Michael Heller on the Tragedy of the Anticommons | Michael Heller | Big Think

Michael Heller on the Tragedy of the Anticommons
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Too much ownership leads to too little prosperity, according to Michael Heller.
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Michael Heller:

Michael Heller is one of America’s leading authorities on property. He is the Lawrence A. Wien Professor of Real Estate Law at Columbia Law School.

His new book The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives was released in 2008. In The Gridlock Economy, Heller draws on everyday experiences - from airport delays to new-style rap music - to show why the structure of ownership matters so much more than people may realize. Private ownership usually creates wealth, but too much ownership has the opposite effect - it creates gridlock. This is a free market paradox that Heller discovered and it's the dynamic at the center of our gridlock economy.
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TRANSCRIPT:

Question: What is new about this theory?

Michael Heller: And the answer is early in my career, a senior colleague told me as an academic I should be aware of the following and it’s been [found out] to be fairly true now in 15 years of teaching which is that you can either, if you write something, either it turned out to be obvious or it’s wrong, but those are really the only two choices you got, something that’s either obvious or wrong, and either is okay as long as it’s interesting. And what I hope that the gridlock economy insight offer is something that is ultimately obvious because there really is nothing new. So, yes, the gridlock economy is a form of transaction cost, but that isn’t a very helpful thing to say in and of itself, right? Because when we’re setting the transaction cost, you want to know how does it operate, can we reduce those cost, where do we go to look for them? And what the gridlock image I hope gives you is a new way to think about a particular kind of transaction cost, one that’s pervasive but really had never been… This is a discovery that I made about an area of loss, of huge loss, of loss of life, of loss of opportunity in our economy that simply hadn’t ever been noticed before. And the discovery that I made isn’t the notion of loss in general but a specific kind of loss and it’s a loss that I call the tragedy of the anticommons.

Question: What is the "tragedy of the anti-commons?"

Michael Heller: In order to understand gridlock, you need to have a set of conceptual tools. So part of why I came up with the gridlock image for describing this problem is that we’re all pretty familiar with gridlock in traffic. We’ve all sat in traffic jams. So, what ownership gridlock is is the economic equivalent of sitting in a traffic jam. Everybody, every driver individually behaves pretty rationally, but when you have 50 people trying to turn left at once at one intersection and everyone gets stuck and it’s the same with ownership. We have an image that owners generally try to do the right thing and that’s right. Every individual owner is trying to do the right thing, but we’ve set up an ownership structure, ownership system where the interaction of those individual reasonable people is that they all get stuck. The drug patent owners can’t agree, the license owners for spectrum can’t agree and the little landowners can’t agree, so we don’t get drugs or wireless or airports. So, ownership gridlock is a little bit harder to see. And here’s the way that I come up with to try to make that invisible problem of gridlock more visible. It’s a conceptual tool. It’s really, if you’re going to take away one image from this interview, the one that I want you to take away is, or one tool from this interview, it’s the notion of the tragedy of the anticommons. So, what is the tragedy of the anticommons? It’s the term that I coined to describe the problem of too many owners [within] too little prosperity. And the way to get there is to sort of go in steps. So most of us are familiar with the notion already of the tragedy of the commons, when we have the ocean we all take fish out and there’s no more fish, that’s the tragedy of the commons, or we all put pollution into the air and the air gets polluted, that’s another tragedy of the commons.

Read the full transcript at https://bigthink.com/videos/michael-h...