Mine! (How the Hidden Rules of Ownership Control Our Lives) 4/7

Michael Heller, James Salzman

Part 3.

4/ My Home Is Not My Castle

• A principle of attachment – “it’s mine because it’s attached to something mine”. In case of airplanes (is the space in front of me mine or my neighbour’s) or backyards (can a drone fly on my territory) it means going 3D from the 2D concepts most people are used to.

• When buying a land, does the person also own what’s above or below the land? How much high or deep is “mine”? Is a neighbour flying a drone on someone’s territory a trespasser? What about a delivery drone bringing a package to you or your neighbour?

• The attachment can’t be unlimited (otherwise planes won’t be able to fly over anyone’s house).

• A more interesting dilemma is when, say, one’s neighbour’s trees put shadow on the one’s solar panels, or the windmills disturb neighbour’s air flow. Is it a violation of property rights or not?

• In the past (at least in the US) it was allowed to enter someone’s land to pick up wild flowers / ferns or to hunt wild animals as the uninterrupted food supply was more important than the land rights. In other word, labour and possession (I worked hard to get something) was more important than the attachment right (it’s my item because it’s attached to my land). Now half of the US states stick to the attachment rule.

• If something is found on one’s land, this is the land owner’s property (there are separate rules of dealing with the find if it’s treasure, but still), no the finder’s property.

• Copyright law: the owner of the copyright / patent automatically has the derivative rights (improvements or extensions).

• Cultural appreciation vs appropriation is a hot topic (with no “right” answer): is copying one’s cultural items / patterns / etc. appropriation? Is it theft? What about food? Hairstyles? Songs? Dance? Parties? More broadly – to what extent do the minority communities “own” their culture and how prohibitive are the rights to it?

• Biopiracy: using traditional / indigenous remedies (the ones that actually work) hidden in local plants or animals. What’s more important – the labour or the attachment (these plants or animals only exist in a certain area)?

• Attachment rule seems to be the default rule in the absence of others. The assumption goes that the owner of the resource is at least as likely to successfully exploit it as the other guy.

• If the resource can unexpectedly bring more benefit than was originally anticipated (finding a treasure, oil, or rare minerals) – it’s even better for the landowner; the rich get richer inevitably leading to wealth inequality.

Backfiring attachment

• Attachment works fine only when the resources are plentiful; pumping groundwater can’t be perpetual as the resource becomes scarce through insufficient speed of replenishment. Consuming resources in a non-sustainable way [MK: finally, we’re making inroads into ESG!] leads to making everyone worse off rather sooner than later.

• The rule of attachment doesn’t work well when one’s consumption depletes the resource for another person. But it’s the tragedy of the commons in full swing: everyone’s worse off in the end, but for someone to stop would mean their death or obsolescence, while others stay in the race to the bottom. It’s the short-term thinking, but if there may be no foreseeable tomorrow – the strategy will secure at least another day of fighting.

• But ownership rules are sticky: once they’re in place – they stay in place for as long as possible, even if they end up leading to catastrophic consequences.

• With oil, though, the mistake of overproduction was avoided by unitization: landowners joined their land parcels and hired pumping companies with the goal of maximizing the revenue from land use for all the landowners. It stopped making sense to pump oil fast and leave a lot of it in the ground; owners collectively were financially motivated to do the right thing.

• Or maybe the solution is to limit the attachment rule and make underground natural resources the property of the state. It’s not possible to change the existing arrangements in the US, but everything can be turned on its head for emerging resources.

Growing and Shrinking

• Beachside properties with private beaches are many people’s dreams; however, when sea levels rise, the beaches shrink, and water gets dangerously close to the properties. Owners lobby local governments to do “something” about it (meaning piling up the sand where the beach used to be) at the taxpayers’ expense. [MK: it’s all too common in Australia, unfortunately.]

• If the private beach grows gradually, it belongs to the property owner (thank you, the rule of attachment!). But if the government all of a sudden decides to expand the beach and pour tons upon tons of sand – the improvements belong to the public.

• Even if the owners never asked for it. The improvement doesn’t make the original owner worse off, so there’s no harm done, and local councils are free to make the new beach accessible to the public. Even if a hurricane creates the same effect – the newly reclaimed beach also belongs to the public.

• Nations engage in controversial practice of extending their territories (and claiming coastal waters as one of the primary reasons) via creating new and reinforcing existing islands. (Think China and its South Sea presence.)

• There are several kinds of fishing rules: a state can claim that it has the exclusive right of fishing in its coastal waters. Independent fishermen claim that they own the catch from anywhere their boats can sail. In the past there used to be a “cannon shot rule”: states controlled waters up to 3mi/5km off their shores.

• Now countries’ territories extend 12mi offshore and exclusive economic zones (EEZ) of up to 200mi offshore. (Russia and Canada are now dividing the Arctic.)

• Outside of the EEZ the capture game is free-for-all, which played a huge role in making many fish species near-extinct due to overfishing.

Attachment Deep Inside

• Condominiums may have “no pet” policies (presumably to protect residents from foul odours and occasional scratching damage to the common property), so owning an apartment doesn’t mean the owner may put in whatever they please.

• In the US 3/5 of all new residential structures are governed by homeowners’ associations. Think of it as a shareholders’ agreement: the initial cohort of owners decide the rules for the future owners to abide by, and owning a property is conditional on adhering to the pre-existing rules.

• Rules have to be enforced, too. Such rules may be as arbitrary and frivolous as one’s sick mind may imagine [MK: don’t forget that there is a higher ratio of psychopaths on the top than in the general population].

• Very rarely governments come up with legislation easing up the rules or making parts of them unenforceable. (In California, apartment owners, but not renters, may keep cats regardless of what the building rules say).

• If one owns a land, which was once a burial ground, tough luck: the descendants of the buried have an unlimited right of access to the land.

Blocking the Sun and the Wind

• When buildings stand too far apart, blocking the sun by a neighbour is never an issue. However, when plots of land become smaller and smaller, one’s tree may block another’s solar panels. What’s funny is that both neighbours may be green to the bone.

• The peaceful solution is talking things over. Doesn’t always work, though.

• Legally there’s a concept of trespass to keep people away from others’ properties, and a concept of nuisance for non-physical intrusion. Nuisance laws, unfortunately, are a mess and don’t reliably tell what’s acceptable / reasonable and what’s not.

• An alternative is the Law and Economics approach stating that in cases where the conflict is between the ordinary use of items, it’s no possible to award ownership to one side without harming the other. It would make sense to put the resources to their maximum economic use and possibly split the net benefit, but people are not rational and have emotional attachments to their possessions and past actions.

• So, logically it makes sense to reach the highest benefit to the society: prioritise solar and compensate for the chopping off the trees or keeping the trees and compensating the neighbour for the loss of solar. It’s all about what’s more valuable. When it’s not possible for neighbours to agree, the judge may have to assign values to both items and have one neighbour buy off the ownership rights from another one.

• With wind power the issue looks quite similar: the first turbine to capture the wind gives less wind to the downstream turbine; should the owner of the first turbine compensate the owners of the second one? It’s not clear at the moment.

• What about drone airways? Can commercial drones fly over people’s land and properties to deliver goods? If not, how would the gridlock be resolved? Would drone operators pay landowners for the overflight rights or would the landowners pay the drone operators not to fly over their parcels of land?

Part 5.