!!Экзамен зачет 2023 год / Honore. (with editorial intr. by Hodgson)

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types of rights. They include the right to use a tangible or intangible asset (usus), the right to appropriate the returns from the asset (usus fructus), the right to change a good in substance or location (abusus), the right to the capital derived from the use of the good as collateral, the right to sell a good (alienation), and several other rights or limitations.

The terms ‘ownership’ and ‘property’ are often treated as synonymous. In some legal accounts, ‘property’ refers to both the bundle of rights and to the object(s) over which the bundle is exercised, while the term ‘ownership’ denotes only the former. Honore´ sees ownership as the full complement of property rights and liabilities, and a property right as one of several possible constitutive elements in ownership. There are multiple different nuances of terminology and the reader has to take careful account of them.

Writers who claim that property rights are ‘confused’ or ‘unclear’ in particular situations, from medieval Europe to modern China, are sometimes unaware that there are different types of property rights, and in principle they can be in the hands of different legal persons. For example, since the Communist revolution the land in China has been owned by the state. So the state alone retains abusus and alienation rights. But since the early 1980s there has been a major distribution of usus and usus fructus rights from collectives to peasant farmers, leading to huge increases in agricultural productivity and launching China’s 30-year growth explosion.

But some commentators muddy the water here. For example, Zhu and Jiang (1993, p. 447), addressing China after the early 1980s reforms, claimed that ‘no one in the community is a real owner of land’ and referred to this ‘vagueness in the land ownership’. Despite the approval of leading Chinese scholar Nolan (1993, p. 74), this description is at best a half truth. Farmers in China do have usus and usus fructus rights, but they are not saleable. The farmers lack other property rights and in some areas even their existing rights are subject to compulsory purchase with little compensation. The greater problems lie with the security of some property rights, rather than with their vagueness.

Notwithstanding these problems, China’s rural growth has been stimulated by the devolution of partially insecure but largely viable property rights (Oi, 1999). The position in China is complex, but we need clear concepts to understand it. Any good argument that clear property rights matter less than their proponents claim cannot be based on unclear or conflated notions of what property rights are. It is necessary to distinguish between possible imperfections of practical legal definition by the authorities, imperfections of allocation, and imperfections of enforcement.

Honore´ (1961) also gives ownership a refined meaning that differs from that provided by many prominent economists. For example, Alchian (1977, p. 238) defined the ‘property rights’ of a person as ‘the probability that his decision about demarcated uses of the resource will determine the use’. The upshot of this definition is that if a thief manages to keep stolen goods then she acquires

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a substantial property right in them. Alchian’s definition of property neglects the concept of rightful ownership. It denotes possession rather than property. Similarly, the prominent property rights economist Barzel (1994, p. 394) defines property as

an individual’s net valuation, in expected terms, of the ability to directly consume the services of the asset, or to consume it indirectly through exchange

. . . the definition is concerned not with what people are legally entitled to do but with what they believe they can do.

This removes the question of legal title from the definition of property. There is no distinction in these two cases between property and mere possession. As Pipes (1999, p. xv) insists, ‘Possession refers to the physical control of assets, material or incorporeal, without formal title to them: it is ownership de facto not de jure’.

Honore´ (1961, p. 115) writes in the essay below: ‘To have worked out the notion of “having a right to” as distinct from merely “having” . . . was a major intellectual achievement. Without it society would have been impossible’. As he further (p. 134) argues: ‘It is not enough for a legal system to recognize the possibility of people owning things. There must be rules laying down how ownership is acquired and lost and how claims to a thing are to rank inter se’. The legal title to an object of property refers to the conditions that must be fulfilled in order that a person may acquire a claim to a thing.

Hence, the role of the legal system is crucial. As Commons (1924, p. 87) quipped long ago, the exchange of property involves not two parties but three, where the third is the state or a ‘superior authority’. Property is an instituted social relation involving rights, benefits, and duties (Hallowell, 1943). The essence of the right of ownership of a resource is its acknowledgement of that right by others, through mechanisms of institutional accreditation and legitimation.

Honore’s´ article is not the last word on the topic. His stance is described as a ‘bundle of rights’ view of property and this has been a matter for critical discussion (Penner, 1996, 1997). But Honore´ also emphasizes the role of the legal environment. As with all key concepts, we never get to the end of the matter. But we have to make our way through the thicket the best we can.

