Introduction

From the vantage point of a late twentieth-century economist, a moment's reflection is required to recall that the concept of private ownership, for most of the last 2,000 years, has been primarily a political concept, defined by specifying the rights that individuals possess with respect to a thing. A person who privately owns a thing has, according to Roman law, the right to “use and abuse” it, and others are forbidden from using the thing. Over the millennia and across space, these rights have been modified to regulate the uses to which a person might put his property, because of negative or positive externalities to which some uses expose other persons.

The crystallization of economics as a science is well measured by the degree to which this political conception of private ownership was seen to imply certain economic behavior, and to imply that resource allocation in a society in which all resources were privately owned was more or less well determined. Suppose in medieval times we had asked a philosopher to describe the trajectory of resource allocation in an economy beginning from some initial position. Of course, it would be anachronistic to pose our question in the language of preferences, technology, and competition. Nor would the ideal type of a private ownership economy have been a useful model for the economic relations of the time. Assuming that we could communicate, the scholastic would probably have answered that “it all depends.”