Capitol Ideas: Hot Property

...I have chapters on property in Rome and the development of the common law in Britain, although far more remains to be said (has already been said) on these vast subjects...

...I argue that it can be attributed to the insecurity of property in Ireland...

...Those are the highlights...

...Still, when trying to explain something—national wealth, in this instance—it's a step in the right direction to identify its necessary precondition...

...That my general thesis about property was considered wrong-headed was brought home to me when I spoke to a bag-lunch seminar at the World Bank in 199o...

...Because the prestige of property was so high, Adam Smith said little about the subject in The Wealth of Nations...

...Law is not a category in the book's index, and there are only a few spotty references to property in its 65o pages...

...We can point, for example, to the sophisticated property rules that were developed both in ancient Rome and in eighteenth-century Britain, and then to the emergence of the Roman and British empires, which surely would not have arisen without the wealth generated by the enabling legal infrastructure—for only rich nations can support empires...

...In fact, for about a hundred years, an intellectual taboo surrounded the whole subject...

...But why these particular nations made the right moves and others did not remains a puzzle...

...Martin's Press is the publisher...

...government had shown that private property was dispensable...

...In that period, too, the U.S...

...Only recently has this connection between property and wealth been accepted by the economics profession, however...

...His (co-authored) book The Rise of the Western World is a rare exception to the general neglect of the role of property rights in history...

...Easily transported capital and technology were supposed to do the trick everywhere...

...In the year the Berlin Wall fell, the Statistical Abstract of the United States, published by the Commerce Department, claimed that East Germany's GDP per capita was higher than West Germany's...

...David Frum noted in the Weekly Standard that Landes "seems uninterested in the legal institutions and social habits that gave eighteenth-century English cotton spinners confidence that the contracts they signed would be honored, the profits they made would not be confiscated, and the money in which they stored their wealth would hold its value...

...Johnson argued that parents should not be allowed to advocate communal ownership to their own children...

...It turns out that a specific political and legal infrastructure was indispensable...

...The response was what you might call...polite puzzlement...

...This may seem obvious, but in all the modern accounts of the rise of the West or the fall of the West, or the rise and fall of great powers, you will find very little written about the law in general or property in particular...

...People then spoke of the "sanctity of private property," which was not just an idle phrase...

...The 1993 Nobel prize winner in economics, North is the economist who has done most to draw attention to the institutional vacuum in neoclassical economic theory...

...Alfred Marshall of Cambridge, the teacher of John Maynard Keynes, earnestly believed in 1890 that such a change was indeed occurring: the need for private property goes "no deeper" than human nature, he wrote...

...The Anglo-Irish landlords, it was said, "only garrison their estates," which were themselves the trophies of conquest and the shifting fortunes of British politics...

...It was Jeremy Bentham who called the law that gives security to property "the noblest triumph of humanity over itself...

...politicians launched their own assault on American property owners...

...Having fallen into disuse for so long, the lens of property can now be used to bring a whole range of subjects into focus...

...Today it is the law that we must examine if we are to account for the failure of this economy or the success of that...

...The establishment of the institution of property—in which things of value can be exchanged by consent and owned securely for an indefinite period—is the greatest TOM BETHELL is The American Spectator's Washington correspondent...

...If they wanted their economies to develop as those of the U.S...

...The emerging tyrants were happy to oblige, and their nations duly slid into ruin...

...Returning colonials urged the new rulers not to create wealth the way Europe had, but to nationalize property, centralize power, and plan, plan, plan...

...For hundreds of years, property in Araby has not been secure from the depredations of the state...

...on the connection between justice and private property...

...The full title is The Noblest Triumph: Property and Prosperity through the Ages, and St...

...Constitution have been broken down, and we now live at a time when (all across the Western world) the range of government action is essentially unlimited...

...These are the great unsolved questions of history...

...More recently (June 1996), the Economist published a cover story, "The Mystery of Economic Growth" — skinny beasts of burden were shown juxtaposed with the Manhattan skyline—pointing out that the very lopsided economic development of the past fifty years was not anticipated, and is still not understood by the right people...

...In Chile, South Vietnam, Iran, and El Salvador, to name just four countries, destructive land-reform schemes were pressed upon unsuspecting locals, creating an unstable and revolutionary situation in all...

...Finding the balance between power and self-restraint is something that few governments in history have been able to do for long...

...Another interesting subject, much debated by the academy, is the Irish famine of the mid-nineteenth century...

...The law, he wrote, has been the "missing ingredient" in the doomed theories and formulae of the development economists...

...Why did countries that got it right later "forget," and stumble...

