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Economic analysis of property rights
Review of Radical Political Economics 1 9 8 2 . T h e L a w of M a r k e t - v a l u e . Science and Society Vol. xlvi, no. 2: p p . 4 2 0 - 4 4 4 . U n o K. 1980. Principles o f Political Economy. H a r v e s t e r . Stavros Mavroudeas Dept. of E c o n o m i c s U n i v e r s i t y of M a c e d o n i a 156 E g n a t i a P.O. B o x 1561 54006 Thesaloniki GREECE [email protected]
Ted S c h r e c k e r (ed.)
Surviving Capitalism: The Social and Environmental Challenges N e w York, N.Y.: St. Martin's Press, 1 9 9 7 2 5 7 pp. Hbk., $ 7 9 . 9 5 Itai S e n e d
The Political Institution o f Private Property Cambridge, Mass.: Cambridge University Press, 1997 2 0 4 pp. Hbk., $ 5 4 . 9 5 Yoram Barzel
Economic Analysis o f Property Rights Cambridge, Mass.: Cambridge University Press, 1997 161 pp. Hbk., $ 5 4 . 9 5 ; Pbk., $ 1 7 . 9 5 T h e c o m b i n a t i o n of c r i s i s - s t r i c k e n c a p i t a l s e x t e r n a l i z i n g m o r e c o s t s , t h e r e c k l e s s u s e of t e c h n o l o g y a n d n a t u r e for v a l u e r e a l i z a t i o n . . . m u s t s o o n e r o r l a t e r l e a d to a " r e b e l l i o n of n a t u r e , " i.e., p o w e r f u l s o c i a l m o v e m e n t s d e m a n d i n g a n e n d to e c o l o g i c a l e x p l o i t a t i o n ( O ' C o n n o r 1988). I n 1 9 9 7 f o r e s t fires a n d d r o u g h t r a v a g e d s u b s t a n t i a l p a r t s of s o u t h e a s t Asia. In 1 9 9 8 p y r a m i d i c a l i n v e s t m e n t s c h e m e s a n d t h e i n t e r v e n t i o n of t h e I M F h a v e t h r e a t e n e d to t o p p l e governments throughout t h e r e g i o n . S o w e r e t h e e f f e c t s of
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combined.
As T e d
Schrecker
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G l o b a l i z a t i o n t e n d s to f a c i l i t a t e ( i n d e e d it c o u l d b e argued that contemporary international financial m a r k e t s r e q u i r e ) t h e m a x i m i z a t i o n of s h o r t - t e r m r e t u r n s w i t h o u t c o n s i d e r a t i o n of l o n g e r - t e r m c o n s e q u e n c e s , w h e t h e r t h o s e c o n s e q u e n c e s i n v o l v e t h e s t a t e of t h e e n v i r o n m e n t , t h e f u t u r e of t h e p e o p l e left o u t a n d left b e h i n d , or b o t h ( S c h r e c k e r : 7). O n e w a y to l o o k a t g l o b a l i z a t i o n is to s e e it a s a p r o c e s s of b r o a d e r s p a t i a l i n t e g r a t i o n a n d c o m m o d i f i c a t i o n of t h e b a s i c m e a n s of p r o d u c t i o n , i n c l u d i n g n a t u r e a n d h u m a n i t y . It r e p r e s e n t s a d r a m a t i c e x t e n s i o n of c a p i t a l ' s r e a c h , a n d a s s u c h a n e x t e n s i o n of p r o p e r t y r i g h t s r e g i m e s . Yet it d o e s so t o d a y w i t h o u t t h e k i n d of s t a t e a p p a r a t u s w h i c h h i s t o r i c a l l y h a s b e e n e s s e n t i a l for t h e p r e s e r v a t i o n of c a p i t a l i s m , f r o m t h e p r o t e c t i o n of p r o p e r t y to m e d i a t i o n of c l a s s conflict to macroeconomic a d j u s t m e n t . The three books of this review provide interesting perspectives on this process even while being neither quite mains t r e a m n o r q u i t e r a d i c a l . T e d S c h r e c k e r ' s Surviving Capitalism (1997) addresses the subject straight-up from a progressive p e r s p e c t i v e w h i l e Y o r a m B a r z e l ' s Economic Analysis of Property Rights (1997) a n d Itai S e n e d ' s T h e Political Institution of Private Property (1997) a n a l y z e p r o p e r t y r e l a t i o n s in a m o r e m a i n s t r e a m manner, i T e d S c h r e c k e r , a p o l i t i c a l t h e o r i s t a n d l e c t u r e r in e n v i r o n m e n t a l s t u d i e s a t t h e U n i v e r s i t y of W a t e r l o o , e d i t s a v o l u m e of essays from fourteen social scientists on topics ranging from e c o n o m i c j u s t i c e , e c o - f e m i n i s m , s o c i a l r e s t r u c t u r i n g d u e to t h e i m p l e m e n t a t i o n of NAFTA, a n d t h e v a l u e s y s t e m of t h e g l o b a l m a r k e t i d e o l o g y . Surviving Capitalism r e p r e s e n t s a C a n a d i a n d i s c u s s i o n o n t h e r e l a t i o n s h i p b e t w e e n g l o b a l i z a t i o n a n d socioe n v i r o n m e n t a l i m p a c t s , a n d its c o n t r i b u t o r s c h a l l e n g e m a n y v a l u e s t r u c t u r e s of c o n t e m p o r a r y c a p i t a l i s t p u b l i c policy, i n c l u d i n g t h e m o n e t i z a t i o n of all s o c i a l v a l u e s . O n e of t h e p r o b l e m s w i t h g l o b a l i z a t i o n is t h a t its p r o c e s s e s i n c l u d e so m u c h of n a t u r a l life t h a t e n c o m p a s s i n g t h e m in a n analytical and political framework becomes daunting. Schrecker's v o l u m e is b r o a d e n o u g h to c o v e r t h i s t e r r i t o r y , b u t like a n y c o l l e c t i o n it is u n e v e n . Its c o n t r i b u t o r s r a n g e f r o m n e o - M a r x i s t to n e o - i d e a l i s t . S o m e c o n t r i b u t i o n s a r e i n t e r e s t i n g p r i m a r i l y for i l l u s t r a t i n g c u r r e n t l i b e r a l p o i n t s of view. S o m e i l l u s t r a t e t h e l i m i t a t i o n s of o t h e r s o c i a l s c i e n c e s in i n t e r p r e t i n g w h a t is a r g u a b l y 1 These three books were combined for this review because of the increasing centrality of property rights arguments in global and environmental economics. S e p t e m b e r 1999
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t h e m o s t s i g n i f i c a n t c h a n g e in t h e p a s t 200 y e a r s . B u t s o m e c o n t r i b u t i o n s a r e j u s t p l a i n good, a n d provide tools for s e e i n g globalization. T h e f i r s t p a r t on e c o n o m i c a n d social d i m e n s i o n s of globalization i n c l u d e s two of the s t r o n g e s t c o n t r i b u t i o n s . 2 Gary Teeple's "Globalization as t he T r i u m p h of Capitalism" provides a s t r o n g n e o - s t r u c t u r a l i s t a n a l y s i s of th e m o v e m e n t of c o r p o r a t i o n s from "their n a t i o n a l political a n d social shells" to a world in w h i c h p r o p e r t y r i g h t s a r e less well d efin ed a n d w h e r e t h e b o u r g e o i s r e g i m e is i n c o m p l e t e . IMF s t r u c t u r a l a d j u s t m e n t p r o g r a m s , i n t e r n a t i o n a l f i n a n c e a n d debt, a n d foreign t r a d e zones a t t a c k n o n - c a p i t a l i s t forms of p r o p e r t y in b o t h the developing world a n d in E a s t e r n E u r o p e a n a n d fo~mer Soviet c o u n t r i e s . Teeple arg u es , '~I'here is no political s y s t e m to t a k e u s into the a l r e a d y existing global r e g i m e of a c c u m u l a t i o n " (33). He calls for developing a global o p p o s i t i o n a l s t r a t e g y in th e c o n t e s t b e t w e e n inclusive a n d exclusive property rights regimes. Melody H e s s i n g ' s "Beyond Iceberg Economics: F e m i n i s t a n d Ecological A p p r o a c h e s to R e s t r u c t u r i n g " e m p h a s i z e s the g e n d e r e d i m p a c t s of r e s t r u c t u r i n g (e.g., e m p l o y m e n t a n d unemployment): Social value terms, while dependency i n s e c u r e labor
is i n c r e a s i n g l y c o n s t r u c t e d in m a r k e t m a r k e t s t h e m s e l v e s c a p i t a l i z e on t h e a n d v u l n e r a b i l i t y of a n i n c r e a s i n g l y force (57).
