Sovereignty and the Politics of Property

The debate whether property is a limit on or the product of sovereignty envisages a tension between “the individual owner” and “the state.” But “the state” is not more than the aggregate of individuals who define theirs and others’ property rights through the state’s political process. The underlying tension between property and sovereignty is thus the tension between the economic market and the political market. Owners and others compete simultaneously at both levels to define, protect or improve the value of property. There are two ways to compete in the political marketplace: by engaging in either “high visibility politics” or “low visibility politics.” Diffuse owners rely on high visibility politics promoted by agents such as political parties or trade unions and on elections, referenda and the like, whereas smaller groups of owners prefer the low politics of capturing lawmakers and state executives.When economic markets became global at the end of the Cold War, so did the political markets: property rights increasingly became defined by international agreements, by decisions of international organizations, and by the exercise of “low politics” in foreign, weaker states. The global political markets were dominated by the executive branches of a handful of relatively strong states that, in turn, were responsive to the “low politics” of special interests. The high transaction costs of cooperation among diffuse owners inhibited the parallel rise of “high politics” at the global level. The skewed global political market for property continues to favor special interests, but there are budding attempts to reclaim the space for “high politics” by national regulators and courts. Current negotiations over the so-called “Mega Regional” agreements between the United States and its trading partners will, if successful, nip these buds as they render certain property rights almost immune to the subsequent challenges of high politics.