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April 9, 2013

Yours, Mine & Ours

Today's rigid attitudes about property rights break with tradition

From the book Our Common Wealth: The Hidden Economy that That Makes Everything Else Work, a collection of writings from Jonathan Rowe (1946-2011). Rowe was a co-founder of On the Commons and a co-editor of On the Commons.org.

Property is a mirror; the way we think about it says a lot about the way we think about ourselves. And the way Americans thought about property for much of our history is very different from what most politicians and economists profess today.

In England before America was formed, commoners had rights that were like property rights, even if they weren’t called that. Much agricultural land was held in common. In practice this was similar to community gardens today: individuals had their own plots, but the underlying ownership was joint. Pastures for grazing animals were also shared. And no one could keep commoners out of woods and rivers that were open to all. These rights dated back to the Magna Carta, and often before.

The English settlers who came to America carried these traditions with them. Thus, James Madison drafted the Virginia law that made unfenced forests a commons for hunting and fishing. The settlers also embraced what historians call the “civic republican” view of private property. In their minds, private property served an essentially civic purpose.

Properly distributed—a crucial proviso—it enabled people to be full citizens. Thomas Jefferson advocated a nation of small farm owners not because he believed in a rural arcadia but because this was the form of property ownership most consistent with civic virtue. Civic republicanism was also reflected in the corporate charters that prevailed well into the 19th century. State legislatures chartered corporations for specific purposes that served a public need, such as building a toll bridge or railroad. Corporations were limited in size and function and their charters expired after a preset number of years.

In the same spirit, early Americans viewed property rights not as a walled fortress but as permeable membranes capable of reconciling parts and the whole. Water law, so important in the new land, reflected this desire for balance. You could use water that ran through your land, but not in a way that diminished your neighbor’s use. The Northwest Ordinance of 1787, which laid out a plan for the upper Midwest, declared that the waterways there “shall be common highways and forever

Residues of this thinking persist today in the doctrine of the public trust. Roman law declared that some things are common by their very nature—air, wildlife, and navigable waters in particular. Government does not own these and therefore cannot privatize them, even if it wants to. Much like trustees of an estate, governments are legally obliged to maintain these assets for the benefit of all, including future generations.

The trouble with most early common property rights, however, was that they weren’t firmly fixed in statutory law. They existed in custom and usage rather than in deeds of ownership. When the British Parliament set out to enclose the commons, no formal property rights stood in its way. This has been the story of the commons ever since. Whether it is the atmosphere or oceans, the public domain of knowledge or the cognitive environment of our daily lives, it has all been vulnerable to invasion and expropriation because there is no protective legal shell. When a person or corporation takes private property, it is called “theft” and is punished accordingly. When government takes private property, it must, per the Constitution, compensate owners fairly, and it can take private property only for public purposes in the first place. But when a commons is taken it is called “growth,” and no punishment or compensation is required.

But can a commons be “propertized”? Would that not make it a carrier of the disease it is supposed to resist? The legal scholar Carol Rose has suggested that a commons can look like property on the outside and support unpropertylike ends on the inside. It all depends on how the property rights are structured. Property is not a metaphysical absolute. It is a construct, a bundle of rights that changes with the context. A first-year law student learns this early on. Partnership rights are different from shareholder rights. Rights in a cooperative are different from those in a condominium. Property in a marriage is different from that in a mutual fund. They are all property, but they are encoded differently to achieve different ends.

To give a commons legal status as property is to give it a protective shell; corporations and governments then can’t trespass or take it. The question is, What kind of shell is most appropriate for a commons? In some cases government ownership can work, as with libraries and parks. But state ownership is always subject to
power and policy shifts, and privatization is never off the table. In many cases the legal structure of not-for-profit trusts can be applied to commons.People establish trusts for the benefit of future generations. In the case of family trusts it’s the children or grandchildren. Nonfamily trusts exist for forests, community-
owned land, universities, and many other things. In all cases, trustees have a fiduciary duty to manage the trust’s assets for the sole benefit of the designated beneficiaries.

However the outer shell is constructed, common property can be encoded internally to counterbalance the tendencies of private property. Where corporate property is encoded to benefit the few (shareholders), common property can be encoded to benefit the many. And just as corporate property is managed for short-term gain, so common property can be managed for the long haul. These imperatives need not be imposed by government regulatory agencies. Rather, they can be embedded in the property itself and enforced like all property rights through the courts.