Evolution of Economic Thought: Difference between revisions
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'''Economics''' is often defined as the science about production, distribution, and consumption of scarce resources. As trite as this definition may sound, it contains the primary challenge of our world- scarcity. Thus,the modern economist Steve Pejovich concludes that “'' a student of economics discovers early that the entire body of the standard theory of production and exchange is built upn the assumption of private property rights and resources''” (1972,310). Property is the problem that makes the existence of economics a necessity, and gives rise to exciting economic concepts such as the concept of property rights. The institution of property is as old as humankind and it exists to some extent in any society, as long as resources are limited and individuals rational. | '''Economics''' is often defined as the science about production, distribution, and consumption of scarce resources. As trite as this definition may sound, it contains the primary challenge of our world- scarcity. Thus,the modern economist Steve Pejovich concludes that “'' a student of economics discovers early that the entire body of the standard theory of production and exchange is built upn the assumption of private property rights and resources''” (1972,310). Property is the problem that makes the existence of economics a necessity, and gives rise to exciting economic concepts such as the concept of property rights. The institution of property is as old as humankind and it exists to some extent in any society, as long as resources are limited and individuals rational. | ||
As any other economic concept, property rights have been commented by a wide range of economists. Each of them shed new light to the subject, thus turning the evolution of property rights into an interesting journey of economic thought. | As any other economic concept, property rights have been commented by a wide range of economists. Each of them shed new light to the subject, thus turning the evolution of property rights into an interesting journey of economic thought. | ||
Overview of Economic Theories on Property Rights: | '''Overview of Economic Theories on Property Rights''': | ||
In his work “Of Property”,''' John Locke''' (1690, 286) is the first one to suggest the idea of the common property- “''God…has given the Earth to the Children of Men, given it to the mankind in common''”. Still communuality does not have to signify absence of ownership as stated by Valcke (1989): “That which is common is not ownership”. | In his work “Of Property”,''' John Locke''' (1690, 286) is the first one to suggest the idea of the common property- “''God…has given the Earth to the Children of Men, given it to the mankind in common''”. Still communuality does not have to signify absence of ownership as stated by Valcke (1989): “That which is common is not ownership”. | ||
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'''Adam Smith '''(1776), as we all know,develops the concept of the invisible hand and the natural regulation of markets. His major contribution to the evolution of property rights is that he makes the distinction between natural rights, such as the right to have "''your body free from injury''” and the rights to property, such as to own a home. | '''Adam Smith '''(1776), as we all know,develops the concept of the invisible hand and the natural regulation of markets. His major contribution to the evolution of property rights is that he makes the distinction between natural rights, such as the right to have "''your body free from injury''” and the rights to property, such as to own a home. | ||
'''John Stuart Mill''' ( ) also recognizes property rights such as the right to the exclusive disposal of what individuals | '''John Stuart Mill''' ( 1848) also recognizes property rights such as the right to the exclusive disposal of what individuals have ”''produced by their own exertions''”. | ||
Alchian (1958) | |||
Armen Alchian (1958) is rather concerned with the reason for emergence of property rights. | |||
The utilitarian Jeremy Bentham (1795) criticizes the application of property rights in his book “Theory of legislation” (1795). He summarizes his view in the following way: “Property and law are born together and die together” | The utilitarian Jeremy Bentham (1795) criticizes the application of property rights in his book “Theory of legislation” (1795). He summarizes his view in the following way: “Property and law are born together and die together” | ||
“ A state’s mere exercise of its power to deprive citizens of their property does not mean that these rights do not exist” (Macey 1994, 186) | “ A state’s mere exercise of its power to deprive citizens of their property does not mean that these rights do not exist” (Macey 1994, 186) | ||
Revision as of 00:53, 5 May 2006
Economics is often defined as the science about production, distribution, and consumption of scarce resources. As trite as this definition may sound, it contains the primary challenge of our world- scarcity. Thus,the modern economist Steve Pejovich concludes that “ a student of economics discovers early that the entire body of the standard theory of production and exchange is built upn the assumption of private property rights and resources” (1972,310). Property is the problem that makes the existence of economics a necessity, and gives rise to exciting economic concepts such as the concept of property rights. The institution of property is as old as humankind and it exists to some extent in any society, as long as resources are limited and individuals rational.
As any other economic concept, property rights have been commented by a wide range of economists. Each of them shed new light to the subject, thus turning the evolution of property rights into an interesting journey of economic thought.
Overview of Economic Theories on Property Rights:
In his work “Of Property”, John Locke (1690, 286) is the first one to suggest the idea of the common property- “God…has given the Earth to the Children of Men, given it to the mankind in common”. Still communuality does not have to signify absence of ownership as stated by Valcke (1989): “That which is common is not ownership”.
Adam Smith (1776), as we all know,develops the concept of the invisible hand and the natural regulation of markets. His major contribution to the evolution of property rights is that he makes the distinction between natural rights, such as the right to have "your body free from injury” and the rights to property, such as to own a home.
John Stuart Mill ( 1848) also recognizes property rights such as the right to the exclusive disposal of what individuals have ”produced by their own exertions”.
Armen Alchian (1958) is rather concerned with the reason for emergence of property rights.
The utilitarian Jeremy Bentham (1795) criticizes the application of property rights in his book “Theory of legislation” (1795). He summarizes his view in the following way: “Property and law are born together and die together” “ A state’s mere exercise of its power to deprive citizens of their property does not mean that these rights do not exist” (Macey 1994, 186) we are not aiming to present a thourough analysis of the evolution of the property rights because we do not claim this to be the purpose of the project. We considered this brief overview to be important to the goals of the project, because it shows the attempts of the brilliant minds of philosophers and economists to explain, apply and justify property rights. This struggle of theirs is explained by the permanent and tangible presence of property rights in our life. The interdependence between our understanding of property rights and the economic welfare of the individual and the society is successfully captured by Thomas Malthius [1836]- “ there is indeed a fatal deficiency in one of the greatest sources of prosperity, the perfect security of property”. The lack of this security is what justifies the behavior in the commons of the subjects in our experiments. His Benthamite Utilitarianism assumed pain and pleasure as the only masters. Felicific calculus (units of pain and pleasure could be measured) accepted that the ultimate measurer of the happiness must be the government. Bentham came close to denying that each man owns his body- government must produce an artificial harmony of interests, as agreed lated by Spiegel 1971, 341) Adolph Berle and Gardiner Means- The Modern Corporation and Private Property. They all supported strongly the idea that property is central to economics and law. Mill (greater government intervention-private ownership but common use) Armen Alchian- division between property ownership and property control - intellectual domain - laws Natural law is based on morality. - political system- should favor stability and liberty- connection b/n freedom and property accumulation Plato-Aristotle-Aquinas-Locke-Smith-Hume- Locke: private property existed prior to law -
