How Many Kinds of Property are There? Two? Or Three?

by Lambert Strether

Posted originally at Naked Capitalism 02 February 2014.

People fighting the landfill up here in the great State of Maine constantly run into the issue of standing: As it turns out, unless you are directly impacted by the landfill – for example, if you live next to it and are affected by foul odors – you have no standing to sue in court against it, or enter the regulatory/rule-making process. Which strikes us all as nuts, since our water, air, quality of life, and property values are all affected by it. In reaction, albeit informally and not as resistance to the landfill in the permitting process, we came up with or acquired the concept of “sheds” – like watershed, airshed, viewshed – and the idea that if you’re in a shed, you should have standing; a voice in the shed’s management and use.

Speculating freely, as is my wont, it seemed reasonable that sheds might be fractal – stream, river, catchment area – and that jurisdictions might be based on shed boundaries; heck, maybe the Penobscots were onto something. Well, as it turns out, we were all stumbling toward the idea of how to govern a commons, a problem that Ellinor Ostrum made her life’s work and won a Nobel Prize for. For work she did twenty years ago. Which, come to think of it, is a reasonable time period for a big idea to propagate.*

I haven’t (yet) mastered and can’t summarize Ostrum’s work on the commons**; here’s her 2009 Nobel acceptance speech. (Readers who are farther along than I am, please amplify and correct; I kinda feel like a six-year-old juggling power tools here). So I want to look at one excruciatingly interesting idea that should be affecting policy makers today, then look at Ostrum’s rules for developing governance systems for commons; and lastly raise a few questions.

The excruciatingly interesting MR SUBLIMINAL Or hideously over-simplifed idea is that there are three kinds of property, and not two. First, let’s limit the discussion a tad; we’re talking about property rights in what Ostrum calls “common pool resources” (for example, fisheries, forests, or water aqueducts; or sheds?). As described by the P2P foundation:

Whenever a group of people depend on a resource that everybody uses but nobody owns, and where one person’s use effects another person’s ability to use the resource, either the population fails to provide the resource, overconsumes and/or fails to replenish it, or they construct an institution for undertaking and managing collective action. The common pool resource (CPR) can be a fishery, a grazing ground, the Internet, the electromagnetic spectrum, a park, the air, scientific knowledge. The institution can be a body of informal norms that are disseminated by word of mouth, enforced by gossip or religious stricture, and passed from one generation to another, or a body of formal written laws that are enforced by state agencies, or a marketplace that treats the resource as private property, or a mixture of these forms. In the real world of fishing grounds and wireless competition, CPR institutions that succeed are those that survive, and those that fail sometimes cause the resource to disappear (e.g., salmon in the Pacific Northwest).

And here’s how Ostrum describes the various kinds of property rights in CPRs:

Common-pool resources may be owned by national, regional, or local [1]governments; by [2] communal groups; by [3] private individuals or corporations; or used as open access resources by whomever can gain access. Each of the broad types of property regimes has different sets of advantages and disadvantages, but at times may rely upon similar operational rules regarding access and use of a resource (Feeny et al. 1990). Examples exist of both successful and unsuccessful efforts to govern and manage common-pool resources by governments, communal groups, cooperatives, voluntary associations, and private individuals or firms …. Thus, as discussed below, there is no [sic]**** automatic association of common-pool resources with common-property regimes-or, with any other particular type of property regime.

So, to answer the question in the headline: Three (not counting the state of nature of “whomever can gain access” (primitive accumulation?)). And most definitely not two.

Three, meaning that there’s a massive impedance mismatch between history – heck, reality; Ostrum and others have done field research on communally managed CPRs – and the conventional wisdom of the political class, which posits two, in a linear tug-of-war between the government and the individual, between State and Market, between public property, and private property, never admitting of a third possibility, and falsely identifying the communal with what is the State’s.

The implication here is that every single discussion of policy regarding CPRs – air…. water…. oil?… soil?- that you hear in the Beltway is at best vacuous and at worst dishonest if it doesn’t allow communal groups a seat at the table. (Here’s one for the Great Lakes (Hi, Rahm! [waves]).)*** So I don’t find the word “excruciating” excessive in this regard. Not a bit. For example, we know that irrigation systems can be managed communally, and have been with success, for hundreds of years (though it’s not clear such systems scale). Does this knowlege inform our political class’s discussion of drought? Of the effect of fracking on groundwater? Of “water wars” in the twenty-first century? No; of course not; and are you kidding?

