...Archive for January 2014

Followup: Pro-family, pro-children, anti-“marriage promotion”

Responding to the previous post, James Pethokoukis misreads the views of people like me. He writes:

Folks who agree with [Waldman’s] view often advocate a hugely expanded government safety net — universal pre-K, one-year paid parental leave, a universal basic income among other programs — to do the work of transmitting social and intellectual capital that intact families no longer can.

Folks who are me do advocate for vastly expanded government benefits for families. I’d support universal pre-K, and I especially support a universal basic income. (Paid parental leave not so much, if the payer would be a prior employer.) But the purpose of these programs is not to “do the work…that intact families no longer can”. On the contrary, I support these programs because they would enable and assist the work that couples must do to stay together and in love and raise children well.

As I tried to emphasize in the previous piece (maybe the goat sex joke obscured it): There is no nonmarginal constituency in the United States advocating for alternatives to the two parent family as the core unit of childrearing. (Advocates of alternative forms of parenting by gay people might once have been an exception here, but the ascendancy of same-sex marriage has largely assimilated the gay community into the broad cultural norm.) While as a free society we should be open to alternative arrangements, my expectation is that in flourishing communities, traditional families will remain the norm. The quantitatively relevant challengers to the intact, two-parent household are divorced parents and single moms. Those households do not result from any decline in positive norms surrounding married life, though they may in part enabled by a relaxation of negative norms surrounding single parenthood and divorce. Americans do not, in large numbers, choose to become single or divorced parents when they have the option of raising children in loving, economically secure marriages. They become single parents because they want to be parents and the loving, economically secure marriage is not available. People who imagine that nefarious alternatives to married childrearing are being promoted and must be countered in the cultural sphere are simply misguided.

The effective way to support traditional families would be to increase the likelihood that a marriage chosen remains loving and economically secure. Matt Yglesias (who is much nicer than me) helpfully suggests this as a means of finding common ground:

[R]ather than being skeptical about this rhetoric [of marriage promotion], a more productive posture might be for liberals to see the family stability angle as a way of getting social conservatives more invested in helping poor people. The suite of things most likely to make for more stable working class families are basically better demand management, better schools, more wage subsidies, better transportation connections to jobs, and overall the kind of stuff that makes things better.

That’s a good idea! But promoting the social and material conditions in which people would likely form durable marriages is very different from nagging people for making poor choices that may not be poor choices, given circumstances on the ground. And it is very different from trying to narrow people’s options by bullying them into marriage with a return of shotgun weddings or restrictions on divorce. That would be the worst kind of cargo cult: One cannot conclude from correlations between voluntary unions and good outcomes that more-or-less coerced marriages would be awesome. But the coercion would carry obvious costs and risks, to people who aren’t pundits or think-tank fellows. Too often, marriage promotion is presented as a substitute rather than a complement to altering the material conditions that render people’s choices so difficult and outcomes so poor.

In a better world, social conservatives would have more confidence in the power of their own ideals. One doesn’t have to be cajoled or trapped into the good life. In the United States, people who have options — even irreligious urbanites with dissolute norms — freely choose marriage at high rates. Yes, Hollywood puts out a lot of prurient and violent movies. But the same industry produces scores of romantic comedies and sappy chick-flicks in which marriage epitomizes the happily-ever-after. Those films remain popular across all socioeconomic classes (if not across genders).

Even in social-conservative-nightmare-land, marriage-indifferent Scandinavia:

“Nowadays, it has become fashionable for the father to hand over the bride. This isn’t a Scandinavian custom, but is something that people have picked up from watching American TV programs,” according to Yvonne Hirdman, professor of history at Stockholms University. Another new imported trend is the practice of placing gifts on the table for guests at the wedding banquet. “That is another new custom that comes from America,” says Anna Lundgren, editor-in-chief of bridal magazine and internet site Bröllopsguiden.

Weddings are parties. They aren’t marriages. Nevertheless, the centrality of wedding fantasy in American cultural life reflects a powerful, durable aspiration. America really is exceptional in its attitude towards marriage.

