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Quotation of the Day…

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… is from page 89 of Anthony Scott’s 2008 book, The Evolution of Resource Property Rights [2] (link added):

In every period of English law, protection of property from actionable damage at the hands of others has been recognized by law….  [E]ven [the American] Justice Story [3] in Tyler v. Wilkinson agreed that sic utere tuo ut alienum non laedas (‘use your land without harming your neighbor’s’) has always been part of the law.

It’s gross error – in most instances reflecting an inadequate knowledge of history – to suppose that the control of what economists call “externalities” (or, more narrowly, of what in popular discussion is called “pollution”) had to await the dictates of legislatures.  Common law was long aware of such potential problems and was remarkably nuanced and surprisingly effective at dealing with them.  One can argue that the common law – and the property-rights regime that was part of it – dealt with externalities less well than did legislators and their bureaucratic appointees.  (And one can argue also the opposite.)  But the popular understanding – one that is shared by many economists, unfamiliar with Alchian [4] and Coase [5], who pronounce on the subject – that externalities are uncontrollable except by legislative diktat is plainly mistaken.

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