me:
> My
> question is instead: Are individual
> property (private-ownership)
> rights _ever_ "duly stipulated"?
> aren't external costs and benefits
> ubiquitous?
Julio:
Private ownership rights can be duly stipulated. That is a legal
issue -- an issue of adjudication of formal rights.
Private ownership rights can be duly stipulated -- always? Not all
individual property rights work in practice. Someone can claim to own
the air or the idea that "efficiency is good," and such claims might
be validated by state decree, but it can be very hard to enforce such
rights. In the case of rivalrous goods, the stipulation of individual
property rights seems very difficult: how can one fisher be given a
property right to one tenth of the stock of fish in the Grand Banks?
The notion of market failure refers to situations in which legally
established markets fail to deliver optimal allocations. The
technological and/or economic sources of those failures can be
multiple, externalities being one set of them.
this is merely a matter of definition of the term "market failure."
Definitions are, by their very nature, conventional. They are not
determined by the ideal Forms which we glimpse as though through a
glass darkly as mere shadows on the cave wall.
Conventions among the economics profession reflect the sociological
conditions of academic specialization and hierarchy within the context
set by the larger society. They thus reflect the dominant ideologies,
though often in a distorted form. (I doubt that any businessfolk
believe in the Walrasian model of the ideal market system or its
conceptions the way that some economists do.)
These conventions may be harmless in many cases, but that decision
should be made on a case-by-case basis. In any event, they must not be
reified.
The tragedy of the commons is the opposite. It's a "government"
failure, i.e. a failure of the public sector (the public or its agent,
the "government") to turn out optimal allocations.
The the original theory of Hardin was not about "government failure"
as much as about a specific type of government, i.e., grass-roots
community democracy. (He likely would deny the possibility of that
kind of government, because he likely assumed that possessive
individualism is the natural consciousness of humanity.) It was only
later extended to assert that a centralized government fails (and then
Hayekian stuff about information problems is brought in). But, as I
said, the "tragedy of the commons" idea has taken on a life of its
own, being interpreted in yet other ways.
Regardless of the veracity of Hardin's story, it'd be easy for
historians to document a myriad other cases in which free access to a
rivalrous good becomes socially inefficient. But so what? Marxists
don't deny this possibility. Marxists don't advocate immediate free
distribution of all goods.
I have never denied the possibility that "free access to a rivalrous
good" can become socially inefficient (though the issue of what
"socially inefficient" means might be contested). There are lots of
examples of this problem under the social conditions and types of
consciousness imposed by modern capitalism.
The question concerns _when_ it can become socially inefficient: if
people do not embrace possessive individualism (and they don't always
do so, so we can't assume that they do so) or even more
individualistic attitudes, then the problem disappears. A more
collectivist mindset solidifies community institutions, which in turn
encourages the persistence of more collective mindsets (a virtuous
circle). There will still be "free riders" (social deviants), but the
community institution can deal with that (via shunning and other
social sanctions).
In economic *theory*, the issue of which form of ownership works best
in general is undecided and, ultimately, undecidable. Because theory
necessarily postulates abstract settings to, then, determine their
logical consequences. In the abstract, perfect markets and perfect
communism are equally efficient ("Pareto equivalent"). We can
juxtapose a long list of market failures to a long list of government
failures, but that won't settle anything.
right. The superiority of socialism can only be shown in practice.
--
Jim Devine / "The price one pays for pursuing any profession or
calling is an intimate knowledge of its ugly side." -- James Baldwin