There is every reason to believe that, if their options were better, many women who today become single moms would instead form traditional families. I know there is more to life and love than material wealth. But there is little more harmful to life and love than poverty and economic instability. Social conservatives are fond of pointing out that AFDC used to explicitly subsidize single motherhood, and that was obviously bad. (It was!) But present arrangements subsidize romantic cohabitation in preference to marriage in poorer, more precarious, communities. Household economies of scale turn into painful diseconomies when a partner neither brings in an income nor does much housework or childrearing. The option of kicking out an indigent partner is extremely valuable, especially for moms in communities where men are frequently out of work. Mothers are wise, not foolish, to retain that option. (The behavioral effects of being a male adult who brings nothing but a mouth to the dinner table ensure that exercise of this option will become emotionally justifiable, pretty fast.) Vigorous full employment, or a universal basic income, would eliminate the strong economic incentive for mothers to prefer cohabitation without commitment and make marriage rational where now it is not.

Conservatives often claim to have faith in America, in American exceptionalism. I wish they’d have a bit more faith in the institutions that they claim are valuable and in Americans who aren’t rich. Marriage “passes the market test” in America among people who could afford, in social and economic terms, to adopt more informal Scandinavian lifestyles. Rich liberals aren’t shamed, exhorted, counseled, bribed, or propagandized into marriage. They choose it. There are rational, remediable reasons why poorer Americans don’t make the same choice. I wish we would address those reasons rather than pretend the choices are mistakes or moral failures.

“Marriage promotion” is a destructive cargo cult

I think I’ll basically be repeating what Matt Yglesias said yesterday, but maybe I can put things more plainly.

“Marriage promotion” as a means of address social problems at the lower end of the socioeconomic ladder is a bad idea. It’s not a neutral idea, or a nice idea that probably won’t work. It’s inexcusably obtuse and may be outright destructive. It is quite literally a cargo cult.

A cargo cult is a particularly colorful way of mistaking cause for effect. Airplanes do not actually come to remote Pacific Islands because of rituals performed by soldiers at airports. But absent other information, to someone with no knowledge of the larger world, it might well look that way. So when the soldiers leave and the airplanes full of valuable stuff no longer come, it’s forgivable in its way that some islanders populated the abandoned tarmacs with wooden facsimile airplanes and tried to reenact the odd dances that used to precede the arrival of wonderful machines. It is forgivable, but it didn’t work. The actual causes of cargo service to remote Pacific Islands lay in hustle of industries vast oceans away and in the logistics of a bloody war, all of which were invisible to local spectators. Soldiers’ dances on the tarmac were an effect of the same causes, not an independent source of action. That is not to say those dances were irrelevant to the great bounty from the skies. An organized airport is part of the mechanism through which the deeper causes of cargo service have their effect, so something like those dances would always be correlated with cargo service. But even a perfectly equipped and organized airport will not cause airplanes sua sponte to deliver valuable goods to islanders. A mock facsimile even less so.

The case for marriage promotion begins with some perfectly real correlations. Across a variety of measures — household income, self-reported life satisfaction, childrearing outcomes — married couples seem to do better than pairs of singles (and much better than single parents), particularly in populations towards the lower end of the socioeconomic ladder. So it is natural to imagine that, if somehow poor people could be persuaded to marry more, they too would enjoy those improvements in household income, life satisfaction, and childrearing. Let them eat wedding cake!

But neither wedding cake nor the marriages they celebrate cause observed “marriage premia” any more than dances on tarmacs caused airplanes to land on Melanesian islands. In fact, for the most part, the evidence we have suggests that marriage is an effect of other things that facilitate good social outcomes rather than a cause on its own. In particular, for poor women, the availability of suitable mates is a binding constraint on marriage behavior. People in actually observed marriages do well because they are the lucky ones to find scarce good mates, not because marriage would be a good thing for everyone else too. Marrying badly, that is marriage followed by subsequent divorce, increases the poverty rate among poor women compared to never marrying at all. Married biological parents who stay together may be good for child rearing, but kids of mothers who marry anyone other than their biological father do no better than children of mothers who never marry at all. As McLanahan and Sigle-Rushton put it (from the abstract):

[U]nmarried mothers and their partners are vastly different from married parents when it comes to age, education, health status and behaviour, employment, and wage rates. These differences translate into important differences in earnings capacities, which, in turn, translate into differences in poverty. Even assuming the same family structure and labour supply, our estimates suggest that much of the difference in poverty outcomes by family structure can be attributed to factors other than marital status. Our results also suggest that full employment is essential to lifting poor families — married or otherwise — out of poverty.

