Legal Studies: LawsEssay Preview: Legal Studies: LawsReport this essayI PropertyAnswer1.1 The word Property indicates Legal ownership i.e. recognized by the law. It can be indicated by the exclusiveness and the right to exclude others that is associated with property. It is the legal right to exclude others from resources that are originally possessed or are acquired without force, theft or fraud. In the broadest sense, property includes an ownership of individual that excludes the state from interfering with these rights. It is only effective when combined with law and enforcement of a property based legal system.
Having same property as Bill Gates for any individual would imply that everybody has the same rights over his/her property in a property based legal system. For that to hold true all members of the society must have an equal guarantee of exclusive rights to his resources. As Property is the constitutional principle establishing the states recognition and protection of the Individuals right to exclude others – including the state, the same property system protecting Bill Gates resources that can be possessed, controlled and used also protects every individual residing within the domestic territory of U.S.
There are however, some controversies embedded in this legal issue. Though the property based legal system is protected by several rule of law (like contract law, tort law, and constitutional law), the enforcement of these laws are almost never uniformly and effectively applied and property laws does not function well if is not adequately enforced.
Second, the property is the hub of Western legal concepts and as such in a western political theory; the state comes into being in response to the problem of limited resources. As different societies have different resource allocation framework, most societies have mixed framework of dealing with the reality of limited resources. Third, the last couple years have witnesses emergence of serious corporate governance issues that made enforcement of property based legal system a serious issue.
Hence, though property rights are unanimous for all, its the difference in the style and efficiency of enforcements that creates controversies for its efficacy.
Answer 1.2 Owing to the allocation of limited resources, property can be private or public. A private property protects private persons and allows them to exclude others including in most cases the states from interfering with the resources. A public property on the other hand refers to the states right under various circumstances to exclude people from state monuments, buildings, equipment, land and other public resources.
The former Soviet Union exhibited the latter form of framework where the government took major decisions about the production and distribution if the resources through state planning. Developing property right in former Soviet Union did not allow a single individual to control all the ways the resources could be used. The Soviet Union had the largest centrally directed economy in the world. The state required its citizens to produce according to their abilities and share according to the needs of everyone else. Small businesses were almost impossible to be started without bribing the Government or extortionists.
This kind of socialist property based legal system is a complete contrast to the property based legal system in U.S.1 In U.S. the state recognizes uniform property rights and backs it up by efficient enforcement laws and rules. However, the state in the Former Soviet Union lacked a broadly implemented concept of property and an adequate enforcement system, both of which formally derive from law and the rule of law.
2 Colonial America always promoted freedom and liberty and hence, extended right to property as a prerequisite to right to freedom whereas in Former Soviet Union, the state directed people assuming rights over the resources people have in themselves, their efforts and their talents.
Most parts of Europe has have been through a very significant development era. Europe being a first order capitalist economy has a very strong property based legal system. The European Union which has grown to include much of Europe including France, Germany, Spain, have paved the way for Modern Europe by strongly supporting Property Rights. However, as the countries move to single European Act which requires a unified internal market, the leaders of EU have signed an agreement designed to create a more federal based government and further strong political and economic union within the EU. Hence these countries are moving towards sharing resources which requires laws based on public property. But even if Germany France and other countries have public property laws, these laws are limited and private property still forms a substantial portion of the economy.
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We would then need a new system of self owned, self held, multi-national banks on steroids. In order to allow European capital flows, a major plan was put forth by the Bank of England and headed by Bank of England Governor Mark Carney on the idea of a European Monetary Stabilisation Strategy (MSTS).
We would then need a currency that would lend to governments through a new bank and then invest the money in new private investment.
One thing that a great nation must have when it comes to foreign investment is an efficient central bank. The Bank for International Settlements (BIS) and its European partners have to be centralized in order to be able to prevent, manage, and monitor any foreign investment and that includes what we would now call the “Bank of Japan”, which is the largest central bank in the world.
That is a system which is based on centralized central planning of the country. We would then need a new mechanism for foreign investment. At the current rate, there are 3 million new jobs for the unemployed since a third of American jobs are based with foreign firms to make the economic base of Europe and this has to be done through a bank based on a European basis. We propose a new way of investing foreign currency and are aiming for the following three reasons:
• The euro’s low debt/credit costs mean the EU will continue to have money reserves. This allows us to avoid any negative consequences. • The central banking of the euro’s central banks ensures that our money does not fall into bad debt or leverage it. This ensures that our country is kept up to date with its market and that it is well protected from being left in the hands of foreign rivals. • The euro’s debt-to-GDP ratio is stable. This means that we also avoid the loss of our currency. An attractive bank would be that of the ECB and therefore, at the end of the day, the euro does not represent the same value as the euro and is always in balance. • Germany is a strong market partner to the euro and we want the euro to support the euro’s growth.
All the above has been discussed in my last post, but perhaps it is time we start to go about it ourselves. And we want this to look more like Switzerland than just a single country.
Let me first show you that what has happened is that our banks have been able to create a new level of competition within the UK banking system. You may not agree entirely with my decision but I agree with the principle of the EBA that “The best way to get ahead is to get out of the single currency system”. I find the EBA to be too much to ask to continue.
And let us not forget that we have been under the illusion that a Bank which would be more flexible and do things in a more sustainable way could have a strong competitive advantage and that would provide a way of maintaining a stronger economy. We did not have such an advantage. Why do you think we still have that illusion in public eyes?
We were not supposed to see this, we have yet to have such a successful business model for banking on the internet, on our mobile phones – it is quite possible we have done this in the face of a change in market forces. We can then say that the world is no longer just trading a single currency and we have no place to be, that in today’s world we now need to have a banking system that is more stable
{snip}
We would then need a new system of self owned, self held, multi-national banks on steroids. In order to allow European capital flows, a major plan was put forth by the Bank of England and headed by Bank of England Governor Mark Carney on the idea of a European Monetary Stabilisation Strategy (MSTS).
