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Property Rights

Property Rights

The right to own land and other property is taken for granted in many countries. It is one of the cornerstones of private enterprise and capitalism, and makes it possible for people to control where they live and work. In space, however, this right is an open issue. International treaties appear to bar people from making ownership claims to property on celestial bodies but do not explicitly prohibit it. Although the topic of property rights in space is not yet a major issue, it is something that will have to be resolved before major commercial development of space, particularly the Moon and other nearby celestial bodies, can proceed.

Treaties and Property Rights

Two international treaties address, at least to some extent, the question of property rights in space. The Outer Space Treaty of 1967, the first treaty to deal exclusively with space, specifically prohibits nations from making claims in outer space. Article 2 of the treaty states: "Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means." This provision is similar to one in the Antarctic Treaty of 1959, which prevented countries from making new claims on territory in Antarctica, although that treaty allowed existing claims to stand.

The Outer Space Treaty does not specifically prohibit nongovernmental organizations, including individuals and businesses, from making claims to or owning property on other worlds. However, because no nation can claim another body, it becomes much more difficult for private claims to be enforced. If two people have a dispute over the ownership of a parcel of land in the United States, that dispute can be resolved through American courts because the United States clearly has jurisdiction over that parcel. However, since no nation has jurisdiction over land on another celestial body, it is unclear how disputes, registration of deeds and claims, and other aspects of property rights could be managed.

The United Nations made an effort to eliminate this concern in 1979 through a separate treaty that is known popularly as the Moon Treaty. This treaty, like the Outer Space Treaty, prohibits countries from claiming property on other worlds. However, the Moon Treaty also bars nongovernmental organizations from owning property on other worlds. The treaty considers the Moon and the celestial bodies of the solar system the "common heritage of mankind" and would require an international organization of some kind to oversee development on other worlds. That organization also would be responsible for the distribution of the benefits realized from any such development among all nations.

Although the Moon Treaty could settle the question of property rights in space, the accord has been largely ignored. Only nine nations have ratified the treaty, none of which play a significant role in space exploration. The United States and other major spacefaring nations have never signed, let alone ratified, the treaty. Although the treaty technically has gone into force because of the small number of nations that have ratified it, the agreement has very little real power. This has left the question of private property rights in space unsettled.

Private Property Right Claims

Despite the current ambiguity regarding private property in space, some companies and individuals have attempted to make claims on celestial bodies. One of the best-known claims was made by Dennis Hope, an American entrepreneur. In 1980 Hope filed a claim for the surface of the Moon, the other planets in the solar system (except for Earth), and their moons. The claim was filed with a claim registry office of the U.S. government under the Homestead Act of 1862. Hope also sent copies of the claim to the United Nations and the Soviet Union, neither of which, according to Hope, contested the claim. Hope has been selling property on the Moon and other solar system bodies since he registered the claim through a company called Lunar Embassy.

Many space law experts do not believe that Hope's claim is valid. They contend that it runs afoul of Article 2 of the Outer Space Treaty, which pre- vents nations from claiming territory in space. Because no nation can claim the Moon or another world, there is no nation that would have jurisdiction over such a claim. Moreover, there is more than one claim to ownership of the Moon: A German, Martin Jürgens, has a declaration given to one of his ancestors by the Prussian king Frederick the Great that gives that person ownership of the Moon. While maintaining the legitimacy of his claim, Hope carefully skirts around the legal issues by noting that the deeds he sells for property on other worlds are "novelty items."

In February 2001 the National Aeronautics and Space Administration's (NASA) Near Earth Asteroid Rendezvous (NEAR) spacecraft landed on the surface of the asteroid Eros after orbiting the body for a year. Shortly afterward Gregory Nemitz, chief executive officer of Orbital Development, a San Diego company, submitted a letter to NASA headquarters. That letter stated that Nemitz and Orbital Development had filed a claim in 2000 for the asteroid with the Archimedes Institute, which maintains a registry of such claims but is not supported or endorsed by any government entity. Nemitz asked NASA for a nominal "parking/storage fee" of $20 per century for landing NEAR on the surface of Eros.

In response, NASA General Counsel Edward Frankle said that the agency would not pay the fee. Frankle cited Article 2 of the Outer Space Treaty, which prohibits nations from claiming celestial bodies, as the main reason why he believed Nemitz's claim was not valid. Although Nemitz made a number of arguments stating why he believed that article of the treaty did not apply, NASA was not swayed. The space agency continued to decline to pay the fee, saying that the claim was not sufficiently established. NASA declined to take a position on whether Article 2 of the Outer Space Treaty applied to individuals or whether the treaty should be amended to deal specifically with this issue.

