The Truth About Property Rules: Some Obstacles to the Economic Analysis of Remedies

2 Washington University Jurisprudence Review 39 (2010)Property Rules, as famously described by Calabresi and Melamed, are remedial rules that place a prohibitively high penalty on violations of rights. This essay examines two aspects of property rules. In each case, the form of the rule is critically important. The first question addressed is the capacity of property rules to affect behavior that takes place outside the context of litigation. Most economic analysis assumes that when a right is protected by a property rule, the property rule will guide private decisionmaking at the time of a contemplated violation, and possibly before that time. Yet, to have this effect, property rules (and liability rules) must be embodied in a set of determinate legal rules defining not only the penalty imposed on violation, but also the entitlements protected and the conditions on which the property-rule remedy is available. Property rules, in other words, must be rules.In fact, "true property rules" that meet this description are scarce. This casts some doubt on the predictions made in literature on the subject. Theory and doctrine may or may not be reconcilable, depending on the desirability and feasibility of determinate rules in the area of remedies.In existing law, most true property rules protect property rights. This leads to the second question addressed here: what relationship, if any, do property rules bear to property? After examining several theories others have proposed to explain the association between property rules and property rights, I suggest that property rules are connected to property in two ways. First, deterrent property rules ensure the continuity that makes property rights valuable to owners and to society. Second, once property rights are securely in place, the value they generate makes property rules a more efficient response to the possibility of unilateral taking. To achieve these results, however, both property rights and property rules must be implemented by general, determinate, and authoritative legal rules.

Property Rights And Traditional Knowledge

For the past several decades, there has been a push to provide some sort of right akin to an intellectual property right in traditional knowledge and traditional cultural expression. This push has encountered staunch resistance from a number of different quarters. Many of the objections are practical. However, underlying these practical concerns is a core philosophical concern. A system of traditional knowledge rights, this argument suggests, simply does not satisfy the basic rationale for granting property rights in intangibles like inventions and expressive works. Intellectual property is meant to encourage innovation and creative activity. Most traditional knowledge, by contrast, is not innovative, at least in the same sense as the inventions and works that qualify for patents and copyrights. At present, the "anti-property" camp seems to have the better of the argument, as even the World Intellectual Property Organisation has abandoned the notion of true property rights.This article seeks to refute this philosophical objection to a property model for traditional knowledge. It argues that the classic philosophical argument justifying intellectual "property" namely, that property rights are justified only as a way to spur innovation and other creative activity is incorrect in two ways. First, the argument misstates the main goal of an intellectual property system. While intellectual property may serve as an incentive for innovation, society's primary concern is not the innovation per se, but instead the dissemination of knowledge. Second, there may be policy reasons other than the development of knowledge that can justify intellectual property-like rights.The article then applies these observations to the particular question of traditional knowledge and cultural expression. It demonstrates that a system of property rights could be useful in helping to encourage the dissemination of traditional knowledge, even if that knowledge is not "new" in the classic sense. Second, other important social concerns, especially the goal of ensuring accuracy in knowledge, may justify a system of property rights. While these arguments may not ultimately support a property rights system—after all, the practical concerns remain very real—they do help to refute the underlying philosophical objection.

Comment on Tilo Wesche

The gist of Welsclie’s argument seems to be to pick up on an idea he attributes to Rawls, that in a true property-owning democracy, productive wealth would be distributed more broadly ‘ex ante’ rather than, as now, ‘ex post.’, the point of demarcation being the use of capital to generate wealth and income. As against this, I argue that ex ante distribution of capital is impossible, because business activity creates wealth, and thus we don’t know what there is to distribute ex ante. Moreover, the prospect of greater wealth for the producers ex post is what especially motivates them to produce, and without production we are poor. It is also noted that Rawls’s ‘difference principle’ does not in fact have the egalitarian implications he supposes, nor really any distributive implications, despite Rawls’s intentions.

Delays in inactivation development and activation kinetics in myxicola giant axons.

Na inactivation was studied in Myxicola (two-pulse procedure, 6-ms gap between conditioning and test pulses). Inactivation developed with an initial delay (range 130-817 microseconds) followed by a simple exponential decline (time constant tau c). Delays (deviations from a simple exponential) are seen only for brief conditioning pulses were gNa is slightly activated. Hodgkin-Huxley kinetics with series resistance, Rs, predict deviations from a simple exponential only for conditioning pulses that substantially activate gNa. Reducing INa fivefold (Tris substitution) had no effect on either tau c or delay. Delay in not generated by Rs or by contamination from activation development. The slowest time constant in Na tails is approximately 1 ms (Goldman and Hahin, 1978) and the gap was 6 ms. Shortening the gap to 2 ms had no effect on either tau c or delay. Delay is a true property of the channel. Delay decreased with more positive conditioning potentials, and also decreased approximately proportionally with time to peak gNa during the conditioning pulse, as expected for sequentially coupled activation and inactivation. In a few cases the difference between Na current values for brief conditioning pulses and the tau c exponential could be measured. Difference values decayed exponentially with time constant tau m. The inactivation time course is described by a model that assumes a process with the kinetics of gNa activation as a precursor to inactivation.

The adenylate cyclase-activating activity of cholera toxin is not associated with a nicotinamide—adenine dinucleotide glycohydrolase activity

The NAD+ glycohydrolase activity of cholera-toxin samples can be separated from their adenylate cyclase-activating activity by polyacrylamide-gel electrophoresis and is inhibited by sodium dodecyl sulphate (which does not inhibit the action of toxin on cells), but not by antibodies to pure toxin. It is therefore probably not a true property of the toxin.

Correspondence of the Family of Hatton

As I never liked ye amorous gallants of our tyme yt make a traffique of lovinge and a trade of dissemblinge, lovinge whom ere they see, and ownlie lovinge whilst they see; soe am I not composed of soe hard a mettle but yt fine beautie can pearce, and compleatc perfections ravish, my admiringe soule. Hithertoe have I beene good tutor to my owne youthfull fancies, makinge keepe whom (home) in a plain whomly breast; but, since of late yr beauty procured them a litle liberty, they are fiowne abroade and have burnte theire winges in affections flame, soe yt I feare they will never flye whome againe. I have ofte observed it to bee ye effect of base and a dull discerninge eie to dote upon every obiect without distinction, and have markt it out as true property of ye fierie soule to honour chast beauty where ever it harbers, and to love ye verie windowes of yt house where soe faire a guest as vertue soiourneth.