Foreword: From Ownership to Credit

Abstract

For much of the previous four decades—decades that saw the rise to prominence of both the New Institutional Economics and Law and Economics movements—the primary intellectual paradigm in property law was one of exclusion and security. The key functional virtue of property law in this paradigm was the security of private investments against outside expropriation, whether vertically from state actors or horizontally from other private entities, and therefore the predictability of returns to investment. Such security was primarily achieved through exclusion rights, exercised both vertically and horizontally: takings law being a major example of the former, and trespass law the central example of the latter. Property rights were therefore, above all, rights of ownership or dominion over things of value, and their primary economic functionality was to facilitate the creation of credible commitments against expropriation or invasion.