Property
EQ 3.1
To what extent are the concepts
of private ownership of
property and free choice
essential for free markets?
Private Property Rights: The Moral and Economic Foundation of a Free
Society
by Dr. Edward Younkins
Professor of Accountancy and Business Administration at Wheeling
Jesuit University in West Virginia and author of Capitalism and
Commerce.
Active Reading
On margins write
Critiques/arguments
Address areas of agreement
Write questions to the author
Summarize
Make connections to other areas of course/social studies/other subjects/world/your life
Private Property
Resources and the factors of production (land, labor,
and capital) are owned by private citizens.
Private ownership combined with the ability to
engage in free trade permits people to make
decisions to maximize their utility.
The incentive to maximize our utility leads to all
other things such as the price system,
entrepreneurship, and prevents the misallocation of
scarce resources and waste.
"The true foundation of republican
government is the equal right of every
citizen in his person and property and
in their management."
--Thomas Jefferson
Government must protect your ability to acquire property through the
use of your mind, body, and talents (paraphrased from a James
Madison quote).
We have the right to. . .
Use our talents, mind and body to acquire property
We may possess and use that property to increase our utility.
We may dispose of or trade our property if we feel that it will improve
our lives.
Why are Private property
rights are important?
1. They provide legal certainty and guard
against man made risks.
1.Recognized private property rights provide the legal certainty necessary for individuals to commit
resources to ventures. The threat of confiscation, by either private individuals or public officials,
undermines confidence in market activity and limits investment possibilities.
2. They prevent waste, and promote
useful allocation over time.
Nobody takes care of someone else’s private property as carefully as they take care of their
own.
2.Clear property rights tend to make decision makers pay close attention to resource use and the
discounted value of the future employment of scarce resources. Absent private property rights,
economic actors will tend to be short-sighted in their decision making and not conserve resources
over time.
3.Develop a framework for free exchange
and growth
3.Property rights are the basis of exchange and the extension of ownership to capital goods
provides the basis for the development of financial markets that are essential for economic growth
and development.
4. They Limit Government power
4.Secure private property rights, as indicated in the above quote by Thomas Jefferson, is the basis
for limited and civilized government. The elimination of arbitrary confiscation and the establishment
of regular taxation at announced rates enables merchants to calculate the present value of
investment decisions and pass judgment on alternative allocations of capital.
The Constitution and property rights
1. Uniform tax for General Welfare and Common Defense
"Congress has not unlimited powers to provide for the
general welfare, but only those specifically enumerated." –
Jefferson
According to Jefferson
Ind. Portion of the share social costs= Ind. portion of shared social benefit
2. Copyrights and Patents
Why?
?
3. 4th amendment – no unwarranted searches an seizures
4. The ‘takings clause” of the 5th amendment
5. 16th Amendment- income tax
Medium of Exchange
Unit of account
Store of value
How could the federal government manipulate the value of your property?
Quote and Continuum activity
1.
2.
3.
4.
5.
Complete quote activity on your own (10 minutes)
Share answers with each group members
Select a group favorite quote and least favorite quote
Record on board
Select favorite student quote
6. Share ideas and quotes with class.
EQ 3.1
To what extent are the concepts
of private ownership of
property and free choice
essential for free markets?
Apply information from
lesson to help answer an
essential question other
than #1.
Private Property
Resources and the factors of production (land, labor, and capital) are owned by private citizens.
Private ownership combined with the ability to engage in free trade permits people to make decisions to maximize their utility.
The incentive to maximize our utility leads to all other things such as the price system, entrepreneurship, and prevents the misallocation of
scarce resources and waste.
Government must protect your ability to acquire property through the use of your mind, body, and talents (paraphrased from a James
Madison quote).
We have the right to. . .
The Constitution and property rights
Use our talents, mind and body to acquire property
1. Uniform tax for General Welfare and Common
Defense
We may possess and use that property to increase our utility.
We may dispose of or trade our property if we feel that it will improve our lives.
Why are Private
property rights are
important?
1. They provide legal
certainty and guard against
man made risks.
2. They prevent waste, and
promote useful allocation over
time.
3. Develop a
framework for free
exchange and growth
4. They Limit Government power
"Congress has not unlimited powers to provide for the
general welfare, but only those specifically
enumerated." – Jefferson
According to Jefferson
Ind. Portion of the share social costs= Ind. portion of
shared social benefit
2. Copyrights and Patents (see diagram to left)
3. 4th amendment – no unwarranted searches an
seizures
4. The ‘takings clause” of the 5th amendment
5. 16th Amendment- income tax