Legal Studies: Laws

I Property

Answer1.1 The word Property indicates 'Legal ownership' i.e. recognized by the law. It can be indicated by the 'exclusiveness' and the 'right to exclude others' that is associated with property. It is the legal right to exclude others from resources that are originally possessed or are acquired without force, theft or fraud. In the broadest sense, property includes an ownership of individual that excludes the state from interfering with these rights. It is only effective when combined with law and enforcement of a property based legal system.

'Having same property as Bill Gates' for any individual would imply that everybody has the same rights over his/her property in a property based legal system. For that to hold true all members of the society must have an equal guarantee of exclusive rights to his resources. As Property is the constitutional principle establishing the state's recognition and protection of the Individual's right to exclude others - including the state, the same property system protecting Bill Gates resources that can be possessed, controlled and used also protects every individual residing within the domestic territory of U.S.

There are however, some controversies embedded in this legal issue. Though the property based legal system is protected by several rule of law (like contract law, tort law, and constitutional law), the enforcement of these laws are almost never uniformly and effectively applied and property laws does not function well if is not adequately enforced.

Second, the property is the hub of Western legal concepts and as such in a western political theory; the state comes into being in response to the problem of limited resources. As different societies have different resource allocation framework, most societies have mixed framework of dealing with the reality of limited resources. Third, the last couple years have witnesses emergence of serious corporate governance issues that made enforcement of property based legal system a serious issue.

Hence, though property rights are unanimous for all, it's the difference in the style and efficiency of enforcements that creates controversies for its efficacy.

Answer 1.2 Owing to the allocation of limited resources, property can be private or public. A private property protects private persons and allows them to exclude others including in most cases the states from interfering with the resources. A public property on the other hand refers to the state's right under various circumstances to exclude people from state monuments, buildings, equipment, land and other public resources.

The former Soviet Union exhibited the latter form of framework where the government took major decisions about the production and distribution if the resources through state planning. Developing property right in former Soviet Union did not allow a single individual to control all the ways the resources could be used. The Soviet Union had the largest centrally directed economy in the world. The state required its citizens to produce according to their abilities and share according to the needs of everyone else. Small businesses were almost impossible to be started without bribing the Government or extortionists.

This kind of socialist property based legal system is a complete contrast to the property based legal system in U.S.

1 In U.S. the state recognizes uniform property rights and backs it up by efficient enforcement laws and rules. However, the state in the Former Soviet Union lacked a broadly implemented concept of property and an adequate enforcement system, both of which formally derive from law and the rule of law.

2 Colonial America always promoted freedom and liberty and hence, extended right to property as a prerequisite to right to freedom whereas in Former Soviet Union, the state directed people assuming rights over the resources people have in themselves, their efforts and their talents.

Most parts of Europe has have been through a very significant development era. Europe being a first order capitalist economy has a very strong property based legal system. The European Union which has grown to include much of Europe including France, Germany, Spain, have paved the way for Modern Europe by strongly supporting Property Rights. However, as the countries move to single European Act which requires a unified internal market, the leaders of EU have signed an agreement designed to create a more federal based government and further strong political and economic union within the EU. Hence these countries are moving towards sharing resources which requires laws based on public property. But even if Germany France and other countries have public property laws, these laws are limited and private property still forms a substantial portion of the economy.

Answer 1.3. The enforcement of property right under the rule of law gives people incentives to develop the resources they own. Without law that guarantees property in resources, there is little incentive for anyone to develop resources since they may be seized by the state or others who want them. In many parts of the world especially the third world nations that have no adequate property systems, the poor 'squatters' lack formally recognized ownership of the land and the resources they develop. Much of their time is allocated to defending their possessions. They cannot mortgage their homes to start new business and hence keep straining in that vicious circle of poverty. However if they are protected under the economic system of poverty, we would unambiguously see an increase in household earning, increase in profitability of working outside home and increase in the likelihood of child labor in the family; all of these clearly would be to the advantage of the poor helping him get through the poverty trap.

Though the private property works best for an economy by providing incentives to a person to develop its own resources and determine how resources are distributed through voluntary exchanges, whenever gap between the socio-economic parity of an economy increases it is in the benefit of the society to change its framework to that of a mixed one with the help of the state interventions. The state can have two options of doing that. It can either redistribute goods and services using the legal rule but that creates distortions in labor/leisure hours and results in efficiency and incentives loss. However, the state can also opt for redistribution of goods and services through taxation. It also causes working hours distortions but it does not create disincentives to work and also does not