Transcript Primitive Property Rights

Primitive Property Rights
• “Primitive” societies
– Preliterate
• No effective government
• No complex economy
– Still exists
• “Archaic” societies
– Preliterate
– No longer exist
• Combine for analysis
Does economic model of human
behavior apply to “primitive” societies?
• “Formalists” - it does and they study marketlike behavior
• “Substantivists” - it doesn’t because no true
markets existed
• It does under modern definition of economics
which has expanded to include
– Non-market behavior
– Institutional structures
• Law
• Information
• Transactions costs
Underlying theory of “law and
economics” studies
• Law is an instrument for maximizing social
wealth or efficiency
– Large body of literature in modern context
– Also applies to primitive societies
• Assumes “rationale economic man”
– Cognitive process is not important, rather
– Are consequences of human behavior consistent
with “economic theory”
Characteristics of “primitive societies”
• Cost of information is
high
– Transactions costs models
apply
– High cost to assess risk
• Little privacy
– Social setting is kinship
groups for all activities
– Makes all members
informers
Posner’s Model
• No effective government
• Limited variety of
consumer goods
– Food is primary
• Limited trading outside
kinship group
• Consumption goods
perishable
• Negligible private gains
from innovation
• Population is immobile
Richard A. Posner
Senior Lecturer in
Law
University of
Chicago Law School
Insurance Principle
• Insecure and variable food
supply
– Accumulation of capital not
possible
• Food is perishable - crops and
game
• Women - monogamy dominates
because women are a form of
capital
Prehistoric female images
focus on reproductive
capacity
Insurance Principle
• Redistributive ethic
– “A” has a surplus of food
– “B” has a shortage of food
– A “gives” food to B
• A’s motivation?
• If in future roles are
reversed, B will give to A
Missed
again ha, ha
A
I hope
brother-inlaw “A” had
better luck
than I did!
B
Insurance Principle
• This exchange is not a “market”
transaction
– No benefits from division of labor
• A form of insurance
• Generosity becomes a highly
valued trait, e.g.
– Debts never expire
• Gifts are reciprocal
• Reduces “free-riding
Mammoth hunters
What are the “property rights”
implications of Posner’s model?
Zapotec Rug: http://www.celerina.com/home.html
Legal Aspects
• Fundamental legal processes of any legal system
– Promulgation of substantive rules
– Resolution of disputes
Property Rights
• Exist based on scarcity
– Exchange value
– Cost of enforcement
– No right if cost exceeds value
Property
• Land
– If no scarcity land in general will be
open to all
– Highly fertile land near settlements
• Usufruct right
Usufruct
• Right based on possession (use)
• Protected by its use
• Terminal type of “estate”
– Terminal based on failure to use
– Can pass on to heirs or transfer to family
members
– Can’t “sell”
Application of model
• Low demand for land
– Surplus given away, not used to
“buy” land
– To do so would be politically
destabilizing
• Primary evidence of
ownership is possession
– High information costs reduce
efficiency of markets
Application of model
• Temporal distortions
– Possessor interest provides
incentive to take more resources
than needed
– Not a problem because it’s
cheaper
• To move to new lands when game
is scarce
• To move to new lands when
productivity declines