Understanding the nature and role of property is vital to understand capitalism. Crucially for the functioning of the modern capitalist system, and unlike objects of mere possession, durable property can be used by its owner as collateral and can involve legal encumbrances (Arner et al., 2007; Steiger, 2008). The registration of durable property and its consequent use as collateral for debt is arguably a crucial institutional mechanism for economic development (Arrunada,˜ 2012; De Soto, 2000).

Clearly, there are major differences between the conceptions of property right offered by some highly influential economists, on the one hand, and leading legal

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theorists such as Honore´. They cannot both be correct, and extensive discussion by economists of key contributions by legal theorists – both in regard to property and other prominent concepts such as the firm (Gindis, 2009; Hodgson 2002) – is long overdue.

References

Alchian, A. A. (1977), ‘Some Implications of Recognition of Property Right Transaction Costs’, in K. Brunner (ed.), Economics and Social Institutions: Insights from the Conferences on Analysis and Ideology, Boston, MA: Martinus Nijhoff, pp. 234–255.

Arner, D. W., C. D. Booth, P. Lejot and B. F. C. Hsu (2007), ‘Property Rights, Collateral, Creditor Rights, and Insolvency in East Asia’, Texas International Law Journal, 42(August): 515–559.

Arrunada,˜ B. (2012), Institutional Foundations of Impersonal Exchange: Theory and Policy of Contractual Registries, Chicago, IL: University of Chicago Press.

Barzel, Y. (1994), ‘The Capture of Wealth by Monopolists and the Protection of Property Rights’, International Review of Law and Economics, 14(4): 393–409.

Commons, J. R. (1924), Legal Foundations of Capitalism, New York: Macmillan.

De Soto, H. (2000), The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, New York: Basic Books.

Gindis, D. (2009), ‘From Fictions and Aggregates to Real Entities in the Theory of the Firm’,

Journal of Institutional Economics, 5(1): 25–46.

Hallowell, A. I. (1943), ‘The Nature and Function of Property as a Social Institution’, Journal of Legal and Political Sociology, 1(3–4): 115–138.

Hart, H. L. A. (1961), The Concept of Law, Oxford: Oxford University Press.

Hart, H. L. A. and A. M. Honore´ (1959), Causation and the Law, Oxford: Oxford University Press.

Hodgson, G. M. (2002), ‘The Legal Nature of the Firm and the Myth of the Firm–Market Hybrid’, International Journal of the Economics of Business, 9(1): February, 37–60.

Honore,´ A. M. (1961), ‘Ownership’, in A. G. Guest (ed.), Oxford Essays in Jurisprudence, Oxford: Oxford University Press, pp. 107–147.

Honore,´ A. M. (1987), Making Law Bind: Essays Legal and Philosophical, Oxford: Oxford University Press.

Honore,´ A. M. (1999), Responsibility and Fault, Oxford: Hart Publishing.

Nolan, P. (1993), ‘China’s Post-Mao Political Economy: A Puzzle’, Contributions to Political Economy, 12: 71–87.

Oi, J. (1999), Rural China Takes Off: Institutional Foundations of Economic Reform, Berkeley, CA: University of California Press.

Penner, J. E. (1996), ‘The “Bundle of Rights” Picture of Property’, University of California Law Review, 43: 711–741.

Penner, J. E. (1997), The Idea of Property in Law, Oxford: Oxford University Press. Pipes, R. (1999), Property and Freedom, New York: Alfred A. Knopf.

Steiger, O. (ed.) (2008), Property Economics: Property Rights, Creditor’s Money and the Foundations of the Economy, Marburg: Metropolis.

Zhu, L. and Z. Jiang (1993), ‘From Brigade to Village Community: The Land Tenure System and Rural Development in China’, Cambridge Journal of Economics, 17(4): 441– 461.

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Ownership

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Ownership is one of the characteristic institutions of human society. A people to whom ownership was unknown, or who accorded it a minor place in their arrangements, who meant by meum and tuum no more than ‘what I (or you) presently hold’ would live in a world that is not our world. Yet to see why their world would be different, and to assess the plausibility of vaguely conceived schemes to replace ‘ownership’ by ‘public administration’, or of vaguely stated claims that the importance of ownership has declined or its character changed in the 20th century, we need first to have a clear idea of what ownership is.

