The liberal commons

Yale Law Journal

Volumn 110, Issue 4, 2001, Pages 549-622

  Dagan, Hanoch ^a   Heller, Michael A ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0011688438     PISSN: 00440094     EISSN: None     Source Type: Journal    
DOI: 10.2307/797596     Document Type: Article

References (344)

1. See infra Section IV.A (discussing the black farm example in detail). See generally U.S. COMM'N ON CIVIL RIGHTS, THE DECLINE OF BLACK FARMING IN AMERICA 3 tbl.1.1 (1982) [hereinafter BLACK FARMING] (describing this decline and its causes); 15,000 Blacks Seek Shares in Settlement, N.Y. TIMES, Sept. 21, 1999, at A25.
2. See infra Section IV.A (discussing the black farm example in detail). See generally U.S. COMM'N ON CIVIL RIGHTS, THE DECLINE OF BLACK FARMING IN AMERICA 3 tbl.1.1 (1982) [hereinafter BLACK FARMING] (describing this decline and its causes); 15,000 Blacks Seek Shares in Settlement, N.Y. TIMES, Sept. 21, 1999, at A25.
3. BLACK FARMING, supra note 1, at 2-3.
4. See, e.g., ROBERT S. BROWNE, ONLY SIX MILLION ACRES: THE DECLINE OF BLACK OWNED LAND IN THE RURAL SOUTH 28-33 (1973); Too Little, Too Late: Black Farmers' Discrimination Settlement May Not Ease Years of Pain, HOUS. CHRON., Dec. 5, 1999, at A1.
5. See, e.g., ROBERT S. BROWNE, ONLY SIX MILLION ACRES: THE DECLINE OF BLACK OWNED LAND IN THE RURAL SOUTH 28-33 (1973); Too Little, Too Late: Black Farmers' Discrimination Settlement May Not Ease Years of Pain, HOUS. CHRON., Dec. 5, 1999, at A1.
6. Garrett Hardin, The Tragedy of the Commons, 162 SCI. 1243, 1244-45 (1968) (introducing the metaphor); see also infra notes 36, 39 (discussing antecedents).
7. See, e.g., Harold Demsetz, Toward a Theory of Property Rights, 57 AM. ECON. REV. 347, 354 (1967). On private property, see 2 WILLIAM BLACKSTONE, COMMENTARIES *2; see also Carol M. Rose, The Several Futures of Property: Of Cyberspace and Folk Tales, Emission Trades and Ecosystems, 83 MINN. L. REV. 129, 150-51 (1998), which discusses this image of private property.
8. See, e.g., Harold Demsetz, Toward a Theory of Property Rights, 57 AM. ECON. REV. 347, 354 (1967). On private property, see 2 WILLIAM BLACKSTONE, COMMENTARIES *2; see also Carol M. Rose, The Several Futures of Property: Of Cyberspace and Folk Tales, Emission Trades and Ecosystems, 83 MINN. L. REV. 129, 150-51 (1998), which discusses this image of private property.
9. See, e.g., Harold Demsetz, Toward a Theory of Property Rights, 57 AM. ECON. REV. 347, 354 (1967). On private property, see 2 WILLIAM BLACKSTONE, COMMENTARIES *2; see also Carol M. Rose, The Several Futures of Property: Of Cyberspace and Folk Tales, Emission Trades and Ecosystems, 83 MINN. L. REV. 129, 150-51 (1998), which discusses this image of private property.
10. See, e.g., ELINOR OSTROM, GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR COLLECTIVE ACTION 35-36 (1990); Margaret A. McKean, Success on the Commons: A Comparative Examination of Institutions for Common Property Resource Management, 4 J. THEORETICAL POL. 247, 261-62 (1992); William H. Simon, Social-Republican Property, 38 UCLA L. REV. 1335, 1343-44 (1991).
11. See, e.g., ELINOR OSTROM, GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR COLLECTIVE ACTION 35-36 (1990); Margaret A. McKean, Success on the Commons: A Comparative Examination of Institutions for Common Property Resource Management, 4 J. THEORETICAL POL. 247, 261-62 (1992); William H. Simon, Social-Republican Property, 38 UCLA L. REV. 1335, 1343-44 (1991).
12. See, e.g., ELINOR OSTROM, GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR COLLECTIVE ACTION 35-36 (1990); Margaret A. McKean, Success on the Commons: A Comparative Examination of Institutions for Common Property Resource Management, 4 J. THEORETICAL POL. 247, 261-62 (1992); William H. Simon, Social-Republican Property, 38 UCLA L. REV. 1335, 1343-44 (1991).
13. See infra text accompanying notes 20-24 (discussing the mistaken conflation of open access and commons property). Though Garrett Hardin introduced the term "tragedy of the commons," Hardin, supra note 4, at 1244-45, each example he analyzed could more precisely, but less evocatively, have been described as a "tragedy of open access." Additionally, commons resource institutions may be evaluated along other salient axes, for example, whether restrictions on exit are property or contract based, infra text accompanying notes 79-83; creation is voluntary or involuntary, infra text accompanying note 134 and Subsection III.B.3.b; management is participatory or hierarchical, infra text accompanying note 180; and scope is limited or comprehensive, infra Subsection III.B.3.b.
14. Cf. FELIX S. COHEN, Transcendental Nonsense and the Functional Approach, in THE LEGAL CONSCIENCE: SELECTED PAPERS OF FELIX S. COHEN 33 (Lucy Kramer Cohen ed., 1960) (showing how legal conceptualism blocks ethical and empirical inquiry and shields the status quo from normative reexamination); Robert Gordon, New Developments in Legal Theory, in THE POLITICS OF LAW: A PROGRESSIVE CRITIQUE 281, 287 (David Kairys ed., 1982) (stating that law is one of many "clusters of belief," "which are profoundly paralysis-inducing because they make it so hard for people . . . even to imagine that life could be different and better").
15. Cf. FELIX S. COHEN, Transcendental Nonsense and the Functional Approach, in THE LEGAL CONSCIENCE: SELECTED PAPERS OF FELIX S. COHEN 33 (Lucy Kramer Cohen ed., 1960) (showing how legal conceptualism blocks ethical and empirical inquiry and shields the status quo from normative reexamination); Robert Gordon, New Developments in Legal Theory, in THE POLITICS OF LAW: A PROGRESSIVE CRITIQUE 281, 287 (David Kairys ed., 1982) (stating that law is one of many "clusters of belief," "which are profoundly paralysis-inducing because they make it so hard for people . . . even to imagine that life could be different and better").
16. As Michael Walzer notes, "[i]f we want the mutual reinforcements of community and individuality to serve a common interest, we will have to act politically to make them effective. They require certain background or framing conditions that can only be provided by state action." MICHAEL WALZER, ON TOLERATION 111 (1997).
17. See RONALD DWORKIN, LAW'S EMPIRE 52-53 (1986) (developing an interpretive method that "strives to make an object the best it can be").
18. See, e.g., JESSE DUKEMINIER & JAMES E. KRIER, PROPERTY 40-59 (4th ed. 1998).
19. See, e.g., DOUGLAS G. BAIRD ET AL., GAME THEORY AND THE LAW 33-34 (1994); AVINASH K. DIXIT & BARRY J. NALEBUFF, THINKING STRATEGICALLY 347-49 (1991).
20. See, e.g., DOUGLAS G. BAIRD ET AL., GAME THEORY AND THE LAW 33-34 (1994); AVINASH K. DIXIT & BARRY J. NALEBUFF, THINKING STRATEGICALLY 347-49 (1991).
21. On the limitations imposed by the standard conceptual map, see generally Michael A. Heller, The Dynamic Analytics of Property Law, 2 THEORETICAL INQUIRIES L. 7 (2000). For the familiar definitions, see, for example, JEREMY WALDRON, THE RIGHT TO PRIVATE PROPERTY (1988); Duncan Kennedy & Frank Michelman, Are Property and Contract Efficient?, 8 HOFSTRA L. REV. 711, 715-16 (1980); and Frank I. Michelman, Ethics, Economics, and the Law of Property, in NOMOS XXIV: ETHICS, ECONOMICS, AND THE LAW 3, 5-6 (1982).
22. On the limitations imposed by the standard conceptual map, see generally Michael A. Heller, The Dynamic Analytics of Property Law, 2 THEORETICAL INQUIRIES L. 7 (2000). For the familiar definitions, see, for example, JEREMY WALDRON, THE RIGHT TO PRIVATE PROPERTY (1988); Duncan Kennedy & Frank Michelman, Are Property and Contract Efficient?, 8 HOFSTRA L. REV. 711, 715-16 (1980); and Frank I. Michelman, Ethics, Economics, and the Law of Property, in NOMOS XXIV: ETHICS, ECONOMICS, AND THE LAW 3, 5-6 (1982).
23. On the limitations imposed by the standard conceptual map, see generally Michael A. Heller, The Dynamic Analytics of Property Law, 2 THEORETICAL INQUIRIES L. 7 (2000). For the familiar definitions, see, for example, JEREMY WALDRON, THE RIGHT TO PRIVATE PROPERTY (1988); Duncan Kennedy & Frank Michelman, Are Property and Contract Efficient?, 8 HOFSTRA L. REV. 711, 715-16 (1980); and Frank I. Michelman, Ethics, Economics, and the Law of Property, in NOMOS XXIV: ETHICS, ECONOMICS, AND THE LAW 3, 5-6 (1982).
24. On the limitations imposed by the standard conceptual map, see generally Michael A. Heller, The Dynamic Analytics of Property Law, 2 THEORETICAL INQUIRIES L. 7 (2000). For the familiar definitions, see, for example, JEREMY WALDRON, THE RIGHT TO PRIVATE PROPERTY (1988); Duncan Kennedy & Frank Michelman, Are Property and Contract Efficient?, 8 HOFSTRA L. REV. 711, 715-16 (1980); and Frank I. Michelman, Ethics, Economics, and the Law of Property, in NOMOS XXIV: ETHICS, ECONOMICS, AND THE LAW 3, 5-6 (1982).
25. For example, Frank Michelman states, "[w]e need some reasonably clear conceptions of regimes that are decidedly not [private property], with which [private property] regimes can be compared." Michelman, supra note 13, at 5.
26. See, e.g., Lawrence C. Becker, Too Much Property, 21 PHIL. & PUB. AFF. 196, 197-98 (1992). But even Becker notes that "we would lose a great deal of clarity and rigor if [the conceptual apparatus] were ignored." Id. at 198.
27. BRUCE A. ACKERMAN, PRIVATE PROPERTY AND THE CONSTITUTION 116-18 (1977) (exploring the lay view of property).
28. Jeremy Waldron, Property Law, in A COMPANION TO PHILOSOPHY OF LAW AND LEGAL THEORY 3, 6 (Dennis Patterson ed., 1996). Frank Michelman focuses attention on his definition of rules for initial acquisition and reassignment. He focuses particularly on the ideas of sole ownership, defined to mean that "[t]he rules must allow that at least some objects of utility or desire can be fully owned by just one person," and freedom of transfer, defined to mean that "[o]wners are both immune from involuntary deprivation or modification of their ownership rights and empowered to transfer their rights to others at will, in whole or in part." Michelman, supra note 13, at 5.
29. 2 BLACKSTONE, supra note 5, at *2; see also JOHN LOCKE, Two TREATISES OF GOVERNMENT 285-302 (Peter Laslett ed., Cambridge Univ. Press 1988) (1690) (basing a theory of private property on the principle that labor removes a resource from the commons and makes it the exclusive property of the laborer).
30. 2 BLACKSTONE, supra note 5, at *2; see also JOHN LOCKE, Two TREATISES OF GOVERNMENT 285-302 (Peter Laslett ed., Cambridge Univ. Press 1988) (1690) (basing a theory of private property on the principle that labor removes a resource from the commons and makes it the exclusive property of the laborer).
31. 3 BLACKSTONE, supra note 5, at *212-15; Robert C. Ellickson, Property in Land, 102 YALE L.J. 1315, 1362 n.237 (1993); Carol M. Rose, Canons of Property Talk, or, Blackstone's Anxiety, 108 YALE L.J. 601, 602 (1998).
32. 3 BLACKSTONE, supra note 5, at *212-15; Robert C. Ellickson, Property in Land, 102 YALE L.J. 1315, 1362 n.237 (1993); Carol M. Rose, Canons of Property Talk, or, Blackstone's Anxiety, 108 YALE L.J. 601, 602 (1998).
33. 3 BLACKSTONE, supra note 5, at *212-15; Robert C. Ellickson, Property in Land, 102 YALE L.J. 1315, 1362 n.237 (1993); Carol M. Rose, Canons of Property Talk, or, Blackstone's Anxiety, 108 YALE L.J. 601, 602 (1998).
34. Thus, Frank Michelman defines a commons property regime as one where "there are never any exclusionary rights. All is privilege. People are legally free to do as they wish, and are able to do, with whatever objects (conceivably including persons) are in the [commons]." Michelman, supra note 13, at 5.
35. JAMES M. ACHESON, THE LOBSTER GANGS OF MAINE 143 (1988); OSTROM, supra note 6, at 48, 222 n.23; GLENN G. STEVENSON, COMMON PROPERTY ECONOMICS: A GENERAL THEORY AND LAND USE APPLICATIONS 8-10, 39-40 (1991); Ellickson, supra note 19, at 1322; Carol M. Rose, Rethinking Environmental Controls: Management Strategies for Common Resources, 1991 DUKE L.J. 1, 3 n.4; Thráinn Eggertsson, Open Access Versus Common Property 8-9 (Oct. 2000) (unpublished manuscript, on file with The Yale Law Journal) ("The treatment of common property in the literature is engulfed in confusion. The focal point of the confusion often is [Hardin's paper] that actually discusses open access and its consequences. . . . In retrospect, the confusion over the nature of common property probably was caused substantially by a mix-up of proper names and theoretical categories.").
36. JAMES M. ACHESON, THE LOBSTER GANGS OF MAINE 143 (1988); OSTROM, supra note 6, at 48, 222 n.23; GLENN G. STEVENSON, COMMON PROPERTY ECONOMICS: A GENERAL THEORY AND LAND USE APPLICATIONS 8-10, 39-40 (1991); Ellickson, supra note 19, at 1322; Carol M. Rose, Rethinking Environmental Controls: Management Strategies for Common Resources, 1991 DUKE L.J. 1, 3 n.4; Thráinn Eggertsson, Open Access Versus Common Property 8-9 (Oct. 2000) (unpublished manuscript, on file with The Yale Law Journal) ("The treatment of common property in the literature is engulfed in confusion. The focal point of the confusion often is [Hardin's paper] that actually discusses open access and its consequences. . . . In retrospect, the confusion over the nature of common property probably was caused substantially by a mix-up of proper names and theoretical categories.").
37. JAMES M. ACHESON, THE LOBSTER GANGS OF MAINE 143 (1988); OSTROM, supra note 6, at 48, 222 n.23; GLENN G. STEVENSON, COMMON PROPERTY ECONOMICS: A GENERAL THEORY AND LAND USE APPLICATIONS 8-10, 39-40 (1991); Ellickson, supra note 19, at 1322; Carol M. Rose, Rethinking Environmental Controls: Management Strategies for Common Resources, 1991 DUKE L.J. 1, 3 n.4; Thráinn Eggertsson, Open Access Versus Common Property 8-9 (Oct. 2000) (unpublished manuscript, on file with The Yale Law Journal) ("The treatment of common property in the literature is engulfed in confusion. The focal point of the confusion often is [Hardin's paper] that actually discusses open access and its consequences. . . . In retrospect, the confusion over the nature of common property probably was caused substantially by a mix-up of proper names and theoretical categories.").
38. JAMES M. ACHESON, THE LOBSTER GANGS OF MAINE 143 (1988); OSTROM, supra note 6, at 48, 222 n.23; GLENN G. STEVENSON, COMMON PROPERTY ECONOMICS: A GENERAL THEORY AND LAND USE APPLICATIONS 8-10, 39-40 (1991); Ellickson, supra note 19, at 1322; Carol M. Rose, Rethinking Environmental Controls: Management Strategies for Common Resources, 1991 DUKE L.J. 1, 3 n.4; Thráinn Eggertsson, Open Access Versus Common Property 8-9 (Oct. 2000) (unpublished manuscript, on file with The Yale Law Journal) ("The treatment of common property in the literature is engulfed in confusion. The focal point of the confusion often is [Hardin's paper] that actually discusses open access and its consequences. . . . In retrospect, the confusion over the nature of common property probably was caused substantially by a mix-up of proper names and theoretical categories.").
39. Michelman, supra note 13, at 9 (discussing commons property).
40. OSTROM, supra note 6, at 48, 222 n.23.
41. Rose, supra note 5, at 155. In other words, despite the similarities between open access and commons property (multiple users and the resulting collective action difficulties), commons property is also characterized by an important feature similar to private ownership: In both cases, the users' group is strictly defined. STEVENSON, supra note 21, at 57; Ellickson, supra note 19, at 1322.
