What Happened to Property in Law and Economics?

Posted: 17 Dec 2001

See all articles by Thomas W. Merrill

Thomas W. Merrill

Columbia University - Law School

Henry E. Smith

Harvard Law School

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.

Suggested Citation

Merrill, Thomas W. and Smith, Henry E., What Happened to Property in Law and Economics?. Yale Law Journal, Vol. 111, pp. 357-398, November 2001. Available at SSRN: https://ssrn.com/abstract=294044

Thomas W. Merrill (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States
212-854-7946 (Phone)

Henry E. Smith

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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