Posts Tagged ‘property’

My friend Ben’s new post musing about the commons reminded me that I never posted a review of Michael Heller’s “The Gridlock Economy” that I read over Thanksgiving weekend. Unfortunately, I’ve neither my book nor my notes, so this will have to be brief.

Heller is a law professor at Columbia and writes one of the most important books that the free culture movement has ever received. The subtitle of the book is, “How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives” and Heller does a terrific job of providing an approachable explanation of why private property is not an absolute good, but instead a institution whose prevalence must be tuned to the happy medium.

Since the 1960s, the idea of a “tragedy of the commons” has been well-known to economists, lawyers and policy makers. A commons, where no one owns private property, is threatened by overuse: if everyone’s cow can use the local field, people will not manage the property correctly and the commons will be tragically over-grazed. This observation, generally applicable to many domains, was a part of the reason towards privatization – if not enough property is tragic, more property must be good! Or so the reasoning went.

Heller, however, realized that too much property can be bad. He first noticed this in post-Soviet Russia as a World Bank analyst. While the store fronts were empty, just feet away thousands of street vendors sold every good imaginable (but mostly just vodka and Tolstoy… just kidding). The reason, he realized after speaking with the vendors, was that to set up a formal brick-and-mortar store required jumping through numerous hoops. A street kiosk only required 1-2 bribes to be in business.

Heller calls this the “tragedy of the anticommons” and it shows up all over:

• Competing property claims stops nearly all airport expansion in the U.S., leading to innumerable delays.
• Patent thickets stop the development of new drugs
• The wireless spectrum is poorly allocated due to an anticommons
• African-American farms are split up over generations into smaller parcels until they are worthless and sold

The list goes on and causes serious economic and social ills. One of Heller’s main goals with the book is to raise public awareness of the problem because it can be solved, but only if it is correctly diagnosed as gridlock. So, go buy, borrow or rent the book, and read it!