...By the end of the Communist experiment, the analysis of property and its consequences had been skirted for so long that its great explanatory potential had been overlooked...

...It could be said that the transition from reverence for property to the Marxian abhorrence of it was so rapid that there was scarcely time for an intermediate phase of analysis...

...on the revival of academic interest in property thanks to the efforts of the economists Ronald Coase and Armen Alchian...

...The author of a book attacking property in the 1780's prudently remained anonymous...

...and on property and the environment...

...on modern China and the contentious role of democracy in wealth creation...

...American elites never understood the sources of their own wealth, and in the years after World War II gave bad advice in country after country—wherever foreign aid gave them the leverage...

...Here, Sir, you sap a great principle in society—property...

...oil has made very little difference...

...What he meant was that in order to enforce property rights, governments must acquire power, but must also refrain from using it to invade those property rights...

...It was then that the socialist experiment in life without private property was conducted, and in the end collapsed, along with the Berlin Wall...

...The analysis of such institutions was considered (by Thomas Malthus) to belong to the realm of "politics" rather than economics, and since then economists have followed his lead and have tended to neglect the political foundations of their own field —at least until about a decade ago...

...Sacred" things are not analyzed, and the English economists of Smith's time took for granted their own legal system...

...The great project of the intellectual classes in that period was to engineer such a transformation of human nature that the rules and restrictions of private property would no longer be needed...

...By the early Private property and Western civilization...

...and two more on the comparative neglect of property by the early economists...

...At the same time, with the disaster called Urban Renewal, U.S...

...Since then, the limits to government action established by the U.S...

...and a few other countries had done, they would have to establish the rule of law, security for private property, and the enforceability of contracts...

...became the wealthiest country in the world...

...It's about property, broadly speaking...

...His book The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, interesting though it is, does not really explain "why" at all...

...It was not necessary to insist upon an institution that was not thought to have any workable alternative...

...Hailing from many different countries, they were professionally involved in economic development all over the world...

...Here is a case where the balance between state power and restraint has perhaps never been achieved...

...Hernando de Soto, the Peruvian author of The Other Path, is one of the few people who has figured all this out...

...It tries to fulfill all those tasks that families would have earlier undertaken, and taxes us accordingly...

...One can admittedly go only so far with this approach...

...For better or worse, I have tried to take a wide-angled look at one of the foundational institutions of Western Civilization...

...As a topic of investigation, property was for a long time out of fashion...

...Karl Marx had greatly confused matters by putting the cart of economy before the horse of law, believing economic relations to be more fundamental than legal relations...

...D avid Landes of Harvard provides only the most recent example...

...The intellectual climate at the time of Adam Smith and his immediate successors could not have been more different...

...Recent books have examined the Takings Clause, or Eminent Domain, or the views on property held by the framers...

...Well, they seemed to say as they munched their sandwiches, the purpose of these seminars is to expose us to something different...

...single prerequisite for the attainment of national wealth and prosperity...

...cii4 20 August 1998 • The American Spectator...

...For decades, there was a consensus that the rapid economic growth claimed by the Soviet Union and accepted on faith by the U.S...

...Their unspoken comment was: "Do eighteenth-century ideas really belong in the late twentieth century...

...Countries without the institution will certainly remain impoverished...

...The parlous condition of the Arab world is one that I explore...

...Douglass C. North also noted the book's "puzzling" omission of the political institutions that "undergird" economies...

...The United States also achieved the same beneficial balance from the time of its founding until (roughly) the New Deal...

...The figures, now an embarrassment, may have erred by a factor of ten...

...But in the years when Bentham was writing—the late eighteenth century—Great Britain did manage it, and of course was the leading power in the world at that time...

...on the relationship between rights and property rights...

...It was attended by fifty or so staffers from the Bank and the International Monetary Fund...

...some-thing that we don't normally hear around the office...

...And you don't think the magistrate would have a right to prevent you...

...Briefly, I told them that tinkering with the familiar economic policy levers—a little monetary stimulus here, a little fiscal restraint there—would not do the job...

...The New Man had been successfully shaped under the Soviet regime, they claimed (without evidence...

...But that has not happened...

...As to the Third World, the dissolution of Europe's empires unhappily coincided with the West's embrace of socialist ideas...

...There are also chapters on intellectual property (why it has in the past fifteen years become so important...

...18 August 1998 • The American Spectator 1960's we find the CIA taking at face value the Soviets' false economic statistics, and Nikita Khrushchev accepting the propaganda of such true believers as Sidney and Beatrice Webb, Julian Huxley, George Bernard Shaw, and Lincoln Steffens...

...It is alone sufficient to explain the impoverished condition of that part of the world...