edited by Terry L. Anderson and Peter J. Hill
Americans are used to thinking of property rights as a given, but as Terry Anderson and P. J. Hill point out in this splendid collection of essays (one of the many books to have come from the Political Economy Research Center-PERC), "the production of property rights is an economic activity determined by the expected returns to defining and enforcing property rights." That insight is important in demonstrating how deep the spontaneous order of the marketplace is: property rights are not merely decreed by political authority, but themselves emerge as a part of the competitive process.
Anderson and Hill have here assembled eight scholarly contributions that explore the connections among technology, institutions, and the establishment of property rights. Much of PERC's work has centered on showing how improved definition and enforcement of property rights would alleviate pollution and resource-conservation problems. With the current volume the contributors show that we need technological freedom to maximize the benefits we can derive from property rights.
To illustrate their basic point that property rights depend on technology, Anderson and Hill discuss the problem of establishing rights in the grazing lands of the American West. Cattle roamed freely on open range before it became feasible to fence large areas. The inefficiency of such arrangements stimulated innovation in fencing materials. The editors note that in the years 1866-1868, 368 patents were issued for fencing products. Barbed wire emerged as the best solution to the problem and mass production thereof made possible large cattle ranches with an owner's cattle kept in and predators kept out.
The book's lead-off essay is Bruce Yandle's "Legal Foundations for Evolving Property Rights Technologies." Yandle gives several intriguing case studies on the evolution of property rights under different institutional environments. In one case, for example, he shows that scientific improvements reduced the costs of defining property rights in water. "Improvements in the science of hydrology," he writes, "made it possible for common law judges to identify polluters who poached on the property rights of downstream owners and led to major modification in common law rules involving groundwater pollution." Yandle's essay ought to be read by all those officials who are prone to think that government regulation is the best or only means of controlling pollution.
Water is also the subject of Clay Landry's essay, "The Role of Geographic Information Systems in Water Rights Management. …