Douglass C. North: Property

Douglass C. North was American Economist. Explore interesting quotes on property.
Douglass C. North: 36   quotes 18   likes

“Karl Marx and Adam Smith both subscribed to this view. They both saw successful growth as dependent on the development of efficient property rights. Their followers appear in the main to have forgotten this.”

Douglass C. North

Source: The rise of the western world, 1973, p. 157

Appearance , Success , Dependency

“Economic growth occurs if output grows faster than population. Given the described assumptions about the way people behave, economic growth will occur if property rights make it worthwhile to undertake socially productive activity. The creating, specifying and enacting of such property rights are costly… As the potential grows for private gains to exceed transaction costs, efforts will be made to establish such property rights. Governments take over the protection and enforcement of property rights because they can do it at a lower cost than private volunteer groups. However, the fiscal needs of government may induce the protection of certain property rights which hinder rather than promote growth; therefore we have no guarantee that productive institutional arrangements will emerge.”

Douglass C. North

Source: The rise of the western world, 1973, p. 8

People , Way , Effort

“The first economic revolution was not a revolution because it shifted man's major economic activity from hunting and gathering to settled agriculture. It was a revolution because the transition created an incentive change for mankind of fundamental proportions. The incentive change stems from the different property rights under the two systems. When common property rights over resources exist, there is little incentive for the acquisition of superior technology and learning. In contrast, exclusive property rights which reward the owners provide a direct incentive to improve efficiency and productivity, or, in more fundamental terms, to acquire more knowledge and new techniques. It is this change in incentive that explains the rapid progress made by mankind in the last 10,000 years in contrast to his slow development during the long era as a primitive hunter/gatherer.”

Douglass C. North

Source: The rise of the western world, 1973, p. 240-1, as cited in: Thrainn Eggertsson (1990), Economic behavior and institutions. p. 255-6

Knowledge , Learning , Change

“International specialization and division of labor requires institutions and organizations to safeguard property rights across international boundaries so that capital markets as well as other kinds of exchange can take place with credible commitment on the part of the players.”

Douglass C. North

Source: Institutions (1990), p. 121

Parting

“Institutions are the humanly devised constraints that structure political, economic, and social interaction. They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal rules (constitutions, laws, property rights). Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange.”

Douglass C. North

Douglass North. (1991). "Institutions." Journal of Economic Perspectives, 5(1): 97-112; Abstract

Law , History

“By that time a structure of property rights had developed in the Netherlands and England which provided the incentives necessary for sustained growth. These included the inducements required to encourage innovation and the consequent industrialization. The industrial revolution was not the source of modern economic growth. It was the outcome of raising the private rate of return on developing new techniques and applying them to the production process.”

Douglass C. North

Source: The rise of the western world, 1973, p. 157

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