What is private property? It’s one of the core legal institutions... in our capitalist economic system. I’ll talk about what the legal concept... of private property is, what sort of things you can own, how private property can lead... to inequality in power and income, and what other types of property there are. Let’s start with the legal concept of property. This is a little different... from how we use it in our daily language. If you say you own a house, you may mean... that you have one right: to do with that house whatever you want. What legal scholars say is you have a set of rights. This is called the bundle of rights theory. What are these rights? The legal scholar Honoré said in liberal democracies... private property consists of eleven elements, or incidents, as lawyers call them. These incidents tell you what you can and must do with the things you own. Some of these incidents are rights. For example, the right of possession. You have the right to exclusively physically control the thing you own. Some are not rights. According to Honoré, one of the property incidents is the duty... not to use property to harm another person. So, property always has a social dimension. With rights come responsibilities. Property never gives owners absolute freedom. When someone holds all these rights, duties, and liabilities with reference... to an object, we call that full liberal ownership. In many cases, these rights are dispersed over a lot of different persons. If I rent my house, that I live in, I can use it and I can decide who comes to visit me. But what I can’t do is sell that house. That right belongs to someone else. Renting is just one way in which the bundle of rights can become dispersed. But actually, a lot of legal arrangements have a similar effect. Today, this is so common, that some lawyers speak of the disintegration of property. As we’ll move on in this module, and talk about corporations... this possibility of disintegration becomes more important. Later, we’ll also talk about how people use... their property to gain political power. For now, it’s important to realize... property is itself already a kind of power. You can exclude others from your property. That means you get to decide how the object you own is used, and by whom. If more people need your property, this power will grow bigger and become more significant. Now you know what property rights are, we can talk about the objects that you can own. We need to distinguish between two main categories. Means of production, and personal use items. Means of production are the things you use... to produce new objects. For example, if you own an apple orchard... the means of production are your land, the apple trees, and your equipment. Generally speaking, means of production include land, natural resources, buildings... equipment, cash for investments, labor power and even knowledge. Private property in the means of production... can be distinguished from personal property in personal use items. You can think of things like clothes, your books or your toothbrush. Things you use personally, but you wouldn’t directly use to produce new products with. It’s private property in the means of production that leads to economic inequality. Personal property doesn’t do this. To see this, we’ll go back to the bundle of rights. Take the right to income and let’s discuss this with reference to the apple orchard again. If I sell the apples, the right of income gives me the right to the money... from those apples. Another important right is the right to capital. It gives me the right to sell the entire object I own. The apple orchard. These two rights form the basis of buying and selling that goes on in markets. What happens now is that owners can use the money they make to make investments... and thereby make even more money. What you can see is that an initial inequality... grows in the market and becomes a more stable and bigger inequality over time. This effect is strengthened by another part of the bundle, called transmissibility. This means when you die, you get to transfer your property to another owner. This is the legal basis of inheritance. This allows economic inequalities to persist and grow. It’s important to realize private property is not the only kind of property. Not all property is held by individuals. States can also own property. We would then call it state property or public property. Here you can think of national parks, military bases, roads. Just a few examples. There are many more. Another possibility is that individuals jointly own an object. This is called common property. For example, a group of independent farmers... share one pasture. They would then share decision rights over that pasture... and share the use rights too. Another possibility that I’d like to mention... is the corporation. Corporate property. But this is a specific type of property... that we’ll discuss in the next lesson. I hope you can see there are... different forms of property, and that the legal theory of the bundle of rights... helps us to understand what different forms of property look like. You have the legal perspective, let’s look at the historical perspective in the next activity.