The n a t u r a l world is u n d e r v a l u e d by the " e x t r a - m a r k e t s t a t u s of its c o m p o n e n t s a n d the externalization of e n v i r o n m e n t a l costs." The p r o p o n e n t s of globalization s e e k radically to s h r i n k t h e p u b l i c - - t h e r e a l of p o litical n e g o t i a t i o n - - a n d . . . e x p a n d a n d r e a s s e r t t he a u t o n o m y of the private sector a n d t he private s p h e r e (62). This is a de facto privatization of the c o m m o n s with all th e social losses t h a t implies. H e s s i n g s u g g e s t s two strategies to overcome t he limitations of iceberg e c o n o m i c s (with the private sector at the top whi le n a t u r e a n d family lie below th e surface): i n c l u s i o n of f e m i n i s t a n d e c o l o g i c a l a p p r o a c h e s into s t a n d a r d e c o n o m i c models, a n d r e t h i n k i n g m a r k e t - b a s e d a p p r o a c h e s to o u r place in the physical universe. The s e c o n d pa r t , on policy i m p l i c a t i o n s , i n c l u d e s a nice c o n t r i b u t i o n b y J e n n i f e r C l a p p , w h o s e " T h r e a t s to t h e E n v i r o n m e n t in a n E r a of G l o b a l i z a t i o n : An E n d to S t a t e 2 The other contribution in this section reviews alienation and globallzatlon from the perspectiv~ of information and spatial structures with a bow to the futurists. 140
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Sovereignty," e m p h a s i z e s a r e c o n c e p t u a l i z a t i o n of th e post-Cold W a r era. Clapp, a n e c o n o m i s t specializing in d e v e l o p m e n t , also s t r e s s e s t he erosion of t he n a t i o n state. Today, b o t h t h e t h r e a t of lost livelihoods s t e m m i n g from e n v i r o n m e n t a l p r o b l e m s , a n d t h e r e s p o n s e s to t h o s e p r o b l e m s p o s e s e r i o u s q u e s t i o n s for t h i s t r a d i t i o n a l n o t i o n of s t a t e s o v e r e i g n t y . B e c a u s e e n v i r o n m e n t a l t h r e a t s e m a n a t e , by a n d large, from o u t s i d e th e s tate r e a l m a n d are largely out s id e states' control b o t h before a n d a f t e r t h e y o c c u r , t r a d i t i o n a l n o t i o n s of s t a t e sovereignty h a v e not always b e e n helpful in a d d r e s s i n g t hos e p r o b l e m s (123). Clapp a r g u e s for t h e i n c l u s i o n of e n v i r o n m e n t a l provisions into i n t e r n a t i o n a l e c o n o m i c t r e a t i e s a n d for e n h a n c i n g t h e role of NGOs in s u c h n e g o t i a t i o n s . T h e i n c r e a s e d " t r a n s p a r e n c y " of i n t e r n a t i o n a l n e g o t i a t i o n s a n d t h e i n c l u s i o n of NGOs in U.S. n e g o t i a t i o n s h a v e a p p a r e n t l y d o n e little to c h a n g e the p r a g m a t i c i m p l i c a t i o n s of i n t e r n a t i o n a l c o n v e n t i o n s , given t h e global f r e e d o m s e n j o y e d by m o s t m u l t i n a t i o n a l c o r p o r a t i o n s . W h e t h e r c o n c e n t r a t i n g p o p u l a r a t t e n t i o n on the United Nations a n d similar i n t e r n a t i o n a l m e c h a n i s m s is likely to b e a r fruit r e m a i n s to be seen. The o t h e r five c o n t r i b u t i o n s in this section cover a r a n g e of topics: a n e w c o n c e p t u a l f r a m e w o r k utilizing t h e i d e a of t h r e e pri me s y s t e m s : biosphere, economy, a n d h u m a n society (I always w o r r y w h e n h u m a n b e i n g s are divorced, even if j u s t for titling p u r p o s e s , from ecological or e c o n o m i s t systems); global civil s o c i e t y w i t h b o w s to P o e l a n y i a n d C.S. Lewis; e n v i r o n m e n t a l j u s t i c e in t he c ont e xt of counter-veiling power; a g e n d e r analogy to the e n v i r o n m e n t in reference to the Montreal protocol on the ozone layer; a n d t h e d e b a t e s on NAFTA as viewed by l i b e r a l s a n d e n v i r o n m e n t a l i s t s . T h e s e are i n t e r e s t i n g c o n t r i b u t i o n s , if n o t as compelling as Clapp's. The t h i r d p a r t on t h e o r e t i c a l perspectives i n c l u d e s the very good c o n t r i b u t i o n "The Global M a r k e t Ideology: A n a t o m y of a V a l u e S y s t e m " by J o h n McMurtry, a p r o f e s s o r of p h i l o s o p h y . M c M u r t r y b e g i n s w i t h a c r i t i q u e of H a y e k ' s a s s u m p t i o n t h a t e c o n o m i c f r e e d o m s a r e e q u i v a l e n t to h u m a n f r e e d o m s . He p r o c e e d s to t h e i d e a of i n t e m a l i z i n g social a n d e n v i r o n m e n t a l e x t e m a l i t i e s t h r o u g h r u l e - b a s e d i n t e r n a t i o n a l e c o n o m y (parallel to the c o n t r i b u t i o n by Hessing), a n d he c o m m e n t s : C o r p o r a t i o n s are tied to no c o m m u n i t y of people, a n d c a n leave a n y society in w h i c h effective laws to protect h u m a n r i g h t s or t h e e n v i r o n m e n t i n c r e a s e b u s i n e s s
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c o s t s .... U n d e r c u r r e n t free trade regimes, rules p r o t e c t i n g h u m a n a n d e n v i r o n m e n t a l life h a v e to b e i n t e r n a t i o n a l to be o b e y e d (187). T h e o t h e r c o n t r i b u t i o n s in t h i s s e c t i o n i n c l u d e a critical e x a m i n a t i o n of e c o - f e m i n i s m f r o m t h e p e r s p e c t i v e of L a c l a u a n d Moufee; t h e c o m m o n s effect of p a t e n t r i g h t s for b i o t e c h n o l o g y ; a n d a call for different d i s c o u r s e s on t h e "realism" of globalization. As is f r e q u e n t l y a n d u n d e r s t a n d a b l y t h e case, t h e c r i t i q u e s of i n t e r n a t i o n a l c a p i t a l i s m in S c h r e c k e r ' s q u i t e u s e f u l collection a r e s t r o n g e r t h a n t h e r e a l i s m of t h e i r a l t e r n a t i v e s . S o m e a l t e r n a t i v e s a r e s i m p l y idealist. Most fail to d e a l w i t h t h e political p o w e r of t h e c a p i t a l i s t n a t i o n - s t a t e a s it e x e r c i s e s its p o w e r s t r a n s n a t i o n a l l y in collaboration (and competition) with other nation-states and international bodies such as the International Monetary Fund. None deals adequately with the microeconomic and macroe c o n o m i c p r e s s u r e s f a c e d b y w o r k e r s in i n d i v i d u a l f a c t o r i e s , r e s i d e n t s i n p a r t i c u l a r c o m m u n i t i e s , n o r c i t i z e n s of s p e c i f i c c o u n t r i e s a s " t h e i r " or " o u r " c a p i t a l i s t s g l o b a l i z e o p e r a t i o n s . C o n f r o n t i n g t r a d e a n d i n v e s t m e n t w i t h i n t e r n a t i o n a l r u l e s is u n d o u b t e d l y a first step. B u t as w i t h t h e e a r l y social m o v e m e n t s for w o r k e r s a n d e n v i r o n m e n t a l p r o t e c t i o n s , t h e s e will be difficult s t e p s . I n c r e a s e d a t t e n t i o n to t h e i n t e r n a t i o n a l policy m a k i