Q&A with Claire Priest, PERC Lone Mountain Fellow and Professor of Law at Yale Law School.
Q: How do the laws and institutions in early America affect modern property rights and law?
A: We take it for granted in America that credit is easy to come by and that we will receive financing for purchase of assets from cars to homes. In many countries, however, the institutions and courts are costly and time-consuming to navigate. I have been interested in how history might explain the vastly different legal environments around the world today.
I also think the history is closely related to the insights of PERC: being able to use property rights to achieve conservation outcomes requires a system that is flexible. To give a prominent example, markets in carbon credits are now well-established in our country. Where did the flexibility in the system come from that allows trading in a good like carbon emissions?
Q: What does your forthcoming book, concerning the evolution of property law in early America, emphasize?
A: In my view, the central force shaping property law in early America from the earliest years of colonization was the desire to use land and other assets, such as slaves, as collateral for the purpose of obtaining credit. The colonists brought English law and legal traditions with them but reformed those laws to adapt to the new conditions present in the colonies. In the American colonies, creditors were given legal priority to land over the landowner’s heirs during inheritance proceedings. Colonial courts and land recording offices also innovated by making title interests and the claims against those interests publicly accessible. Unfortunately, strong credit markets encouraged the expansion of slavery, a form of labor that depended on upfront payments of money. Slaves were often purchased programs. But after chatting with the local fishers I on credit and themselves became a primary form of collateral in credit agreements. I believe this story is very important to our history.
Q: You claim Hernando de Soto has glossed over some important details when it comes to the history of capital formation? Can you offer a few examples?
A: I admire that de Soto has drawn attention to how property laws and institutions affect the economy and capital formation. In the current draft I use de Soto’s work to illustrate a different issue, which is the gap in the scholarship on the history of property laws and institutions of the American colonial period. De Soto’s The Mystery of Capital includes a chapter called “The Missing Lessons of U. S. History” which focuses on preemption rights for squatters in the nineteenth century American West. I ask the question: what were the origins of the property system that was able to give rights to western squatters? What happened in the earliest years of colonization as these laws and institutions were initially put into place?
Q: Would it be possible to replicate America’s evolutionary experience with property law in a globalized context today?
A: That is a very difficult question. What I have been struck by in my close reading of colonial documents is that early America presented an opportunity for colonial legislatures to establish and reshape institutions in ways that conformed to the needs and preferences of the population. When an institution was not working right, the state legislature would pass an act to fix the perceived problem. The legislatures were sorting out the kinks in the system for over a hundred years. I think that property law reforms can be helpful but there needs to be a mechanism for local people to have input into how the institutions can best serve their needs. Courts and land title registries only work well as underpinnings of a property system when they have legitimacy and authority within the community.