Some Economics and Common Law of Property Rights

"Economists are, I think, too prone to examine exchange as a cooperative act whereby the buyer and seller each act in an effort to reach a more desired position. ... 

    "Yet if we look at the fields of economics, say as presented by the American Economic Association's classification of areas of interest or specialisation, we find no mention of the word 'property.' ... [We might] infer that economists have forgotten about the possibility of subjective rigorous systematic coherent analysis of the various forms of property rights ... 

    "Private property rights are rights not merely because the state formally makes them so but because individuals want such rights to be enforced, at least for a vast, overwhelming majority of people ... 

    "Often the idea or scope or private property rights is expressed as an assignment of exclusive authority to some individual ... of the goods deemed to be his private property. .... [to] have an unrestricted right to the choice of use of specified goods. Notice, that we did not add - 'so long as the rights of other people are similarly respected.' That clause is redundant in strict logic. ....

    "What are the effects of various partitionings of use rights? By this I refer to the fact that at the same time several people may each possess some portion of the rights to use the land. « A » may possess the right to grow wheat on it. « B » may possess the right to walk across it. « C » may possess the right to dump ashes and smoke on it. « D » may possess the right to fly an air-plane over it. «E» may have the right to subject it to vibrations consequent to the use of some neighbouring equipment. And each of these rights may be transferable. In sum, private property rights to various partitioned uses of the land are « owned » by different persons ... 

    "[W]hat are commonly called nuisances and torts apply to just such situations in which rights are partitioned and the exercise of one owner's rights involves distress or nuisance for the owners of other right ... 

    "The ability of individuals to enter into mutually agreeable sharing of the rights they possess is evident from the tremendous variety of such arrangements, e.g., corporations, partnerships, non-profit corporations, licenses, bailments, non-voting common stock, trusts, agencies, employee-employer relationships, and marriages. ... The variety of joint sharing of property and ownership rights is a testimony to man's ingenuity."

~ Armen Alchian from his 1965 article 'Some Economics of Property Rights'