I propose, therefore, to begin by giving an account of the standard incidents of ownership: i.e. those legal rights, duties, and other incidents which apply, in the ordinary case, to the person who has the greatest interest in a thing admitted by a mature legal system. To do so will be to analyse the concept of ownership, by which I mean the ‘liberal’ concept of ‘full’ individual ownership, rather than any more restricted notion to which the same label may be attached in certain contexts.

Secondly, I propose to say something about the notion of title, about the types of rule which legal systems adopt in order to decide who is to own a thing and, if two or more persons have claims to a thing, how priority between them is to be settled. Thirdly, I touch briefly on some instances of split ownership, in which the standard incidents are divided between two or more persons. Last comes the topic of the restriction of ownership in the social interest and the relation between ownership and public administration. This order of treatment should have the following advantage: once the standard case of full ownership has been [108] depicted, the variants and possible alternatives stand out more clearly in contrast, and are easier to understand and assess. On the other hand, this treatment is not meant to prejudge the issue, how far private ownership should stretch and to what extent it should be modified in the public interest. That issue, though it lies outside the scope of this essay, can be understood only with the help of an adequate analysis of the concept of ownership.

1. The liberal concept of ownership

If ownership is provisionally defined as the greatest possible interest in a thing which a mature system of law recognizes, then it follows that, since all mature systems admit the existence of ‘interests’ in ‘things’, all mature systems have, in a sense, a concept of ownership. Indeed, even primitive systems, like that of the

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and tenant that the position of neither presented a sufficient analogy with the paradigm case of owning a thing.5

Indeed, in nearly all systems there will be some things to which not all the standard incidents apply, some things which cannot be sold or left by will, some interests which cannot endure beyond a lifetime, some things (flick knives, Colorado [110] beetles) which it is forbidden to use or to use in certain ways. If the differences between these cases and the paradigm case are striking enough, we shall be tempted to say that the things in question are not or cannot be owned, but it would be a mistake to conclude that the legal systems in which these cases occur do not recognize ownership. Whether a system recognizes ownership, and to what extent it permits ownership (who may own, what may be owned), are widely differing questions. No doubt liberal societies are more inclined than socialist societies to extend the list of items that can be owned, but it does not follow that, when a socialist system permits ownership, or ‘personal ownership’, it is permitting something different from what is permitted in the corresponding case in a liberal society. It may well be – and all the evidence indeed supports the view – that socialist societies recognize the ‘liberal’ notion of ‘full’ ownership, but limit the range of things that can be owned. Perhaps definitions of ownership contained in codes are not a safe guide. Still, it is striking that the French civil code, enacted in an atmosphere of liberal individualism, defines ownership as ‘the right of enjoying and disposing of things in the most absolute manner, provided that one abstains from any use forbidden by statute or subordinate legislation’;6 while the Soviet civil code, framed in a socialist context, provides, in very similar language, that ‘within the limits laid down by law, the owner has the right to possess, to use and to dispose of his property’.7 Obviously much here depends on what limits are laid down by law in each system; in fact, so far as articles subject to ‘personal ownership’ are concerned, the limits in the two systems hardly differ.

One further caveat. I set out to describe the incidents of ownership in the simple cases in which one would not hesitate to say ‘X owns that thing, that is X’s book or house’, even though T may have borrowed it, or r may be X’s tenant. In doing this, I do not lose sight of the existence of more complicated cases in which layman and lawyer alike may be puzzled to know which, of two or more persons interested in a thing, to call owner, or whether to say, on the other hand, that neither or [111] none is owner. Just as the rules of a system may so restrict the permissible ways of dealing with certain types of things that we are inclined to say that such things are not capable of being owned in that system, or can be owned only a sense different from the full, liberal sense we are to investigate, so the rules of a system may provide for the splitting of interests in a type of thing which, in general, is admittedly capable of being owned. Houses

5Pollock and Maitland, History of English Law to 1290, Vol. 11, p. 4.

6Code Civil, art. 544.

7Soviet Civil Code, art. 58.

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can be owned, and there is no conceptual difficulty in locating the ownership of a house let on a short lease. But if A lets B a house on a lease for 2,000 years, it may be very unclear, at least to the layman, whether A or B or neither should be called owner. (In this case, legal usage designates A owner despite the tenuous character of his reversionary right.) Again, can a mortgagor be said to ‘own’ a house which is mortgaged? (Legal usage here refuses to designate the mortgagee owner despite the potentially indeterminate character of his interest.) No obvious linguistic convention governs the answer to such problems, and, if the rules of a legal system demand an answer, it must be sought in positive law, in the comparative strength of competing analogies with the paradigm case and in the light shed on the problem by the social context.

