Are rights always right?

The Winter 2020 issue (vol. 34, no. 1) of the Journal of Economic Perspectives contains an article that looks at The Consequences of Treating Electricity as a Right, by Robin Burgess, Michael Greenstone, Nicholas Ryan and Anant Sudarshan (pp. 145-69).

Abstract

This paper seeks to explain why billions of people in developing countries either have no access to electricity or lack a reliable supply. We present evidence that these shortfalls are a consequence of electricity being treated as a right and that this sets off a vicious four-step circle. In step 1, because a social norm has developed that all deserve power independent of payment, subsidies, theft, and nonpayment are widely tolerated. In step 2, electricity distribution companies lose money with each unit of electricity sold and in total lose large sums of money. In step 3, government-owned distribution companies ration supply to limit losses by restricting access and hours of supply. In step 4, power supply is no longer governed by market forces and the link between payment and supply is severed, thus reducing customers' incentives to pay. The equilibrium outcome is uneven and sporadic access that undermines growth.

Making something a "right" can have negative unintended consequences.

Intellectual property rights: yay or nay?

From the IEA comes this podcast in which Kate Andrews and Steve Davies talk about the good and bad aspects of intellectual property rights.

The Institute of Economic Affairs's Dr Steve Davies joins Kate Andrews to discuss the arguments for and against intellectual property rights - a topic that which particularly divides the libertarian movement.

In the podcast, Steve explains the philosophical arguments both for and against, ultimately arguing that copyright law forms illogical conclusions when taken to the extreme.

However, Steve thinks certain forms of intellectual property are justifiable and helpful, like trademarks, often because they spring up organically, and recognised by courts rather than determined by state policy.

He also points out, that as it becomes increasingly more difficult to monitor copyright infringement, changes to law may be needed for the 21st century.

The "anti-commons" in intellectual policy

A common argument made with respect to intellectual property is that many countries innovation system provide excessively strong or numerous intellectual property rights that drown innovation in a “thicket” or “anti-commons” of overlapping legal rights. The majority view holds that anti-commons effects are a common occurrence that raises significant policy concerns about excessive intellectual property rights. A counter view to this line of argument is that market players have incentives and capacities to correct for anti-commons type effects through contract and other mechanisms.

In a paper, The Anti-Commons Revisited, forthcoming in the Harvard Journal of Law and Technology, Jonathan Barnett aggregates and critically reviews the diverse body of evidence on this issue. He independently replicates some of the most controversial results, surveying over a century’s worth of pooling arrangements, and providing additional evidence on potential anti-commons effects in certain markets. Two surprising and unusually consistent conclusions emerge. First, there is little concrete evidence that intensive levels of intellectual property acquisition and enforcement restrain innovation or output. Second, unless constrained by antitrust limitations, markets consistently exhibit capacities to devise transactional solutions that preempt or mitigate intellectual thickets. These conclusions erode confidence in the majority view, which in turn casts doubt on normative recommendations in favour of weakening intellectual property rights to preclude anti-commons effects.

The abstract reads:

Intellectual property scholars and policymakers often assert that technology and creative markets suffer from “anti-commons” (“AC”) effects that restrain innovation within a web of conflicting intellectual property claims. A minority view asserts that market players have incentives and capacities to correct for AC effects through transactional solutions. To assess the relative merits of each side of this debate, I review a large and diverse body of empirical evidence relating to AC effects in contemporary and historical markets. I independently replicate the most controversial empirical findings, supplement additional research on selected markets, and provide a survey of all documented IP-pooling arrangements in U.S. markets since 1900. The weight of the evidence strongly favors the minority view. Evidence for AC effects is scarce while evidence that markets correct for AC effects is abundant. AC effects are typically preempted or mitigated through cooperative arrangements among small numbers of IP holders or transactional solutions devised by entrepreneurial intermediaries for large numbers of IP holders. This pattern recurs over a diverse array of markets and periods, including automobiles, petroleum refining, aircraft, and radio communications in the early to mid-20th century, and information and communications technology markets from the late 20th century through the present. Contrary to standard assumptions, there is little evidence that these markets experienced reduced or delayed innovation or output despite intensive levels of patent issuance and litigation.

