Common Property and Corporate Property: A Comparison of Property Rights

Abstract

"Common property bears an obvious resemblance to corporate property since both involve joint ownership of productive resources. There are, however, important differences which are illuminated by an analysis of property rights.

"I take three property rights to be most fundamental to modern 'ownership': the right to use (and determine the use of) property; the right to transfer ownership (all rights) to others; the right to ownership of any proceeds from transfer. I then analyze the nature of common property, for-profit corporations (businesses) and not-for-profit corporations (such as universities) using this framework. The results are as follows: -Commoners own the CPR in common, but acquire individual ownership of the products they harvest from the commons by authorized methods. -Common property owners typically harvest from the commons as individuals, taking benefits in kind, whereas corporate owners typically employ others to produce monetary benefits for them. -While commoners acquire all three property rights for harvested products, they have typically, de facto, lacked rights of transfer and proceeds to the CPR. -Not-for-profit corporations provide a partial parallel for this in modern, law-governed societies, since the rights to proceeds for their property is vested in the corporate person, and not in any group of individuals. -The absence of rights to proceeds might appear to make the common property form a better protector of natural resources than private property, but the same ends are probably better achieved by other devices, such as purchase of development rights or conservation easements from private owners."