The fact that there are such cases of split ownership and that they present baffling problems to one who is compelled to fix on one interested person as the owner of the thing does not make it worthless to try to delineate the incidents present in the ordinary, uncomplicated case. On the contrary, such a delineation is essential in order that it may be possible to assess the strength of the analogies in the peripheral cases. What must, however, be recognized at the outset is that the actual use of ‘owner’ and ‘ownership’ extends beyond the standard case now to be described and that to delineate the standard case is here, as with most legal notions, not to provide a code for the use of the word. For instance, the 16 or so pages of Burrows’ Words and Phrases Judicially Defined,8 concerned with the interpretation of the word ‘owner’ in various statutes, amply reveal how the courts have wrestled with provisions extending the [112] legal meaning of ‘owner’ beyond the standard cases. But it is important to see that the very existence of such problems of statutory interpretation presupposes that there are paradigm cases in which the interpretation of ‘owner’ is clear.

Thus, where a statute provided9 that ‘“owner” in relation to land, includes every person who jointly or severally whether at law or in equity, is entitled’ to the profits of the land etc., Griffith C. J. pointed out that the term ‘owner’ ‘Prima facie connotes entire dominion. Section 3 [the definition section] extends the meaning so as to take in certain persons who possess some, but not all, of the rights of absolute owners. Although, therefore, the language of the definition is in form inclusive, and not exhaustive, it must be read as if the words “besides the absolute owner” were inserted after “includes”’.10 This presupposes that we know, without the help of an interpretation clause, what is meant by ‘absolute owner’. Again, when Jessel M. R. said in a case on the interpretation of the Highways Act, 1835, ‘I am clearly of the opinion that the term “owner” means the man in occupation, who may be either the actual owner or else only the

8(1934), Vol. 4, pp. 130–146.

9Land Tax Assessment Act, 1910, s. 3.

10Union Trustee Co. of Australia, Ltd. v. Land Tax Federal Commission (1915), 20 C.L.R. 526, at p. 531.

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occupying tenant’,11 he could not meaningfully have said this unless there were available criteria for the identification of the interest called ‘ownership’ and so of the ‘actual owner’ in the majority of cases.

The standard incidents

I now list what appear to be the standard incidents of ownership. They may be regarded as necessary ingredients in the notion of ownership, in the sense that, if a system did not admit them, and did not provide for them to be united in a single person, we would conclude that it did not know the liberal concept of ownership, though it might still have a modified version of ownership, either of a primitive or sophisticated sort. But the listed incidents are not individually necessary, though they may be together sufficient, conditions for the person [113] of inherence to be designated ‘owner’ of a particular thing in a given system. As we have seen, the use of ‘owner’ will extend to cases in which not all the listed incidents are present.

Ownership comprises the right to possess, the right to use, the right to manage, the right to the income of the thing, the right to the capital, the right to security, the rights or incidents of transmissibility and absence of term, the prohibition of harmful use, liability to execution, and the incident of residuarity: this makes 11 leading incidents. Obviously, there are alternative ways of classifying the incidents; moreover, it is fashionable to speak of ownership as if it were just a bundle of rights, in which case at least two items in the list would have to be omitted.

No doubt the concentration in the same person of the right (liberty)12 of using as one wishes, the right to exclude others, the power of alienating and an immunity from expropriation is a cardinal feature of the institution. Yet it would be a distortion – and one of which the 18th century, with its overemphasis on subjective rights, was patently guilty – to speak as if this concentration of patiently garnered rights was the only legally or socially important characteristic of the owner’s position. The present analysis, by emphasizing that the owner is subject to characteristic prohibitions and limitations, and that ownership comprises at least one important incident independent of the owner’s choice, is an attempt to redress the balance.

(1) The right to possess

The right to possess, viz. to have exclusive physical control of a thing, or to have such control as the nature of the thing admits, is the foundation on which the whole superstructure of ownership rests. It may be divided into two aspects, the right (claim) to be put in exclusive control of a thing and the right to remain in control, viz. the claim that others should not without permission, interfere.

11Woodard v. Billericay Harbour Board (1879), 11 Ch. D.214, at p. 217.

12In this article, I identify rights with claims, liberties, etc. For a criticism of this identification, see (1960), 34 Tulane L.R. 453.