Suicide and property rights in India

There is an interesting but troubling result in a new NBER working paper on Suicide and Property Rights in India by Siwan Anderson and Garance Genicot. The abstract reads,

This paper studies the impact of female property rights on male and female suicide rates in India. Using state level variation in legal changes to women's property rights, we show that better property rights for women are associated with a decrease in the difference between female and male suicide rates, but an increase in both male and female suicides. We conjecture that increasing female property rights increased conflict within household and this increased conflict resulted in more suicides among both men and women in India. Using individual level data on domestic violence we find evidence that increased property rights for women did increase the incidence of wife beating in India. A model of intra-household bargaining with asymmetric information and costly conflict is consistent with these findings.

Increasing property rights for women is a good thing but increasing the suicide rate for both men and women is the bad thing. An increase in domestic violence is also, clearly, a bad thing. How to deal with the trade-offs here is not obvious. As Anderson and Genicot write,

To be sure, this paper is not suggesting that improving female property rights is undesirable. Until recently, women have been excluded from land rights in many societies and their ability to inherit property has largely been restricted. A growing body of empirical evidence shows that improving women’s asset ownership, relative income, or ability to control land impacts the intra-household allocation of resources towards children (among others Lundberg et al. 1997, Duflo and Udry 2004, Bobonis 2009). That improvements in women’s relative position in the household can be desirable, not only on equity, but also on efficiency grounds is a frequent justification for policies targeting women, such as microcredit and conditional cash transfers. Moreover, there is evidence that making inheritance laws more egalitarian between sons and daughters has had desirable consequences in India. For example, Roy (2010) and Deininger, Goyal, and Nagarajan (2013) show that the legal changes to women’s property rights that we consider here increased daughters’ likelihood to inherit land, women’s age at marriage and the educational attainment of daughters.

Our model predicts that women’s expected welfare rises due to increased female property rights. When wives contribute a greater proportion of the total family wealth, they do no longer accept any allocation offered by their husbands. Women expect, and are more likely to get, a more equitable share of consumption. However, as a consequence of these higher expectations, conflict within the household can rise and result in higher suicide rates for both men and women.

When considering the policy implications of their results Anderson and Genicot note that they are certainly not recommending that inheritance rights be kept unequal between men and women. Clearly their paper highlights some of the negative implications of women empowerment but they also point out that they do expect that women are made ex-ante better off by more equitable property rights. Anderson and Genicot suggest that other policies should be enacted to help deal with the negative aspects of the increase in female property rights. They suggest that policies that decrease the cost of conflict by easing separations for example can help. Referring to US evidence Anderson and Genicot point out that that states that adopted more liberal laws permitting "unilateral divorce" reported a 8 to 16 percent decline in female suicide and roughly a 30 percent decline in domestic violence for both men and women, and a 10 percent decline in females murdered by their partners. Anderson and Genicot note that in India, the Marriage Laws (Amendment) Bill in 2012 made divorce proceedings for unhappy couples easier and women-friendly, but stigma as well as norms in terms of child custody and alimony still make separation extremely hard in practise.

Property rights may mean something after all.

Thanks to Homepaddock I have been alerted to this news item noting that the Court of Appeal has upheld a High Court ruling that the Anglican Church is entitled to demolish the Christ Church Cathedral. This is, as Homepaddock notes, a victory for property rights.

As I have argued before it is up to the owners of a building what happens to the building. The owners have the property rights over the building, which include the right to bring it down, if they so wish, and the Great Christchurch Buildings Trust - the group wanting to stop the cathedral from being demolished - gets no say in the matter. The news item points out that the Court of Appeal has dismissed all the arguments made by the Trust.

Oliver Wendell Holmes Jr. made it clear as to what ownership means,

But what are the rights of ownership? They are substantially the same as those incident to possession. Within the limits prescribed by policy, the owner is allowed to exercise his natural powers over the subject-matter uninterfered with, and is more or less protected in excluding other people from such interference. The owner is allowed to exclude all, and is accountable to no one. (The Common Law, p193, (1963 edn.))

The Anglican Church has these rights and their rightful exercising of them means that the cathedral can be demolished, if they so determine it should be, and that decision is to be "uninterfered with". The Great Christchurch Buildings Trust, or any other such group,  must be excluded "from such interference", the Trust has no right to try and usurp control over the cathedral away from its rightful owners.

Will they never get the point?

From Stuff comes this bit of "news":

Several thousand people have gathered in Christchurch this afternoon to protest the demolition of the city's Anglican cathedral.

The protest rally began in Cranmer Square and saw past and present civic leaders, MPs and other high profile Christchurch residents calling on the Anglican Church to immediately halt demolition work on the quake-damaged Cathedral

Listen up people, you don't own the Cathedral and thus you get no say in what happens to it. If you want control rights over the building then buy them .... using YOUR money of course.