42. E.g., Carol Rose, The Comedy of the Commons: Custom, Commerce, and Inherently Public Property, 53 U. CHI. L. REV. 711 (1986).
43. WALDRON, supra note 13, at 40 & n.30.
44. Id. at 41. Additionally, as Waldron suggests, state property is not just a special case of a private property regime, where the state just acts as another private owner. Instead, at a theoretical level the state is somehow expressing the collective interest in determining how a state property resource is to be used. The collective, represented usually by the state, holds all rights of exclusion and is the unitary locus of decisionmaking regarding the use of resources. So, a subsidiary set of questions needs to be answered to specify fully a state property regime, including what the "collective interest" is and what procedures will be used to apply that conception to a particular resorce. Id. at 40.
45. Indeed, part of the political science literature on the commons has come as a response to this "false dichotomy." OSTROM, supra note 6, at 8-13; Bonnie J. McCay & James M. Acheson, Human Ecology of the Commons, in THE QUESTION OF THE COMMONS: THE CULTURE AND ECOLOGY OF COMMUNAL RESOURCES 1, 7, 9, 13 (Bonnie J. McCay & James M. Acheson eds., 1987).
46. To be sure, private property systems do contain, and it seems must contain, public elements, typically organized as state property, such as highways, streets, and public parks. Ellickson, supra note 19, at 1381 & n.342, 1397 n.413 (noting the scale and inevitability of public space in cities); Rose, supra note 25, at 723 (discussing the effect of state property in enhancing community wealth as well as sociability).
47. E.g., YORAM BARZEL, ECONOMIC ANALYSIS OF PROPERTY RIGHTS 99 (2d ed. 1997) (stating that the standard economic analysis of property "tend[ed] to classify ownership status into all-or-nothing categories, the latter being termed 'common property' - property that has no restrictions placed on its use").
48. See generally Heller, supra note 13 (elaborating this argument).
49. Michael A. Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 HARV. L. REV. 621, 622-26 (1998). In an anticommons, too many owners may each exclude others from a resource, the mirror image of a commons with a mirror tragedy: Resources may be prone to waste through underuse, rather than from overuse. Heller's image of anticommons property, and the tragedy that can ensue, shows how breaking out of the old trilogy can crystallize emerging property relations that otherwise remain invisible. Id. at 633-42 (discussing the consequences of misguided privatization of state property in postsocialist economies); Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCI. 698, 698 (1998) (showing how efforts to spur private investment in biomedical research by granting property rights may paradoxically result in fewer drugs that save lives).
50. Michael A. Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 HARV. L. REV. 621, 622-26 (1998). In an anticommons, too many owners may each exclude others from a resource, the mirror image of a commons with a mirror tragedy: Resources may be prone to waste through underuse, rather than from overuse. Heller's image of anticommons property, and the tragedy that can ensue, shows how breaking out of the old trilogy can crystallize emerging property relations that otherwise remain invisible. Id. at 633-42 (discussing the consequences of misguided privatization of state property in postsocialist economies); Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCI. 698, 698 (1998) (showing how efforts to spur private investment in biomedical research by granting property rights may paradoxically result in fewer drugs that save lives).
51. Hanoch Dagan, The Distributive Foundation of Corrective Justice, 98 MICH. L. REV. 138, 149 (1999). Dagan advocates a progressive conception of private property that incorporates our commitments to social responsibility and to equality. According to this conception, private property is not merely a bundle of rights, but also a social institution that creates bonds of commitment and responsibility among owners and others who live or work with the owner, or are otherwise affected by the owner's properties. Furthermore, private property necessarily entails distribution, since it is a source of economic and, therefore, also social, political, and cultural rights and powers, the correlative of which are other people's duties and liabilities. Hanoch Dagan, Just Compensation, Incentives, and Social Meanings, 99 MICH. L. REV. (forthcoming Oct. 2000);
52. Hanoch Dagan, The Distributive Foundation of Corrective Justice, 98 MICH. L. REV. 138, 149 (1999). Dagan advocates a progressive conception of private property that incorporates our commitments to social responsibility and to equality. According to this conception, private property is not merely a bundle of rights, but also a social institution that creates bonds of commitment and responsibility among owners and others who live or work with the owner, or are otherwise affected by the owner's properties. Furthermore, private property necessarily entails distribution, since it is a source of economic and, therefore, also social, political, and cultural rights and powers, the correlative of which are other people's duties and liabilities. Hanoch Dagan, Just Compensation, Incentives, and Social Meanings, 99 MICH. L. REV. (forthcoming Oct. 2000);
53. Hanoch Dagan, Takings and Distributive Justice, 85 VA. L. REV. 741, 772-73, 779-81, 791-92 (1999).
54. See Carol M. Rose, Left Brain, Right Brain and History in the New Law and Economics of Property, 79 OR. L. REV. 479 (2000) (discussing limited commons property hybrids).
55. Robert Ellickson suggests two relevant types of organizational diversity, two manifestations of the eclecticism of land regimes: either variations in the "initial bundles of rights and transfer rules" or opportunistic mixtures of public and private ownership. Ellickson, supra note 19, at 1387-88. The liberal commons construct relates only to the former type. For an example of the other type, consider Henry E. Smith, Semicommon Property Rights and Scattering in the Open Fields, 29 J. LEGAL STUD. 131, 131 (2000), which characterizes the medieval open-field system as a "semicommons." The resource is "owned and used in common for one major purpose, but, with respect to some other major purpose, individual economic units . . . have property rights to separate pieces of the commons." Id.
56. ARISTOTLE, THE POLITICS (H. Rackham trans., 1932). A classic passage is: Property that is common to the greatest number of owners receives the least attention; men care most for their private possessions, and for what they own in common less, or only so far as it falls to their own individual share; for in addition to the other reasons, they think less of it on the ground that someone else is thinking about it . . . . Id. at bk. 2, ch. 1, § 10 (Bekker § 1261b30-35). Also consider: [R]egulations for the common ownership of property would give more causes for discontent; for if both in the enjoyment of the produce and in the work of production they prove not equal but unequal, complaints are bound to arise between those who enjoy or take much but work little and those who take less but work more. And in general to live together and share all our human affairs is difficult, and especially to share such things as these [farms and produce]. Id. at ch. 2, § 2-3 (Bekker § 1263a10-17).
57. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
58. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
59. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
60. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
61. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
62. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
63. DOUGLASS C. NORTH & ROBERT PAUL THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973); Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777 (1972); Armen Alchian & Harold Demsetz, The Property Rights Paradigm, 33 J. ECON. HIST. 16 (1973); Demsetz, supra note 5; Eirik G. Furubotn & Svetozar Pejovich, Property Rights and Economic Theory: A Survey of Recent Literature, 10 J. ECON. LIT. 1137 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and the Ownership Structure, 3 J. FIN. ECON. 305 (1976); and Svetozar Pejovich, Towards an Economic Theory of the Creation and Specification of Property Rights, 30 REV. SOC. ECON. 309 (1972).
64. E.g., GOTTFRIED DIETZE, IN DEFENSE OF PROPERTY 9 (1963). Dietze explains: [T]he institution of private property has been defended on the grounds of justice, freedom, progress, peace and happiness. . . . Common ownership, although enjoying temporary vogues, has been rejected as utopian, as incompatible with the good of society and the individual, as productive of quarrels, as retarding development, as restraining freedom, as arbitrary and unjust. Id.
65. Hardin, supra note 4. Before Hardin, H. Scott Gordon identified the tragedy without so labeling it. H. Scott Gordon, The Economic Theory of a Common-Property Resource: The Fishery, 62 J. POL. ECON. 124 (1954). Hardin claimed that rational co-owners are bound to underinvest in the common resource, while overexploiting it. Hardin, supra note 4, at 1244-45. But he never considered the costs of any other legal arrangement, in particular the establishment and maintenance of a private property regime. As Michael Taylor points out: Every solution, every combination of property rights and controls, has its costs. Private property rights are not costlessly created, modified, and enforced; state regulation does not come free; and both may have effects which it is impossible to cost. What solution is best must surely depend to some extent on the relative costs of the possible solutions. Hardin ignores them.
66. Michael Taylor, The Economics and Politics of Property Rights and Common Pool Resources, 32 NAT. RES. J. 633, 635 (1992).
67. Demsetz, supra note 5.
68. Id. at 354-56. The difficulties posed by free riders for collective action were recognized by jurists long before the recent law-and-economics scholarship, as the following Jewish law example demonstrates. Rabbi Hayyim Yair Bachrach of Germany (d. 1701) addressed the validity of a stipulation in a contract between some members of a community and an expert in shofar (ram's horn) blowing, according to which the ritual service is to be performed only in the name of the paying members of the community. In his opinion, R. Bachrach noted that the stipulation should apparently be classified as the type in which "one benefits and the other sustains no loss" (Pareto superiority in modern language), a type to which the applicable Jewish law rule was "exemption," that is, the stipulation could not operate to deprive nonpaying members from the spiritual benefits of the contract. But R. Bachrach was also attentive to the detrimental incentive effects (free-riding) of applying the exemption rule in these circumstances. His result seems unavoidable: The contracting members were indeed allowed to restrict the group of spiritual beneficiaries of the shofar blowing to themselves only. R. HAYYIM YAIR BACHRACH, Responsum 186, in RESPONSA HAVAT YAIR (1997).
69. Demsetz, supra note 5, at 356-57.
70. Id. at 356.
71. Id. at 350-53. Private property rights "arise when it becomes economic for those affected by externalities to internalize benefits and costs." Id. at 354; see also Hardin, supra note 4, at 1245 (explaining the increasing negative effects of freedom in a commons).
72. James E. Krier, The Tragedy of the Commons, Part Two, 15 HARV. J.L. & PUB. POL'Y 325, 336-38 & n.44 (1992) (arguing that both Hardin and Demsetz end up begging the same question, assuming the same problem away, and implicitly arguing that a community plagued by noncooperation can improve its condition by cooperating); see also DUKEMINIER & KRIER, supra note 11, at 56, 59 (noting that theory and empirical evidence suggest that values and other variables prevent this evolutionary pattern from occurring in all situations); Carol M. Rose, Property as Storytelling: Prespectives from Game Theory, Narrative Theory, Feminist Theory, 2 YALE J.L. & HUMAN. 37 (1990) (proposing that after-the-fact narratives are necessary to explain the development of property regimes, because they do not always unfold as logic predicts). Jim Krier has reported to us that Demsetz has replied to the many criticisms of his theory by saying, "That's why I called it 'Toward a Theory of Property Rights.'"
73. James E. Krier, The Tragedy of the Commons, Part Two, 15 HARV. J.L. & PUB. POL'Y 325, 336-38 & n.44 (1992) (arguing that both Hardin and Demsetz end up begging the same question, assuming the same problem away, and implicitly arguing that a community plagued by noncooperation can improve its condition by cooperating); see also DUKEMINIER & KRIER, supra note 11, at 56, 59 (noting that theory and empirical evidence suggest that values and other variables prevent this evolutionary pattern from occurring in all situations); Carol M. Rose, Property as Storytelling: Prespectives from Game Theory, Narrative Theory, Feminist Theory, 2 YALE J.L. & HUMAN. 37 (1990) (proposing that after-the-fact narratives are necessary to explain the development of property regimes, because they do not always unfold as logic predicts). Jim Krier has reported to us that Demsetz has replied to the many criticisms of his theory by saying, "That's why I called it 'Toward a Theory of Property Rights.'"
74. Terry L. Anderson & P.J. Hill, The Evolution of Property Rights: A Study of the American West, 18 J.L. & ECON. 163 (1975). They argue that increasing levels of definition-and-enforcement activity lead to benefits because of the increased probability that people will be able to appropriate an asset's worth. To elaborate, the benefit from property rights definition depends upon the value of the asset and the degree to which the activity ensures that the value will be captured by the owner. Any change in the price of the well-defined and well-enforced bundle of rights changes the return on resources devoted to property rights questions. Furthermore, any increase in the productivity of a definition-and-enforcement activity will shift the marginal benefit curve outward. An increase in the probability of loss of an asset will usually result in an increase in the productivity of property rights activity and thus will result in such a shift. Marginal benefits are also likely a declining function as definition-and-enforcement activity increases (for reasons similar to the declining marginal physical product of any input in general). Conversely, the marginal costs of property rights reorganization are increasing because of the opportunity cost of resources used in property rights definition activities. Id.; see also Smith, supra note 35, at 164 (making a similar claim). 47. Similarly, Steven Cheung has shown that various property arrangements may be efficient and that individuals therefore choose different contract arrangements under varying conditions, though he has also maintained that this variation must remain within a private property regime to achieve efficient outcomes. STEVEN N.S. CHEUNG, THE THEORY OF SHARE TENANCY 4, 158 (1969). Challenging other economists' conclusions that share tenancy is a less efficient system than fixed rents, Cheung focuses on transaction costs and risk to develop a theory that explains the divergence of property arrangements. Id. at 30, 63-77.
75. Terry L. Anderson & P.J. Hill, The Evolution of Property Rights: A Study of the American West, 18 J.L. & ECON. 163 (1975). They argue that increasing levels of definition-and-enforcement activity lead to benefits because of the increased probability that people will be able to appropriate an asset's worth. To elaborate, the benefit from property rights definition depends upon the value of the asset and the degree to which the activity ensures that the value will be captured by the owner. Any change in the price of the well-defined and well-enforced bundle of rights changes the return on resources devoted to property rights questions. Furthermore, any increase in the productivity of a definition-and-enforcement activity will shift the marginal benefit curve outward. An increase in the probability of loss of an asset will usually result in an increase in the productivity of property rights activity and thus will result in such a shift. Marginal benefits are also likely a declining function as definition-and-enforcement activity increases (for reasons similar to the declining marginal physical product of any input in general). Conversely, the marginal costs of property rights reorganization are increasing because of the opportunity cost of resources used in property rights definition activities. Id.; see also Smith, supra note 35, at 164 (making a similar claim). 47. Similarly, Steven Cheung has shown that various property arrangements may be efficient and that individuals therefore choose different contract arrangements under varying conditions, though he has also maintained that this variation must remain within a private property regime to achieve efficient outcomes. STEVEN N.S. CHEUNG, THE THEORY OF SHARE TENANCY 4, 158 (1969). Challenging other economists' conclusions that share tenancy is a less efficient system than fixed rents, Cheung focuses on transaction costs and risk to develop a theory that explains the divergence of property arrangements. Id. at 30, 63-77.
76. See also JAMES E. PENNER, THE IDEA OF PROPERTY IN LAW 69 (1997) (arguing that although "in some situations commons work," scarcity generally "give[s] rise to conflict," and thus "the general point"-the "obvious solution" - is "to link rights of use with rights of exclusion," namely, private property).
77. Ellickson, supra note 19.
78. Respecting small events, Ellickson identifies three basic reasons for the relative efficiency of individual private property in terms of monitoring costs: Self-control by one person is simpler than the multiperson coordination entailed by intragroup monitoring; detecting a trespasser is less demanding than evaluating the conduct of persons otherwise privileged to use a resource; and policing boundaries or carrying out other monitoring functions is easier for an individual landowner, who will be more highly motivated than a member of a commons group. Likewise, Ellickson identifies three advantages of individual ownership with regard to medium events: Excessive dependence on coordination through a large number of transactions can be avoided; cooperation becomes more probable because of relatively multiplex relationships among neighbors; and dispute settlement arising out of medium events can be relegated to those persons most likely to be informed about the controversy. Id. at 1327-32.
79. Id. at 1332.
80. Id. at 1335-41.
81. Barry C. Field, The Evolution of Property Rights, 42 KYKLOS 319 (1989); see also Fikret Berkes, Cooperation from the Perspective of Human Ecology, in COMMON PROPERTY RESOURCES: ECOLOGY AND COMMUNITY-BASED SUSTAINABLE DEVELOPMENT 70, 79-82, 84 (Fikret Birkes ed., 1989) (arguing that cycles in intensity of resource use can bring cycles of common-resource management, and describing Cree Amerindian hunting territories as an example of "the evolution, demise and subsequent recovery (more than once) of communal resource-management systems").
82. Barry C. Field, The Evolution of Property Rights, 42 KYKLOS 319 (1989); see also Fikret Berkes, Cooperation from the Perspective of Human Ecology, in COMMON PROPERTY RESOURCES: ECOLOGY AND COMMUNITY-BASED SUSTAINABLE DEVELOPMENT 70, 79-82, 84 (Fikret Birkes ed., 1989) (arguing that cycles in intensity of resource use can bring cycles of common-resource management, and describing Cree Amerindian hunting territories as an example of "the evolution, demise and subsequent recovery (more than once) of communal resource-management systems").