n g m e c h a n i s m s of p a r t i c u l a r n a t i o n - s t a t e s w o u l d be a good n e x t s t e p in r a d i c a l political e c o n o m y . P e r h a p s b e c a u s e S c h r e c k e r ' s is a C a n a d i a n v o l u m e , it fails to d e a l fully w i t h t h e p r o p e r t y r i g h t s - b a s e d a p p r o a c h to p u b l i c policy a n d t h e w i s e u s e m o v e m e n t s w h i c h a r e so c e n t r a l to environm e n t a l s t r u g g l e s i n t h e U n i t e d S t a t e s . B u t b e c a u s e of t h e i d e o l o g i c a l s t r e n g t h a n d s i g n i f i c a n c e of t h e p r o p e r t y - r i g h t s a p p r o a c h a t t h e W o r l d B a n k , t h e IMF, a n d i n t e r n a t i o n a l c o n s u l t a n c i e s , t h i s is a s i g n i f i c a n t s h o r t c o m i n g . P r o p e r t y - r i g h t s a p p r o a c h e s a r e c e n t r a l to c o n t e m p o r a r y a p p l i e d n a t u r a l r e s o u r c e m a n a g e m e n t a n d e n v i r o n m e n t a l policy. T h e s e i n c l u d e i n n o v a t i o n s s u c h a s t r a d e a b l e p o l l u t i o n p e r m i t s a n d t h e p r i v a t i z a t i o n of f i s h e r i e s t h r o u g h i n d i v i d u a l q u o t a s . A s i m i l a r p r o c e s s is o c c u r r i n g i n t h e p r i v a t i z a t i o n a n d c o n s o l i d a t i o n of c o m m o n l a n d in d e v e l o p i n g e c o n o m i e s , a n d t h e p r i v a t i z a t i o n of f o r m e r s t a t e e n t e r p r i s e s in t h e f o r m e r Soviet a n d E a s t e r n E u r o p e a n e c o n o m i e s . I n b o t h c a s e s , d e a l i n g w i t h t h e e x t e r n a l i t i e s of c a p i t a l ' s r e l a t i o n s h i p w i t h n a t u r e a n d society is critical to political practice. T h e two b o o k s r e v i e w e d h e r e on p r o p e r t y rights, a l t h o u g h n e i t h e r addresses economic globalization and the environment, illustrate b o t h t h e p o w e r a n d w e a k n e s s of this a p p r o a c h , a n d provide c l u e s i n t o t h e s i g n i f i c a n c e of t h e p r o p e r t y - r i g h t s a p p r o a c h to p u b l i c policy.
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Book Reviews Itai S e n e d , a p r o f e s s o r of political s c i e n c e f r o m t h e U n i v e r s i t y of T e l Aviv a n d St. L o u i s U n i v e r s i t y , e x a m i n e s t h e o r i g i n of p r o p e r t y a n d o t h e r r i g h t s f r o m t h e p e r s p e c t i v e of a s o c i a l c o n t r a c t i n s t i t u t e d t h r o u g h t h e political p r o c e s s . T h e e s s e n c e of s o c i a l life a n d , t h e r e f o r e , t h e p r i n c i p a l s u b j e c t m a t t e r of t h e s o c i a l s c i e n c e s , is t h e c o n t e n t a n d f o r m of h u m a n i n t e r a c t i o n s . . . c i v i l s o c i e t y e m e r g e s a n d evolves o u t of p e r s o n a l d e c i s i o n s a n d a c t i o n s of r a t i o n a l i n d i v i d u a l s (Sened: xii). B u t a s o p p o s e d to t h e n e o - i n s t i t u t i o n a l e c o n o m i s t s (e.g., W i l l i a m s o n 1 9 8 7 ) , S e n e d ' s T h e Political I n s t i t u t i o n o f Private Property s t r e s s e s t h e r o l e of p o l i t i c a l e n t r e p r e n e u r s in the e v o l u t i o n of p r o p e r t y r i g h t s . T h e b a s i c f r a m e w o r k is a n i n d i v i d u a l istic r a t i o n a l c h o i c e , g a m e t h e o r e t i c a p p r o a c h . S e n e d c o n t r a s t s h i s perspective with classical liberalism and neoclassical theories w h i c h a r e a b s e n t of p u r p o s i v e i n d i v i d u a l s e n g a g i n g in s t r a t e g i c p o l i t i c a l activity. T h e s e a r g u m e n t s a r e laid o u t in t h e first t h r e e c h a p t e r s , a n d t h e n t h e n e o l i b e r a l m o d e l is e l a b o r a t e d in t h e c o n c l u d i n g f o u r c h a p t e r s . T h e c e n t r a l p o i n t is t h a t '~rhis m o d e l rests on the premise that property rights are designed, granted, a n d p r o t e c t e d b y l a w - e n f o r c i n g g o v e r n m e n t s " (76). A l t h o u g h t h e p u b l i c - c h o i c e s c h o o l of m a i n s t r e a m e c o n o m i c s m i g h t f i n d t h i s f r a m e w o r k f a m i l i a r , S e n e d d o e s n o t fall for t h e i d e a l i s m of t h e u n f e t t e r e d m a r k e t . He s e e s g o v e r n m e n t e x t e n d i n g p r o p e r t y r i g h t s to i n c r e a s e b e n e f i t s to g o v e r n m e n t , l a r g e l y t a x r e v e n u e s , s u b j e c t to t h e c o s t s of e n f o r c i n g t h e s e r i g h t s . P r i v a t e r i g h t s c o m e i n t o b e i n g t h r o u g h t h e a c t i o n of p o l i t i c a l e n t r e p r e n e u r s w h e n t h e r e a r e n e t a d v a n t a g e s to d o i n g so. P o l i t i c a l entrepreneurs--party activists, lobbyists, etc.--serve as the nexus of i n f o r m a t i o n a n d c o o r d i n a t i o n in t h i s p r o c e s s . As s u c h t h e y i n t e r a c t w i t h i n t e r e s t g r o u p s a n d g o v e r n m e n t officials ( i n c l u d i n g legislators), a n d a l l e v i a t e t h e collective a c t i o n p r o b l e m of g r o u p s of individuals. T h i s is a c l e a r t e x t w h o s e g a m e t h e o r e t i c a x i o m s a r e well p r e s e n t e d . O n l y o n e c h a p t e r really relies o n m a t h e m a t i c s to m a k e its a r g u m e n t - - a n e o l i b e r a l t h e o r y of t h e social c o n t r a c t : t h e role of a u t o n o m o u s i n d i v i d u a l s in t h e e v o l u t i o n of p r o p e r t y r i g h t s . It is i n t e r e s t i n g to s e e t h e m o v e m e n t of e c o n o m i c s i n t o p o l i t i c a l s c i e n c e , a n d q u i t e p o s s i b l y i n t o a n a r e n a w h e r e it is well s u i t e d . It is a l s o i n t e r e s t i n g to s e e t h e a x i o m a t i c b i a s e s of n e o c l a s s i c a l w e l f a r e e c o n o m i c s t r a n s p o r t e d i n t o a n o t h e r a r e n a . F e w r e a d e r s of t h i s j o u r n a l will "buy" S e n e d ' s a n a l y t i c a l a r g u m e n t s a b o u t t h e c o n s t r u c t i o n of p r o p e r t y r i g h t s , b u t h i s a r g u m e n t t h a t g o v e r n m e n t ' s m o n o p o l y of f o r c e is c e n t r a l to t h e d e v e l o p m e n t a n d m a i n t e n a n c e of p r o p e r t y r i g h t s is a u s e f u l palliative to t h e p u b l i c -
S e p t e m b e r 1999