Second, I want to share Ostrum’s rules for figuring out how to govern a commons, once you’ve determined you have one. (Yes, this is meta; rules need to be site-specific tuned to context, not emitted by some zombie economist.) As summarized at Resilience:

Based on her survey, Ostrom distilled this list of common design principles from the experience of successful governance institutions:

  1. Clearly defined boundaries. Individuals or households who have rights to withdraw resource units from the CPR must be clearly defined, as must the boundaries of the CPR itself.
  2. Congruence between appropriation and provision rules and local conditions. Appropriation rules restricting time, place, technology, and/or quantity of resource units are related to local conditions and to provision rules requiring labour, material, and/or money.
  3. Collective-choice arrangements. Most individuals affected by the operational rules can participate in modifying the operational rules [how refreshing. Standing!].
  4. Monitoring. Monitors, who actively audit CPR conditions and appropriator behavior, are accountable to the appropriators or are the appropriators.
  5. Graduated sanctions. Appropriators who violate operational rules are likely to be assessed graduated sanctions (depending on the seriousness and context of the offence) by other appropriators, by officials accountable to these appropriators, or by both.
  6. Conflict-resolution mechanisms. Appropriators and their officials have rapid access to low-cost local arenas to resolve conflicts among appropriators or between appropriators and officials.
  7. Minimal recognition of rights to organize. The rights of appropriators to devise their own institutions are not challenged by external governmental authorities.
  8. For CPRs that are parts of larger systems:

  9. Nested enterprises. Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.

I don’t have a lot to say about Ostrum’s rules, except that if (see above) you’ve got a commons on your hands that you feel should be governed communally, and not by the Market or the State, it will be useful not to have to reinvent the wheel, but to rely on Ostrum’s analysis and fieldwork. More centrally, governance issues are making their way to the forefront (it seems to me) in many contexts all over the world right now; the world faces full-blown or incipient legitimacy crises in many places right now; one way to look at Occupy – even the Black Bloc permathread – is that it was all about governace. And if the planet goes pear-shaped in a way we all hope it won’t, communal treatments of CPRs could offer people the best solutions. Historically, in some cases, they have.

Third and finally, I said I’d have questions, plural, but I lied to you. I really have just one question: Are “human resources” collectively (for example, you, and you, and you…. and me) a “common pool resource”, and hence subject to one of the three property regimes outlined in this post? Why or why not?

NOTE * Which just goes to show how horribly, horribly stunted the discourse of the political class isMR SUBLIMINAL Looking at you, Paul Krugman; I didn’t know Ostrum’s work or ideas, because for years material from our political class was all I read.

NOTE ** One definition of the commons from David Bollier:

The commons is….

  • A social system for the long-term stewardship of resources that preserves shared values and community identity.
  • A self-organized system by which communities manage resources (both depletable and and replenishable) with minimal or no reliance on the Market or State.
  • The wealth that we inherit or create together and must pass on, undiminished or enhanced, to our children. Our collective wealth includes the gifts of nature, civic infrastructure, cultural works and traditions, and knowledge.
  • A sector of the economy (and life!) that generates value in ways that are often taken for granted – and often jeopardized by the Market-State.

NOTE *** From my brief survey of the literature, I do note there’s a bit of “Spot the CPR!” game in some circles; however, a CPR is always vested, as it were, in a concrete time and place, like a fisheries (or the planet?), and so the determination of what is and what isn’t a CPR can’t be done by a formula or on a chalkboard. This reminds me, I’m not quite sure, why, of Graber’s idea that debt, like slavery, necessarily rips a person from context.

UPDATE **** Correction of horrible typo moving from PDF, a wretched proprietary data format that makes simple copying and pasting very difficult, to HTML: “automatic association” should have read “no automatic association,” which is why fieldwork is needed.

NOTE Hat tip to alert reader Ellen F for the “three kinds of property” concept.

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