Property

Property is historically a contested concept. Especially by Marxist authors much interesting critique of property has been produced. Still, in modern, liberal societies, property is usually taken for granted, and for good, and generally well-understood reasons, such as the efficiency of markets at maximizing production and regulating the allocation of resources. Property as such is not contested here.

Property as it is normally understood, however, applies to physical, and easily delineable goods, such as houses, a car, or land. Farm-land for example can be fenced off, and it is definitely physical. Land and other physical goods have two characteristics that are very relevant from an economic standpoint: they are rivalous, and exclusive. First of all land is rivalous, in that if you would farm my land, for example, I could not farm it at the same time. Only one person can use a rivalous good for a certain purpose at the same time. Secondly land is exclusive, I can keep you off my land if I want to. For exclusive goods it is easy to prevent others from using them. Rivalousness and exclusivity make private ownership of physical goods both beneficial, and possible.

To further explain the benefits of having land in private property, one can look back at the times before the enclosures of the 15th and 16th centuries in Britain. This forms the setting for a thought-experiment by Garrett Hardin, known as the Tragedy of the Commons: There is a grazing-pasture, held in common by a village of shepherds. Each shepherd can use it for grazing his flock of sheep. Now if there are no further regulations or inhibitions, it will be in the personal interest of each shepherd to increase the size of his flock, as the reduced quality of the pasture weights on him less, than the added benefit of an extra sheep. Therefore the pasture is going to be over-grazed, and rendered useless. Thus applying private property to things like land is not a bad idea.