83. Field, supra note 53, at 319-20, 328. To see why, consider the impact of increases in demand on the costs and benefits of establishing and maintaining a private property regime. As Demsetz claims, the increasing value of output justifies some additional costs in creating and maintaining a system of private property; the higher returns possible in a system of private property justify the accompanying increase in exclusion costs. Demsetz, supra note 5. Field insists, however, that this analysis is incomplete because it takes exclusion costs as given. But the effectiveness of resources devoted to exclusion depends on the incentives that exist for encroachment, which are related to the derived value of the resource. If the resource has no value, there would be little incentive to encroach, and thus it would be relatively easy to exclude, other things being equal. So an increase in the value of output could be expected to increase the incentive for encroachment, which implies that additional resources are required to achieve the same effective level of exclusion that obtained before. If this effect is particularly strong, it may overcome the effect identified by Demsetz and lead to commons property as the ultimate outcome. Cf. Field, supra note 53, at 329 (demonstrating similar ambiguous effects with respect to population growth).
84. One focal point for this group of scholars appears to be the International Association for the Study of Common Property (IASCP), which holds an annual convention drawing hundreds. McKean, supra note 6, at 250 n.4.
85. Of course, there are also numerous counterexamples, where locking people together to manage a resource has disastrous effects. To give one particularly poignant example, consider United States policy toward Native American land holdings, which has led to a classic tragedy of the anticommons. See Michael A. Heller, The Boundaries of Private Property, 108 YALE L.J. 1163, 1213-17 (1999) (discussing the consequences of a federal allotment policy that prohibited alienation yet did not provide any collective governance mechanism for managing land resources).
86. See, e.g., McCay & Acheson, supra note 28, at 7, 9, 13.
87. Sara Singleton & Michael Taylor, Common Property, Collective Action and Community, 4 J. THEORETICAL POL. 309, 311 (1992).
88. MICHAEL TAYLOR, COMMUNITY, ANARCHY AND LIBERTY 104-29 (1982); Singleton & Taylor, supra note 58, at 316.
89. Elinor Ostrom, Community and the Endogenous Solution of Commons Problems, 4 J. THEORETICAL POL. 343, 347 (1992). But cf. Fred P. Bosselman, Replaying the Tragedy of the Commons, 13 YALE J. ON REG. 391, 399-400 (1996) (reviewing ELINOR OSTROM ET AL., RULES, GAMES AND COMMON-POOL RESOURCES (1994)) ("[T]He solution of common resource problems becomes both more difficult and more important as the scale of the resource grows.").
90. Elinor Ostrom, Community and the Endogenous Solution of Commons Problems, 4 J. THEORETICAL POL. 343, 347 (1992). But cf. Fred P. Bosselman, Replaying the Tragedy of the Commons, 13 YALE J. ON REG. 391, 399-400 (1996) (reviewing ELINOR OSTROM ET AL., RULES, GAMES AND COMMON-POOL RESOURCES (1994)) ("[T]He solution of common resource problems becomes both more difficult and more important as the scale of the resource grows.").
91. Elinor Ostrom, Community and the Endogenous Solution of Commons Problems, 4 J. THEORETICAL POL. 343, 347 (1992). But cf. Fred P. Bosselman, Replaying the Tragedy of the Commons, 13 YALE J. ON REG. 391, 399-400 (1996) (reviewing ELINOR OSTROM ET AL., RULES, GAMES AND COMMON-POOL RESOURCES (1994)) ("[T]He solution of common resource problems becomes both more difficult and more important as the scale of the resource grows.").
92. Ostrom, supra note 60, at 347-50; see also, e.g., Lawrence Taylor, "The River Would Run Red with Blood": Community and Common Property in an Irish Fishing Settlement, in THE QUESTION OF THE COMMONS, supra note 28, at 290, 305-06 (distinguishing between "traditional communities," which understand collective ownership as natural, rather than derived from discrete decisions to cooperate, and "contractual communities," whose conceptions of community and common property have more specific origins, and noting that contractual communities frequently manage common resources through institutions and may be "equally 'close-knit'").
93. OSTROM, supra note 6, at 58-102, 143-81; see also Field, supra note 53, at 321, 335-40. Field argues that both the exclusion of noncommoners (the costs of private property) and the transactions among commoners (the costs of commons property) are carried out by the collectivity. Thus, "we can look on political innovations as also having a distinct role to play in determining efficient property institutions in a society." Field, supra note 53, at 337. More specifically, innovations in institutions of internal common governance may facilitate commons property, whereas innovations in the institutions of boundary maintenance and exclusion support private property.
94. See McKean, supra note 6, at 261-62.
95. Carolyn Frantz and Hanoch Dagan are exploring these issues in an article currently in progress.
96. Michael Heller and Rick Hills will be considering the common interest community case in an upcoming article.
97. See DWORKIN, supra note 10, at 52-53 (developing such an interpretive method).
98. ALBERT O. HIRSCHMAN, EXIT, VOICE, AND LOYALTY (1970).
99. Leslie Green, Rights of Exit, 4 LEGAL THEORY 165, 171 (1998) (emphasis omitted); see also id. at 177 (stating that "the core right of exit" is "the claim right that others not prevent one from leaving the jurisdiction of the group").
100. See LAURENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW 1400-09 (2d ed. 1988) (describing the "dual character of associational rights," which include both the right to associate oneself with certain persons and the right to dissociate oneself from certain persons). See generally HIRSCHMAN, supra note 67, at 19-20 (suggesting the usefulness of economic concepts such as exit to political scientists, and the usefulness of political mechanisms such as voice to economists).
101. Green, supra note 68, at 171.
102. See HIRCHMAN, supra note 67, at 22-25.
103. Green, supra note 68, at 171.
104. See ISAIAH BERLIN, TWO CONCEPTS OF LIBERTY 6-16 (1959) (discussing the concept of negative liberty and its consequences for individual behavior).
105. Green, supra note 68, at 176.
106. See Michael Walzer, The Communitarian Critique of Liberalism, 18 POL. THEORY 6, 11-12, 15-16 (1990).
107. Id. at 21.
108. We develop this point in Subsection III.B.3 infra.
109. See Mark D. Rosen, The Outer Limits of Community Self-Governance in Residential Associations, Municipalities, and Indian Country: A Liberal Theory, 84 VA. L. REV. 1053, 1099-101, 1126-27 (1998).
110. Consider an example from outside the liberal commons context: Despite the tide of fundamentalism in some parts of the world, certain rights of exit - such as the right to emigrate from one's homeland - are now considered basic human rights, which are, as such, inalienable and nonwaiveable. See, e.g., Universal Declaration of Human Rights, art. 13, G.A. Res. 217 (III)(A), U.N. GAOR, 3d Sess., pt. 1, at 71, U.N. Doc. A/810 (1948).
111. Admittedly, this is not the only justification for these inalienabilities. Another important justification comes from efficiency. See Heller, supra note 56, at 1199-201 (discussing the role of restrictions on restraint on alienability); see also Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089, 1111-15 (1972) (discussing the inefficiency of restraints on alienation but also suggesting "instances, perhaps many, in which economic efficiency is more closely approximated by such limitations");
112. Richard A. Epstein, Why Restrain Alienation?, 85 COLUM. L. REV. 970, 971-72 (1985) (setting out the efficiency argument for alienation and arguing against restraints on alienation to achieve distributional goals); Susan Rose-Ackerman, Inalienability and the Theory of Property Rights, 85 COLUM. L. REV. 931, 932 (1985) (accepting that "unencumbered market trades are desirable unless we can locate a valid reason for their restriction," while broadening the range of efficient restrictions on alienability from the Calabresi and Melamed model).
113. See generally Heller, supra note 56, at 1199 n. 174 (enumerating objections to restraints on alienation).
114. On contractual freedom and individual autonomy, see CHARLES FRIED, CONTRACT AS PROMISE: A THEORY OF CONTRACTUAL OBLIGATION 7-17 (1981).
115. Compare Chandran Kukathas, Are There Any Cultural Rights?, in THE RIGHTS OF MINORITY CULTURES 228, 238 (Will Kymlicka ed., 1995) (highlighting the liberal view of cultural communities as voluntary associations), with Green, supra note 68 (arguing that exit is not sufficient to secure individual autonomy in groups).
116. Recall also that, even aside from liberal theory, exit is a value with many virtues, including, but not limited to, serving as a disciplinary limit on organizations.
117. See, e.g., ISAIAH BERLIN, The Pursuit of the Ideal, in THE CROOKED TIMBER OF HUMANITY: CHAPTERS IN THE HISTORY OF IDEAS 1 (Henry Hardy ed., 1991); JOHN KEKES, THE MORALITY OF PLURALISM (1993); JOSEPH RAZ, THE MORALITY OF FREEDOM (1986).
118. See, e.g., ISAIAH BERLIN, The Pursuit of the Ideal, in THE CROOKED TIMBER OF HUMANITY: CHAPTERS IN THE HISTORY OF IDEAS 1 (Henry Hardy ed., 1991); JOHN KEKES, THE MORALITY OF PLURALISM (1993); JOSEPH RAZ, THE MORALITY OF FREEDOM (1986).
119. See, e.g., ISAIAH BERLIN, The Pursuit of the Ideal, in THE CROOKED TIMBER OF HUMANITY: CHAPTERS IN THE HISTORY OF IDEAS 1 (Henry Hardy ed., 1991); JOHN KEKES, THE MORALITY OF PLURALISM (1993); JOSEPH RAZ, THE MORALITY OF FREEDOM (1986).
120. See, e.g., JOSEPH RAZ, ETHICS IN THE PUBLIC DOMAIN: ESSAYS IN THE MORALITY OF LAW AND POLITICS 155-74 (1994); Chaim Gans, The Liberal Foundations of Cultural Nationalism, 30 CAN. J. PHIL. 441 (2000); Avishai Margalit & Moshe Halbertal, Liberalism and the Right to Culture, 61 SOC. RES. 491 (1994); Charles Taylor, The Politics of Recognition, in MULTICULTURALISM: EXAMINING THE POLITICS OF RECOGNITION 25, 40-41 (Amy Gutmann ed., 1994).
121. See, e.g., JOSEPH RAZ, ETHICS IN THE PUBLIC DOMAIN: ESSAYS IN THE MORALITY OF LAW AND POLITICS 155-74 (1994); Chaim Gans, The Liberal Foundations of Cultural Nationalism, 30 CAN. J. PHIL. 441 (2000); Avishai Margalit & Moshe Halbertal, Liberalism and the Right to Culture, 61 SOC. RES. 491 (1994); Charles Taylor, The Politics of Recognition, in MULTICULTURALISM: EXAMINING THE POLITICS OF RECOGNITION 25, 40-41 (Amy Gutmann ed., 1994).
122. See, e.g., JOSEPH RAZ, ETHICS IN THE PUBLIC DOMAIN: ESSAYS IN THE MORALITY OF LAW AND POLITICS 155-74 (1994); Chaim Gans, The Liberal Foundations of Cultural Nationalism, 30 CAN. J. PHIL. 441 (2000); Avishai Margalit & Moshe Halbertal, Liberalism and the Right to Culture, 61 SOC. RES. 491 (1994); Charles Taylor, The Politics of Recognition, in MULTICULTURALISM: EXAMINING THE POLITICS OF RECOGNITION 25, 40-41 (Amy Gutmann ed., 1994).
123. See, e.g., JOSEPH RAZ, ETHICS IN THE PUBLIC DOMAIN: ESSAYS IN THE MORALITY OF LAW AND POLITICS 155-74 (1994); Chaim Gans, The Liberal Foundations of Cultural Nationalism, 30 CAN. J. PHIL. 441 (2000); Avishai Margalit & Moshe Halbertal, Liberalism and the Right to Culture, 61 SOC. RES. 491 (1994); Charles Taylor, The Politics of Recognition, in MULTICULTURALISM: EXAMINING THE POLITICS OF RECOGNITION 25, 40-41 (Amy Gutmann ed., 1994).
124. See Roderick M. Hills, Jr., You Say You Want a Revolution? The Case Against the Transformation of Culture Through Antidiscrimination Laws, 95 MICH. L. REV. 1588, 1592-614 (1997) (reviewing ANDREW KOPPELMAN, ANTIDISCRIMINATION LAW AND SOCIAL EQUALITY (1996)).
125. See Roderick M. Hills, Jr., You Say You Want a Revolution? The Case Against the Transformation of Culture Through Antidiscrimination Laws, 95 MICH. L. REV. 1588, 1592-614 (1997) (reviewing ANDREW KOPPELMAN, ANTIDISCRIMINATION LAW AND SOCIAL EQUALITY (1996)).
126. See Roderick M. Hills, Jr., The Constitutional Rights of Private Government (Sept. 25, 2000) (unpublished manuscript, on file with The Yale Law Journal).
127. WALZER, supra note 9, at 105.
128. See supra Section II.C (discussing conditions for success on the commons).
129. See Gregory S. Alexander, Dilemmas of Group Autonomy: Residential Associations and Community, 75 CORNELL L. REV. 1, 50-53 (1989); Clayton P. Gillette, Courts, Covenants, and Communities, 61 U. CHI. L. REV. 1375, 1375 (1994) (arguing that, within limits, a polity should approve of the way residential associations "allow individuals with common preferences to gravitate to a common location where they can pursue their conception of the good life").
130. See Gregory S. Alexander, Dilemmas of Group Autonomy: Residential Associations and Community, 75 CORNELL L. REV. 1, 50-53 (1989); Clayton P. Gillette, Courts, Covenants, and Communities, 61 U. CHI. L. REV. 1375, 1375 (1994) (arguing that, within limits, a polity should approve of the way residential associations "allow individuals with common preferences to gravitate to a common location where they can pursue their conception of the good life").
131. For an example of such a limitation, see Samuel Issacharoff & Richard H. Pildes, Politics as Markets: Partisan Lockups of the Democratic Process, 50
132. E.g., Shelley v. Kraemer, 334 U.S. 1 (1948) (holding that state-court enforcement of a racially restrictive housing covenant violates the Equal Protection Clause of the Fourteenth Amendment); Alexander, supra note 91, at 38, 54-55.
133. Developing this point are Gillette, supra note 91, at 1397-99; and Hills, supra note 87, at 1592-614. See also Alexander, supra note 91, at 55-61 (advocating a legal regime of open-ended standards for governing the question of the limits of group autonomy, in order to "create opportunities for those inside and those outside to engage each other in dialogue"). See generally Rosen, supra note 78 (suggesting the outer limits of community self-governance that may be entailed by JOHN RAWLS, POLITICAL LIBERALISM (1993)).
134. Should there also be a right to eject a member who was mistakenly accepted or to protect against a member's later change of heart? In most cases, it seems to us that such a right would do more harm than good: A group right to eject can easily be abused by the majority as an instrument for exploitation or retaliation for nonconformism. Granting such a power to the majority may upset the delicate balance between majority jurisdiction and the minority protection discussed below in Subsection III.B.2. To be sure, we do not want to downplay the harm a bad cooperator or a disgruntled commoner can inflict on a liberal commons. To some extent, this harm can be mitigated if the other commoners have already developed a thick fabric of cooperative social norms with corresponding social sanctions for violations. But we concede that this is no full cure. This difficulty is one good reason for adopting the relatively permissive approach to group-entry limitations that we suggest in the text above.
135. Ellickson, supra note 19, at 1332-44.
136. STEVENSON, supra note 21, at 70.
137. See ABHIJIT V. BANERJEE, LAND REFORMS: PROSPECTS AND STRATEGIES 2 (Mass. Inst. of Tech. Dep't of Econ., Working Paper No. 99-24, 1999) (citing studies that suggest how large parcels may economize on production costs).
138. See JON ELSTER, THE CEMENT OF SOCIETY: A STUDY OF SOCIAL ORDER 187 (1989). Jon Elster argues that successful collective action is produced by a "mix of motivations - selfish and normative, rational and irrational . . . . Motivations that taken separately would not get collective action off the ground may interact, snowball and build upon each other so that the whole exceeds the sum of its parts." Id. Carol Rose has helpfully suggested to us that our emphasis on the social value of cooperation can be reframed in terms of the synergistic (rather than merely aggregative) benefits of cooperation.
139. Samuel Scheffler, Relationships and Responsibilities, 26 PHIL. & PUB. AFF. 189, 200 (1997). In a similar vein, Walzer notes, "Individuals are stronger, more confident, more savvy, when they are participants in a common life, when they are responsible to and for other people." WALZER, supra note 9, at 104.
140. See, e.g., Alexander, supra note 91, at 26, 41-42 (pointing to the intrinsic good of the experience of belonging that is based on a shared good or a shared resource); Ellickson, supra note 19, at 1345, 1395 (noting that companionship and the solidification of "mutual-aid relationships" are potential benefits of living in a multimember household, and pointing out the satisfaction of "living in a social environment that is consistent with [one's] ideology"); Henry Hansmann, When Does Worker Ownership Work? ESOPs, Law Firms, Codetermination, and Economic Democracy, 99 YALE L.J. 1749, 1769-70 (1990) (concluding that worker ownership may bring noneconomic benefits: the satisfaction of engaging in a communal activity; the elimination of the potential conflict of interest between workers and owners; the psychological benefit of control over resources; and training for democratic participation that may benefit society generally as well as the workers themselves); Simon, supra note 6, at 1364 (praising cooperative housing as "creat[ing] a fairly strong form of interdependence, as well as opportunities for collective action").
