Initial Allocation of Rights; Economic Essentials, Relativity of Title Flashcards
(80 cards)
According to Johnson v. M’Intosh (1823), are land title transfers from Indian tribes to private individuals prior to the American Revolution recognized in a United States court?
No.
- “title to lands, especially, is and must be admitted to depend entirely on the law of the nation in which they lie”
- Discoverer gets right to perfect title by occupancy, conquest, or purchase.
- However, the treaty ending the American Revolutionary War transferred sovereignty and power of the lands under such transfers from the British to the United States.
What are the 2 types of theories of law?
descriptive and prescriptive
What is a descriptive theory of law? Name one
it’s positive- what is
Evidence: C.J. John Marshall in Johnson v. M’Intosh USSC 1823: “Conquest gives a title which the Courts of the conqueror cannot deny . . . ”
What is a prescriptive theory of law? Name the 5
It’s normative- what should be
Efficiency, safety, privacy, happiness, justice
According to Pierson v. Post (1805), is pursuit alone enough to gain title
No.
“. . . Pursuit alone vests no property or right in the huntsman. . .”
For wild animals, what establishes title?
First possession- capture
How does one practice possession?
Physical control or at least the intent to assert control over property
What is the tragedy of the commons?
It is in the individuals best interest to exploit a collective resource, but it’s in the community’s interest that the collective resource be managed sustainably
- What is one way to prevent the tragedy of the commons?
2. What are 2 problems that would make this solution not feasible?
- One way is to assign property.
For example, for the whaling industry, if one owner owned rights to all whales, that owner would try to
leave enough whales to reproduce and would protect the whales from being killed by others.
- A. Biological problem of dividing some forms of property (ex: hard to divide rights to whales- migration range)
B. Political problem: no one would agree to give all the rights to one person or nation
Externalities
Exist whenever some person makes a decision about how to use resources w/o taking full account of the effects of the decision. This person ignores some of the effects- costs or benefits that result- because they fall on others- are external to the person.
What is one way to solve the problem of externalities?
ban the behavior by regulation
What happens when the net externalities are negative?
rational actors might carry on too much of the activity. (Too much is defined by efficiency, getting the most from our resources.)
What happens when the net externalities are positive?
rational actors will carry on too little of the activity.
What happens when there are zero net externalities?
the optimal decision for the individual is also the optimal decision for society. Private cost and social cost do not diverge, they are the same. Efficient private decisions will be socially efficient.
How can we internalize the externalities so that the actor will make the socially efficient
decision?
– Arthur Cecil Pigou: taxing or subsidizing
– Ronald Coase: bargaining; affected parties make offers to decisionmaker (Nobel prize)
– Harold Demsetz: property
– Garrett Hardin: efficient private behaviors can create a Tragedy of the Commons.
– Neil Komesar: intertwined utility curves
• Stake’s wording: sympathy internalizes externalities
– Elinor Ostrom: social coordination can internalize externalities and can reduce strategic behaviors
(Nobel prize)
What is the point of efficiency?
to get the most utility, benefit, or happiness out of resources.
How do we measure utility?
We approximate utility with monetary value. The prices people pay reflect the utility they will get from the resource. The more they will pay, the more utility.
What is the problem with using money to approximate utility?
The problem is that equal money bid does not
reflect equal utility.
Example: An Example of the problem with bidding for resources: Suppose you and Warren Buffett are both bidding for an item on eBay. Who do you think will win the auction? If Warren wins, are we sure that he gets more utility from the item than
you do?
Does a remedy exist for a property owner whose use of his property for profit is frustrated by the malicious act of another?
Yes.
Keeble v. Hickeringill (1701) a man was liabe for shooting a gun that caused the wildfowl of another property to scatter
What property rule applies to oil and gas?
first capture rule
*But these rules led to inefficient production- too much too fast.
So, legislatures (and courts) have created new rules that are less wasteful.
What is the American rule for water rights and what is the rule for some western states?
- American rule: first grab, but limited to reasonable use that does not damage other wells drawing from the aquifer (that limitation leads to litigation on reasonableness).
– Some western states: prior appropriation; right to continue grabbing what you grabbed
the past and put to reasonable and beneficial use.
What is the “first in time” “bourgeois” strategy?
- Those who did not respect possession tried to take from those who would defend or failed to defend when opponent would have deferred
- it is respect for possession
In what 2 scenarios would respect for possession (the Property Instinct, the Bourgeois Strategy) break down?
- possessor is not an equal to the non-possessor
2. resource value is high enough compared to cost of fight
According to Popov v. Hayashi (2002), Is a person entitled to an interest in a piece of property if they achieve significant steps towards possessing said property, but are thwarted due to the unlawful conduct of another?
Yes.
