Property Rights: The Little Guy's Best Friend

Release Date
September 30, 2011

Topic

Basic Economics Rights
Description

Do stable property rights benefit only the rich? Prof. Aeon Skoble argues that, contrary to public belief, equally protected property rights are the little guy’s best protection against the rich and those with power. Put another way, property rights benefit all people regardless of wealth and power status.

Property Rights: The Little Guy’s Best Friend
Some people think that institutions like property rights only protect wealthy landowners and that somehow thinking that it’s important to take property rights seriously is something that only rich people would be interested in. But the reality is stable property rights are the little guy’s best protection against being taken advantage of by those fat cats.
If you want the little developer, the little businessman, the private citizen to be able to stand on an equal footing with large corporations and big interests that have money, the best way to make sure that happens is to be sure that their property rights are as equally protected as that of the heavy hitters. Property rights are the little guy’s best protection, not only against abuse by the government but also by being taken advantage of by larger corporations and interests.
For example, consider some of the recent controversies involving what’s called eminent domain, where the government takes your land. The constitution does give the government the power to take certain lands that are privately held for public use. But interestingly, if we understand public use in terms of giving them to another private citizen because they think they can develop that land more efficiently, then you’re really not taking the land for public use but for another person’s private use. The best way to protect a small landowner from being taken advantage of by a wealthy landowner is to make sure that the small landowner’s property rights are strongly protected against that kind of seizure.
Another example is what we call civil asset forfeiture. Let’s say that you’re driving in your car, and you’re suspected of having had drugs in the car. They can seize your car. Now it doesn’t matter if you’re ultimately found not to have been in possession of any illegal substances. Once they’ve seized your car, they get to keep your car, because the idea is that the car doesn’t have rights, only you do. But this seems like a violation of your rights, because you’ve just lost your car. So the idea of having robust property rights is what’s going to keep your car in your own possession.
So, robust protection of property rights is the little guy’s best insulation against both state abuse and being taken advantage of by larger, wealthier, interests.