… is from page 359 of the late Paul Heyne‘s insightful 1981 article “Measures of Wealth and Assumptions of Right: An Inquiry” as it is reprinted in the 2008 collection of Heyne’s writings, “Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion (Geoffrey Brennan and A.M.C. Waterman, eds.) (footnote deleted):
Marxists have long complained that conventional economic analysis takes for granted the existing system of property rights. The charge is fundamentally correct. Offers to supply goods and efforts to purchase goods always depend upon people’s expectations of what they can and may do under specific contemplated circumstances. What a person may do expresses, in the broadest sense, that person’s property rights. In order to predict, explain, or even talk intelligibly about those patterns and instances of social interaction that we call “the economy,” we must begin with people’s expectations, that is, their property rights.
DBx: To avoid possible misunderstanding, I would have slightly reworded the final sentence of this quotation to read: “In order to predict, explain, or even talk intelligibly about those patterns and instances of social interaction that we call “the economy,” we must begin with people’s legitimate expectations – namely, those expectations that are widely shared and agreed to throughout the community – that is, their property rights.”
Heyne’s point is profound and important. Obviously, we cannot possibly distinguish illegitimate coercion against others from the legitimate exercise or defense of one’s rights until we know in sufficient detail the property-rights arrangement. If I break the window of a house at 123 Elm St. and then enter, you cannot know from this physical act if I am burgling the house (and hence, violating someone’s property right) or entering the house with the permission of the homeowner (namely, in this example, myself who locked myself out of this house that I own).
What is less obvious, but no less important, is the fact that property rights boil down to shared expectations. In modern America (as in most modern societies) ownership of a house includes the widely shared expectation that in all but extreme circumstances – for example, when the house is engulfed in fire – the right to decide who may enter the house is reserved to the homeowner. Ultimately, this right rests on widely shared expectations. If I, a modern American, move to some community in which the widely shared expectation is that anyone who wishes may enter unannounced into any house in that community, with or without the permission of the owner or occupants, and by whatever means, then no right of mine is violated if some stranger breaks into my house.
Expectations, being what they are, can be affected by the formal legal and legislative codes, but expectations can also diverge from these codes. (An example of such a divergence is the fact that in some U.S. states – I think, for instance, in Massachusetts – it remains an ‘on-the-books’ criminal offense for two adults who aren’t married to each other to have consensual sex with each other. Yet community expectations now no longer regard such activities to be unlawful.) Expectations change more frequently (especially in open societies) than does the formal law and the legislative codes, and expectations are always more nuanced and ‘granular’ than articulated legal rules or legislative commands can possibly be.
At bottom, a society’s laws are its widely shared expectations about how individuals may and may not act toward each others’ persons and toward the material things, as well as the symbols and markers, that individuals possess and use as they conduct their affairs both individually and in groups.
(By the way, do watch the 1997 movie, The Castle.)