The most convincing justification for private property provided by Ziff is that of economic efficiency. Private property incentivises innovation, lowers the cost of dealing with externalities, and with moderation, reduces the susceptibility of property to the tragedy of the commons. Economic efficiency holds particular weight because of the significant amount of today’s societies that rely on a market based system to conduct business, trade and commerce. This system lists private property as one of its founding tenets and therefore heightens the justification’s persuasiveness. It is not suggested that a fully privatised property regime would be ideal either, but a mixture of both private property and communal property is seen as the best method of achieving economic efficiency in market economies with common-pool resources.

Private property provides incentives for innovation that supersede that of a society with communal property rights. The idea of communal property rights is said to be one that provides the best redistribution of wealth, such that a greater net utility is retained from an economy, an idea often referred to as the Benthemite view of utilitarianism. It does this through sharing information at no cost within parties. Ziff suggests that the sharing of property with communal interest holders stagnates innovation as it reduces the incentives for property holders to be more efficient. Demsetz, supports this claim by suggesting that incentives for innovation would be deteriorated under a communal property system because the “benefits derivable from these ideas will not be concentrated on their originators”. This therefore highlights the lack of efficiency in a communal property regime and supports the need for private property. Similarly it has been argued that private property though incentivising innovation promotes “self development” as it provides individuals with “control over resources in the natural environment” . This allows people to show “individuality and full self expression”, as they are rewarded for their efforts. So it is evident that inherent in the idea of incentivising innovation is the idea that personhood is developed as moral development is encouraged and rewarded. This moral development increases economic efficiency as it provides alternatives to current practises, which may then lead to increased efficiency. To the contrary it is argued that too much private property may over-fragment natural resources to a point where innovation is naturally stifled due to the multiplicity of interest holders – a problem referred to as the tragedy of the anti-commons. This further supports the suggestion that a fully privatised property regime has with it ingrained downfalls that require the use of intervention. It is therefore ideal to have a regime that is both private and communal, as it provides individual opportunities, whilst catering to the community more efficiently.

Similarly, it is shown that private property is the most efficient manner in which the cost of externalities can be dealt with as it reduces both the time and the cost of abatement. It is argued by Ziff that “an increase in the communality of property leads, generally, to an increase in the cost of internalizing” as it requires the engagement of all land holders before addressing change, and requires policing of these changes so as to ensure that they are enforced. This leads to externalities, such as pollution, being dealt with inefficiently as both costs and time are increased. Similarly, Ziff also argues that in the same way, private property reduces the effect of the tragedy of the commons; an issue that arises when common-goods are underprovided for due to multiple interest holders failing to take responsibility for damage to property or externalities created by property. This leads to time consuming negotiations between parties which lowers economic efficiency, through both increasing time and costs. Private property on the other hand allows for more responsive and cost efficient regulation of such issues and in doing so makes the process more economically efficient.

To the contrary Ziff argues that the cost of policing would also be more expensive under a private property regime as the creation of boundaries would add costs that would not have otherwise have existed. Conversely Grafton suggests that the cost of boundary erection is merely temporary, as after the initial set up of boundaries, cost of negotiations and policing are comparatively reduced. Communal property rights contrast this; as they hold long-term economic costs to the interest owners as negotiation costs will continue to increase exponentially, as policing costs are not one off, and negotiation costs are comparatively higher . It is therefore evident that private property provides the most economically efficient method of dealing with externalities in the short-run and the long run, as costs and reaction time are rapidly reduced.

Ziff also argues that the over distribution of private property may result in myopic view of externalities, as each land-owner would only care for their own property and not about the needs of the wider community affected by externalities created by their land. This short term view, is an inherent downfall of private property, but society has developed means and ways in which these costs can be met, for example through regulatory authorities, and it is therefore argued that a fully privatise property regime would not be preferable but a partly common and partly private alternative, as seen in most market economies should be used instead.

Private property is essential to today’s market based economic system. It provides a method by which individuals can create their own wealth whilst at the same time benefitting the needs of society. This system incentivises efficiency, reduces the cost of externalities, and lowers the impact of the tragedy of the commons. These have the effects of increasing economic efficiency and productivity. Saying this, it is evident that a fully privatised system, would not work as it would create a short term mentality that would not take into account the greater good of others. It is therefore suggested that private property still has its place but only in conjunction with the use of common property rights so that a balance is met between a community’s utility and economic efficiency. It is for these reasons that I believe economic efficiency to be the most persuasive justification for private property.

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[ 1 ]. Bruce Ziff, Principles of Property Law (4th ed.2006) pp1 - 51
[ 2 ]. Ziff above n 1, 13
[ 3 ]. Grafton Squires Fox, Private Property and economic Efficiency: a study of a common-pool resource (2000)43 journal of Law and Economics pp 679-714
[ 4 ]. Ziff above n 1, 22
[ 5 ]. Harold Demsetz, “Towards a Theory of Property Rights” (1967) 57 American Economic Review 359
[ 6 ]. Ziff above n 1, 27
[ 7 ]. Ziff above n 1, 27
[ 8 ]. Ziff above n 1, 27
[ 9 ]. Ziff above n 1, 19
[ 10 ]. Ziff above n 1, 18
[ 11 ]. Grafton Squires Fox, Private Property and economic Efficiency: a study of a common-pool resource (2000) 43 Journal of Law and Economics pp 679-714
[ 12 ]. Ziff above n 1, 15
[ 13 ]. Grafton Squires Fox, Private Property and economic Efficiency: a study of a common-pool resource (2000)43 journal of Law and Economics pp 679-714
[ 14 ]. Grafton above n 13, 683
[ 15 ]. Grafton above n 13, 683