Other companies have taken a more circumspect approach to the question of property rights. Applied Space Resources, an American company that is planning to land a spacecraft on the Moon, has made a conscious decision not to claim any territorial rights on the Moon. The company is concerned that any near-term debate over property rights could prove detrimental for commercial efforts because it believes that one possibility would be a moratorium on commercial space projects until the legal questions about property rights are resolved.

The Future of Property Rights in Space

A complete solution to the question of private property rights in space probably will require either changes to the Outer Space Treaty or an entirely new accord. As of this writing, however, there are no efforts under way to amend existing treaties or write new ones. In light of the relative lack of activity in commercial space enterprises to date, it may be some time until nations take action on this issue.

However, there have been some low-key efforts to address the property rights issue. Attorney Wayne White has drafted a proposed treaty that deals with property rights on the Moon and other bodies. Under his proposal, private entitiesindividuals or companiesthat operate a space facility of some kind on the surface of another world for at least one year would be accorded the right to the property on which the facility is located as well as a "safety zone" extending up to 1 kilometer (0.62 mile) from it. This provision would prevent people from claiming entire planets without even landing a spacecraft on them. The proposal also includes provisions for transferring property and revoking property rights if the facility is abandoned or is not used for peaceful purposes. White has presented his draft treaty and papers based on it at meetings of the International Institute for Space Law, but the proposal has not been taken up by any nation.

Although property claims on other celestial bodies have not been recognized by any nation, there is a registry for tracking those claims. The Archimedes Institute, which was established by law professor Lawrence Roberts, operates a claims registry where individuals can file claims on objects throughout the solar system. Claims filed with the Archimedes Institute have no special protection or priority over other claims because no nation has recognized such claims. However, the institute hopes that the creation of the registry will encourage the formation of new agreements that will recognize private property rights in space.

see also Governance (volume 4); Land Grants (volume 4); Law (volume 4); Law of Space (volume 1).

Jeff Foust

Bibliography

Reynolds, Glenn H., and Robert P. Merges. Outer Space: Problems of Policy and Law. Boulder, CO: Westview, 1994. Ward & Partners. "Sovereignty in Space." <http://www.spacelaw.com.au/content/sovereignty.htm>.

Internet Resources

Space Property Rights. Applied Space Resources.<http://www.appliedspace.com/property_rights.htm>.

White, Wayne N. "Proposal for a Multilateral Treaty Regarding Jurisdiction and Real Property Rights in Outer Space."Space Future. <http://www.spacefuture.com/archive/proposal_for_a_multilateral_treaty_regarding_jurisdiction_and_real_ property_rights_in_outer_space.shtml>.

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Property Rights

Property Rights

THE CLASSICAL LIBERAL POSITION

THE SOCIALIST POSITION

EXTERNALITIES AND THE TRAGEDY OF THE COMMONS

BIBLIOGRAPHY

Property rights consist of a persons ability to own, transfer, and use that which a person owns without government coercion. Property rights and economic freedom are interrelated in that a person cannot engage in economic activity if the state does not recognize and defend that persons right to own property, and because it is meaningless to have the ability to speak and act freely if one lacks the ability to monetize ones words and actions.

The way in which property rights are defined depends on which of two premises is taken as the starting point. Rights of ownership either originate with society as a whole and are bestowed by society on individuals from time to time or originate with individuals and are bestowed by individuals on society from time to time. The former is the position of socialist philosophers; the latter, that of classical liberal philosophers.

THE CLASSICAL LIBERAL POSITION

Classical liberalism begins with the premise that an individuals life belongs to that individual. This ownership of self, classical liberalists believe, is not something that is bestowed by human-made law but is a natural right that arises by virtue of an individuals status as a human being. Starting from the assumption that individuals own their own lives, classical liberals argue that it logically follows that individuals own their own labor because labor is the action of the self and individuals own themselves as a matter of natural law. Because individuals own their own labor, they also own the wages they earn from that labor because the wages are what they receive in exchange for the labor they own. Similarly, an individual owns the things that individual buys with his or her wages because those things are traded for the wages that were traded for labor that is the result of action by the self that the individual naturally owns. Thus, classical liberals maintain that property rights are sacrosanct as a matter of natural law.

The principle of natural law is invoked in the U.S. Bill of Rights, which speaks of inalienable rights: rights that exist as a matter of peoples state as humans and that can be neither established nor revoked by government action. Although the individual may choose to give up some property rights to society for the common good or in exchange for protections granted by society, classical liberals maintain that those rights are the individuals to give up, not societys to take.