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Review of Radical Political Economics choice school of e c o n o m i c s . And it also points o u t the i m p o r t a n c e of s t a t e - b u i l d i n g in t h e g l o b a l i z a t i o n of c a p i t a l . I r o n i c a l l y dictatorial s t a t e s a r e f r e q u e n t l y n o t strong s t a t e s in th e s e n s e of being able to pr ot e c t t he b r o a d i n t e r e s t s of capital as a whole a n d so capital relies on a b s o l u t e r a t h e r t h a n relative s u r p l u s value in its d e v e l o p m e n t . One n o t i c e s t h a t this is m u c h m o r e erosive of h u m a n rights a n d e n v i r o n m e n t s , a n d it a r g u e s for the i m p o r t a n c e of i n t e r n a t i o n a l l y c o o r d i n a t i n g social m o v e m e n t s in r e s p o n s e to t h e specific i n t r u s i o n s of globalization. In this, t h e "utopian" c o n c l u s i o n s of m a n y of t h e c o n t r i b u t o r s to S c h r e c k e r ' s v o l u m e m a y be m o r e realistic t h a n t ho se w h o have a r g u e d p r o t e c t i o n i s m as a u n i l a t e r a l r e s p o n s e to globalization. Finally, Y o r a m Barzel, a p r o f e s s o r of e c o n o m i c s at t h e University of W a s h i n g t o n , provides a c o m p r e h e n s i v e critique of the n e o c l a s s i c a l W a l r a s i a n m o d e l of p r o p e r t y rights from w i t h i n its own logical f r a m e w o r k , individual maximization. In this his w o r k is similar to t h a t of Gary Libecap (1989) in c o n c e n t r a t i n g on w h a t is viewed as t h e c o n t r a c t u a l n a t u r e of i n s t i t u t i o n a l development. While this f r a m e w o r k a n d s o m e a s p e c t s of its application will irk m o s t radical economists, it r e m a i n s a useful text. E c o n o m i c A n a l y s i s o f Property Rights i n c l u d e s e l e v e n chapters, introducing the property-rights model and then analyzing several problems. These range from c o n t r a c t choice, the n a t u r e of t he firm a n d ownership, the formation of rights, slavery, a n d c o m m o n p r o p e r t y a p p l i c a t i o n s . The e x p o s i t i o n is clear, b e g i n n i n g with basic propositions, u s in g the s t a n d a r d comparative statics microeconomic graphics and household situations, and e x t e n d i n g t he a r g u m e n t t o public policy is s u es. B u t u n l i k e th e neoclassical school, Barzel does not adopt the frictionless model. The literature t h a t a s s u m e s t h a t the costs of t r a n s a c t i n g a re zero a n d t h a t all p r o p e r t y rights are perfectly well d e l i n e a t e d is i n c a p a b l e of dealing with a vast a r r a y of a c t u a l observed practices (Barzel: 151). A critical c o m p o n e n t of Barzel's a n a l y s i s is his e m p h a s i s on th e m u l t i p l e a t t r i b u t e n a t u r e of m o s t "commodities," w h i c h m a k e s c o m p l e t e o w n e r s h i p of t he entire c o m m o d i t y frequently problematic. Barzel m a k e s c l e a r t h a t th e p r o p e r t y - r i g h t s a p p r o a c h h a s t a k e n s u b s t a n t i a l liberties with reality in p ro mo tin g the u n i v e r s a l a d v a n t a g e s of p r i v a t e o w n e r s h i p . T h i s is i m p o r t a n t in e n v i r o n m e n t a l a n d social cost in w h i c h he is m u c h m o r e careful a b o u t t h e t e r m " c o m m o n property" t h a n m a n y p r o p e r t y - r i g h t s p r o p o n e n t s w h o followed Garrett Hardin's (1968) ill-posed "tragedy of t he c o m m o n s " a p p r o a c h . The putative i n c r e a s e in v alu e of the transfer of public property into the private d o m a i n is one example:
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Book Reviews A priori r e a s o n i n g , however, is i n c a p a b l e of d e m o n s t r a t ing t h a t private o w n e r s h i p is n e c e s s a r i l y m o r e efficient t h a n g o v e r n m e n t o w n e r s h i p or t h a t d e s i g n a t i n g p r o p e r t i e s s u c h as t h o s e in m i d - o c e a n as private will yield n e t benefits (100). C o m p a r e d to S e n e d , Barzel o p e r a t e s m o r e within the m a i n s t r e a m e c o n o m i c s f r a m e w o r k , a n d as s u c h he v ests m o r e d i s c r e t i o n to i n d i v i d u a l s t h a n to g o v e r n m e n t s . N o n e t h e l e s s Barzel p r o v i d e s s o m e u s e f u l a r g u m e n t s in t h e i d e o l o g i c a l c o n t e s t b e t w e e n p r o p e r t y - r i g h t s d r i v e n p u b l i c policy a n d w i d e r social i n t e r e s t s . S o m e m a y a r g u e t h a t "giving in" to t h e s e essentially m a i n s t r e a m e c o n o m i c s p e r s p e c t i v e s gives a w a y th e n o n m a r k e t a b l e n a t u r e of public v a l u e s a n d t he class ba sis of capitalist d y n a m i c s . Bu t one c a n also a r g u e t h a t t h e r e is a b r o a d a r r a y of ways to critique the effects of e x t e n d i n g private (corporate) p r o p e r t y rights implied by globalization. S e n e d a n d Barzel s h o w a n o t h e r way in w h i c h the s t a n d a r d property-rights a r g u m e n t s are impoverished. While globalization m e a n s m a n y t h i n g s to m a n y people, it clearly involves a t t e m p t s to c o m m o d i f y i n c r e a s i n g a s p e c t s of the n a t u r a l world w hi l e at t he s a m e time m a r g i n a l i z i n g s u b s t a n t i a l p a r t s of t h e w o r l d ' s h u m a n p o p u l a t i o n . Private p r o p e r t y social re gi me s are expert at socializing costs a n d privatizing benefits. As s u g g e s t e d by S c h r e c k e r , c o n f r o n t i n g e n v i r o n m e n t a l externalities c a n be i m p o r t a n t c h a l l e n g e s to t h e p r e r o g a t i v e s of global capitalism. REFERENCES
Hardin, G a r r e t t . 1968. The T r a g e d y of t h e C o m m o n s . S c i e n c e (162): 1243-48. Libecap, Gary D. 1989. Contracting for Property Rights. Cambridge: C a m b r i d g e University Press. O ' C o n n o r , J a m e s . 1988. C a p i t a l i s m , N a t u r e , S o c i a l i s m : A Theoretical Introduction. Capitalism, Nature, Socialism (1): 32. W i l l i a m s o n , R o b e r t E. 1987. The Economic Institutions of Capitalism. The Free Press. S a m Pooley P.O. Box 22716 Honolulu, HI 96823
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Surviving Capitalism: The Social and Environmental Challenges N e w York, N.Y.: St. Martin's Press, 1 9 9 7 2 5 7 pp. Hbk., $ 7 9 . 9 5 Itai S e n e d
The Political Institution o f Private Property Cambridge, Mass.: Cambridge University Press, 1997 2 0 4 pp. Hbk., $ 5 4 . 9 5 Yoram Barzel
Economic Analysis o f Property Rights Cambridge, Mass.: Cambridge University Press, 1997 161 pp. Hbk., $ 5 4 . 9 5 ; Pbk., $ 1 7 . 9 5 T h e c o m b i n a t i o n of c r i s i s - s t r i c k e n c a p i t a l s e x t e r n a l i z i n g m o r e c o s t s , t h e r e c k l e s s u s e of t e c h n o l o g y a n d n a t u r e for v a l u e r e a l i z a t i o n . . . m u s t s o o n e r o r l a t e r l e a d to a " r e b e l l i o n of n a t u r e , " i.e., p o w e r f u l s o c i a l m o v e m e n t s d e m a n d i n g a n e n d to e c o l o g i c a l e x p l o i t a t i o n ( O ' C o n n o r 1988). I n 1 9 9 7 f o r e s t fires a n d d r o u g h t r a v a g e d s u b s t a n t i a l p a r t s of s o u t h e a s t Asia. In 1 9 9 8 p y r a m i d i c a l i n v e s t m e n t s c h e m e s a n d t h e i n t e r v e n t i o n of t h e I M F h a v e t h r e a t e n e d to t o p p l e governments throughout t h e r e g i o n . S o w e r e t h e e f f e c t s of
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combined.
