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Abstract:
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From the Introduction:
"Have economists got it all wrong? Thus muses Federico Aguilera Klink (1994) as he claims that the argument for privatisation of common property is fuelled by a misconception of terms. Most economists refer to Adam Smith when they proffer the case for private property as the most efficient means of easing transactions between rational human beings, and thus spurring economic growth. However, Smith also very much emphasised the importance of moral and legal restraints within the market, in order to exert a counter-pressure, a restraining hand, on the rational actions of self-interested individuals. Is private property really the best means by which to create sustainable growth, as some argue? Judging by the trends of privatisation that is seen in todays society, one may certainly be led to believe so. However, before the reader throws away this paper in anguish over yet another naivist who has not understood that capitalism, and by inference, private property, is here to stay, let me please make one point clear at the outset. My intention is not to deride the concept of private property as such, which unquestionably serves its purpose in many contexts. The issue here is not a debate about common property vs. private property per se, but rather to look at the key arguments offered by proponents of both institutional arrangements, exploring some examples that underpin or undermine these arguments, as well as analysing the driving factors of institutional change towards the establishment of private property regimes. When looking at differing institutional set-ups, particular attention will be paid to the variations in outcomes in terms of equality, efficiency, and environmental sustainability. The paper will round off with some remarks regarding the soundness of arguments and the applicability of differing institutional arrangements to varying contexts."
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