THE SOCIALIST POSITION

Socialism begins with the position that it is the responsibility of society to ensure an equitable distribution of ownership. That obligation falls to society because, socialists believe, when individuals are left to their own devices, political and economic power become concentrated in the hands of the strong, who then exploit the weak. Thus, because it is the responsibility of society to protect all its members, property rights must belong to society as a whole. In the socialist framework the society bestows property rights on individuals to maintain equality of income and wealth.

The socialist position was greatly influenced by the exploitation of western workers in the late nineteenth century. The German philosopher Karl Marx maintained that workers had a right to the value of their labor and that a system that allowed employers to profit from the fruits of workers labors is destined to bring about the exploitation of those workers. Marxist socialists maintain that the way to avoid this exploitation of labor is for the state to own the means of production. Removing private ownership means that the government must decide how the means of production are to be used. This is accomplished by a central planning board that decides how much output industries will produce, what prices they will charge, and how much they will pay their workers.

Communism is regarded as the next evolutionary step beyond socialism. In the socialist system, the government owns the means of production only. Individuals still maintain ownership of their personal property. In the Communist system, the government keeps all property rights to itself and the individual owns nothing. In the Communist system, people work for no wage and receive everything they need from the government at no cost. What is common to the socialist and Communist frameworks is that property rights originate with society, not with the individual. Despite the use of the term, no modern country has ever achieved a Communist framework. Even those that have come closest, Russia, China, and North Korea, have not succeeded in attaining government control of all property. Modern examples of Communist systems are seen in religious communities whose members take vows of poverty. In these communities, the individual owns nothing but is granted use of property owned by the community.

EXTERNALITIES AND THE TRAGEDY OF THE COMMONS

Economists argue that it is important that property rights be well defined. When they are not, there is a disconnect between individuals who make decisions and individuals who must live with the consequences of those decisions. This situation is known as externalities and the tragedy of the commons.

In the case of externalities one individual imposes a cost on another that would necessitate compensation for the second individual if property rights were well defined. For example, a factory that pollutes the air imposes a cost on people who breathe the air. Because the factory does not bear the cost of pollution, it has an incentive to pollute more than it would otherwise. If property rights are defined so that those people own the air, the factory is forced to compensate them for the air it pollutes. The result is that the factory pollutes less. If property rights are defined so that the factory owns the air, people must pay the factory to pollute less so that the air will be breathable. Again, less pollution is created. Thus, when property rights are poorly defined, the economy produces more of the good than is socially optimal. When property rights are well defined, regardless of whom the rights are assigned to, the economy produces the socially optimal quantity of product.

The economic problem of the tragedy of the commons also results from poorly defined property rights. For example, if everyone in a village together owns a plot of pastureland (a commons), each person is free to graze his or her cattle on the land. However, because the ownership is spread over so many people, no single person has an incentive to maintain the land. The result is that the land will be overgrazed. However, if one person owned the land, that person would have the ability to profit from owning the land and therefore would have an incentive to maintain it.

A contemporary example of the tragedy of the commons is the treatment of endangered species. In countries that have outlawed the killing of elephants the elephant population dwindles because poachers have an incentive to evade the law and no one has an incentive to protect the elephants. Conversely, in the few countries in which killing elephants is legal, the elephant population is flourishing because people have an incentive to help the elephants thrive so that they can be harvested at a profit. As an extension of this example, cows are not endangered in the United States despite the fact that Americans consume millions of tons of beef annually. Because it is legal to own cows, farmers have an incentive to maintain herds and cull them at a profit. The decimation of the American buffalo, in contrast, occurred because cattlemen came to the plains before the rule of law was established. Without law to enforce property rights, the buffalo were a common resource and so were hunted to near extinction.

SEE ALSO Bill of Rights, U.S.; Capitalism; Coase Theorem; Communism; Externality; Freedom; Government; Individualism; Liberalism; Market Economy; Natural Rights; Property; Socialism; State, The; Tragedy of the Commons

BIBLIOGRAPHY

Bastiat, Federic. 1850. Economic Harmonies. Ed. George B. de Huszar, trans. W. Hayden Boyers. Irvington-on-Hudson, NY: Foundation for Economic Education, 1996.

Hoppe, Hans-Hermann. 1989. A Theory of Socialism and Capitalism. Boston: Kluwer Academic Publishers.

Marx, Karl. 1867. Capital. Trans. and ed. S. Levitsky. Washington, DC: Regnery, 2000.

Von Mises, Ludwig. 1979. Economic Policy: Thoughts for Today and Tomorrow. South Bend, IN: Regnery/Gateway.

Antony Davies

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