Let’s stop with the litany of citations for a minute and just think like humans. Marriage is a big deal. The stylized fact that the great preponderance of grown-ups with kids who seem economically and socially successful are married is known to everybody, rich and poor, black and white. Yes, the traditional family is not uncontested. There are, in our culture, valorizations of single-parenthood as statements of feminist independence, valorizations of male liberty and libertinism, aspirational valorizations of nontraditional families by until-recently-excluded gay people, etc. But, despite the outsized role played by Kurt on Glee, these alternative visions are numerically marginal, and probably especially marginal among the poor. Single motherhood is the alternative family structure that matters from a social welfare (rather than culture-war) perspective. The problem marriage promotion could solve, if it could solve any problem at all, would be to increase the well-being of the people who currently become single mothers and of their children.

But why do single women choose to become single mothers? It does not, in any numerically significant way, seem to have much to do with purposeful rebellion against traditional family norms. No, marriage of poor women seems constrained by the availability of promising mates. And why might that be?

Charles Murray recently wrote a wonderful, terrible, book called “Coming Apart“. The book is wonderful, because it identifies and very sharply observes the core social problem of our time, the Great Segregation (sorry Tyler), or more accurately, the Great Secession of the rich from the rest, and especially from the poor. The book is terrible, because it then analyzes the problems of the poor as though they come from nowhere, as though phenomena Murray characterizes as declines in industriousness, religiosity, and devotion to marriage among the poor have nothing to do with the evacuation of the rich into dream enclaves. There are obvious connections that Murray doesn’t make because, I think, he simply doesn’t wish to make them. Let’s make some. We were talking about marriage.

Murray does a wonderful job of describing the homogamy of our socioeconomic elites. The people who, at marriageable age, seem poised to succeed economically and socially, tend to marry one another. Johnnie doesn’t marry the girl next door, who might have been a plumber’s daughter while Daddy was a bank manager. Johnnie doesn’t marry anyone at all he met in high school, but holds out for someone who got into the same sort of selective college he got into. The children of the rich marry children of the rich, with notable allowances made for children of the nonrich who have accumulated credentials that signal a high likelihood of present or future affluence. Of course, love knows no boundaries.

As a matter of simple arithmetic, increasing homogamy among the elite and successful implies a reduced probability that a person who cannot lay claim to that benighted group will be able to “marry up”, as it were. Once upon a time, in the halcyon days that Murray contrasts to the present, the courting would not have been so crass. There were many fewer markers of social class and future affluence. The best and brightest were not so institutionally, geographically, and culturally segregated from the rest. (That is, within the community of white Americans. For black Americans, all of this is old hat.) The risk of “mismarrying”, for a male, was not so great, as he would be the primary breadwinner anyway, and her family, while perhaps poorer than his own, was unlikely to be in desperate straits. Men could choose whom they liked, in a personal, sexual, and romantic sense without great cost. Women from poor-ish backgrounds had a decent chance at landing a solid breadwinner, if not the next President. Very much like an insurance pool, a large and mixed pool of potential spouses renders marriage on average a pretty good deal for everyone. Really bad future husbands existed then as now, and then as now women were wise to do all they could to avoid marrying them. But the quality of a marriage is never revealed until well after you are in it. In a middle-class society, it was reasonable for a woman to guess that a nice guy she could fall in love with would be able to be a good husband and father too.

Flash-forward to the present. We now live in a socially and economically stratified society. By the time we marry, we can ascertain with reasonable confidence what kind of job, income, neighborhood, and friends a potential mate is likely to come with. The stakes are much higher than they used to be. Our lifestyle norms are based on two-earner households, so men as well as women need to think hard about the earning prospects of potential mates. Increasing economic dispersion — inequality — means that it is quite possible that a potential mate’s family faces circumstances vastly more difficult than ones own, if one is near the top of the distribution. It is unfashionable to say this in individualistic America, but it is as true now as it was for Romeo and Juliette that a marriage binds not only two people, but two families. If you have a good marriage, you will love your spouse. If you love your spouse and then her uninsured mother is diagnosed with cancer, those medical bills will to some perhaps large degree become your liability. More prosaically, if the inlaws can’t keep the heat on, do you wash your hands of it and let them shiver through the winter? In a very unequal society, the costs and risks of “marrying down” are large.