141. MARGARET GILBERT, LIVING TOGETHER: RATIONALITY, SOCIALITY, AND OBLIGATION 2, 8 (1996). For a succinct summary of the literature on collective agency, see Elizabeth S. Anderson & Richard H. Pildes, Expressive Theories of Law: A General Restatement, 148 U. PA. L. REV. 1503, 1514-20 (2000)
142. MARGARET GILBERT, LIVING TOGETHER: RATIONALITY, SOCIALITY, AND OBLIGATION 2, 8 (1996). For a succinct summary of the literature on collective agency, see Elizabeth S. Anderson & Richard H. Pildes, Expressive Theories of Law: A General Restatement, 148 U. PA. L. REV. 1503, 1514-20 (2000)
143. See GILBERT, supra note 102, at 221.
144. Cf. PENNER, supra note 48, at 181 (arguing that exclusive use - the core feature of private property - suits an impersonal social situation).
145. Cf. GILBERT, supra note 102, at 222-23 (noting that marriage may produce an intensive, long-term fusion, ranging over an ever-increasing number of projects, and that it is exactly this intensity and continuity of intensity that stimulates unity, closeness, and mutual trust); Robert McC. Netting, What Alpine Peasants Have in Common: Observations on Communal Tenure in a Swiss Village, 4 HUM. ECOLOGY 135, 143 n.13 (1976). Netting notes that while most vineyards and grain fields in the Swiss village of Törbel were individually owned, the community as a whole owned a vineyard, a grain field, a church, and a dwelling where the priest lived. These resources were used to support the priest, as well as to compensate the fire brigade and others who provided special services for the community. Netting links the existence of this communal property to community cohesion: "In these cases, communal rights to land and buildings that would otherwise be private contribute directly to social solidarity and village integrity. In each instance, the token communal resources are used to support social services and village-wide celebrations that promote cooperation and emphasize unity." Netting, supra, at 143 n.13.
146. See, e.g., ANDREW GRAY, INDIGENOUS RIGHTS AND DEVELOPMENT: SELF-DETERMINITION IN AN AMAZONIAN COMMUNITY 109-11 (1997) (describing the close identification of land and other resources with individuals and groups among the Arakmbut of the southeastern Peruvian rainforest); Angela R. Riley, Recovering Collectivity: Group Rights to Intellectual Property in Indigenous Communities, 18 CARDOZO ARTS & ENT. L.J. 175, 194 (2000) ("The group product in the indigenous society is the medium through which all tribal members, living, dead and unborn, speak their voice and become a part of the tribal way."); Jeremy Waldron, Superseding Historic Injustice, 103 ETHICS 4, 19-20 (1992) (claiming that for some tribes and communities, land forms the center of a present way of life and can be of religious and cultural significance).
147. See, e.g., ANDREW GRAY, INDIGENOUS RIGHTS AND DEVELOPMENT: SELF-DETERMINITION IN AN AMAZONIAN COMMUNITY 109-11 (1997) (describing the close identification of land and other resources with individuals and groups among the Arakmbut of the southeastern Peruvian rainforest); Angela R. Riley, Recovering Collectivity: Group Rights to Intellectual Property in Indigenous Communities, 18 CARDOZO ARTS & ENT. L.J. 175, 194 (2000) ("The group product in the indigenous society is the medium through which all tribal members, living, dead and unborn, speak their voice and become a part of the tribal way."); Jeremy Waldron, Superseding Historic Injustice, 103 ETHICS 4, 19-20 (1992) (claiming that for some tribes and communities, land forms the center of a present way of life and can be of religious and cultural significance).
148. See, e.g., ANDREW GRAY, INDIGENOUS RIGHTS AND DEVELOPMENT: SELF-DETERMINITION IN AN AMAZONIAN COMMUNITY 109-11 (1997) (describing the close identification of land and other resources with individuals and groups among the Arakmbut of the southeastern Peruvian rainforest); Angela R. Riley, Recovering Collectivity: Group Rights to Intellectual Property in Indigenous Communities, 18 CARDOZO ARTS & ENT. L.J. 175, 194 (2000) ("The group product in the indigenous society is the medium through which all tribal members, living, dead and unborn, speak their voice and become a part of the tribal way."); Jeremy Waldron, Superseding Historic Injustice, 103 ETHICS 4, 19-20 (1992) (claiming that for some tribes and communities, land forms the center of a present way of life and can be of religious and cultural significance).
149. "Collective action" is a generic term describing the difficulty faced by a group of self-interested individuals where the promotion of their self-interest requires cooperation. Even if they all agree on both their collective purpose and the best means to promote this purpose, they will still face difficulties in achieving it, since for each and every one of them, the individual interest supersedes their share of the collective good. MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOODS AND THE THEORY OF GROUPS 2, 7-8, 10-11, 16, 21, 51, 60-61 (1971).
150. E.g., OSTROM, supra note 6, at 3-5; STEVENSON, supra note 21, at 20-27.
151. ROBERT AXELROD, THE EVOLUTION OF COOPERATION 20 (1984).
152. Id. at 174.
153. Id. at 126-32; see also RUSSELL HARDIN, COLLECTIVE ACTION 145-50, 164-67 (1982) ("[P]layers may rationally cooperate in iterated Prisoner's Dilemmas.").
154. E.g., ANTHONY DE JASAY, SOCIAL CONTRACT, FREE RIDE: A STUDY OF THE PUBLIC GOODS PROBLEM 63-66 (1989) (noting that the individual-maximization calculus under which it works even better not to take advantage of others arises when there are continuing interactions with the same players); Rose, supra note 45, at 51 n.49 (noting that the possibility of retaliation preserves a cooperative regime on a basis of self-interest, but also pointing out difficulties with this theory).
155. See, e.g., R. DUNCAN LUCE & HOWARD RAIFFA, GAMES AND DECISIONS 94-102 (1957). For certain (partial) solutions, see HARDIN, supra note 111, at 173-87, 211-13, suggesting ways in which varied, but overlapping, interactions can provide opportunities for meaningful sanctions, the knowledge necessary to cooperate, and a rough simulation of an infinitely iterated prisoner's dilemma game.
156. In the real world, commoners are not usually voracious and unsocialized. Indeed, the opposite seems true. But the always real possibility of abuse suggests the role of legal protection: It seems a necessary, but not sufficient, condition to sustain trust and cooperation in a liberal commons setting. Our simple game theory mode of analysis helps puzzle through these relationships.
157. For instance, in the antitrust context, collusive agreements can be stable. See RICHARD A. POSNER & FRANK H. EASTERBROOK, ANTITRUST: CASES, ECONOMIC NOTES, AND OTHER MATERIALS 336-38 (2d ed. 1981) (identifying conditions conducive to collusion).
158. Players in long but transitory games, that is, where all parties know the end point, may be less prone to defecting because the symmetry of information somewhat eases the fear of exploitation. HARDIN, supra note 111, at 145-50.
159. Notice the difference between the two reasons that exit threatens successful commons property. The first reason requires a unique payoff structure in which the variations between gains at different times are so great that defection destabilizes cooperation. The second applies more broadly. If exit at a time between now and a given moment in the future is imposed (due to those external reasons), the domino effect applies, and the party who is about to leave is likely to exploit her superior information.
160. See Rose, supra note 45, at 51; see also EIRIK G. FURUBOTN & RUDOLF RICHTER, INSTITUTIONS AND ECONOMIC THEORY: THE CONTRIBUTION OF THE NEW INSTITUTIONAL ECONOMICS 76 (1997) ("[T]he existence of trust, reinforced with institutional safeguards, can lead to the convention of private property and its social protection."); TAYLOR, supra note 59, at 44-48 (characterizing the features of law that provide security of property as a public good); Krier, supra note 45, at 333 (observing the dependence of a private property regime on public regulation).
161. See OSTROM, supra note 6, at 190, 212.
162. Id. at 212.
163. See sources discussed supra Section II.C.
164. The background trust-building role we envision for law, as stated in the text, can only be postulated here. It is quite another project to address the undertheorized understanding of the way law generally (and not only the law regarding common ownership) affects people's everyday lives and constrains or enables their decisionmaking.
165. E.g., ELIZABETH ANDERSON, VALUE IN ETHICS AND ECONOMICS 157 (1993); ROBERT C. ELLICKSON, ORDER WITHOUT LAW: How NEIGHBORS SETTLE DISPUTES 60-64, 69, 76, 274 (1991); Elizabeth S. Scott & Robert E. Scott, Marriage as Relational Contract, 84 VA. L. REV. 1225, 1285-87, 1294-95 (1998); Dan M. Kahan, Trust, Collective Action, and Law (Sept. 2000) (unpublished manuscript, on file with The Yale Law Journal).
166. E.g., ELIZABETH ANDERSON, VALUE IN ETHICS AND ECONOMICS 157 (1993); ROBERT C. ELLICKSON, ORDER WITHOUT LAW: How NEIGHBORS SETTLE DISPUTES 60-64, 69, 76, 274 (1991); Elizabeth S. Scott & Robert E. Scott, Marriage as Relational Contract, 84 VA. L. REV. 1225, 1285-87, 1294-95 (1998); Dan M. Kahan, Trust, Collective Action, and Law (Sept. 2000) (unpublished manuscript, on file with The Yale Law Journal).
167. E.g., ELIZABETH ANDERSON, VALUE IN ETHICS AND ECONOMICS 157 (1993); ROBERT C. ELLICKSON, ORDER WITHOUT LAW: How NEIGHBORS SETTLE DISPUTES 60-64, 69, 76, 274 (1991); Elizabeth S. Scott & Robert E. Scott, Marriage as Relational Contract, 84 VA. L. REV. 1225, 1285-87, 1294-95 (1998); Dan M. Kahan, Trust, Collective Action, and Law (Sept. 2000) (unpublished manuscript, on file with The Yale Law Journal).
168. E.g., ELIZABETH ANDERSON, VALUE IN ETHICS AND ECONOMICS 157 (1993); ROBERT C. ELLICKSON, ORDER WITHOUT LAW: How NEIGHBORS SETTLE DISPUTES 60-64, 69, 76, 274 (1991); Elizabeth S. Scott & Robert E. Scott, Marriage as Relational Contract, 84 VA. L. REV. 1225, 1285-87, 1294-95 (1998); Dan M. Kahan, Trust, Collective Action, and Law (Sept. 2000) (unpublished manuscript, on file with The Yale Law Journal).
169. See generally Symposium, Law, Economics, and Norms, 144 U. PA. L. REV. 1643 (1996) (including articles describing a range of contexts in which such norms form and operate).
170. HARDIN, supra note 111, at 186 ("[T]He possibility of sanction is valuable for letting the well-intentioned, who do not require sanctions, risk being cooperative on the secure knowledge that those with whom they come to interact are similarly well-intentioned."); H.L.A. HART, THE CONCEPT OF LAW 193 (1961); JEREMY WALDRON, When Justice Replaces Affection: The Need for Rights, in LIBERAL RIGHTS 370, 373-74, 376, 385, 387 (1993); Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms, 144 U. PA. L. REV. 1765, 1793 (1996) ("[T]he transactor may find it desirable to include terms in the contract that are the best terms if the other transactor turns out to be untrustworthy, while making extralegal commitments . . . that will govern the relationship if the other party turns out to be trustworthy.");
171. HARDIN, supra note 111, at 186 ("[T]He possibility of sanction is valuable for letting the well-intentioned, who do not require sanctions, risk being cooperative on the secure knowledge that those with whom they come to interact are similarly well-intentioned."); H.L.A. HART, THE CONCEPT OF LAW 193 (1961); JEREMY WALDRON, When Justice Replaces Affection: The Need for Rights, in LIBERAL RIGHTS 370, 373-74, 376, 385, 387 (1993); Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms, 144 U. PA. L. REV. 1765, 1793 (1996) ("[T]he transactor may find it desirable to include terms in the contract that are the best terms if the other transactor turns out to be untrustworthy, while making extralegal commitments . . . that will govern the relationship if the other party turns out to be trustworthy.");
172. HARDIN, supra note 111, at 186 ("[T]He possibility of sanction is valuable for letting the well-intentioned, who do not require sanctions, risk being cooperative on the secure knowledge that those with whom they come to interact are similarly well-intentioned."); H.L.A. HART, THE CONCEPT OF LAW 193 (1961); JEREMY WALDRON, When Justice Replaces Affection: The Need for Rights, in LIBERAL RIGHTS 370, 373-74, 376, 385, 387 (1993); Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms, 144 U. PA. L. REV. 1765, 1793 (1996) ("[T]he transactor may find it desirable to include terms in the contract that are the best terms if the other transactor turns out to be untrustworthy, while making extralegal commitments . . . that will govern the relationship if the other party turns out to be trustworthy.");
173. Carol M. Rose, Trust in the Mirror of Betrayal, 75 B.U. L. REV. 531, 535, 537-38, 540-41, 546, 550 (1995) (discussing bases for, and betrayals of, "semi-rational" or "doubting" trust).
174. See OSTROM, supra note 6, at 36.
175. Philip Pettit, The Cunning of Trust, 24 PHIL. & PUB. AFF. 202, 209-10 (1995). Kahan elaborates: [The] behaviorally realistic model suggests the importance of promoting trust. Individuals who have faith in the willingness of others to contribute their fair share will voluntarily respond in kind. Spontaneous cooperation of this son, moreover, breeds even more of the same, as individuals observe others contributing to public goods and are moved to reciprocate. Kahan, supra note 123, at 2.
176. We are grateful to our colleague Jim Krier for challenging us on this front and helping us respond to this challenge.
177. See James E. Krier & Stewart J. Schwab, Property Rules and Liability Rules: The Cathedral in Another Light, 70 N.Y.U. L. REV. 440, 464, 478 (1995); see also Smith, supra note 35, at 167 (making a similar claim with respect to scattered and semicommons property).
178. On penalty default rules, see Ian Ayres & Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 YALE L.J. 87, 91 (1989), which argues that "penalty defaults are purposefully set at what the parties would not want - in order to encourage the parties to reveal information to each other or to third parties."
179. A regime that encourages ownership and management of commons resources must focus its effects mainly on mid-level cooperators, because especially good cooperators may well succeed in effectively working together irrespective of the legal regime, and uniquely bad cooperators would fail in any event. (Furthermore, to the extent that for mid-level cooperators cooperation is itself a reward, but for bad cooperators it is not, the latter are unlikely to bid as high as the former to join.) The only important prescription regarding bad cooperators is that the law should allow - maybe even encourage - the others to exclude them. As the text below explains, this exclusion can be achieved without adopting a regime of penalty default rules.
180. See Krier, supra note 45, at 337-39.
181. Rose, supra note 125, at 554-56.
182. Indeed, if failure is likely ex ante, one might understand cooperation, the failure to exit, as an affirmative decision to remain (though, admittedly, a contextual decision not to exit does not require affirmative action and therefore may be less weighty than an initial decision to enter into cooperative resource management).
183. An important question arises regarding the proper boundary between the sphere of individual dominion and the sphere of democratic self-governance. We cannot provide a precise answer to this question for all liberal commons settings because the outcome must depend on contextual macro and micro values. But in Subsection III.B.2.b infra, we provide our general guideline: The liberal commons favors majority rule in a broad realm of management and investment (or divestment) decisions so long as the majority's decisions are not purely redistributive, shifting utility from the minority to the majority. This general prescription signals some "bias" in favor of democratic self-governance: In a liberal commons, the sphere of individual dominion is residual whereas the sphere of democratic self-governance is dominant. Such a bias does not collapse the liberal commons into the communitarian ideals of commons property, however, because for the liberal commons, collective governance is democratic and exit is preserved.
184. As an aside, the success of the medieval open-field system seems due, in part, to communal regulation of the fields' use according to the two forms we explore in the text below. Cf. Smith, supra note 35, at 132, 136-37 (terming the open-field system a "semicommons" because of how it combines commons and private uses).
185. OSTROM, supra note 6, at 71-74 (detailing how access to a river for irrigation in villages in Valencia was controlled by consistent monitoring by the farmers themselves and by elected officials, with a tribunal determining violations and imposing fines); id. at 94-100 (addressing the importance of graduated sanctions); McKean, supra note 6, at 256 (describing escalating penalties - including exclusion or banishment in extreme cases - in the commons governance regimes of certain Japanese villages); id. at 272-75 (describing the need for easily enforceable rules).
186. McKean, supra note 6, at 272-75.
187. Where the visibility of exploitation efforts is low, fair-market-value liability may not suffice to deter excessive use. There, potential violators can count on some measure of underenforcement. They may reasonably expect some probability that deviance will not be spotted if monitoring is relaxed, as we expect it to be, until eventually there is major deviance. Also, if the pattern of deviance is detected late, evidentiary problems may arise because the exact degree of earlier excess uses may be harder and more costly to identify, a cost that is aggravated if catching extreme exploiters also requires settling the accounts of other, less extreme exploiters.