As T e d
Schrecker
comments
in h i s
G l o b a l i z a t i o n t e n d s to f a c i l i t a t e ( i n d e e d it c o u l d b e argued that contemporary international financial m a r k e t s r e q u i r e ) t h e m a x i m i z a t i o n of s h o r t - t e r m r e t u r n s w i t h o u t c o n s i d e r a t i o n of l o n g e r - t e r m c o n s e q u e n c e s , w h e t h e r t h o s e c o n s e q u e n c e s i n v o l v e t h e s t a t e of t h e e n v i r o n m e n t , t h e f u t u r e of t h e p e o p l e left o u t a n d left b e h i n d , or b o t h ( S c h r e c k e r : 7). O n e w a y to l o o k a t g l o b a l i z a t i o n is to s e e it a s a p r o c e s s of b r o a d e r s p a t i a l i n t e g r a t i o n a n d c o m m o d i f i c a t i o n of t h e b a s i c m e a n s of p r o d u c t i o n , i n c l u d i n g n a t u r e a n d h u m a n i t y . It r e p r e s e n t s a d r a m a t i c e x t e n s i o n of c a p i t a l ' s r e a c h , a n d a s s u c h a n e x t e n s i o n of p r o p e r t y r i g h t s r e g i m e s . Yet it d o e s so t o d a y w i t h o u t t h e k i n d of s t a t e a p p a r a t u s w h i c h h i s t o r i c a l l y h a s b e e n e s s e n t i a l for t h e p r e s e r v a t i o n of c a p i t a l i s m , f r o m t h e p r o t e c t i o n of p r o p e r t y to m e d i a t i o n of c l a s s conflict to macroeconomic a d j u s t m e n t . The three books of this review provide interesting perspectives on this process even while being neither quite mains t r e a m n o r q u i t e r a d i c a l . T e d S c h r e c k e r ' s Surviving Capitalism (1997) addresses the subject straight-up from a progressive p e r s p e c t i v e w h i l e Y o r a m B a r z e l ' s Economic Analysis of Property Rights (1997) a n d Itai S e n e d ' s T h e Political Institution of Private Property (1997) a n a l y z e p r o p e r t y r e l a t i o n s in a m o r e m a i n s t r e a m manner, i T e d S c h r e c k e r , a p o l i t i c a l t h e o r i s t a n d l e c t u r e r in e n v i r o n m e n t a l s t u d i e s a t t h e U n i v e r s i t y of W a t e r l o o , e d i t s a v o l u m e of essays from fourteen social scientists on topics ranging from e c o n o m i c j u s t i c e , e c o - f e m i n i s m , s o c i a l r e s t r u c t u r i n g d u e to t h e i m p l e m e n t a t i o n of NAFTA, a n d t h e v a l u e s y s t e m of t h e g l o b a l m a r k e t i d e o l o g y . Surviving Capitalism r e p r e s e n t s a C a n a d i a n d i s c u s s i o n o n t h e r e l a t i o n s h i p b e t w e e n g l o b a l i z a t i o n a n d socioe n v i r o n m e n t a l i m p a c t s , a n d its c o n t r i b u t o r s c h a l l e n g e m a n y v a l u e s t r u c t u r e s of c o n t e m p o r a r y c a p i t a l i s t p u b l i c policy, i n c l u d i n g t h e m o n e t i z a t i o n of all s o c i a l v a l u e s . O n e of t h e p r o b l e m s w i t h g l o b a l i z a t i o n is t h a t its p r o c e s s e s i n c l u d e so m u c h of n a t u r a l life t h a t e n c o m p a s s i n g t h e m in a n analytical and political framework becomes daunting. Schrecker's v o l u m e is b r o a d e n o u g h to c o v e r t h i s t e r r i t o r y , b u t like a n y c o l l e c t i o n it is u n e v e n . Its c o n t r i b u t o r s r a n g e f r o m n e o - M a r x i s t to n e o - i d e a l i s t . S o m e c o n t r i b u t i o n s a r e i n t e r e s t i n g p r i m a r i l y for i l l u s t r a t i n g c u r r e n t l i b e r a l p o i n t s of view. S o m e i l l u s t r a t e t h e l i m i t a t i o n s of o t h e r s o c i a l s c i e n c e s in i n t e r p r e t i n g w h a t is a r g u a b l y 1 These three books were combined for this review because of the increasing centrality of property rights arguments in global and environmental economics. S e p t e m b e r 1999
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t h e m o s t s i g n i f i c a n t c h a n g e in t h e p a s t 200 y e a r s . B u t s o m e c o n t r i b u t i o n s a r e j u s t p l a i n good, a n d provide tools for s e e i n g globalization. T h e f i r s t p a r t on e c o n o m i c a n d social d i m e n s i o n s of globalization i n c l u d e s two of the s t r o n g e s t c o n t r i b u t i o n s . 2 Gary Teeple's "Globalization as t he T r i u m p h of Capitalism" provides a s t r o n g n e o - s t r u c t u r a l i s t a n a l y s i s of th e m o v e m e n t of c o r p o r a t i o n s from "their n a t i o n a l political a n d social shells" to a world in w h i c h p r o p e r t y r i g h t s a r e less well d efin ed a n d w h e r e t h e b o u r g e o i s r e g i m e is i n c o m p l e t e . IMF s t r u c t u r a l a d j u s t m e n t p r o g r a m s , i n t e r n a t i o n a l f i n a n c e a n d debt, a n d foreign t r a d e zones a t t a c k n o n - c a p i t a l i s t forms of p r o p e r t y in b o t h the developing world a n d in E a s t e r n E u r o p e a n a n d fo~mer Soviet c o u n t r i e s . Teeple arg u es , '~I'here is no political s y s t e m to t a k e u s into the a l r e a d y existing global r e g i m e of a c c u m u l a t i o n " (33). He calls for developing a global o p p o s i t i o n a l s t r a t e g y in th e c o n t e s t b e t w e e n inclusive a n d exclusive property rights regimes. Melody H e s s i n g ' s "Beyond Iceberg Economics: F e m i n i s t a n d Ecological A p p r o a c h e s to R e s t r u c t u r i n g " e m p h a s i z e s the g e n d e r e d i m p a c t s of r e s t r u c t u r i n g (e.g., e m p l o y m e n t a n d unemployment): Social value terms, while dependency i n s e c u r e labor
is i n c r e a s i n g l y c o n s t r u c t e d in m a r k e t m a r k e t s t h e m s e l v e s c a p i t a l i z e on t h e a n d v u l n e r a b i l i t y of a n i n c r e a s i n g l y force (57).
