Source of Power in Society

Physical
strength

Power backed by military might

Generally accepted codified set of written laws

 Who Has Access to Property Rights?

Limited to those with the ability to physically take and defend property

Limited to those connected with the government elite

 Available to all through written due process

 How Are Property Rights Acquired ?

 Taken by physical force - possession is ownership

 Granted by those in power - political favoritism

Granted by the sovereignty of the state through legally-specified process available to all

 Enforcement Mechanism

 Individual vigilance, personal policing

Government protection provided to those designated by the elite

Government protection available equally to all, as specified by law

 Consistency of Enforcement

Very inconsistent, depending upon physical force

Limited and arbitrary, characterized by political favoritism

High degree of consistency, based upon law and historical precedent

Transferability of Property Rights

Limited by lack of consistent enforcement and no formal proof of ownership

Limited - requires permission of ruling elites

 Virtually unlimited, aided by if due process

Do Property Rights Encourage Capital Formation?

(Source of collateral for loans ?)

 No - instability and uncertainty of ownership

Rarely. Property rights subject to whim of ruling elite. Future security questionable.

Yes - Valuable source, based upon security of ownership and freedom of voluntary exchange