Author Archives: admin

This week we sat down with Claire Priest, Professor of Law at Yale Law School. Her expertise is in the area of property and American legal history. Her current book project is titled Creating an American Property Law, and examines the evolution of property and inheritance law in America from 1650 to 1820 through the lens of credit and financial markets, slavery, and debtor/creditor relations.

Claire visited PERC as a 2011 Lone Mountain Fellow. We thank her for taking the time to answer our questions. For more of PERC’s Q&A series, visit the archived Q&As here.

Q: Your book project provides a new account of the evolution of property law in early America. What will your book emphasize that other historical scholarship has not focused on?

The role of property in historical accounts has generally related to the ideological revolution taking place during the Founding Era of the United States. The political leaders of the Founding Era believed that dismantling vestiges of aristocracy was crucial to the success of a republican society. They emphasized the need to make property in land dynamic and available in the market, rather than having the legal system protect stable landholding by an aristocracy. Historians have traced the path of republican views from the colonial era forward, to demonstrate the republican underpinnings of the Revolution.

I focus on a wider range of issues. 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. Reforming the law to encourage credit markets was a major trend. One reform was to legally define land as a “chattel” commodity when creditors’ interests were involved. This allowed more stream-lined processes to be used when creditors tried to seize debtors’ land in the case of default on a debt. In addition, in contrast to England, 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. Credit markets in the American colonies were robust.

Unfortunately, strong credit markets encouraged the expansion of slavery, a form of labor that depended on upfront payments of money. Slaves were often purchased on credit and themselves became a primary form of collateral in credit agreements. I believe this story is very important to our history.

Q: How did the emergence of these laws and institutions relating to property in early America affect the way we view property rights and law in modern America?

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. Filing a financing statement to use chattel goods as security is inexpensive and easy. 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?

With the battle over the debt heating up in Congress, the EPA has once again become the target of budget cutters in Washington. A plan by House Republicans to reduce funding for the agency has been called an “environmental disaster” and a “declaration of war” on environmental protections. But the question no one is asking is what effect the EPA’sContinue reading “EPA Budget Cuts: Reducing Bureaucracy, Not Environmental Quality”

Matthew Turner, a visiting 2011 PERC Julian Simon Fellow, was interviewed on All Things Considered this weekend about road congestion: For decades, urban areas across the country have been adding lanes and building roads to fight congestion, but a recent study by University of Toronto researchers finds that widening and building more roads actually creates more traffic.Continue reading “The Fundamental Law of Road Congestion”

PERC’s latest visiting fellow is Todd Zywicki, the Foundation Professor of Law at George Mason University and senior scholar at the Mercatus Center. He teaches is the area of contracts, bankruptcy, and law and economics. He is the co-editor of the Supreme Court Economic Review and a frequent commentator on legal issues in print and broadcast media. He blogs at The Volokh Conspiracy.

Todd is a 2011 PERC Lone Mountain Fellow researching the political economy of Takings law. We thank him for taking the time to answer our questions. See more of PERC’s ongoing Q&A series here.

Q: You work is heavily influenced by Gordon Tullock and his contributions to the study of spontaneous orders and methodological individualism. How might Tullock’s work be applied to environmental policy and law?

A:  Tullock’s central insight is that the cost of government policy is not just the misallocation of resources—using resources for lower rather than higher-valued uses. There is an additional cost—the resources that people use seeking preferential treatment from the government. He refers to these as “rent-seeking” costs and they can be quite large. The lessons for environmental policy and law are important: whenever decisions about resource use are moved from the world of private property and contract to the public domain, there will inevitably be rent-seeking costs as well. Thus, even if government makes wise decisions in the end (which it often does not), there will still be the costs of operating the system. And those costs can be large.

Q: While you are at PERC you have been working on a project exploring the political economy of the “Takings” law. Can you offer a brief overview of the government’s eminent domain or Takings power?

A:  The Takings power permits the government to seize private property for public use so long as it pays “just compensation” for the property taken. This enables the government to seize property to build roads, schools, etc.

Q: You have pointed out that law and economic analysis has been invoked to justify increased discretionary power for the government to take private property for public use such as in the case of Kelo v. New London. What is missing from this analysis?

A:  In Kelo many law and economics scholars have posited that the challenges confronting a private developer seeking to assemble many parcels of land in order to build an office building are identical to those of the government when it wants to build a school or post office. The underlying problem, it is claimed, is a hold out problem that landowners might try to hold out for a premium price, thereby killing the project. I argue that the situations are not analogous. In particular, when building an office building there are many similar alternative sites where the building might be constructed and so as a result the developer can shop among many different parcels of land, thereby eliminating the hold out problem.  Governments might have less ability to do that (or perhaps not). So I argue that even if one supports allowing the government to use the Takings power to overcome hold out problems, that does not support using the power for private developers in a case like Kelo. Moreover, there is a second point—to the extent that there are not comparable substitutes in Kelo it is only because the City of New London, in that case, gave Pfizer a bunch of subsidies and benefits to encourage development there. As a result, Pfizer felt compelled to build in New London. But that is merely an artificial distinction among different parcels of land that should not justify using the Takings power to later overcome the hold out problem that prior intervention creates.