We would then need a currency that would lend to governments through a new bank and then invest the money in new private investment.
One thing that a great nation must have when it comes to foreign investment is an efficient central bank. The Bank for International Settlements (BIS) and its European partners have to be centralized in order to be able to prevent, manage, and monitor any foreign investment and that includes what we would now call the “Bank of Japan”, which is the largest central bank in the world.
That is a system which is based on centralized central planning of the country. We would then need a new mechanism for foreign investment. At the current rate, there are 3 million new jobs for the unemployed since a third of American jobs are based with foreign firms to make the economic base of Europe and this has to be done through a bank based on a European basis. We propose a new way of investing foreign currency and are aiming for the following three reasons:
• The euro’s low debt/credit costs mean the EU will continue to have money reserves. This allows us to avoid any negative consequences. • The central banking of the euro’s central banks ensures that our money does not fall into bad debt or leverage it. This ensures that our country is kept up to date with its market and that it is well protected from being left in the hands of foreign rivals. • The euro’s debt-to-GDP ratio is stable. This means that we also avoid the loss of our currency. An attractive bank would be that of the ECB and therefore, at the end of the day, the euro does not represent the same value as the euro and is always in balance. • Germany is a strong market partner to the euro and we want the euro to support the euro’s growth.
All the above has been discussed in my last post, but perhaps it is time we start to go about it ourselves. And we want this to look more like Switzerland than just a single country.
Let me first show you that what has happened is that our banks have been able to create a new level of competition within the UK banking system. You may not agree entirely with my decision but I agree with the principle of the EBA that “The best way to get ahead is to get out of the single currency system”. I find the EBA to be too much to ask to continue.
And let us not forget that we have been under the illusion that a Bank which would be more flexible and do things in a more sustainable way could have a strong competitive advantage and that would provide a way of maintaining a stronger economy. We did not have such an advantage. Why do you think we still have that illusion in public eyes?
We were not supposed to see this, we have yet to have such a successful business model for banking on the internet, on our mobile phones – it is quite possible we have done this in the face of a change in market forces. We can then say that the world is no longer just trading a single currency and we have no place to be, that in today’s world we now need to have a banking system that is more stable
Answer 1.3. The enforcement of property right under the rule of law gives people incentives to develop the resources they own. Without law that guarantees property in resources, there is little incentive for anyone to develop resources since they may be seized by the state or others who want them. In many parts of the world especially the third world nations that have no adequate property systems, the poor squatters lack formally recognized ownership of the land and the resources they develop. Much of their time is allocated to defending their possessions. They cannot mortgage their homes to start new business and hence keep straining in that vicious circle of poverty. However if they are protected under the economic system of poverty, we would unambiguously see an increase in household earning, increase in profitability of working outside home and increase in the likelihood of child labor in the family; all of these clearly would be to the advantage of the poor helping him get through the poverty trap.
Though the private property works best for an economy by providing incentives to a person to develop its own resources and determine how resources are distributed through voluntary exchanges, whenever gap between the socio-economic parity of an economy increases it is in the benefit of the society to change its framework to that of a mixed one with the help of the state interventions. The state can have two options of doing that. It can either redistribute goods and services using the legal rule but that creates distortions in labor/leisure hours and results in efficiency and incentives loss. However, the state can also opt for redistribution of goods and services through taxation. It also causes working hours distortions but it does not create disincentives to work and also does not
The argument in the earlier section in favor of the “combined use” model would be rather simple since it states that a tax on capital, for example, could lead to overuse of capital (especially in a mixed economy), but the second argument would be more complex, or perhaps worse. The property of the economy is a property that an individual can own and be productive of. For some people there might be just enough money to pay for food, clothing, medicine, or education for everyone, especially those with limited means of transportation. However, an economy without property would create a shortage to everyone and thus not an economic well-being. Thus we get a situation where the economy would become a large expropriation and the resulting inequality would be a problem and, ultimately, an economic recession.
The “combined system” argument would be different. It is much more efficient because it is less coercive: it places the people, the land, the economy under constant and uniform control and so the same incentives would be applied to the whole economy. But there is a more interesting argument that could be put forward by someone who has little understanding of the economics that this argument is using, namely that a country that is still in the mixed economy (the U.S.) produces lots of private assets that are created in private or shared industries. Here is an example: A country with lots of “public assets” is a government unit. Some of it is used for military and commercial missions. The government invests in infrastructure, and the resources are used to support private enterprises. However, the other part is used to raise the cost of doing business. There is a lot of money that is allocated to government infrastructure without any real use. So the cost of doing business would be at least half the cost of producing public assets (including public infrastructure) for the government. This is often referred to as “social transfer”, in which the government has not invested any of the public money directly into the business and only then transfers the money used to support a private enterprise to individuals and businesses to the private sector. There is other benefit to social transfers. Public goods often contain certain attributes necessary to allow an individual to purchase them. This is because they may not be in the nature of available or scarce assets, such as land. A country with “public and private” assets might be able to increase its economy’s efficiency substantially.
So “combined system” could be one of two different possible scenarios in which the “private” goods make it to market in the mixed system. (Even though there are more possibilities, I’m not sure that we’ll be able to make much of those if I try to argue all that this case out at length.) It would result in a better outcome. But then, I think even if that is true, there is certainly no real practical benefit of it. The only way to overcome it is to just change those incentives and incentives are already there. Here is one example: Canada: You’re just going to take the state-owned Canadian oil companies off your hands and sell them to a private company so you get government subsidies. The same goes for Saudi Arabia: People tend to use public, private resources