As with an insurance pool, too much knowledge can poison the marriage pool, and reduce aggregate welfare by preventing distributive arrangements that everyone would rationally prefer in the absence of information, but which become the subject of conflict when information is known in advance. Because the stakes are now very high and the information very solid, good marriage prospects (in a crass socioeconomic sense) hold out for other good marriage prospects. The pool that’s left over, once all the people capable of signaling their membership in the socioeconomic elite have been “creamed” away, may often be, objectively, a bad one. Marriage has a fat lower tail. When you marry, you risk physical abuse, you risk appropriation of your wealth and income, you risk mistreatment of the children you hope someday to have, you risk the Sartre-ish hell of being bound eternally to someone whose company is intolerable. More commonly, you risk forming a household that is unable to get along reasonably in an economic sense, causing conflicts and crises and miseries even among well-intentioned and decent people. It is quite rational to demand a lot of evidence that a potential mate sits well above the fat left tail, but the ex ante uncertainty is always high. When the right-hand side of the desirability distribution is truncated away, marriage may simply be a bad risk.

If you are at all libertarian, what the behavior of the poor tells you is that it is a bad risk. After all, marriage is not subject to a Bryan-Caplan-esque critique of politics, where people make bad choices in the voting booth that they would not make in the supermarket because they don’t own the costs of a bad vote. The consequences of a decision to marry or not to marry or who to marry are internalized very deeply by the people who make them. Humans, rich and poor, have strong incentives to try to make those choices well. Both common sense, social science, and revealed preference suggest that marriage rates among the poor have declined because the value of the contingent claim upon the future represented by the words “I do” has also declined within the affected population.

Promoting marriage among this population is not merely ineffective. It is at best ineffective. If the marriage-promoters persuade people to marry despite circumstances that render it likely they will marry poorly, the do-gooders will have done outright harm. Pacific Islanders no doubt bore some cost to build their wooden planes, lashed to a mistaken theory of causality. But lives were not destroyed. Overcoming peoples’ well-founded misgivings about the quality of potential mates with moral exhortations and clipboards of superficial social science might well destroy lives. It would create plenty of success stories for marriage promoters, sure, because even bad bets turn out well now and again. But it would create more tragedies than successes, tragedies that very likely would be blamed on personal deficiencies of the unhappy couple while the successes would be victories for marriage itself in some insane ideological version of the fundamental attribution error.

Fortunately, people aren’t stupid, so marriage promotion is more likely to be ineffective than devastating. But why go there at all? There is some evidence, for example, that where prevailing social norms prohibit premarital fun stuff and push towards early marriage, people do marry earlier and they marry poorly. Social norms matter, and even smart people are sometimes guided by them to do stupid things. Let’s not reinforce foolish norms.

None of this is to say marriage is bad! On the contrary, despite my lefty hippie enthusiasm for transgressive goat sex and stuff, I think in the context of the actually existing society, the prevalence of durable marriages is a reflection of social health. Marriage is part of how we organize a good life when a good life is on offer, just like airports with people guiding planes on the tarmac are part of how Pacific Islanders might organize trade for valuable cargo. But before the odd dances on the tarmac must come the production of goods and services for trade, or at least some kind of arrangement with the people in faraway places who control the airplanes. Before you get to smiling families, you have to create the material circumstances that render marriage on average a good deal. For poor women in particular, it very often is no longer a good deal.

But what about the children? One variant of marriage-centric social theory refrains from pushing marriage so hard, and simply asks that people delay childrearing until the marriage comes. (See e.g. Reihan Salam for some discussion.) If a woman is likely to find a good spouse at a reasonable age, then it might make sense to suggest she delay childbearing until the happy couple is stable and married, since kids reared by married biological parents seem to do better than other kids. Even that is subject to a causality concern: Perhaps childrearing is best performed by the kind of mother capable of finding a good mate, and at a time some unobservable factor renders her both ready to raise a child well and likely to take a husband. This would create a spurious correlation between the presence of biological fathers and good kid outcomes. We can’t rule that out, sure. But we have no reason to think it’s so, and lots of common sense reasons to think a biological father in a stable marriage improves outcomes by contributing to better parenting. So, I’d agree that women likely to find great marriage partners should by all means delay children until they have actually found one.

But women likely to find great marriage partners already do exactly that. Single motherhood is not a frequent occurrence among women who expect to marry happily and soon. The relevant question is whether we should discourage from having children women who reasonably expect they may not find a good spouse at all, at least not while they are in their youth. That is to say, should we tell women who have been segregated into the bad marriage market, who on average have lowish incomes and unruly neighbors and live near bad schools, that motherhood is just not for them, probably ever? We could bring back norms of shame surrounding single motherhood, or create other kinds of incentives to reduce the nonadoption birth rate of people statistically likely to raise difficult kids. It is possible.

