What Happened to Property in Law and Economics?

Abstract:     
This essay describes how the in rem nature of property has been largely ignored in the law-and-economics literature and argues that this omission leads to an incomplete view of property. We trace how, in this as in other respects, Coase's famous article on social cost fundamentally altered the prevailing notion of property by focusing on property as a baseline for contracting or for collectively imposed resolutions of use conflicts. Like the Legal Realists, Coase's article tends to view entitlements as arbitrary lists of use-rights that result from the resolution of use conflicts by courts or contracting parties. Three broad post-Coasean approaches - the contractarian, the tort, and the entitlement perspectives - are identified, in each of which the in rem nature of property is likewise suppressed. Finally, we briefly examine how four areas - the numerus clausus of property forms, the prevalence of certain in rem social norms, the direction of legal causation in resource conflicts, and the trespass-nuisance distinction - could be better explained by appealing to this in rem nature of property and the information costs to which it gives rise.

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