Monday, February 13, 2012
The False Promise of the Right to Exclude (Econ Journal Watch) on SSRN. Here's the abstract:
This essay, written for the Econ Journal Watch symposium, “Property: A Bundle of Rights?,” addresses a dispute among the critics of the “bundle” conception of property: does defining the core essence of property as the right to exclude avoid the disintegrating effects of the bundle conception? Thomas Merrill and Henry Smith believe so, and they have developed an extensive literature modeling how their “exclusion conception of property” achieves determinacy and information-cost efficiencies in property law. This essay contends that this is a false promise. Merrill and Smith are correct that the bundle conception is wrong, but their model of how the right to exclude functions in practice -- what they call the “exclusion strategy” -- does not account for the majority of property doctrines raised in real-world lawsuits. Despite the emphasis on trespass and conversion doctrines within academic scholarship, most property disputes are not situations in which a property-owner seeks to exclude a stranger from one’s land or chattel; rather, most property disputes arise from sustained and substantial ex ante relationships between individuals concerning the use, possession or disposition of a valued asset or resource. Merrill and Smith claim that these "governance strategies" function only at the "periphery" of property law, but in practice this is simply not true, including even in trespass cases, which supposedly represent the exclusion strategy par excellence. This essay briefly explores this insight by detailing how the exclusion conception of property fails to account fully for this heterogeneity in real-world property disputes, Although the elegant reductionism of the exclusion conception of property makes it theoretically appealing, lawyers and economists should be wary of its promise of determinacy in saving property from the disintegrative effects of the bundle conception.