Property is the Market

Is it possible to image a world without private property? The right to own property is the probably the most overlooked rights in the United States and other developed nations. It is these rights that enable the market system to operate. These rights enable people to choose the products they want, and allow for the progression of society. The owning of property allows for loans, which further contribute to society. The essential element in any strong market system is a foundation based on strong property rights.

Private property is the essential part of any market system. This ownership of property enables individuals and firms, not the government, to do what they wish with their own property. The exchange of these goods allows for people to develop new technologies to exchange for more goods (McConnell 30). In-class discussions back this statement. When discussing property rights the idea of investing with leverage was discussed. Having property rights and little government interference for investors mean that the final outcome of the investment is left to the people and their self-interest. If people invest in a firm and the firm does well, the people are allowed to grow in wealth and better that investment without the fear of loss that is experienced when property rights do not exist.

Property rights also allow the individual to exchange goods easier. The documents such as titles and deeds that state who the owner is and allow for exchange show that the individual owns the property, not the government. This ability to enter into contracts and negotiate outside of the government is critical to the economic growth (McConnell 30). The unique quality of a market system is the ability of the individual to do what they please with their own property. This idea of contract is what makes all of the difference. The ability of two people to go into an agreement without government intervention as to what is to be done with property. The property is disposed, traded, and modified with little interference from any government.

The notion that contracts and markets are disconnected would be a false notion. The government watches the various behaviors regarding property rights demanded by people and the impact they have on the market. This causes the government to change laws and generate policies to keep the public happy with the rights they have. This protection is essential since the market of a large nation, like the United States, would not operate off bartering alone (Hurst 1111). Dr. Morgan taught in the History of World Civilization II course that the Chinese invented paper money. The money stands in the place of bartering from goods and acts as a contract. The Chinese has the right idea from the beginning. Money serves as an exchange and contract; value for a good of equal value. If the government adjusts how money is handled, or the value of money, its effects are felt throughout the market. This can best be seen in Germany following World War I when the government began mass producing money to pay back war debts, which ultimately led to an economic collapse (Bentley 996-997).

There is evidence to show that the countries that have strong property rights are the countries that developed into the powerful nations of today. The nations with the strong property rights are the nations that see the largest number of private investors. The move confident an investor feels in the property rights the more willing they are to invest ("Private Property Rights"). This support for property, both real and private, shows that investors want to protect their investments. The logical reasoning is that for communism everyone owns everything equally. The government can willingly appear and just remove an investment for their purpose on behalf of the people. Investors see this as an investment lost since the government did not put the resources into the investment, yet they reap the rewards.

The world of property rights can play out two different ways. In the first world the inventor can develop a technology that revolutionizes the way of life for the whole country. Every country wants this item. The inventor keeps the schematics but destroys his idea out of fear that the government will raid his or her home and steal the invention and profit for themselves and not let the inventor have any gain from his or her invention. The second world is a world where the inventor develops his or her wonderful technology. The patent is issued and he or she then owns the idea and technology. The inventor opens up a firm and begins to market the new technology. This technology is contracted and purchased by the government and the increased revenue the firm receives allows for improvements and loans to be taken out for expansion. The question becomes, which world would you rather live in?

Works Cited

Bentley, Jerry and Herb Ziegler. Traditions and Encounters. 3rd ed. Vol. 2. New York: McGraw-Hill, 2006.

Hurst, James Willard. "Freedom of Contract." Encyclopedia of the American Constitution. Ed. Leonard W. Levy and Kenneth L. Karst. 2nd ed. Vol. 3. Detroid: Macmillian Reference, 2000. 1111-1117.

McConnell, Cabpbell R. Economics: principles, problems, and policies. 17. New York: Mc-Graw-Hill, 2008.

"Private Property Rights"." Gale Encyclopedia of U.S. Economic History. Vol. 2. Detroit: Gale, 2000. 819-820.