Property's Problem with Extremes

58 Pages Posted: 15 Nov 2018

Date Written: November 2, 2018


Western-style property systems are ill-equipped to deal with extremes – extreme poverty, extreme wealth, extreme environmental harm. Though they can effectively handle many problems, the current systems are inherently incapable of providing the type of reforms needed to address extreme situations that are straining the fabric of societies – situations that are stressing the integrity of core societal and natural systems to the breaking point. The American system, in particular, is problematic. The system has a long tradition of strong individual rights and relies primarily on the efficiency norm to operate and shape the incentives of rights holders. The economic model that now dominates the American property system cannot, on its own, make the reforms needed to address problems of extremes. The assumption of a rational acting property owner and the individual scale of decision-making create an intrinsically self-serving system that will not, without redirection, force individual owners to consider important, outside interests or internalize serious, long-term externalities. Constitutional protection of property, with its increasingly economic focus, reinforces the owner-centric approach.

Yet property systems are fundamentally important to free and secure societies. Strong property rights protect the autonomy of individuals against government and third-party infringement. They also promote economic activities, rewarding investment and labor. A strong property system provides a way to order a society and its resources by establishing a framework for allocating, distributing, and managing interests in the resources. This framework includes organizational and operating principles that enable the society’s economic and political systems to work on a daily basis.

This article focuses on the extreme problem of climate change, asking whether it is possible to have a property system that both protects individual rights and sustains the integrity of the Earth system. Climate change is rewriting the world’s sense of scale and place in ways that will eventually require reforms to western property systems and their economies. Climate change is a problem that affects the whole regardless of the contributions of the part. It is a problem that needs the attention of the whole but can benefit from the responsiveness of the part. In order for western property systems to operate in ways that minimize property’s adverse effects on the Earth and on humans, some fundamental rewiring of property’s incentive structure and operating rules must occur.

Keywords: Property, Land Use & Real Estate, Property Rights, Property Theory, Takings, Climate Change

Suggested Citation

Butler, Lynda L., Property's Problem with Extremes (November 2, 2018). Available at SSRN: or

Lynda L. Butler (Contact Author)

William & Mary Law School ( email )

South Henry Street
P.O. Box 8795
Williamsburg, VA 23187-8795
United States

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