Introduction to Normative Property Theory

home_cover (1)This was my first (1972) publication in property theory. The normative part of the theory is essentially the same as what I would espouse today, but for the descriptive theory, I was still in the grip of the “fundamental myth” that the rights to the product are part and parcel of some existing property rights to some capital asset. Only after realizing that there were no such pre-existing product rights and that the appropriation of the product of production was determined by who hires what or whom (i.e., was contractually determined)–only then was the ground cleared to realize that there must be some market-based mechanism to impute and assign the liabilities (for the used-up inputs) and the assets (the produced outputs) created in normal production. Hence this paper represents a flawed transitional stage when I argued that the “product rights attached to capital” ought not exist before I realized that they do not exist in a private property market economy, and that instead appropriation is handled by the invisible hand mechanism of property appropriation (the “Invisible Judge”) that I wrote about later. Thus the flaw lies not in the alleged “product rights attached to capital” but in the legal validation of the person-rental or employment contract wherein the owners of capital rent the people working in a company.

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