I think it would be monstrous. I believe that, as a society, we should commit ourselves to creating circumstances in which the fundamentally human experience of parenthood is available to all, not barred from those we’ve left behind on our way to good schools and walkable neighborhoods. Women unlikely to marry who wish to have children by all means should. The shame is ours, not theirs. It belongs to those of us who call ourselves “elite”, who are so proud of our “achievements” that we walk away without a care from the majority of our fellow citizens and fellow humans, from people who in other circumstances, even in the not so distant past, would have been our friends and coworkers, lovers and spouses. It’s on us to join together what we have put asunder.

Update History:

  • 23-Jan-2014, 12:55 p.m. EEST: “invisible to local spectators” Thanks Noumenon!
  • 24-Jan-2014, 2:25 a.m. EEST: “caused airplanes landing to land on Melanesian islands”, fixed misspelling of Reihan Salam’s name.
  • 24-Jan-2014, 11:35 a.m. EEST: “as though phenomena he Murray characterizes”

Tax price, not value

Property rights are primarily rights to exclude. If I “own” something, what that means is that it is legitimate for me to exclude others who may wish to use or consume it.

Exclusion, very obviously, carries externalities. My choice to exclude alternate uses of a resource affects those who might have benefited from those uses. By convention, we don’t usually refer to the effects of the exclusion at the core of a property right as an “externality”. One could argue, as is often argued of so-called “pecuniary externalities“, that the effect of property rights on alternative users is the sort of externality that should not be discouraged — because undoing the externality would amount to a mere redistribution rather than a welfare gain, or because the operation of the externality is part and parcel of the process by which the market system functions. But, as with pecuniary externalities, there are devils in details.

The social cost of the excluding alternative uses varies dramatically between resources. A Ferrari, for example, may be a costly and valuable resource, but it is plausible to claim that its owner’s exclusive control does not subject potential alternative users to real deprivation. On the other hand, the exclusive right to commercialize a potentially lifesaving medicine may impose huge costs on potential users deprived of access because a patent owner has chosen not to make a drug available where they live, or has chosen to set an inaccessible price. The new urbanists (Yglesias / Avent / Glaeser ) frequently argue that homeowners’ ability to exclude alternative uses of their neighborhoods (a kind of tacit property right) imposes very large social and economic costs by preventing higher-density alternative use of uniquely situated real estate.

I presume that most ordinary property rights don’t burden alternative users so much as to merit policy intervention. It is wise to simply tolerate very small externalities and address their consequences collectively, rather than create annoyances and transaction costs by trying to impose fine-grained discipline. We don’t tax humans for eating beans, despite the fact that methane is a powerful greenhouse gas.

But for some classes of property, most notably patents and real estate, a tax on the externalities of exclusion might be very sensible. You can frame it as a Pigouvian tax, or alternatively as a kind of user fee that compensates the state for its enforcement of a right to exclude despite external harms. But on what basis should such a tax be collected?

Usually property or wealth taxes are levied against the “market value” of an asset, with the scare quotes particularly appropriate. When property taxes are assessed against real property, some appraisal or estimation has to be made of what is often an entirely hypothetical value. Assessment procedures are vigorously contested and frequently reflect social and political concerns unrelated to the question of what a property “would” sell for. Patents are extraordinarily specialized and illiquid assets. Any bureaucratic value assessment would be a farce.

There is, of course, a much easier way to gauge what a property would sell for: Solicit from its owner a price.

The price at which an owner would be willing to sell a thing has a particularly valuable characteristic. It limits the burden to alternative users of the exclusion in a property right. If the price is set low, a user harmed by exclusion can simply purchase the thing and have at. If the price is set high, alternative users may be seriously burdened yet be unable to buy access.

So, for the sorts of exclusion that do impose substantial burdens to alternative users, a natural policy intervention would be to require property owners to declare a price at which they commit to sell the property (for some period of time), and levy a tax of some legislatively determined percentage against that actual, actionable price, rather than a hypothetical market value. Property owners could pay as much or as little tax as they choose. When they set their price, they face a trade-off, between the risk of being undercompensated for losing the asset if the price is too low, and an exaggerated tax burden if they set a price so high that the risk of sale is negligible or the required overcompensation extreme. The owner is free to choose how much she values certainty of continued ownership, but she must pay for that.

The price set by the property owner might constitute an option to buy for all comers, or just for the state. (I’m not sure which would be best. What do you think?)

