If you don’t get the right property rights system in place, the chances of getting things working properly are slight.
There are still lots of places in the world where the ownership of property rights is difficult, dependent on the will of a friend in Government, or just impossible.
The Letters section from the Economist (27 July) reminded me of this. I guess it is not shocking that Uzbbenstein has not thrown off the shackles of Communism, has a dysfunctional property rights regime, and the government can’t be trusted.
But, before we rush to criticise these “backward” places, it is useful to look closer to home.
Europe’s fisheries have a primitive property rights system, where the State owns the rights to fish (in most countries). Most countries do not have enforceable property rights systems for the many, not just the few.
The UK is looking at banning ‘non-British’ people from buying British fishing boats and quota.
Can you imagine any proper business that says an individual can’t set up in, or buy up and enter into, because where they were born?
If you re-adopted laws that said “Catholics” could not own property, live in an area, or practice a profession because of their religion, people would likely be confused. People may say “we are in the 21st century after all.”
Many fisheries in Europe have a system that reminds me of modern feudalism. First, the quota is not an enforceable property right, that can be bought and sold freely, and the ownership is public. In many places, the quota is owned by the State and lent in a near black market to a select group of fishermen. Second, the labour practices would charitably be described as Victorian. Third, there is little incentive to manage the stocks well.
The previous Commissioner, the former Communist Maria Damanaki, tried to introduce private property rights to Europe fisheries. She was blocked by a coalition of NGOs, industry and governments. It made sense for large industry players to back the status quo. Those who hold the quota are, in some regions, making profits that only a Cartel make.
If you want systems to prosper, economically and ecologically, you need to fix the basics first. The first thing to fix is the property rights system. If you don’t do that, you can’t be surprised when things fail.
Cotton puff
Many of Uzbekistan’s farmers would no doubt love to grow fruit and veg in place of cotton (“Ready, steady, reform”, July 6th). They are unable to do so because of the system of mandatory state orders, inherited from Soviet times. If you fail to deliver the mandated cotton quota to the state you lose your leasehold. Revenues from the cotton harvest are reputed to be funnelled through semi-private government-linked trading companies; abolishing the quotas would hurt these powerful entities.
Émigré groups such as the Uzbek-German Forum for Human Rights document how forced labour, sometimes consisting of doctors, teachers and other state employees, continues in the harvest, despite the government’s claim to have eradicated it. On a separate point, hundreds of families across the country have lost their homes in the past two years without compensation or effective recourse, to make way for shady developments. Real reform begins with enforceable property rights for the many, not just for the few.
cassandra cavanaugh
New York