The n a t u r a l world is u n d e r v a l u e d by the " e x t r a - m a r k e t s t a t u s of its c o m p o n e n t s a n d the externalization of e n v i r o n m e n t a l costs." The p r o p o n e n t s of globalization s e e k radically to s h r i n k t h e p u b l i c - - t h e r e a l of p o litical n e g o t i a t i o n - - a n d . . . e x p a n d a n d r e a s s e r t t he a u t o n o m y of the private sector a n d t he private s p h e r e (62). This is a de facto privatization of the c o m m o n s with all th e social losses t h a t implies. H e s s i n g s u g g e s t s two strategies to overcome t he limitations of iceberg e c o n o m i c s (with the private sector at the top whi le n a t u r e a n d family lie below th e surface): i n c l u s i o n of f e m i n i s t a n d e c o l o g i c a l a p p r o a c h e s into s t a n d a r d e c o n o m i c models, a n d r e t h i n k i n g m a r k e t - b a s e d a p p r o a c h e s to o u r place in the physical universe. The s e c o n d pa r t , on policy i m p l i c a t i o n s , i n c l u d e s a nice c o n t r i b u t i o n b y J e n n i f e r C l a p p , w h o s e " T h r e a t s to t h e E n v i r o n m e n t in a n E r a of G l o b a l i z a t i o n : An E n d to S t a t e 2 The other contribution in this section reviews alienation and globallzatlon from the perspectiv~ of information and spatial structures with a bow to the futurists. 140
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Sovereignty," e m p h a s i z e s a r e c o n c e p t u a l i z a t i o n of th e post-Cold W a r era. Clapp, a n e c o n o m i s t specializing in d e v e l o p m e n t , also s t r e s s e s t he erosion of t he n a t i o n state. Today, b o t h t h e t h r e a t of lost livelihoods s t e m m i n g from e n v i r o n m e n t a l p r o b l e m s , a n d t h e r e s p o n s e s to t h o s e p r o b l e m s p o s e s e r i o u s q u e s t i o n s for t h i s t r a d i t i o n a l n o t i o n of s t a t e s o v e r e i g n t y . B e c a u s e e n v i r o n m e n t a l t h r e a t s e m a n a t e , by a n d large, from o u t s i d e th e s tate r e a l m a n d are largely out s id e states' control b o t h before a n d a f t e r t h e y o c c u r , t r a d i t i o n a l n o t i o n s of s t a t e sovereignty h a v e not always b e e n helpful in a d d r e s s i n g t hos e p r o b l e m s (123). Clapp a r g u e s for t h e i n c l u s i o n of e n v i r o n m e n t a l provisions into i n t e r n a t i o n a l e c o n o m i c t r e a t i e s a n d for e n h a n c i n g t h e role of NGOs in s u c h n e g o t i a t i o n s . T h e i n c r e a s e d " t r a n s p a r e n c y " of i n t e r n a t i o n a l n e g o t i a t i o n s a n d t h e i n c l u s i o n of NGOs in U.S. n e g o t i a t i o n s h a v e a p p a r e n t l y d o n e little to c h a n g e the p r a g m a t i c i m p l i c a t i o n s of i n t e r n a t i o n a l c o n v e n t i o n s , given t h e global f r e e d o m s e n j o y e d by m o s t m u l t i n a t i o n a l c o r p o r a t i o n s . W h e t h e r c o n c e n t r a t i n g p o p u l a r a t t e n t i o n on the United Nations a n d similar i n t e r n a t i o n a l m e c h a n i s m s is likely to b e a r fruit r e m a i n s to be seen. The o t h e r five c o n t r i b u t i o n s in this section cover a r a n g e of topics: a n e w c o n c e p t u a l f r a m e w o r k utilizing t h e i d e a of t h r e e pri me s y s t e m s : biosphere, economy, a n d h u m a n society (I always w o r r y w h e n h u m a n b e i n g s are divorced, even if j u s t for titling p u r p o s e s , from ecological or e c o n o m i s t systems); global civil s o c i e t y w i t h b o w s to P o e l a n y i a n d C.S. Lewis; e n v i r o n m e n t a l j u s t i c e in t he c ont e xt of counter-veiling power; a g e n d e r analogy to the e n v i r o n m e n t in reference to the Montreal protocol on the ozone layer; a n d t h e d e b a t e s on NAFTA as viewed by l i b e r a l s a n d e n v i r o n m e n t a l i s t s . T h e s e are i n t e r e s t i n g c o n t r i b u t i o n s , if n o t as compelling as Clapp's. The t h i r d p a r t on t h e o r e t i c a l perspectives i n c l u d e s the very good c o n t r i b u t i o n "The Global M a r k e t Ideology: A n a t o m y of a V a l u e S y s t e m " by J o h n McMurtry, a p r o f e s s o r of p h i l o s o p h y . M c M u r t r y b e g i n s w i t h a c r i t i q u e of H a y e k ' s a s s u m p t i o n t h a t e c o n o m i c f r e e d o m s a r e e q u i v a l e n t to h u m a n f r e e d o m s . He p r o c e e d s to t h e i d e a of i n t e m a l i z i n g social a n d e n v i r o n m e n t a l e x t e m a l i t i e s t h r o u g h r u l e - b a s e d i n t e r n a t i o n a l e c o n o m y (parallel to the c o n t r i b u t i o n by Hessing), a n d he c o m m e n t s : C o r p o r a t i o n s are tied to no c o m m u n i t y of people, a n d c a n leave a n y society in w h i c h effective laws to protect h u m a n r i g h t s or t h e e n v i r o n m e n t i n c r e a s e b u s i n e s s
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c o s t s .... U n d e r c u r r e n t free trade regimes, rules p r o t e c t i n g h u m a n a n d e n v i r o n m e n t a l life h a v e to b e i n t e r n a t i o n a l to be o b e y e d (187). T h e o t h e r c o n t r i b u t i o n s in t h i s s e c t i o n i n c l u d e a critical e x a m i n a t i o n of e c o - f e m i n i s m f r o m t h e p e r s p e c t i v e of L a c l a u a n d Moufee; t h e c o m m o n s effect of p a t e n t r i g h t s for b i o t e c h n o l o g y ; a n d a call for different d i s c o u r s e s on t h e "realism" of globalization. As is f r e q u e n t l y a n d u n d e r s t a n d a b l y t h e case, t h e c r i t i q u e s of i n t e r n a t i o n a l c a p i t a l i s m in S c h r e c k e r ' s q u i t e u s e f u l collection a r e s t r o n g e r t h a n t h e r e a l i s m of t h e i r a l t e r n a t i v e s . S o m e a l t e r n a t i v e s a r e s i m p l y idealist. Most fail to d e a l w i t h t h e political p o w e r of t h e c a p i t a l i s t n a t i o n - s t a t e a s it e x e r c i s e s its p o w e r s t r a n s n a t i o n a l l y in collaboration (and competition) with other nation-states and international bodies such as the International Monetary Fund. None deals adequately with the microeconomic and macroe c o n o m i c p r e s s u r e s f a c e d b y w o r k e r s in i n d i v i d u a l f a c t o r i e s , r e s i d e n t s i n p a r t i c u l a r c o m m u n i t i e s , n o r c i t i z e n s of s p e c i f i c c o u n t r i e s a s " t h e i r " or " o u r " c a p i t a l i s t