Primitive Property Rights

1. Primitive Property Rights • “Primitive” societies • Preliterate • No effective government • No complex economy • Still exists • “Archaic” societies • Preliterate • No longer exist • Combine for analysis

2. 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

3. 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”

4. 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

5. 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

6. 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

7. Insurance Principle A I hope brother-in-law “A” had better luck than I did! • 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 B Missed again - ha, ha

8. 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

9. What are the “property rights” implications of Posner’s model? Zapotec Rug: http://www.celerina.com/home.html

10. Legal Aspects • Fundamental legal processes of any legal system • Promulgation of substantive rules • Resolution of disputes

11. Property Rights • Exist based on scarcity • Exchange value • Cost of enforcement • No right if cost exceeds value

12. Property • Land • If no scarcity land in general will be open to all • Highly fertile land near settlements • Usufruct right

13. 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”

14. 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

15. 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