188. HANOCH DAGAN, UNJUST ENRICHMENT: A STUDY OF PRIVATE LAW AND PUBLIC VALUES 18 (1997). Removing ex post the possibility of profit from detected infringements makes overuse somewhat less valuable ex ante and thus may more effectively deter violations. To be sure, even with this remedy there is still a chance that the infringement will go undetected or that the other commoners will fail to pursue their claim, which makes the violator's expected gains greater than zero. Nevertheless, the ability to recover the violator's gains makes detecting infringements -even past infringements - relatively more worthwhile to the other commoners. Id. Where the risk of underenforcement is sufficiently high, even a "simple" profits-based remedy may not suffice. In these (extreme) cases, the measure of recovery for preventing overuse should be increased so that the exploiter's average damages will equal its profit. Technically, this would require that the level of damages imposed equal the exploiter's profits divided by the probability of liability. See Hanoch Dagan & James J. White, Governments, Citizens, and Injurious Industries, 75 N.Y.U. L. REV. 354, 421 (2000).
189. HANOCH DAGAN, UNJUST ENRICHMENT: A STUDY OF PRIVATE LAW AND PUBLIC VALUES 18 (1997). Removing ex post the possibility of profit from detected infringements makes overuse somewhat less valuable ex ante and thus may more effectively deter violations. To be sure, even with this remedy there is still a chance that the infringement will go undetected or that the other commoners will fail to pursue their claim, which makes the violator's expected gains greater than zero. Nevertheless, the ability to recover the violator's gains makes detecting infringements - even past infringements - relatively more worthwhile to the other commoners. Id. Where the risk of underenforcement is sufficiently high, even a "simple" profits-based remedy may not suffice. In these (extreme) cases, the measure of recovery for preventing overuse should be increased so that the exploiter's average damages will equal its profit. Technically, this would require that the level of damages imposed equal the exploiter's profits divided by the probability of liability. See Hanoch Dagan & James J. White, Governments, Citizens, and Injurious Industries, 75 N.Y.U. L. REV. 354, 421 (2000).
190. ELLICKSON, supra note 123, at 234-36.
191. Id. at 56; see also Bernstein, supra note 125, at 1796-98 (arguing that trade association members rely on informal accounting during ongoing dealing but strict legal accounting during the endgame).
192. ELLICKSON, supra note 123, at 56.
193. Omri Ben-Shahar, Rights Eroding from Past Breach, 1 AM. L. & ECON. REV. 190 (2000). Contra McKean, supra note 6, at 273-74 (arguing that successful systems "betray an intense concern with . . . bookkeeping to keep track of contributions and withdrawals from the commons").
194. Rose, supra note 125, at 555.
195. The mechanisms we suggest make monitoring cheaper indirectly: By supporting trust, they encourage the parties to spend less on monitoring, because each can expect the others to self-report potential overuses.
196. Rose, supra note 125, at 556-57. There is another possible objection to the accounting mechanism we propose. Our mechanism can never be perfect - and thus the overuse aspect of the tragedy of the commons can never be fully overcome - because potential defectors will always be able to get away with their opportunism if they overuse or damage the common resource in unobservable or unverifiable ways. Cf. Alan Schwartz, Relational Contracts in the Courts: An Analysis of Incomplete Agreements and Judicial Strategies, 21 J. LEGAL STUD. 271, 279-80 (1992) (discussing the distinction between observable and verifiable information). This critique postulates that there are many acts of individual commoners that would be impossible - or, more likely, too costly - to observe or to prove in court (even if observed). The critique further implies that a regime of private property (the sole owner case) is free from this difficulty. We do not dispute that commons property regimes face the difficulty of unobservable or unverifiable infringements. Ellickson, supra note 19, at 1329 (comparing the effectiveness of barking dogs as a boundary-infringement device with the difficulty of designing commons-shirking detection mechanisms). But this difficulty is not wholly absent with private property: Trespassing must be policed and licensees monitored. Therefore, if - or, better, in those cases where - the default rules we propose can overcome the difficulties of collective action in controlling overuse by way of observable and verifiable acts, the liberal commons is not different, in this respect, from so-called Blackstonian private property.
197. Richard J. Arneson, The Principle of Fairness and Free-Rider Problems, 92 ETHICS 616, 621-22 (1982).
198. See id. at 622.
199. ELLICKSON, supra note 123, at 71-75, 275; OSTROM, supra note 6, at 49; McKean, supra note 6, at 266-67.
200. See generally Dagan & White, supra note 141, at 385-90 (discussing restitutionary liability for unilateral conferral of unsolicited benefits).
201. As Saul Levmore explains, individual valuations are idiosyncratic because they depend on varying abilities to pay for a good and on personal tastes. Levmore gives three exceptions where the phenomenon of subjective devaluation would not occur: (1) the recipient has infinite wealth; (2) the recipient is a profit-making enterprise where subjective preferences have little role; or (3) the nonbargained benefit is easily translated into wealth. Unless those exceptions apply, one cannot easily refute the recipient's claim that the recipient preferred to invest money in the acquisition of some other benefit more clearly to the recipient's liking. Saul Levmore, Explaining Restitution, 71 VA. L. REV. 65, 74-79 (1985).
202. For the proposition that awarding restitution for unsolicited benefits in cases of varying subjective valuations insults the liberal commitment to individual free choice, see PETER BIRKS, AN INTRODUCTION TO THE LAW OF RESTITUTION 109-10, 228 (1985); 1 DAN B. DOBBS, LAW OF REMEDIES § 4.9(2) (2d ed. 1993); John D. McCamus, The Self-Serving Intermeddler and the Law of Restitution, 16 OSGOODE HALL L.J. 515, 520 (1978); and Mitchell McInnes, Incontrovertible Benefits in the Supreme Court of Canada: Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, 23 CAN. BUS. L.J. 122, 123, 128 (1994).
203. For the proposition that awarding restitution for unsolicited benefits in cases of varying subjective valuations insults the liberal commitment to individual free choice, see PETER BIRKS, AN INTRODUCTION TO THE LAW OF RESTITUTION 109-10, 228 (1985); 1 DAN B. DOBBS, LAW OF REMEDIES § 4.9(2) (2d ed. 1993); John D. McCamus, The Self-Serving Intermeddler and the Law of Restitution, 16 OSGOODE HALL L.J. 515, 520 (1978); and Mitchell McInnes, Incontrovertible Benefits in the Supreme Court of Canada: Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, 23 CAN. BUS. L.J. 122, 123, 128 (1994).
204. For the proposition that awarding restitution for unsolicited benefits in cases of varying subjective valuations insults the liberal commitment to individual free choice, see PETER BIRKS, AN INTRODUCTION TO THE LAW OF RESTITUTION 109-10, 228 (1985); 1 DAN B. DOBBS, LAW OF REMEDIES § 4.9(2) (2d ed. 1993); John D. McCamus, The Self-Serving Intermeddler and the Law of Restitution, 16 OSGOODE HALL L.J. 515, 520 (1978); and Mitchell McInnes, Incontrovertible Benefits in the Supreme Court of Canada: Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, 23 CAN. BUS. L.J. 122, 123, 128 (1994).
205. For the proposition that awarding restitution for unsolicited benefits in cases of varying subjective valuations insults the liberal commitment to individual free choice, see PETER BIRKS, AN INTRODUCTION TO THE LAW OF RESTITUTION 109-10, 228 (1985); 1 DAN B. DOBBS, LAW OF REMEDIES § 4.9(2) (2d ed. 1993); John D. McCamus, The Self-Serving Intermeddler and the Law of Restitution, 16 OSGOODE HALL L.J. 515, 520 (1978); and Mitchell McInnes, Incontrovertible Benefits in the Supreme Court of Canada: Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, 23 CAN. BUS. L.J. 122, 123, 128 (1994).
206. Levmore explains: In partition the property is generally reduced to monetary terms, often by sale . . . . The recipient, whose share of the improvement's value is deducted from his share of the property's total value, cannot claim to have been forced to purchase a good that he does not value, because he has received in partition the monetary equivalent of his share of the improvement. Levmore, supra note 153, at 78. This rule leaves a commoner who invests in improvements and exits early with no right of contribution. But, as the text above explains, any other rule would leave the other commoners too vulnerable to uncalled-for impositions of benefits. And, as we indicate below, a commoner who wishes to initiate a common investment in the resource can and should resort to democratic self-governance mechanisms.
207. See Merritt B. Fox & Michael A. Heller, Corporate Governance Lessons from Russian Enterprise Fiascoes, 75 N.Y.U. L. REV. 1720, 1727-33 (2000) (explaining how nonpreservation can be efficient and giving colorful examples of value-destroying Russian enterprises).
208. In other words, until the community can reach some agreement on how risk-averse it is going to be, our rules should assume that it is maximally risk-averse, so that individual investment is reimbursable only when it can be characterized as a protection against erosion. In such a case, differences in subjective valuations are unlikely.
209. Such is indeed the practice of successful commons regimes. McKean, supra note 6, at 264-65.
210. Assume, for example, that there are two commoners, that the fair market value for using the resource as a whole (say, a parcel of land) is 40, that the fair market value of the pertinent labor is 10, and that the resulting net profit is 100 (after deducting all expenses, including the 10 in labor paid back to the laboring commoner). The first option would give the passive commoner 20 (50% of the fair market value of the parcel's use), and leave the laborer 80. The second rule would give each party 50 of the profit (so that the laborer does not get any special benefit). The third rule would allocate 20% of the net profits to "work" and 80% to "land," thus allowing the passive commoner to receive 40 (50% of what has been allocated to "land") and the laborer 60 (50% of what has been allocated to "land" as well as that part of the net profits that has been allocated to "work").
211. Lawrence Berger, An Analysis of the Economic Relations Between Cotenants, 21 ARIZ. L. REV. 1015, 1021-22 (1979) (describing the first rule as "clearly aimed at the reward of his [the owner's] present efforts in maximizing the utility of the land"); Robert P. Merges & Lawrence A. Locke, Co-Ownership of Patents: A Comparative and Economic View, 72 J. PAT. & TRADEMARK OFF. SOC'Y 586, 595-96 (1990) (preferring the first rule for co-ownership of patents for similar reasons).
212. Lawrence Berger, An Analysis of the Economic Relations Between Cotenants, 21 ARIZ. L. REV. 1015, 1021-22 (1979) (describing the first rule as "clearly aimed at the reward of his [the owner's] present efforts in maximizing the utility of the land"); Robert P. Merges & Lawrence A. Locke, Co-Ownership of Patents: A Comparative and Economic View, 72 J. PAT. & TRADEMARK OFF. SOC'Y 586, 595-96 (1990) (preferring the first rule for co-ownership of patents for similar reasons).
213. Heller, supra note 32, at 622-26 (explaining how the anticommons tragedy operates).
214. HIRSCHMAN, supra note 67, at 77 (stating that loyalty makes exit less likely and increases the likelihood of voice).
215. Id. at 82 ("While loyalty postpones exit its very existence is predicated on the possibility of exit.").
216. Id. at 37.
217. Id. at 43.
218. See id. at 36-43.
219. Cf. Jeremy Waldron, Legislators' Intentions and Unintentional Legislation, in LAW AND INTERPRETATION: ESSAYS IN LEGAL PHILOSOPHY 329, 346-48 (Andrei Marmor ed., 1995) (arguing, based on Aristotle, that pooling of experiences and perspectives produces better decisions than any one individual could reach alone).
220. OSTROM, supra note 6, at 93.
221. Id. 172. E.g., Michael A. Heller & James E. Krier, Deterrence and Distribution in the Law of Takings, 112 HARV. L. REV. 997, 1011-12 (1999) (discussing when compensation is appropriate in takings cases based on a nuisance rationale); Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 HARV. L. REV. 1165, 1196-97 (1967) (same).
222. Id. 172. E.g., Michael A. Heller & James E. Krier, Deterrence and Distribution in the Law of Takings, 112 HARV. L. REV. 997, 1011-12 (1999) (discussing when compensation is appropriate in takings cases based on a nuisance rationale); Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 HARV. L. REV. 1165, 1196-97 (1967) (same).
223. Furthermore, it may well be that in such a case it is the minority's insistence to continue an inefficient (and positively harmful) use that is strategic.
224. See Gillette, supra note 91, at 1425 (describing how changing circumstances may frustrate some homeowners' original expectations in a housing association).
225. McKean, supra note 6, at 258. These bodies had reasons to convene other than management of the commons. As McKean explains, this made management more efficient by lessening the transaction costs of assembling for these purposes. Id. at 260.
226. Id. at 260-61. See generally Symposium, The Republican Civic Tradition, 97 YALE L.J. 1493 (1988).
227. See Ellickson, supra note 19, at 1350.
228. McKean, supra note 6, at 260-61. As McKean explains: Disgruntled violators . . . could begin to free-ride . . . or to shirk . . . if they felt that the maintenance of the commons was no longer in their interest because the rules were unfair. And they could free-ride as individuals even if they could not overcome the collective action dilemma in order to demand changes in governance of the commons. Id.
229. Id. at 261.
230. See Henry Hansmann, Condominium and Cooperative Housing: Transactional Efficiency, Tax Subsidies, and Tenure Choice, 20 J. LEGAL STUD. 25, 34-36 (1991) (describing how landlords, contracting separately with each tenant, may be better able to maximize aggregate tenant preferences than cooperatives or condominiums).
231. Steven D. Smith, Reductionism in Legal Thought, 91 COLUM. L. REV. 68, 71 (1991) (discussing the dispute resolution function of law).
232. Cf. HART, supra note 125, at 79-88 (discussing law as a source of reasons for action); James A. Henderson, Jr. & Richard N. Pearson, Implementing Federal Environmental Policies: The Limits of Aspirational Commands, 78 COLUM. L. REV. 1429 (1978) (describing the difficulty of controlling behavior through "aspirational commands" from legislatures or courts).
233. McKean, supra note 6, at 259.
234. OSTROM, supra note 6, at 212.
235. A possible limitation could include protecting against the negative externalities that may arise from excessive fragmentation of property rights. See Heller, supra note 56, at 1173-74.
236. Private constitutions raise several questions that cannot properly be addressed here, regarding both the outer limits of freedom of contract (especially in contexts that may raise concerns of systematic exploitation) and the possibility of unwritten constitutions. 187. Cf. Green, supra note 68, at 178-79 (discussing "principles of justice in dissolution, conditioned by the legitimate expectations of the members"). Attempts to deprive others unjustly can be initiated either by the majority or by the minority (or one individual commoner). In the former case, preventing unjust deprivation not only serves as an anti-opportunistic device, but also is crucial to securing practical (and not merely theoretical) exit. See id. In the latter case, preventing unjust deprivation safeguards against independent exploiters who want to take the money and run.
237. Note that this approach, which disfavors opportunistic exit, requires a measure of instrumental reasoning. However, the instrumental analysis is deployed here to refine the class of exit decisions protected from a liberal standpoint, not as an end in itself.
238. See MARTIN J. OSBORNE & ARIEL RUBINSTEIN, A COURSE IN GAME THEORY 135 (1994). As an aside, recall that in all these cases, the norms of well-socialized commoners can override law-created incentives.
239. Cf. Scott & Scott, supra note 123, at 1283 (arguing that a cooling-off period "reduces the risk of asymmetric investment" by reducing the risk of strategic exit or threats of exit and encourages the parties to invest in the relationship even where the expected reciprocity is long-term). Some may object to our reliance on people's irrationality as a means for driving the right outcome, suggesting that our solution offends transparency, which is another important liberal value, and - even more importantly - is disrespectful of people. But both of these objections must be wrong. People's cognitive biases do not necessarily disappear if they are exposed, and thus there is no need to conceal the law's reliance on these failures. Further, there is no reason to think of such deviations from the rational-actor model in derogatory terms. Some of the most rewarding goods in life cannot and should not be reduced to market rationality. See generally ANDERSON, supra note 123, at 141-67 (discussing the ethical limitations of market rationality). 193. One concern with exit taxes is that, by increasing the incentive needed before exit becomes rational, they may induce opportunists to exploit even more to justify their costs on exit. If so, then exit taxes would not ameliorate, but rather exacerbate exploitation. But by pushing potential exploiters to be so greedy, exit taxes can also significantly increase the likelihood of detection. This effect is likely to (at least) counterbalance the concern of exacerbating exploitation.
240. See generally Hanoch Dagan, Encroachments: Between Private and Public, in THE COMPARATIVE LAW OF UNJUSTIFIED ENRICHMENT (David Johnston & Reinhard Zimmermann eds., forthcoming 2001) (arguing that restitution of benefits is the appropriate measure for deterring infringements).
241. Dagan & White, supra note 141, at 387-89. But see Rosen, supra note 78, at 1101. Rosen's only stipulation on this matter is that "[r]ules requiring disgorgement of particular economic benefits allocated to the community member on the assumption that he or she would be a lifetime member should be presumptively valid to the extent such provisions do not make exit an impossibility." Id. Our approach above is more careful about autonomy.
