Property

EQ 3.1 To what extent are the concepts of private ownership of property and free choice essential for free markets?

Private Property Rights: The Moral and Economic Foundation of a Free Society       by Dr. Edward Younkins    Professor of Accountancy and Business Administration at Wheeling Jesuit University in West Virginia and author of Capitalism and Commerce.   Active Reading On margins write Critiques/arguments Address areas of agreement Write questions to the author Summarize Make connections to other areas of course/social studies/other subjects/world/your life

Private Property Resources and the factors of production (land, labor, and capital) are owned by private citizens. Private ownership combined with the ability to engage in free trade permits people to make decisions to maximize their utility. The incentive to maximize our utility leads to all other things such as the price system, entrepreneurship, and prevents the misallocation of scarce resources and waste.

"The true foundation of republican government is the equal right of every citizen in his person and property and in their management." --Thomas Jefferson

  Government must protect your ability to acquire property through the use of your mind, body, and talents (paraphrased from a James Madison quote). We have the right to. . . Use our talents, mind and body to acquire property We may possess and use that property to increase our utility. We may dispose of or trade our property if we feel that it will improve our lives.

Why are Private property rights are important?

1. They provide legal certainty and guard against man made risks. Recognized private property rights provide the legal certainty necessary for individuals to commit resources to ventures. The threat of confiscation, by either private individuals or public officials, undermines confidence in market activity and limits investment possibilities.

2. They prevent waste, and promote useful allocation over time. Nobody takes care of someone else’s private property as carefully as they take care of their own. Clear property rights tend to make decision makers pay close attention to resource use and the discounted value of the future employment of scarce resources. Absent private property rights, economic actors will tend to be short-sighted in their decision making and not conserve resources over time.

Develop a framework for free exchange and growth Property rights are the basis of exchange and the extension of ownership to capital goods provides the basis for the development of financial markets that are essential for economic growth and development.

They Limit Government power Secure private property rights, as indicated in the above quote by Thomas Jefferson, is the basis for limited and civilized government. The elimination of arbitrary confiscation and the establishment of regular taxation at announced rates enables merchants to calculate the present value of investment decisions and pass judgment on alternative allocations of capital.

The Constitution and property rights 1. Uniform tax for General Welfare and Common Defense "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." – Jefferson According to Jefferson Ind. Portion of the share social costs= Ind. portion of shared social benefit

2. Copyrights and Patents Why?

?

3. 4th amendment – no unwarranted searches an seizures 4. The ‘takings clause” of the 5th amendment 5. 16th Amendment- income tax

Medium of Exchange Unit of account Store of value How could the federal government manipulate the value of your property?

Quote and Continuum activity Complete quote activity on your own (10 minutes) Share answers with each group members Select a group favorite quote and least favorite quote Record on board Select favorite student quote Share ideas and quotes with class.

EQ 3.1 To what extent are the concepts of private ownership of property and free choice essential for free markets?

Apply information from lesson to help answer an essential question other than #1.

Why are Private property rights are important? Resources and the factors of production (land, labor, and capital) are owned by private citizens. Private ownership combined with the ability to engage in free trade permits people to make decisions to maximize their utility. The incentive to maximize our utility leads to all other things such as the price system, entrepreneurship, and prevents the misallocation of scarce resources and waste. Government must protect your ability to acquire property through the use of your mind, body, and talents (paraphrased from a James Madison quote). We have the right to. . . Use our talents, mind and body to acquire property We may possess and use that property to increase our utility. We may dispose of or trade our property if we feel that it will improve our lives. The Constitution and property rights 1. Uniform tax for General Welfare and Common Defense "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." – Jefferson According to Jefferson Ind. Portion of the share social costs= Ind. portion of shared social benefit 2. Copyrights and Patents (see diagram to left) 3. 4th amendment – no unwarranted searches an seizures 4. The ‘takings clause” of the 5th amendment 5. 16th Amendment- income tax Why are Private property rights are important? 1. They provide legal certainty and guard against man made risks. 2. They prevent waste, and promote useful allocation over time. 3. Develop a framework for free exchange and growth 4. They Limit Government power