the costs of state-imposed duties don't exceed the benefits of state enforcement of the right to exclude others from property, owners will submit to the cost. Property owners and the state are locked in a symbiotic marriage of convenience.
All in all a fascinating piece that has lots of food for thought.
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