242. Ideally, exit taxes should be calibrated in utility terms, which requires that they take into account wealth disparities. In some settings this fine-tuning may prove, however, to be too cumbersome from an administrative standpoint.
243. The conventional wisdom has long been that these rights have, at most, a minimal effect on property value because they do not impede alienation. E.g., 3 ERIC MILLS HOLMES, CORBIN ON CONTRACTS § 11.3, at 484-85 (Joseph M. Perillo ed., rev. ed. 1996). Recent work, though, suggests that, because of the high search and negotiation costs of bidding on unique property subject to first refusal rights, alienation (and hence owner exit) may be significantly burdened. David I. Walker, Rethinking Rights of First Refusal, 5 STAN. J.L. BUS. & FIN. 1, 16-18, 43-46 (1999); see also Marcel Kahan, An Economic Analysis of Rights of First Refusal (June 1999) (unpublished manuscript, on file with The Yale Law Journal) (modeling the value of rights of first refusal and rights of first offer).
244. The conventional wisdom has long been that these rights have, at most, a minimal effect on property value because they do not impede alienation. E.g., 3 ERIC MILLS HOLMES, CORBIN ON CONTRACTS § 11.3, at 484-85 (Joseph M. Perillo ed., rev. ed. 1996). Recent work, though, suggests that, because of the high search and negotiation costs of bidding on unique property subject to first refusal rights, alienation (and hence owner exit) may be significantly burdened. David I. Walker, Rethinking Rights of First Refusal, 5 STAN. J.L. BUS. & FIN. 1, 16-18, 43-46 (1999); see also Marcel Kahan, An Economic Analysis of Rights of First Refusal (June 1999) (unpublished manuscript, on file with The Yale Law Journal) (modeling the value of rights of first refusal and rights of first offer).
245. The conventional wisdom has long been that these rights have, at most, a minimal effect on property value because they do not impede alienation. E.g., 3 ERIC MILLS HOLMES, CORBIN ON CONTRACTS § 11.3, at 484-85 (Joseph M. Perillo ed., rev. ed. 1996). Recent work, though, suggests that, because of the high search and negotiation costs of bidding on unique property subject to first refusal rights, alienation (and hence owner exit) may be significantly burdened. David I. Walker, Rethinking Rights of First Refusal, 5 STAN. J.L. BUS. & FIN. 1, 16-18, 43-46 (1999); see also Marcel Kahan, An Economic Analysis of Rights of First Refusal (June 1999) (unpublished manuscript, on file with The Yale Law Journal) (modeling the value of rights of first refusal and rights of first offer).
246. See McKean, supra note 6, at 263 (noting that successful commons regimes tend to have careful eligibility screening for individual households).
247. As an aside, rights of first refusal may raise issues of discrimination when existing insiders restrict entry, but these issues are better policed through familiar antidiscrimination mechanisms. On this point, see sources cited supra note 94.
248. See, e.g., JOHN E. CRIBBET & CORWIN W. JOHNSON, PRINCIPLES OF THE LAW OF PROPERTY 407 (3d ed. 1989).
249. The next two articles planned in this series will be authored by Carolyn Frantz and Hanoch Dagan, see supra note 64, and Michael Heller and Rick Hills, see supra note 65.
250. For another exploration of the interaction of race and political/legal structure, see Issacharoff & Pildes, supra note 92. While race discrimination was undeniably an integral aspect of blacks' exclusion from southern primaries, Issacharoff and Pildes show that this argument misses the structural reasons for all-white primaries. Id. at 662-64.
251. See EMERGENCY LAND FUND, THE IMPACT OF HEIR PROPERTY ON BLACK RURAL LAND TENURE IN THE SOUTHEASTERN REGION OF THE UNITED STATES 283-86 (1980) [hereinafter HEIR PROPERTY]. See generally Thomas W. Mitchell, From Reconstruction to Deconstruction: Undermining Black Landownership, Political Independence and Community Through Partition Sales of Tenancies in Common (1999) (unpublished LL.M. thesis, University of Wisconsin) (on file with The Yale Law Journal) (discussing the role of partition sales in declining black farmland ownership and collecting sources).
252. See EMERGENCY LAND FUND, THE IMPACT OF HEIR PROPERTY ON BLACK RURAL LAND TENURE IN THE SOUTHEASTERN REGION OF THE UNITED STATES 283-86 (1980) [hereinafter HEIR PROPERTY]. See generally Thomas W. Mitchell, From Reconstruction to Deconstruction: Undermining Black Landownership, Political Independence and Community Through Partition Sales of Tenancies in Common (1999) (unpublished LL.M. thesis, University of Wisconsin) (on file with The Yale Law Journal) (discussing the role of partition sales in declining black farmland ownership and collecting sources).
253. HEIR PROPERTY, supra note 203, at 284-86 (listing the heirs' interests and reproducing the Brown family tree).
254. Id. at 283.
255. Id.
256. See BLACK FARMING, supra note 1, at 45. In 1982, 85% of all black farmers were concentrated in the South, but they were rare even there, totaling only about 6% of Southern farmers. Id.
257. Id. at 2-3. Between 1959 and 1969, the number of black commercial farm operators declined by 84%, compared to 26% for white operators. Id. at 40. Between 1970 and 1980, the black farm population dropped 65%, compared to 22% for the white population. Id. at 44. For state-by-state data on declining black landownership, see OFFICE OF MINORITY BUS. ENTER., U.S. DEP'T OF COMMERCE, LAND AND MINORITY ENTERPRISE: THE CRISIS AND THE OPPORTUNITY (1976). For a county-by-county breakdown of black landownership in the South, see BROWNE, supra note 3, at apps. Q-W.
258. Settlement, supra note 1; see also BLACK FARMING, supra note 1, at 44 (indicating that, of America's six million farm residents in 1982, 4% were black Americans).
259. Settlement, supra note 1 (discussing decades of routine discrimination by the Department of Agriculture in denying crucial loans to black farmers); see also infra text accompanying notes 225-226.
260. HEIR PROPERTY, supra note 203, at 282; see, e.g., Mitchell, supra note 203, at 4-7.
261. HEIR PROPERTY, supra note 203, at 62.
262. Ward Sinclair, Black Farmers: A Dying Minority, WASH. POST, Feb. 18, 1986, at A1.
263. HEIR PROPERTY, supra note 203, at 282.
264. Joseph Brooks, The Emergency Land Fund: A Rural Land Retention and Development Model, in THE BLACK RURAL LANDOWNER - ENDANGERED SPECIES 117, 121 (Leo McGee & Robert Boone eds., 1979).
265. HEIR PROPERTY, supra note 203, at 282-83. See generally BROWNE, supra note 3, at 54 (describing the obstacles to effective governance created by the multiplying number of owners as land passes through several generations). Governance difficulties are compounded because identifying heirs with legal interests becomes a more complex and expensive project with each passing generation. Id.
266. BLACK FARMING, supra note 1, at 68 (quoting HEIR PROPERTY, supra note 203, at 75).
267. HEIR PROPERTY, supra note 203, at 282-83.
268. See BROWNE, supra note 3, at 54.
269. As an aside, filing suit often turns out to be a significant strategic error based on the mistaken belief held by most southern rural black landowners (according to surveys) that "an heir's interest cannot be sold without the consent of all the heirs, and that heirs in possession of the land have superior rights to the land." BLACK FARMING, supra note 1, at 69 (reporting a survey of black landowners).
270. Even when partition in kind is possible and perhaps even practical, courts favor partition sales. See RICHARD R. POWELL, POWELL ON REAL PROPERTY ¶ 612 (Richard R. Powell & Patrick J. Rohan eds., abr. ed. 1968).
271. See BROWNE, supra note 3, at 55.
272. Brooks, supra note 215, at 121.
273. See BROWNE, supra note 3, at 53. Indeed, these bidders may well be the people who induced the action for partition. Id. at 55 ("A variation of this procedure, where the white man instigates the partition after having gained a small interest, has been used, especially in the past, to gain black-owned land.").
274. Criticizing the prevalence of forced partition sales, one note argues
275. In 1982, the average commercial black-owned farm in the South was 128 acres, while the average white-owned farm was 428 acres. BLACK FARMING, supra note 1, at 50. "Economies of scale, research and technology, tax benefits, government price and income supports, and commercial lending all militate against the survival of black-operated small farms." Id. (footnote omitted).
276. E.g., Housing and Community Development Amendments, Pub. L. No. 95-557, 92 Stat. 2080 (1978); BLACK FARMING, supra note 1.
277. The most significant private initiative is the Emergency Land Fund, a private, nonprofit organization founded in 1971 to counter black land loss. See Brooks, supra note 215, at 117.
278. There are incentives outside of property law that also encourage partition. For example, attorney fee structures often award lawyers 10% of the land value on partition sale, but not it the title problem is informally resolved. There are many stories of lawyers who have initiated partition suits for heirs over the objection of the heirs' families. In one case, a New York heir asked her lawyer to provide deeds to the family property, but the lawyer instead filed an action for sale and partition. When the heir fired the lawyer, the lawyer then found another heir to prosecute the suit HEIR PROPERTY, supra note 203, at 292-93. Also, the tax system encourages partition sales by favoring wealthy investors who can write off certain losses in ways not available to low-or moderate-income farmers. See BLACK FARMING, supra note 1, at 4.
279. See, e.g., William E. Nelson, Jr., Black Rural Land Decline and Political Power, in THE BLACK RURAL LANDOWNER - ENDANGERED SPECIES, supra note 215, at 83, 93 ("The absence of a viable equity base has been costly to the black community both economically and politically. Black dependency on white economic support has served to rob the black community of its autonomous decision-making potential.").
280. Lisa Groger, Tied to Each Other Through Ties to the Land: Informal Support of Black Elders in a Southern U.S. Community, 7 J. CROSS-CULTURAL GERONTOLOGY 205, 205 210 (1992).
281. Id. at 205, 217; cf. Lisa A. Kelly, Race and Place: Geographic and Transcendent Community in the Post-Shaw Era, 49 VAND. L. REV. 227, 243 n.56 (1996) (discussing varying levels of ability of landless elders to mobilize informal support).
282. This phenomenon of cognitive psychology was hypothesized by Mark Kelman, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. CAL. L. REV. 669 (1979) . Later studies confirmed the effect. Loss aversion may at least partially explain this difference. Amos Tversky & Daniel Kahneman, Rational Choice and the Framing of Decisions, 59 J. BUS. S251, S258 (1986).
283. This phenomenon of cognitive psychology was hypothesized by Mark Kelman, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. CAL. L. REV. 669 (1979) . Later studies confirmed the effect. Loss aversion may at least partially explain this difference. Amos Tversky & Daniel Kahneman, Rational Choice and the Framing of Decisions, 59 J. BUS. S251, S258 (1986).
284. Perhaps locking people together by preventing alienation, the no-exit illiberal solution, would have kept more farms within the family. But such a solution, even if it achieved community-preserving goals, would still be tragic, because it sacrifices each heir's liberty to exit. Further, we question whether preventing alienability would necessarily achieve even instrumental community-building goals. Consider the disastrous consequences of the federal allotment policy for Native Americans that locked people together without providing effective internal self-governance mechanisms. See Heller, supra note 56, at 1213-17 (discussing the tragedy of the anticommons resulting from these policies).
285. Cotenants are those who share land under the common-law regime of tenancy in common. Each individual tenant has an interest in the same undivided piece of property. Unlike joint tenants, cotenants have no right of survivorship. See DUKEMINIER & KRIER, supra note 11, at 322. In all states where it existed, the presumption in favor of joint tenancy has been abolished almost completely, id. at 323, so, on death and in the absence of a will, heirs hold property as tenants in common. Abolishing the presumption of joint tenancy thus may have had the unintended effect of accelerating fractionation.
286. In many respects, Israel is usually considered a common-law jurisdiction. But the Israeli Land Law is part of a codification that was heavily influenced by the Continental tradition. See Yoram Shachar, History and Sources of Israeli Law, in INTRODUCTION TO THE LAW OF ISRAEL 1, 5-6 (Amos Shapira & Karen C. DeWitt-Arar eds., 1995).
287. The reason for the traditional common-law hostility towards co-ownership is somewhat of a puzzle, especially if we are correct in our claim that co-ownership is not an institution that necessarily fails. One possibility is that an outdated hostility toward feudal forms drove the development of co-ownership law. Consider W.W. BUCKLAND & ARNOLD D. MCNAIR, ROMAN LAW & COMMON LAW: A COMPARISON IN OUTLINE 106 (2d ed. 1952), which states: The inconvenience of common ownership was so great that a power of division was from early times inherent in the institution. . . . The contrary rule of our earlier law, till Henry VIII, under which no partition could be compelled (except as between coparceners, who became joint owners by operation of law, so that the position was not voluntarily assumed), rests, no doubt, in reality more on the interest of the chief lord in having the services undivided than on this ground . . . .
288. In some circumstances, family farms can be a rather efficient scale of agricultural production. See generally HENRY HANSMANN, THE OWNERSHIP OF ENTERPRISE 141-42 (1996) (contrasting the success of family farms with the failure of vertically organized agricultural cooperatives).
289. See, e.g., Alison Maitland, Shrewd Farmers See the Way the Wind Is Blowing, FIN. TIMES, Mar. 17, 1998, at 2 (discussing German farmers' support for extensive price subsidies).
290. 2 AMERICAN LAW OF PROPERTY § 6.14, at 57 (A. James Casner ed., 1952); DUKEMINIER & KRIER, supra note 11, at 351; W.W. Allen, Annotation, Accountability of Cotenants for Rents and Profits or Use and Occupation, 51 A.L.R.2d 388, 395 (1957). There are, however, jurisdictions that have adopted other rules. For example, some jurisdictions have statutes or common law that specifically require tenants in possession to compensate nonpossessory commoners for the value of possession, usually calculated as the nonpossessing tenant's proportionate share of rent, as if the property were rented to a third party. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY § 5.8, at 214 & n.22 (2d ed. 1993); Evelyn Alicia Lewis, Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability and a Call for Default Rule Reform, 1994 WIS. L. REV. 331, 351. Other jurisdictions hold the duty to account applicable whenever a "cotenant derives any income from the sole possession of the property in the form of rents or otherwise." CUNNINGHAM ET AL., supra, § 5.8, at 213-14.
291. 2 AMERICAN LAW OF PROPERTY § 6.14, at 57 (A. James Casner ed., 1952); DUKEMINIER & KRIER, supra note 11, at 351; W.W. Allen, Annotation, Accountability of Cotenants for Rents and Profits or Use and Occupation, 51 A.L.R.2d 388, 395 (1957). There are, however, jurisdictions that have adopted other rules. For example, some jurisdictions have statutes or common law that specifically require tenants in possession to compensate nonpossessory commoners for the value of possession, usually calculated as the nonpossessing tenant's proportionate share of rent, as if the property were rented to a third party. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY § 5.8, at 214 & n.22 (2d ed. 1993); Evelyn Alicia Lewis, Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability and a Call for Default Rule Reform, 1994 WIS. L. REV. 331, 351. Other jurisdictions hold the duty to account applicable whenever a "cotenant derives any income from the sole possession of the property in the form of rents or otherwise." CUNNINGHAM ET AL., supra, § 5.8, at 213-14.
292. 2 AMERICAN LAW OF PROPERTY § 6.14, at 57 (A. James Casner ed., 1952); DUKEMINIER & KRIER, supra note 11, at 351; W.W. Allen, Annotation, Accountability of Cotenants for Rents and Profits or Use and Occupation, 51 A.L.R.2d 388, 395 (1957). There are, however, jurisdictions that have adopted other rules. For example, some jurisdictions have statutes or common law that specifically require tenants in possession to compensate nonpossessory commoners for the value of possession, usually calculated as the nonpossessing tenant's proportionate share of rent, as if the property were rented to a third party. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY § 5.8, at 214 & n.22 (2d ed. 1993); Evelyn Alicia Lewis, Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability and a Call for Default Rule Reform, 1994 WIS. L. REV. 331, 351. Other jurisdictions hold the duty to account applicable whenever a "cotenant derives any income from the sole possession of the property in the form of rents or otherwise." CUNNINGHAM ET AL., supra, § 5.8, at 213-14.
293. 2 AMERICAN LAW OF PROPERTY § 6.14, at 57 (A. James Casner ed., 1952); DUKEMINIER & KRIER, supra note 11, at 351; W.W. Allen, Annotation, Accountability of Cotenants for Rents and Profits or Use and Occupation, 51 A.L.R.2d 388, 395 (1957). There are, however, jurisdictions that have adopted other rules. For example, some jurisdictions have statutes or common law that specifically require tenants in possession to compensate nonpossessory commoners for the value of possession, usually calculated as the nonpossessing tenant's proportionate share of rent, as if the property were rented to a third party. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY § 5.8, at 214 & n.22 (2d ed. 1993); Evelyn Alicia Lewis, Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability and a Call for Default Rule Reform, 1994 WIS. L. REV. 331, 351. Other jurisdictions hold the duty to account applicable whenever a "cotenant derives any income from the sole possession of the property in the form of rents or otherwise." CUNNINGHAM ET AL., supra, § 5.8, at 213-14.