s g l o b a l i z e o p e r a t i o n s . C o n f r o n t i n g t r a d e a n d i n v e s t m e n t w i t h i n t e r n a t i o n a l r u l e s is u n d o u b t e d l y a first step. B u t as w i t h t h e e a r l y social m o v e m e n t s for w o r k e r s a n d e n v i r o n m e n t a l p r o t e c t i o n s , t h e s e will be difficult s t e p s . I n c r e a s e d a t t e n t i o n to t h e i n t e r n a t i o n a l policy m a k i n g m e c h a n i s m s of p a r t i c u l a r n a t i o n - s t a t e s w o u l d be a good n e x t s t e p in r a d i c a l political e c o n o m y . P e r h a p s b e c a u s e S c h r e c k e r ' s is a C a n a d i a n v o l u m e , it fails to d e a l fully w i t h t h e p r o p e r t y r i g h t s - b a s e d a p p r o a c h to p u b l i c policy a n d t h e w i s e u s e m o v e m e n t s w h i c h a r e so c e n t r a l to environm e n t a l s t r u g g l e s i n t h e U n i t e d S t a t e s . B u t b e c a u s e of t h e i d e o l o g i c a l s t r e n g t h a n d s i g n i f i c a n c e of t h e p r o p e r t y - r i g h t s a p p r o a c h a t t h e W o r l d B a n k , t h e IMF, a n d i n t e r n a t i o n a l c o n s u l t a n c i e s , t h i s is a s i g n i f i c a n t s h o r t c o m i n g . P r o p e r t y - r i g h t s a p p r o a c h e s a r e c e n t r a l to c o n t e m p o r a r y a p p l i e d n a t u r a l r e s o u r c e m a n a g e m e n t a n d e n v i r o n m e n t a l policy. T h e s e i n c l u d e i n n o v a t i o n s s u c h a s t r a d e a b l e p o l l u t i o n p e r m i t s a n d t h e p r i v a t i z a t i o n of f i s h e r i e s t h r o u g h i n d i v i d u a l q u o t a s . A s i m i l a r p r o c e s s is o c c u r r i n g i n t h e p r i v a t i z a t i o n a n d c o n s o l i d a t i o n of c o m m o n l a n d in d e v e l o p i n g e c o n o m i e s , a n d t h e p r i v a t i z a t i o n of f o r m e r s t a t e e n t e r p r i s e s in t h e f o r m e r Soviet a n d E a s t e r n E u r o p e a n e c o n o m i e s . I n b o t h c a s e s , d e a l i n g w i t h t h e e x t e r n a l i t i e s of c a p i t a l ' s r e l a t i o n s h i p w i t h n a t u r e a n d society is critical to political practice. T h e two b o o k s r e v i e w e d h e r e on p r o p e r t y rights, a l t h o u g h n e i t h e r addresses economic globalization and the environment, illustrate b o t h t h e p o w e r a n d w e a k n e s s of this a p p r o a c h , a n d provide c l u e s i n t o t h e s i g n i f i c a n c e of t h e p r o p e r t y - r i g h t s a p p r o a c h to p u b l i c policy.
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Book Reviews Itai S e n e d , a p r o f e s s o r of political s c i e n c e f r o m t h e U n i v e r s i t y of T e l Aviv a n d St. L o u i s U n i v e r s i t y , e x a m i n e s t h e o r i g i n of p r o p e r t y a n d o t h e r r i g h t s f r o m t h e p e r s p e c t i v e of a s o c i a l c o n t r a c t i n s t i t u t e d t h r o u g h t h e political p r o c e s s . T h e e s s e n c e of s o c i a l life a n d , t h e r e f o r e , t h e p r i n c i p a l s u b j e c t m a t t e r of t h e s o c i a l s c i e n c e s , is t h e c o n t e n t a n d f o r m of h u m a n i n t e r a c t i o n s . . . c i v i l s o c i e t y e m e r g e s a n d evolves o u t of p e r s o n a l d e c i s i o n s a n d a c t i o n s of r a t i o n a l i n d i v i d u a l s (Sened: xii). B u t a s o p p o s e d to t h e n e o - i n s t i t u t i o n a l e c o n o m i s t s (e.g., W i l l i a m s o n 1 9 8 7 ) , S e n e d ' s T h e Political I n s t i t u t i o n o f Private Property s t r e s s e s t h e r o l e of p o l i t i c a l e n t r e p r e n e u r s in the e v o l u t i o n of p r o p e r t y r i g h t s . T h e b a s i c f r a m e w o r k is a n i n d i v i d u a l istic r a t i o n a l c h o i c e , g a m e t h e o r e t i c a p p r o a c h . S e n e d c o n t r a s t s h i s perspective with classical liberalism and neoclassical theories w h i c h a r e a b s e n t of p u r p o s i v e i n d i v i d u a l s e n g a g i n g in s t r a t e g i c p o l i t i c a l activity. T h e s e a r g u m e n t s a r e laid o u t in t h e first t h r e e c h a p t e r s , a n d t h e n t h e n e o l i b e r a l m o d e l is e l a b o r a t e d in t h e c o n c l u d i n g f o u r c h a p t e r s . T h e c e n t r a l p o i n t is t h a t '~rhis m o d e l rests on the premise that property rights are designed, granted, a n d p r o t e c t e d b y l a w - e n f o r c i n g g o v e r n m e n t s " (76). A l t h o u g h t h e p u b l i c - c h o i c e s c h o o l of m a i n s t r e a m e c o n o m i c s m i g h t f i n d t h i s f r a m e w o r k f a m i l i a r , S e n e d d o e s n o t fall for t h e i d e a l i s m of t h e u n f e t t e r e d m a r k e t . He s e e s g o v e r n m e n t e x t e n d i n g p r o p e r t y r i g h t s to i n c r e a s e b e n e f i t s to g o v e r n m e n t , l a r g e l y t a x r e v e n u e s , s u b j e c t to t h e c o s t s of e n f o r c i n g t h e s e r i g h t s . P r i v a t e r i g h t s c o m e i n t o b e i n g t h r o u g h t h e a c t i o n of p o l i t i c a l e n t r e p r e n e u r s w h e n t h e r e a r e n e t a d v a n t a g e s to d o i n g so. P o l i t i c a l entrepreneurs--party activists, lobbyists, etc.--serve as the nexus of i n f o r m a t i o n a n d c o o r d i n a t i o n in t h i s p r o c e s s . As s u c h t h e y i n t e r a c t w i t h i n t e r e s t g r o u p s a n d g o v e r n m e n t officials ( i n c l u d i n g legislators), a n d a l l e v i a t e t h e collective a c t i o n p r o b l e m of g r o u p s of individuals. T h i s is a c l e a r t e x t w h o s e g a m e t h e o r e t i c a x i o m s a r e well p r e s e n t e d . O n l y o n e c h a p t e r really relies o n m a t h e m a t i c s to m a k e its a r g u m e n t - - a n e o l i b e r a l t h e o r y of t h e social c o n t r a c t : t h e role of a u t o n o m o u s i n d i v i d u a l s in t h e e v o l u t i o n of p r o p e r t y r i g h t s . It is i n t e r e s t i n g to s e e t h e m o v e m e n t of e c o n o m i c s i n t o p o l i t i c a l s c i e n c e , a n d q u i t e p o s s i b l y i n t o a n a r e n a w h e r e it is well s u i t e d . It is a l s o i n t e r e s t i n g to s e e t h e a x i o m a t i c b i a s e s of n e o c l a s s i c a l w e l f a r e e c o n o m i c s t r a n s p o r t e d i n t o a n o t h e r a r e n a . F e w r e a d e r s of t h i s j o u r n a l will "buy" S e n e d ' s a n a l y t i c a l a r g u m e n t s a b o u t t h e c o n s t r u c t i o n of p r o p e r t y r i g h t s , b u t h i s a r g u m e n t t h a t g o v e r n m e n t ' s m o n o p o l y of f o r c e is c e n t r a l to t h e d e v e l o p m e n t a n d m a i n t e n a n c e of p r o p e r t y r i g h t s is a u s e f u l palliative to t h e p u b l i c -