This sounds very dry and complicated, but ultimately it’s a simple and natural scheme. Suppose that a drug company invents a cure for a rare tropical disease that could cure thousands in the developing world but only hundreds domestically. It might well be the case that the profit-maximizing commercialization strategy would be to make the drug available at a very high price domestically, but not sell it cheaply in poor countries, to prevent reimportation from cannibalizing sales. As long as the tax rate is material, the drug company would try to set its price no higher than the discounted value of domestic profits, less the discounted cost of the new tax. However, since the social value of the drug if the patent were not used to exclude is much higher than that market value of the profits, governments and nonprofits could pool funds to buyout the patent. In theory, this can happen already — governments and nonprofits could band together and negotiate with drug companies to buy out patents. But the coordination costs of that are very high, and once interest has been signalled the patent owner has every incentive to hold out for a price very near the drug’s social value, which is much higher than the market value it would otherwise have realized. A tax on enforcement of exclusion would force all patent holders to decide a value and precommit to a price without the negotiating advantage of knowing they have a captive buyer. Of course, if a company thinks a public-interest buyout is very likely, it might set its price high in hopes of earning a windfall gain from a sale. But there are limits to that strategy unless a swift buyout is certain. The cost in overpayment of taxes and the risk that a buyout won’t actually happen increases with the level at which the price is set.

Firms will set a dear price on patents with such high and unique social value that a prompt buyout is inevitable. But as long those patents are genuinely for new, nonobvious inventions — admittedly a weak point! — that’s arguably a feature, as the scheme creates incentives that don’t now exist for firms to develop goods with high social value but low market value. At present, there is no functioning market in public-interest sales of patents. Instead, firms understandably avoid high-social-value, low-market-value projects. Given the negotiating realities and political perceptions surrounding licensing or sale of patent rights to the public sector, the prospect of a high payout is offset by risks of outright expropriation and public relations catastrophes.

Urban property is another domain where the externalities associated with enforcing exclusive property rights are arguably very large. Suppose a developer or a city government believes that a neighborhood is horrifically underutilized, and wants to redevelop it at high density. Under this proposal, every parcel in the neighborhood would have a prearranged price. The developer (with or without a requirement of political buy-in) could plan to buy the lots she needs and those of near-neighbors with effective veto power, and then do with them what she will. As with patentholders, for most homeowners the best strategy would be to set the price at the actual value that would compensate them for the loss of the house and the trouble and heartache of eviction from their home (which might be a lot!), less the discounted cost of expected taxes. As with patents, some homeowners might strategically try to set very high prices in hopes of a windfall buyout, but again, that’s a costly and self-limiting strategy, unlikely succeed except in very rare cases where some parcel is so unique that alternative development plans that exclude it cannot compete. A real problem here is that this scheme would disadvantage property owners so cash poor they cannot afford any substantial taxation, who might set prices below what would actually compensate for the loss of property. But then these property owners have a hard time paying existing property taxes too. That devil would live in the detail of arranging the actual tax burden.

Just what should the tax rate on stated price be? Should it be a flat or progressive? I don’t know. Maybe some clever modeling can be done to try to elucidate the issues. Qualitatively things are pretty clear: the higher the tax rate, the more costly it will be to enjoy the rights of exclusion that come with property ownership. That’s already true with any sort of property tax. This new sort of property tax simply gives the owner the right to pay the tax in cash or in risk of being forced into a sale. A low tax rate, especially the status quo zero tax rate for patents, is very comfortable for property holders. It encourages people to set an infinite “sticker price” and so force potential buyers to reveal themselves as needful in bespoke negotiations. A high tax rate would be less comfortable. Owners would be forced to either pay up for the right to exclude or bear real risk that their property will be bought-out for a higher value use. In each domain — patents, real estate, whatever — legislators (or city councilpersons) would have to balance the social benefits associated with certain and inexpensively maintained property ownership, the social costs of excluding high-value alternative uses, and of course revenue requirements.

There are more radical, arguably better, solutions to problems created by socially costly exclusive use of real or intellectual property. But within the confines of incremental, neolibbish ideas, I think this one merits some consideration.

This proposal owes something to a recent conversation with Leigh Caldwell (@leighblue), the king of prices. The good ideas are his. The crappy ones are mine.

Update History:

  • 9-Jan-2014, 5:10 a.m. EST: Cleaned up a bunch of awkward sentences in this particularly awkwardly written piece. No substantive changes, but I didn’t track the small edits.