294. See CUNNINGHAM ET AL., supra note 240, § 5.8, at 211-12.
295. In theory, but not in practice, the law of waste might penalize a cotenant for overuse, such as clear-cutting timber from property today if the timber would be more valuable in later years. While the law of waste is designed to avoid property use that fails to maximize the property's value, see RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 73 (4th ed. 1992), the law is sufficiently confused and the penalties sufficiently light that overuse is encouraged, CUNNINGHAM ET AL., supra note 240, § 5.8, at 214-15. Courts are divided over the question of whether cutting timber or drilling for oil constitutes waste (activities that the law may well want to encourage on the appropriate scale). 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.15, at 65-66.
296. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.17, at 73-74; DUKEMINIER & KRIER, supra note 11, at 359. Some jurisdictions, however, have adopted a rule that if the tenant who paid taxes is in possession and the value of his or her use and enjoyment equals or exceeds such payment, then there is no cause of action for contribution. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.17, at 76; DUKEMINIER & KRIER, supra note 11, at 359. This modification, however, is itself not uniformly applied. See Allen, supra note 240, § 19.
297. On the complex, conflicting, and multifarious approaches to cotenants and repairs, consult 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 77-80; CUNNINGHAM ET AL., supra note 240, § 5.9, at 215-16; DUKEMINIER & KRIER, supra note 11, at 359; 2 GEORGE E. PALMER, THE LAW OF RESTITUTION § 10.7, at 430 (1978); Berger, supra note 160, at 1019-20; and John P. Dawson, The Self-Serving Intermeddler, 87 HARV. L. REV. 1409, 1422-24 (1974). It may appear at first sight that the doctrine of ouster provides a background rule of strict accounting. An action for ejectment restores possession to an ousted plaintiff and awards the plaintiff mesne profits, with an offset for necessary repairs (and perhaps some improvements, if profits are attributable to them). CUNNINGHAM ET AL., supra note 240, § 5.8, at 212, 214. Ouster, however, requires an express denial of another cotenant's right to entry and possession. The doctrine provides no remedy for a cotenant who is in possession or who is voluntarily not in possession. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.13, at 52-54; CUNNINGHAM ET AL., supra note 240, § 5.8, at 211. Furthermore, there is a presumption that one cotenant's possession (even if it is sole possession) is not adverse to other cotenants' possession. 7 POWELL, supra note 221, ¶ 612, § 50.03(2); Allen, supra note 240, § 13, at 437. Thus, ouster doctrine provides some recourse only in a limited set of circumstances and may be costly or difficult to prove even then.
298. On the complex, conflicting, and multifarious approaches to cotenants and repairs, consult 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 77-80; CUNNINGHAM ET AL., supra note 240, § 5.9, at 215-16; DUKEMINIER & KRIER, supra note 11, at 359; 2 GEORGE E. PALMER, THE LAW OF RESTITUTION § 10.7, at 430 (1978); Berger, supra note 160, at 1019-20; and John P. Dawson, The Self-Serving Intermeddler, 87 HARV. L. REV. 1409, 1422-24 (1974). It may appear at first sight that the doctrine of ouster provides a background rule of strict accounting. An action for ejectment restores possession to an ousted plaintiff and awards the plaintiff mesne profits, with an offset for necessary repairs (and perhaps some improvements, if profits are attributable to them). CUNNINGHAM ET AL., supra note 240, § 5.8, at 212, 214. Ouster, however, requires an express denial of another cotenant's right to entry and possession. The doctrine provides no remedy for a cotenant who is in possession or who is voluntarily not in possession. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.13, at 52-54; CUNNINGHAM ET AL., supra note 240, § 5.8, at 211. Furthermore, there is a presumption that one cotenant's possession (even if it is sole possession) is not adverse to other cotenants' possession. 7 POWELL, supra note 221, ¶ 612, § 50.03(2); Allen, supra note 240, § 13, at 437. Thus, ouster doctrine provides some recourse only in a limited set of circumstances and may be costly or difficult to prove even then.
299. On the complex, conflicting, and multifarious approaches to cotenants and repairs, consult 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 77-80; CUNNINGHAM ET AL., supra note 240, § 5.9, at 215-16; DUKEMINIER & KRIER, supra note 11, at 359; 2 GEORGE E. PALMER, THE LAW OF RESTITUTION § 10.7, at 430 (1978); Berger, supra note 160, at 1019-20; and John P. Dawson, The Self-Serving Intermeddler, 87 HARV. L. REV. 1409, 1422-24 (1974). It may appear at first sight that the doctrine of ouster provides a background rule of strict accounting. An action for ejectment restores possession to an ousted plaintiff and awards the plaintiff mesne profits, with an offset for necessary repairs (and perhaps some improvements, if profits are attributable to them). CUNNINGHAM ET AL., supra note 240, § 5.8, at 212, 214. Ouster, however, requires an express denial of another cotenant's right to entry and possession. The doctrine provides no remedy for a cotenant who is in possession or who is voluntarily not in possession. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.13, at 52-54; CUNNINGHAM ET AL., supra note 240, § 5.8, at 211. Furthermore, there is a presumption that one cotenant's possession (even if it is sole possession) is not adverse to other cotenants' possession. 7 POWELL, supra note 221, ¶ 612, § 50.03(2); Allen, supra note 240, § 13, at 437. Thus, ouster doctrine provides some recourse only in a limited set of circumstances and may be costly or difficult to prove even then.
300. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 78.
301. To complete the picture, we should mention the common-law rules regarding improvements. Cotenants who make improvements on the property are generally unable to bring an action for contribution, nor are they credited the cost of the improvement in an accounting for rents and profits. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 81; Dawson, supra note 244, at 1424. The only recourse available for tenants to recover their investment is partition. Dawson, supra note 244, at 1425; see also DUKEMINIER & KRIER, supra note 11, at 360 (discussing improvements). Nevertheless, even with partition, the valuation of improvements discourages such expenditures. The majority rule is that improving cotenants are entitled to the lesser of the cost of the improvement or the additional increase in property value. See 2 PALMER, supra note 244, § 10.7, at 429-30. Contra 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 83-84 (stating that improvers are entitled to the increase in value but that the cost of improvements is irrelevant). Some courts even say that credits for improvements can only offset additional moneys owed and cannot be a source of income. Dawson, supra note 244, at 1425-26 & n.48.
302. For Israel, see Israel Land Law § 33, 1959, 23 L.S.I. 288 (1968-1969); consider also the Louisiana Civil Code, LA. CIV. CODE ANN. art. 806 (West Supp. 2000).
303. Section 35 of the Israeli Land Law provides, "Every joint owner is entitled to a share in the proceeds of the joint property in accordance with his share in the property." In the Yotzer case, the court declined to give this passage a narrowing interpretation that would have applied it only to situations in which the proceeds were created through no particular owner's labor, or even to adopt our complex intermediate approach. C.A. 274/82, Yotzer v. Yotzer, 39(1) P.D. 53, 55-56 (Isr.). For similar rules in Germany and Austria, see § 839 ALLGEMEINES BÜRGERLICHES GESETZBUCH [ABGB] (Aus.); § 743 Nr. 1 BÜRGERLICHES GESETZBUCH [BGB] (F.R.G.); Gerd-Hinrich Langhein, [Commentary], in J. VON STUDINGERS KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH 126-27 (Norbert Horn ed., 13th ed. 1996); and Karsten Schmidt, [Commentary], in MÜNCHENER KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH §§ 743-47 (Peter Ulmer ed., 3d ed. 1997). Thus, these countries use the second of the three plausible rules for sharing fruits and revenues we discuss supra at text accompanying note 159. In a unique case, a German court allocated 100% of the profits from advertising to one co-owner of a gable wall who had allowed his side of the wall to be used for these purposes. Entscheidungen des Bundesgerichtshofes in Zivilsachen [BGHZ] [Supreme Court] 43, 127 (133-34). This outcome has been explained by the fact that, although a gable wall is jointly owned, each side is intended to be used exclusively by one owner. See Langhein, supra, at 127.
304. Section 35 of the Israeli Land Law provides, "Every joint owner is entitled to a share in the proceeds of the joint property in accordance with his share in the property." In the Yotzer case, the court declined to give this passage a narrowing interpretation that would have applied it only to situations in which the proceeds were created through no particular owner's labor, or even to adopt our complex intermediate approach. C.A. 274/82, Yotzer v. Yotzer, 39(1) P.D. 53, 55-56 (Isr.). For similar rules in Germany and Austria, see § 839 ALLGEMEINES BÜRGERLICHES GESETZBUCH [ABGB] (Aus.); § 743 Nr. 1 BÜRGERLICHES GESETZBUCH [BGB] (F.R.G.); Gerd-Hinrich Langhein, [Commentary], in J. VON STUDINGERS KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH 126-27 (Norbert Horn ed., 13th ed. 1996); and Karsten Schmidt, [Commentary], in MÜNCHENER KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH §§ 743-47 (Peter Ulmer ed., 3d ed. 1997). Thus, these countries use the second of the three plausible rules for sharing fruits and revenues we discuss supra at text accompanying note 159. In a unique case, a German court allocated 100% of the profits from advertising to one co-owner of a gable wall who had allowed his side of the wall to be used for these purposes. Entscheidungen des Bundesgerichtshofes in Zivilsachen [BGHZ] [Supreme Court] 43, 127 (133-34). This outcome has been explained by the fact that, although a gable wall is jointly owned, each side is intended to be used exclusively by one owner. See Langhein, supra, at 127.
305. Section 35 of the Israeli Land Law provides, "Every joint owner is entitled to a share in the proceeds of the joint property in accordance with his share in the property." In the Yotzer case, the court declined to give this passage a narrowing interpretation that would have applied it only to situations in which the proceeds were created through no particular owner's labor, or even to adopt our complex intermediate approach. C.A. 274/82, Yotzer v. Yotzer, 39(1) P.D. 53, 55-56 (Isr.). For similar rules in Germany and Austria, see § 839 ALLGEMEINES BÜRGERLICHES GESETZBUCH [ABGB] (Aus.); § 743 Nr. 1 BÜRGERLICHES GESETZBUCH [BGB] (F.R.G.); Gerd-Hinrich Langhein, [Commentary], in J. VON STUDINGERS KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH 126-27 (Norbert Horn ed., 13th ed. 1996); and Karsten Schmidt, [Commentary], in MÜNCHENER KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH §§ 743-47 (Peter Ulmer ed., 3d ed. 1997). Thus, these countries use the second of the three plausible rules for sharing fruits and revenues we discuss supra at text accompanying note 159. In a unique case, a German court allocated 100% of the profits from advertising to one co-owner of a gable wall who had allowed his side of the wall to be used for these purposes. Entscheidungen des Bundesgerichtshofes in Zivilsachen [BGHZ] [Supreme Court] 43, 127 (133-34). This outcome has been explained by the fact that, although a gable wall is jointly owned, each side is intended to be used exclusively by one owner. See Langhein, supra, at 127.
306. For Germany, see § 748 BGB, translated in THE GERMAN CIVIL CODE 122 (Ian S. Forrester et al., trans., 1975), which states, "Each participant is bound as against the other participants to bear the burdens of the common object and the costs of maintenance, management, and common use in proportion to his share." See also Langhein, supra note 248, at 219 (indicating that there is no compensation for improvements). This rule also holds in Israel. See Israel Land Law § 32. Interestingly, Swiss law, which generally follows the German Continental tradition, seems more like American law in this respect, granting the co-owner only the right to "take on his own the necessary steps which have to be taken without loss of time in order to preserve the object from imminent or increasing damage." SCHWEIZERISCHES ZIVILGESETZBUCH [ZGB] art. 647 (Switz.).
307. The Continental tradition also prohibits individuals from making use of the resource in a manner that interferes with the reasonable use of other co-owners. See § 828 ABGB (Aus.); CODE CIVIL [C. CIV.] art. 815-9 (Fr.); § 743 Nr. 2 BGB (F.R.G.); Israel Land Law § 31(a)(1); see also LA. CIV. CODE ANN. art. 802. These codes employ flexible guidelines to restrict use to what may reasonably be expected by other commoners, typically by reference to the nature of the property and its previous uses. Of course, state law in the United States, apart from Louisiana, and the law of other regimes that we generally consider less supportive of liberal commons goals, also prohibit such interfering use. The salient difference in this area comes in the details of how this prohibition is implemented. Of particular importance is the rule adopted when joint use is impossible or unreasonable. In such a situation, where similar use by both would be impossible, can one party then use the property to the exclusion of the other? As we have shown, American law allows such use, encouraging the parties to enter into a strategic game where each seeks to be the one allowed to exclude the others, behavior inconsistent with the idea of productive cooperation. Forbidding such use, on the other hand, encourages the parties to reach a cooperative and efficient solution (such as a rental to a third party). Providing an incentive for such a solution is the supportive approach to encouraging a liberal commons. German law provides just such a supportive approach: Use by one owner is allowed only when it does not interfere with the use of other owners. Langhein, supra note 248, at 135. If joint use is impossible, the disposition of the property must be determined by the agreement of all of the commoners; if this is impossible, a majority vote may determine the use of the property, and compensation for the benefits of this use must be paid to the nonusing owners. § 745 BGB. Swiss law is similar in this regard. ARTHUR MEIER-HAYOZ, Das Eigentum [Property Rights], in 4 BERNER KOMMENTAR: DAS SACHENRECHT 447-50 (1966) (discussing the Swiss provision). Israeli law is unsettled on this matter, with Justice Ben-Porat favoring the unsupportive American approach and Justice Netanyahu favoring the more supportive rule. C.A. 458/82, Vilner v. Golani, 42(1) P.D. 49 (Isr.).
308. Lewis, supra note 240, at 341.
309. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.18, at 78.
310. HEIR PROPERTY, supra note 203, at 306.
311. For instance, if the agreed-upon alteration requires an unfair contribution by one commoner (for example, paying 1/4, but getting 1/10 of the value) who voted against the contribution, then that commoner must be compensated. ZGB art. 647d(3).
312. Germany provides each co-owner a right to "adequate" participation in the decision-making process, which includes access to adequate information and a right that each co-owner's opinion be adequately taken into account. § 744 Nr. 1 BGB; Langhein, supra note 248, at 163-64; Schmidt, supra note 248, §§ 744, 745 ¶¶ 14-17. In Israel, there are requirements of disclosure and consultation, Zol Bo Ltd., 37(4) P.D. 737, as well as requirements that parties approach the consultation open to suggestions. Violations of these requirements void the majority decision. C.A. 458/82, Vilner v. Golani, 42(1) P.D. 49 (Isr.).
313. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.26, at 116; CRIBBET & JOHNSON, supra note 200, at 114; WILLIAM B. STOEBUCK & DALE A. WHITMAN, THE LAW OF PROPERTY 216-17 (3d ed. 2000) (noting that a reasonable time is typically defined as being a time within the period of the rule against perpetuities). The waivability of the right to call for partition proves to be one of the central features that distinguishes co-ownership from condominium law in general. Unlike co-ownership, condominium statutes or agreements prohibit action by unit owners to compel partition of the co-owned elements, so exit is by sale of the unit only. See STOEBUCK & WHITMAN, supra, at 181, 217.
314. 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.26, at 116; CRIBBET & JOHNSON, supra note 200, at 114; WILLIAM B. STOEBUCK & DALE A. WHITMAN, THE LAW OF PROPERTY 216-17 (3d ed. 2000) (noting that a reasonable time is typically defined as being a time within the period of the rule against perpetuities). The waivability of the right to call for partition proves to be one of the central features that distinguishes co-ownership from condominium law in general. Unlike co-ownership, condominium statutes or agreements prohibit action by unit owners to compel partition of the co-owned elements, so exit is by sale of the unit only. See STOEBUCK & WHITMAN, supra, at 181, 217.
315. STOEBUCK & WHITMAN, supra note 258, at 178 & n.19.
316. But it was not during the earliest days of the tenancy in common form. CRIBBET & JOHNSON, supra note 200, at 127 (noting that at early common law, only coparceners, but not cotenants, had the right to demand partition).
317. Ashley v. Baker, 867 P.2d 792, 796 (Alaska 1994) (placing financial interests of co-owners at the center of the decision whether to partition by sale or in kind); Von Behren v. Oberg, 902 S.W.2d 338, 340-41 (Mo. 1995) (analyzing the financial interests of parties in partition actions); 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.26, at 114; Candace Reid, Note, Partitions in Kind: A Preference Without Favor, 7 CARDOZO L. REV. 855, 856 (1986).
318. Ashley v. Baker, 867 P.2d 792, 796 (Alaska 1994) (placing financial interests of co-owners at the center of the decision whether to partition by sale or in kind); Von Behren v. Oberg, 902 S.W.2d 338, 340-41 (Mo. 1995) (analyzing the financial interests of parties in partition actions); 2 AMERICAN LAW OF PROPERTY, supra note 240, § 6.26, at 114; Candace Reid, Note, Partitions in Kind: A Preference Without Favor, 7 CARDOZO L. REV. 855, 856 (1986).