S e p t e m b e r 1999
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Review of Radical Political Economics choice school of e c o n o m i c s . And it also points o u t the i m p o r t a n c e of s t a t e - b u i l d i n g in t h e g l o b a l i z a t i o n of c a p i t a l . I r o n i c a l l y dictatorial s t a t e s a r e f r e q u e n t l y n o t strong s t a t e s in th e s e n s e of being able to pr ot e c t t he b r o a d i n t e r e s t s of capital as a whole a n d so capital relies on a b s o l u t e r a t h e r t h a n relative s u r p l u s value in its d e v e l o p m e n t . One n o t i c e s t h a t this is m u c h m o r e erosive of h u m a n rights a n d e n v i r o n m e n t s , a n d it a r g u e s for the i m p o r t a n c e of i n t e r n a t i o n a l l y c o o r d i n a t i n g social m o v e m e n t s in r e s p o n s e to t h e specific i n t r u s i o n s of globalization. In this, t h e "utopian" c o n c l u s i o n s of m a n y of t h e c o n t r i b u t o r s to S c h r e c k e r ' s v o l u m e m a y be m o r e realistic t h a n t ho se w h o have a r g u e d p r o t e c t i o n i s m as a u n i l a t e r a l r e s p o n s e to globalization. Finally, Y o r a m Barzel, a p r o f e s s o r of e c o n o m i c s at t h e University of W a s h i n g t o n , provides a c o m p r e h e n s i v e critique of the n e o c l a s s i c a l W a l r a s i a n m o d e l of p r o p e r t y rights from w i t h i n its own logical f r a m e w o r k , individual maximization. In this his w o r k is similar to t h a t of Gary Libecap (1989) in c o n c e n t r a t i n g on w h a t is viewed as t h e c o n t r a c t u a l n a t u r e of i n s t i t u t i o n a l development. While this f r a m e w o r k a n d s o m e a s p e c t s of its application will irk m o s t radical economists, it r e m a i n s a useful text. E c o n o m i c A n a l y s i s o f Property Rights i n c l u d e s e l e v e n chapters, introducing the property-rights model and then analyzing several problems. These range from c o n t r a c t choice, the n a t u r e of t he firm a n d ownership, the formation of rights, slavery, a n d c o m m o n p r o p e r t y a p p l i c a t i o n s . The e x p o s i t i o n is clear, b e g i n n i n g with basic propositions, u s in g the s t a n d a r d comparative statics microeconomic graphics and household situations, and e x t e n d i n g t he a r g u m e n t t o public policy is s u es. B u t u n l i k e th e neoclassical school, Barzel does not adopt the frictionless model. The literature t h a t a s s u m e s t h a t the costs of t r a n s a c t i n g a re zero a n d t h a t all p r o p e r t y rights are perfectly well d e l i n e a t e d is i n c a p a b l e of dealing with a vast a r r a y of a c t u a l observed practices (Barzel: 151). A critical c o m p o n e n t of Barzel's a n a l y s i s is his e m p h a s i s on th e m u l t i p l e a t t r i b u t e n a t u r e of m o s t "commodities," w h i c h m a k e s c o m p l e t e o w n e r s h i p of t he entire c o m m o d i t y frequently problematic. Barzel m a k e s c l e a r t h a t th e p r o p e r t y - r i g h t s a p p r o a c h h a s t a k e n s u b s t a n t i a l liberties with reality in p ro mo tin g the u n i v e r s a l a d v a n t a g e s of p r i v a t e o w n e r s h i p . T h i s is i m p o r t a n t in e n v i r o n m e n t a l a n d social cost in w h i c h he is m u c h m o r e careful a b o u t t h e t e r m " c o m m o n property" t h a n m a n y p r o p e r t y - r i g h t s p r o p o n e n t s w h o followed Garrett Hardin's (1968) ill-posed "tragedy of t he c o m m o n s " a p p r o a c h . The putative i n c r e a s e in v alu e of the transfer of public property into the private d o m a i n is one example:
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Book Reviews A priori r e a s o n i n g , however, is i n c a p a b l e of d e m o n s t r a t ing t h a t private o w n e r s h i p is n e c e s s a r i l y m o r e efficient t h a n g o v e r n m e n t o w n e r s h i p or t h a t d e s i g n a t i n g p r o p e r t i e s s u c h as t h o s e in m i d - o c e a n as private will yield n e t benefits (100). C o m p a r e d to S e n e d , Barzel o p e r a t e s m o r e within the m a i n s t r e a m e c o n o m i c s f r a m e w o r k , a n d as s u c h he v ests m o r e d i s c r e t i o n to i n d i v i d u a l s t h a n to g o v e r n m e n t s . N o n e t h e l e s s Barzel p r o v i d e s s o m e u s e f u l a r g u m e n t s in t h e i d e o l o g i c a l c o n t e s t b e t w e e n p r o p e r t y - r i g h t s d r i v e n p u b l i c policy a n d w i d e r social i n t e r e s t s . S o m e m a y a r g u e t h a t "giving in" to t h e s e essentially m a i n s t r e a m e c o n o m i c s p e r s p e c t i v e s gives a w a y th e n o n m a r k e t a b l e n a t u r e of public v a l u e s a n d t he class ba sis of capitalist d y n a m i c s . Bu t one c a n also a r g u e t h a t t h e r e is a b r o a d a r r a y of ways to critique the effects of e x t e n d i n g private (corporate) p r o p e r t y rights implied by globalization. S e n e d a n d Barzel s h o w a n o t h e r way in w h i c h the s t a n d a r d property-rights a r g u m e n t s are impoverished. While globalization m e a n s m a n y t h i n g s to m a n y people, it clearly involves a t t e m p t s to c o m m o d i f y i n c r e a s i n g a s p e c t s of the n a t u r a l world w hi l e at t he s a m e time m a r g i n a l i z i n g s u b s t a n t i a l p a r t s of t h e w o r l d ' s h u m a n p o p u l a t i o n . Private p r o p e r t y social re gi me s are expert at socializing costs a n d privatizing benefits. As s u g g e s t e d by S c h r e c k e r , c o n f r o n t i n g e n v i r o n m e n t a l externalities c a n be i m p o r t a n t c h a l l e n g e s to t h e p r e r o g a t i v e s of global capitalism. REFERENCES
Hardin, G a r r e t t . 1968. The T r a g e d y of t h e C o m m o n s . S c i e n c e (162): 1243-48. Libecap, Gary D. 1989. Contracting for Property Rights. Cambridge: C a m b r i d g e University Press. O ' C o n n o r , J a m e s . 1988. C a p i t a l i s m , N a t u r e , S o c i a l i s m : A Theoretical Introduction. Capitalism, Nature, Socialism (1): 32. W i l l i a m s o n , R o b e r t E. 1987. The Economic Institutions of Capitalism. The Free Press. S a m Pooley P.O. Box 22716 Honolulu, HI 96823
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