Abstract
This chapter explains why, in economics regarding property rights, we should distinguish between man-made products and natural (nature-made) resources as first discussed by Henry George. In conventional economic thinking, private property rights are indispensable in the achievement of allocative efficiency, regardless of the nature of the goods. Also, according to conventional economic understanding, one way to avoid the overexploitation of freely accessible resources (open access regimes) could be by privatizing these resources. This argument is based on the idea that only market goods (excludable and subject to competition) can be efficiently allocated by the market. The sale of significant parts of Chilean forests to private companies in the 1980’s was based on this economic concept. This chapter challenges this classic view, providing arguments for why allocative efficiency can really only be achieved if private property rights exist for man-made products only, but not for natural resources.
So neither the one who plants nor the one who waters is
anything, but only God who gives the growth.
(1 Cor. 3: 6–7)
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Economic “rent” is a term that defines an amount of money earned that exceeds that which goes beyond the opportunity costs of production factors invested. Economic rents often arise from market inefficiencies.
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“Disposición Tercera Transitoria“, Constitution from 1980 in conjunction with “Disposición 17ª Transitoria“, Constitution from 1925. On might even argue that natural resources belong to the whole world, and not only to the people who by chance live on, over or nearby the territory where the resource is exploited (Gesell 1949).
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Only later this governmental structure was watered down when Kings in Europe gave land titles to ever more nobles, who themselves also gave land titles to nobles of inferior categories (landlords). Although this resulted in more private people (nobles and landlords) owning land tenures, the vast majority of the citizens still did not own any land. In consequence many felt discriminated, the divine precedence of the governmental structure was questioned, and social class struggles emerged. These led into land reforms in many European countries and the registration of land ownership in cadasters where every person could own land.
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Piketty has shown through tax records that the capital-income ratio β has risen from approximately 2.5 to over 4 worldwide since the end of World War II. He forecasts that β will have risen to more than 6.5 by the end of the century.
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Fuders, F., Pastén, R. (2020). Allocative Efficiency and Property Rights in Ecological Economics: Why We Need to Distinguish Between Man-Made Capital and Natural Resources. In: Fuders, F., Donoso, P. (eds) Ecological Economic and Socio Ecological Strategies for Forest Conservation. Springer, Cham. https://doi.org/10.1007/978-3-030-35379-7_3
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DOI: https://doi.org/10.1007/978-3-030-35379-7_3
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