Why Do Property Rights Matter?

Materials:

• Property Riddles
• Handout B: Focus Quotations
• Handout C: The 21st Century Tragedy of the Commons

Display the Property Riddles, concealing all but the description of Situation.

• Ask a student to read the situation aloud, and ask students to brainstorm reasons for Annie and Jamie’s different electricity usages.
• Once a few suggestions have been offered, reveal the clue and ask for more reasons based on this new information.
• Reveal the solution and ask the class for their response. Make sure students understand the definition of “incentive”: a motivating factor.
• Repeat for Situations B and C.
• Debrief the class and ask what they can find in common among the three Property Riddles. As a large group, compose a one- or two-sentence lesson that can be learned from the three scenarios and write it on the board. For example:
  • When you have no reason to use less of something, you’ll use more.
  • When there are no rules about owning something, no one takes responsibility for it.
  • That which is free will be freely used.

• Distribute Handout B: Focus Quotations.
• Have students work in pairs to complete the Handout, and then reconvene the class to share paraphrases and responses. See the Answer Key for suggested responses.
• Ask the class: What is “tragic” about the “tragedy of the commons”? What do these quotations assume about human nature? Do you agree that people generally tend to act in their own self-interest.
• Explain that private property is one solution to the “tragedy of the commons.” Others include systems where property is allocated by a dictator, or by central planners. What are the advantages and disadvantages of each?

The pasture metaphor might seem irrelevant—particularly if students live in an urban or suburban environment. Ask them to come up with similar metaphors that make a similar point as the common pasture metaphor. In addition to responses students generate, or to facilitate discussion, you may suggest:

• A dormitory refrigerator that is shared by the entire dorm floor, with no one responsible for cleaning it.
• An apple orchard from which everyone is free to pick apples.
• A common closet where everyone is free to pick out the designer clothes they want to wear that day.

Have students complete Handout C: The Twenty-First Century Tragedy of the Commons.

• Have students read the diary of William Bradford (1623) in which he describes the colonists’ experiences with communal farming. What happened when communalism was replaced with private property, and each family was given its own land? What can the colonists’ experiencesteach us about the importance of private property? The diary can be found at: www.BillofRightsInstitute.org/property/diary.
• Once students understand the “tragedy of the commons,” have them learn more about another economic problem, the “anticommons.” In the anticommons, a term coined by economist Michael Heller, too many property rights holders (instead of the lack of rights-holders) results in less innovation, because too many individuals or institutions have “vetopower” over the use of a resource. How might the anticommons apply to these real world examples? What solutions to the anticommons can students imagine?
  • Technology utilizing several thousand different pieces of patented hardware
  • Older films and television shows which include copyrighted music for which DVD rights were never negotiated
  • Medical breakthroughs that promise to cure disease, but which utilize many different patented medicines combined. Students can begin their research by reading “Can Patents Deter Innovation?”