The intellectual content of “property rights,” a term that has enchanted and occasionally mesmerized economists, seems to lie within the jurisdiction of the legal profession. Consistent with their imperialist tendencies, however, economists have also attempted to appropriate it. Both disciplines can justify their claims, since the term is given different meanings on different occasions. Perhaps economists should initially have coined a term distinct from the one used for legal purposes, but by now the cost of doing so is too high. I attempt, however, to make clear the meaning I give to “property rights” and to demonstrate why property rights so defined are an appropriate subject for economic analysis.

The material of the book is at the heart of a course I have taught in recent years. Undergraduate students take my approach in stride. Graduate students often vigorously resist my dissatisfaction with the zero transaction costs model; converting them is, however, rewarding. This book is influenced by the diverse classroom reactions. It is an attempt to appeal both to those with little training in economics and to specialists.

I am grateful to my former students Douglas Allen and Dean Lueck and to my colleague Paul Heyne, who read early drafts of the book and forced me to reformulate many of my ideas and to clarify their presentation. Douglass North, who supported the project from its infancy, also read the entire manuscript and made numerous valuable suggestions. Victor Goldberg and Levis Kochin provided useful comments as well. I also thank Elizabeth Case and my daughter Tamar for excellent editing; they demonstrated that clear writing enhances clear thinking. Finally, I wish to thank the Earhart Foundation for financial support.