Primitive Property Rights • “Primitive” societies – Preliterate • No effective government • No complex economy – Still exists • “Archaic” societies – Preliterate – No longer exist • Combine for analysis
Jan 29, 2016
Primitive Property Rights
• “Primitive” societies– Preliterate
• No effective government
• No complex economy
– Still exists
• “Archaic” societies– Preliterate
– No longer exist
• Combine for analysis
Does economic model of human behavior apply to “primitive” societies?
• “Formalists” - it does and they study market-like behavior
• “Substantivists” - it doesn’t because no true markets existed
• It does under modern definition of economics which has expanded to include– Non-market behavior
– Institutional structures• Law
• Information
• Transactions costs
Underlying theory of “law and economics” studies
• Law is an instrument for maximizing social wealth or efficiency– Large body of literature in modern context
– Also applies to primitive societies
• Assumes “rationale economic man”– Cognitive process is not important, rather
– Are consequences of human behavior consistent with “economic theory”
Characteristics of “primitive societies”
• Cost of information is high– Transactions costs
models apply
– High cost to assess risk
• Little privacy– Social setting is kinship
groups for all activities
– Makes all members informers
Posner’s Model• No effective government• Limited variety of
consumer goods– Food is primary
• Limited trading outside kinship group
• Consumption goods perishable
• Negligible private gains from innovation
• Population is immobile
Richard A. PosnerSenior Lecturer in
Law
University of Chicago Law School
Insurance Principle
• Insecure and variable food supply– Accumulation of capital not
possible• Food is perishable - crops and
game
• Women - monogamy dominates because women are a form of capital
Prehistoric female images focus on reproductive
capacity
Insurance Principle
• Redistributive ethic– “A” has a surplus of food
– “B” has a shortage of food
– A “gives” food to B• A’s motivation?
• If in future roles are reversed, B will give to A
I hope brother-in-law “A” had better luck than I did!
Missed again - ha, ha
B
A
Insurance Principle
• This exchange is not a “market” transaction– No benefits from division of labor
• A form of insurance• Generosity becomes a highly
valued trait, e.g.– Debts never expire
• Gifts are reciprocal• Reduces “free-riding
Mammoth hunters
What are the “property rights” implications of Posner’s model?
Zapotec Rug: http://www.celerina.com/home.html
Legal Aspects
• Fundamental legal processes of any legal system– Promulgation of substantive rules
– Resolution of disputes
Property Rights
• Exist based on scarcity– Exchange value
– Cost of enforcement
– No right if cost exceeds value
Property
• Land– If no scarcity land in general will be
open to all
– Highly fertile land near settlements• Usufruct right
Usufruct
• Right based on possession (use)• Protected by its use• Terminal type of “estate”
– Terminal based on failure to use
– Can pass on to heirs or transfer to family members
– Can’t “sell”
Application of model
• Low demand for land– Surplus given away, not used
to “buy” land
– To do so would be politically destabilizing
• Primary evidence of ownership is possession– High information costs reduce
efficiency of markets
Application of model
• Temporal distortions– Possessor interest provides
incentive to take more resources than needed
– Not a problem because it’s cheaper
• To move to new lands when game is scarce
• To move to new lands when productivity declines