Former MP Jim Anderton told the crowd that 100 engineers had confirmed the Cathedral could be saved and restoration should go ahead regardless of the cost. If the city could afford to spend money on a new rugby stadium it could afford to restore the city's most iconic building. (Emphasis added)

Regardless of the cost?! Then you pay the cost Jimbo. Don't try and spend other peoples money on the Cathedral just because you want to save it. You don't have the right to force other people to pay for restoration just because you want it. Use your money. And remember there is an opportunity cost to saving the Cathedral,  money spent on that can not be spent on other more important things, you know like sewage and water systems, housing for the homeless etc. Actually Jim the city can not afford to spend money on either saving the Cathedral or a new rugby stadium. Just look at Dunedin to see the problems a stadium can cause.

"Pause, consult the experts and let the public ... have a say about their Cathedral,'' Crighton said. (Emphasis added)

But, and this is the important point, it ISN'T their Cathedral! Property rights over the building are held by the Anglican Church and not by Anna Crighton and her bunch of wannabe owners. They have no right to try and usurp control over the Cathedral away from its rightful owners, the Anglican Church.

Controlling other people's property

As Grossman and Hart pointed out more than 25 years ago ownership is defined in terms of control rights, a point lost, it seems, on some people in Christchurch. If you own a building you have the right to determine whether or not it is demolished.

From The Press:

A last-gasp plea to save Christ Church Cathedral has been rejected by Canterbury Earthquake Recovery Minister Gerry Brownlee.

Campaigners called for government intervention after Anglican leaders rejected a proposal to restore the quake-damaged building.

Brownlee told The Press: "We haven't gone around taking buildings off other people and we are not about to do that with the Anglican Church.

For once I agree with Gerry Brownlee. The Cathedral is owned by the Anglican Church and it is their decision as to what happens to it. Simple.

The Restore Christ Church Cathedral Group has no right to tell the Anglican Church what it can do with its property. But it gets worse,

The Restore Christ Church Cathedral Group had proposed sharing restoration costs between the Anglican diocese, the Christchurch City Council and the Government.

So not only do these people want to usurp the property rights of the Church they also  want the right to tell the Church, the Council and the Government how to spend their money!

Later the article says,

Restore Christ Church Cathedral Group spokesman Mark Belton said the Government needed to intervene to save the building.

"We want to challenge the Government to step in. It is in the national interest to take over this property and fix it," he said.

A translation: we want the government to give us the right to determine what happens to other people's property.

And what the hell is this "It is in the national interest" bit? What is the "national interest" and how is saving this building part of that interest?

There is not need for a debate

There has been a Call for TV cathedral debate. We are told,

A televised debate on the future of Christ Church Cathedral needs to be held, a city councillor says.

Cr Aaron Keown today emailed New Zealand's news networks asking for one to ''host the biggest debate in the earthquake recovery of Christchurch''.

He said the public needed to hear all the facts in an "open and transparent" forum before the "symbol of our city" was lost forever.

and

Keown said last week the cathedral would be demolished "over my dead body".

"I would be in there chaining myself to the building to stop that and I know lots of other volunteers would come in to do that," he said.

Actually no. "We" don't need a debate because it isn't up to "us" whether or not the Cathedral is demolished. It is up to the owners of the building. They have the property rights over the building, which include the right to bring it down, if they so wish, and Mr Keown-or anyone else-gets no say in the matter.

Oliver Wendell Holmes Jr. made it clear as to what ownership means,

But what are the rights of ownership? They are substantially the same as those incident to possession. Within the limits prescribed by policy, the owner is allowed to exercise his natural powers over the subject-matter uninterfered with, and is more or less protected in excluding other people from such interference. The owner is allowed to exclude all, and is accountable to no one. (The Common Law, p193, (1963 edn.))

The Anglican church has these rights and their rightful exercising of them means that the cathedral will be demolished and that decision is to be "uninterfered with" and Mr Keown and his supporters must be excluded "from such interference".

The only group who need to "hear all the facts in an "open and transparent" forum" are the owners and I assume, given that they have made their decision, they already know the facts.

Aaron Keown, or anyone else, doesn't have control rights over the Cathedral and if he wants said rights then he can get them by buying the Cathedral from its current owners. Using HIS money I should add. I'm guessing he could get it cheap right now!

The decision as to the future of the Cathedral belongs to the Anglican church, as they are its owners and only to them. If the church wishes to ask for Mr Keown's opinion that is up to them, but Mr Keown certainly has not right to try to usurp the church's property rights.