319. Eli v. Eli, 557 N.W.2d 405, 408-11 (S.D. 1997) (remanding for the application of rules of owelty and creation of easements to ensure equitable partition in kind); STOEBUCK & WHITMAN, supra note 258, at 215 (defining owelty).
320. 7 POWELL, supra note 221, ¶ 612; STOEBUCK & WHITMAN, supra note 258, at 221-24.
321. See generally DAGAN, supra note 140, at 41-47 (discussing theories of personhood, resources, and property); MARGARET JANE RADIN, REINTERPRETING PROPERTY 35 (1993) (discussing personhood and property); WALDRON, supra note 13, at 343-89 (discussing theories of property and personhood). In the recent case of Eli, the court noted that partition in kind should trump monetary considerations, especially when "the land in question has descended from generation to generation." 557 N.W.2d at 410.
322. ALA. CODE § 35-6-100 (1975); Jolly v. Knopf, 463 So. 2d 150, 153 (Ala. 1985) (holding that the statute violated the equal protection provisions of the federal and state constitutions).
323. See, e.g., IDAHO CODE § 6-509 (Michie 1998); N.C. GEN. STAT. § 46-16 (1999); TENN. CODE ANN. § 29-27-104 (1980); UTAH CODE ANN. § 78-39-9 (1996).
324. Cases construing the Alabama right-of-first-refusal statute, however, often articulated its purpose to be the protection of a co-owner against involuntary divestment of her property interest; thus these courts seemed to focus attention on the liberal rather than the cooperation interest of remaining co-owners. See, e.g., Williams v. McIntyre, 632 So. 2d 446, 449 (Ala. 1993); Jolly, 463 So. 2d at 153; Black v. McCorvey, 428 So. 2d 607, 608 (Ala. 1983); Ragland v. Walker, 387 So. 2d 184, 185 (Ala. 1980).
325. CRIBBET & JOHNSON, supra note 200, at 130 (discussing rights of first refusal as a mechanism to give condominium owners a voice in selecting their neighbors); STOEBUCK & WHITMAN, supra note 258, at 123-24, 182, 203 (discussing rights of first refusal for condominium associations).
326. See, e.g., ABGB art. 829 (Aus.) (alienation); id. art. 830 (partition); C. CIV. art. 815 (Belg.) (partition); C. CIV. art. 815 (Fr.) (partition); § 747 BGB (F.R.G.) (alienation); § 749 Nr. 1 id. (partition); Israel Land Law § 34(a), 1959, 23 L.S.I. 288 (1968-1969) (alienation); id. § 37(a) (partition); ZGB art. 646(3) (Switz.) (alienation); id. art. 650(1) (partition); see also LA. CIV. CODE ANN. art. 805 (West Supp. 2000) (alienation). The French law allows for a court-ordered delay of the exercise of this right for a maximum of two years if immediate partition would depreciate the value of the property. C. CIV. art. 815. If used too frequently, this provision could represent a troubling inroad on the availability of exit. Used sparingly, however, and for such a limited period, it may be an acceptable compromise between the parties' interests in preserving the value of their property and their right to exit. Note that countries that did not provide generally for the right to partition without court approval are excluded from this comparative discussion. See infra note 275.
327. In Israel, the time limitation for agreements restraining alienation is five years, Israel Land Law § 34(b), and the time limit on agreements restraining partition is left to the discretion of the court - after three years, the court may order partition despite the agreement if the court deems it just to do so, Israel Land Law § 37(b). Many Continental regimes limit agreements to restrain partition to five years. E.g., C. CIV. art. 815 (Belg.); C. CIV. art. 815 (Fr.). Japan also does so. MINPŌ art. 256. In Louisiana, parties may agree to restrain alienation and partition for a period of up to fifteen years. LA. REV. STAT. ANN. § 9:1112 (West 1991).
328. § 747 BGB (providing the general right to alienate one's share). This right may not be limited by any juristic act. § 137 c.1 id. 272. German law allows agreements to restrain partition to remain in force indefinitely, subject to invalidation by the court for "serious cause." § 749 Nr. 2 BGB. This provision seems to contemplate the possibility of permanent agreements to restrain partition in some circumstances. §§ 749, 751 id. (referring to the power to exclude "permanently"). Such restrictions potentially outlast transfers of the property. § 751 id. Although this criterion at first sounds like it may be too great a restraint on exit - a requirement of "serious cause" sounds much more restrictive than the broad discretion sometimes placed in courts to invalidate agreements - there is reason to believe that it is not, in fact, applied so rigidly in Germany. In particular, counterbalancing the concern that such an agreement will unduly burden the parties' ability to exit is the likelihood that a restraint on partition that lasts for an "unreasonably" long time, along with other causes that approximate concerns about restrictions on exit, will count as sufficient "serious cause." Schmidt, supra note 248, § 749 ¶ 8. Other causes for invalidating these agreements include a violation of the minority's procedural rights in decisionmaking or a breakdown in the personal relations of the commoners, Langhein, supra note 248, § 745, at 20; Schmidt, supra note 248, § 749 ¶ 11, and hostility among the commoners such that joint use is impossible, BGH [Supreme Court], NJW-Rechtsprechungs-Report Zivilrecht [NJW-R-RZ], 10 (1995), 334 (335). Conversely, a good opportunity to sell the common property is generally not considered a good cause. Schmidt, supra note 248, § 749 ¶ 11.
329. ZGB art. 650(2). On this point, Hungary is even more protective of exit, disallowing agreements restraining partition altogether. PTK. art. 147.
330. § 831 ABGB; see also § 832 id. (stating that a third-party disposition of property in common can bind the first parties to the disposition, but not their heirs). As an aside, a similar regime is in place in India, where agreements in perpetuity are allowed, but they have been held not to bind heirs, on the grounds of public policy concerns with alienation of land. SHAMBHUDAS MITRA, MITRA'S CO-OWNERSHIP AND PARTITION 173-74 (1994).
331. There are, of course, much more extreme examples of sacrificing the liberal aspect of the liberal commons by creating serious barriers to exit. For instance, several Middle Eastern countries do not have an express right to partition. In Iran, partition is not available if it leads to a loss in value of the land. QUANUN-I MADANI art. 595 (Iran). In Jordan, partition may only be had by means of a petition to the court which, presumably, may be rejected. QUANUN AL-MADANI § 1040 (Jordan). In Nigeria, as well, partition of jointly owned family land - where "family" appears to be defined quite broadly - is available only for cause, and, when deciding whether or not to partition, the court must consider the best interest of the family as a whole. T.O. ELIAS, NIGERIAN LAND LAW 126-27 (1971).
332. E.g., § 843 ABGB (Aus.); Israel Land Law §§ 39, 40, 1959, 23 L.S.I. 288 (1968-1969); ZGB art. 651(2) (Switz.); C.A.1017/97, Ridlevitch v. Moda'i, 52(4) P.D. 625 (Isr.). This is also the law in many other countries influenced by this tradition, including several postsocialist systems. SB. art. 142 (Czech Rep.); PTK. art. 148 (Hung.); MINPŌ art. 258 (Japan); GRAZHDANSKII KODEKS [GRAZH. K.] art. 218 (Kaz.); BÔ LUÂT DÂN SU [BÔ L.] art. 238 (Vietnam). Interestingly, England effectively has the reverse presumption: Partition by sale is much easier to effect than partition in kind. See infra note 283.
333. E.g., C. CIV. art. 833 (Belg.); C. CIV. art. 830 (Fr.); Israel Land Law § 39(b); ZGB art. 651(3) (Switz.).
334. § 752 BGB.
335. See Langhein, supra note 248, § 749 ¶ 53; Schmidt, supra note 248, § 749 ¶¶ 25-26. For the law in Israel, see C.A. 623/71, Gan-Boaz v. Englander, 27(1) P.D. 334 (Isr.).
336. C. CIV. arts. 814-15 (Fr.). The right of first refusal is relatively common, and appears, for example, in many recent French-influenced civil codes. E.g., ZHONGHUA RENMIN GONGHEGUO FAGUI HUIBIAN art. 78 (P.R.C.) (allowing "right of preemption if all other conditions are equal"); SB. art. 140 (Czech Rep.); GRAZH. K. art. 216 (Kaz.); BÔL. art. 237 (Vietnam).
337. To understand the relevant English law, first note some unique structural features of English land law. Interests in land are divided into legal interests (strictly speaking, ownership) and equitable interests (strictly speaking, various rights of use and control). English law does not allow for legal interests to take the form of a "tenancy in common" - the type of commons property we are considering here. Law of Property Act (LPA), 1925, 15 Geo. 5, c. 20, § 1(6). It does, however, allow for these interests to be held as a joint tenancy, which differs from a tenancy in common mainly because of the existence of survivorship rights. E.H. BURN, CHESHIRE AND BURN'S MODERN LAW OF REAL PROPERTY 225 (15th ed. 1993); KEVIN GRAY, ELEMENTS OF LAND LAW 512 (2d ed. 1994); ROBERT MEGARRY & M.P. THOMPSON, MEGARRY'S MANUAL OF THE LAW OF REAL PROPERTY 288 (7th ed. 1993). Because of this restriction, all commons property technically must be held as equitable interests, and not as legally owned property. Because ownership is just a collection of equitable interests - various rights of use and control - the restriction could have been merely formal, for land registration purposes. One person could have owned the legal title but have been made powerless regarding equitable interests, and the co-owners could have split the equitable rights among themselves, much as they are split in other systems. But the formal restriction on legal commons property has had a more profound effect on jointly held equitable interests in property.
338. To understand the relevant English law, first note some unique structural features of English land law. Interests in land are divided into legal interests (strictly speaking, ownership) and equitable interests (strictly speaking, various rights of use and control). English law does not allow for legal interests to take the form of a "tenancy in common" - the type of commons property we are considering here. Law of Property Act (LPA), 1925, 15 Geo. 5, c. 20, § 1(6). It does, however, allow for these interests to be held as a joint tenancy, which differs from a tenancy in common mainly because of the existence of survivorship rights. E.H. BURN, CHESHIRE AND BURN'S MODERN LAW OF REAL PROPERTY 225 (15th ed. 1993); KEVIN GRAY, ELEMENTS OF LAND LAW 512 (2d ed. 1994); ROBERT MEGARRY & M.P. THOMPSON, MEGARRY'S MANUAL OF THE LAW OF REAL PROPERTY 288 (7th ed. 1993). Because of this restriction, all commons property technically must be held as equitable interests, and not as legally owned property. Because ownership is just a collection of equitable interests - various rights of use and control - the restriction could have been merely formal, for land registration purposes. One person could have owned the legal title but have been made powerless regarding equitable interests, and the co-owners could have split the equitable rights among themselves, much as they are split in other systems. But the formal restriction on legal commons property has had a more profound effect on jointly held equitable interests in property.
339. To understand the relevant English law, first note some unique structural features of English land law. Interests in land are divided into legal interests (strictly speaking, ownership) and equitable interests (strictly speaking, various rights of use and control). English law does not allow for legal interests to take the form of a "tenancy in common" - the type of commons property we are considering here. Law of Property Act (LPA), 1925, 15 Geo. 5, c. 20, § 1(6). It does, however, allow for these interests to be held as a joint tenancy, which differs from a tenancy in common mainly because of the existence of survivorship rights. E.H. BURN, CHESHIRE AND BURN'S MODERN LAW OF REAL PROPERTY 225 (15th ed. 1993); KEVIN GRAY, ELEMENTS OF LAND LAW 512 (2d ed. 1994); ROBERT MEGARRY & M.P. THOMPSON, MEGARRY'S MANUAL OF THE LAW OF REAL PROPERTY 288 (7th ed. 1993). Because of this restriction, all commons property technically must be held as equitable interests, and not as legally owned property. Because ownership is just a collection of equitable interests - various rights of use and control -the restriction could have been merely formal, for land registration purposes. One person could have owned the legal title but have been made powerless regarding equitable interests, and the co-owners could have split the equitable rights among themselves, much as they are split in other systems. But the formal restriction on legal commons property has had a more profound effect on jointly held equitable interests in property.
340. In the English system, commons property at law is provided for by means of a trust. The trustees (no more than four, per the Trustee Act, 1925, 15 Geo. 5, c. 19, § 34) are empowered to make decisions about managing and disposing of the property, but they are bound by various requirements of consultation and potential judicial overrides. One of the main reasons for requiring that common ownership be in trust was that a small group of trustees was thought more able to facilitate alienation of the land than a potentially larger group of common owners. And the trust structure did indeed have that effect, particularly regarding alienation. A potential purchaser was not required to investigate all of the interests in common property; she only needed to deal with the trustees. MEGARRY & THOMPSON, supra note 281, at 291-92. Before 1996, the trust itself was referred to as a "trust for sale" and the trustees were under a statutory duty to sell the property at the earliest convenience. Id. at 289. Under the equitable doctrine of conversion, a beneficiary was considered to have an interest only in the proceeds of the sale of the co-owned property and not the land itself, as equity regarded as "done that which ought to be done" (in this case, sale). Id. at 257. Trustees could postpone sale, but only if they all agreed to do so (even one trustee favoring sale was enough to trigger the duty). Id. at 289. Furthermore, alienation of the property was also facilitated by the power of two trustees validly to sell the land to a bona fide purchaser, overriding the equitable interests of the co-owners of the property. LPA §§ 2(1)(ii), 27(2). The only major exception to the duty to sell came for property that, like the family home, had a "purpose" other than sale, and this development came rather far along in the history of the law. See Williams & Glyn's Bank Ltd. v. Boland, 1981 App. Cas. 487 (appeal taken from Ch.); BURN, supra note 281, at 236-37. The preference for sale and the ease with which sale could be accomplished demonstrate the degree to which the common law considered commons property to be pathological - an arrangement to be ended as quickly as possible.
341. Interestingly, American law rejected the English common-law view of the sale of the undivided property as the primary means of ending commons property and instead focused on the right to partition, a much more standard approach globally. Because of its focus on alienating the undivided property, the English common law actually made it more difficult to obtain partition than its Continental counterparts. This effectively resulted in an incentive to partition by sale (without consent of the parties) rather than in kind. Under the present English law, partition of the property by the trustees requires the consent of all of the beneficiaries, a task much more difficult tha eliminating their interests in the co-owned land through sale and then distributing the proceeds Trusts of Land and Appointment of Trustees Act (TLATA), 1996, c. 47, § 7.
342. The trust structure has been maintained, but its ingrained preference for sale has been significantly eroded. The automatic duty to sell and the equitable doctrine of conversion have both been abolished. TLATA § 3(3) (abolishing the doctrine of conversion); id. § 5(1) (abolishing the duty to sell). And, although two trustees can still sell the property to a bona fide purchaser and thus override the equitable interests of the co-beneficianes, LPA §§ 2(1)(ii), 27(2); TLATA § 8(2), the co-beneficiaries are now empowered to petition the court to stop such a sale, see TLATA § 14. Also, the TLATA adds some procedural norms that enable greater participants by nontrustees, such as the requirement that, if practicable, the beneficiaries of the trust must be consulted and the wishes of the majority followed, at least insofar as these coincide "with the general interest of the trust." TLATA § 11.
343. Leigh v. Dickeson, [1884-1885] 15 Q.B.D. 60; see also GRAY, supra note 281, at 479. To give another example, agreements to restrain partition and alienation are allowed, but only if they are a part of the instrument creating the trust, TLATA § 8, and two trustees may override the agreement by selling the land to a bona fide purchaser for value, id. § 16. These trustee powers decrease the effectiveness of nonpartition and nonalienation agreements as tools to enable long-term cooperation. Also, the trustees themselves must be unanimous in exercising their powers, Luke v. South Kensington Hotel Co., [1879] 11 Ch. D. 121, 125, which can make governance of the commons more difficult.
344. See, e.g., Rochelle Cooper Dreyfuss, Collaborative Research: Conflicts on Authorship, Ownership, and Accountability, 53 VAND. L. REV. 1162 (2000). Dreyfuss explains, The artist, starving in a garret; the dedicated scientist, experimenting in a garage; the reclusive professor, burning midnight oil in the office - these are becoming endangered species. The creative industries have evolved: collaborative production is replacing individual effort. . . . [Yet,] the intellectual property literature has focused so little on the special problems of collaborative work. . . . Allocating the incidents of ownership is not a part of the ́mental furnituré of many collaborators; left on their own, parties can and do run into significant difficulties. . . . Redesigning the intellectual property system to take explicit account of collaborative production would have significant advantages. Well-designed rules reduce transaction costs by functioning as off-the-shelf arrangements or starting points for ex ante negotiations. They also serve ex post, as default rules for situations in which the parties discover that they have omitted key terms from their agreements. Id. at 1162, 1164-66. These and similar examples give us confidence that the liberal commons construct will have wide scope for further theoretical development and useful application.