The Foundations of Property
2021-05-17 · Guest: Bart J. Wilson (Professor at Chapman University) · 51:51
Anthropological and economic roots of property rights
Bob Zadek interviews Professor Bart J. Wilson about the anthropological and economic roots of property rights. They discuss how property functions as a universal human custom that facilitates conflict avoidance, abstract trade, and specialization, ultimately leading to significantly higher societal wealth through the principle of comparative advantage.
Topics: Private Property, Experimental Economics, Anthropology, Trade, Conflict Avoidance, Comparative Advantage, Human Nature, John Locke, David Hume
Speakers: Bob Zadek, Bart J. Wilson
Introduction: The Core of the Free Market [00:17]
Bob Zadek: Good morning, everyone. Welcome to the Bob Zadek Show, the longest-running live—yes, I mean live—libertarian talk radio show in all of radio. Thank you so much for listening this Sunday morning. We are, this morning and always, the show of ideas, never once the show of attitude.
Last Sunday, I spent an hour with a wonderful guest, John Judis, you may recall, and we discussed socialism. We compared socialism to a free market economy, to a more laissez-faire economy. It was quite an interesting hour. During that show, I had a bit of an epiphany. I discovered in the course of my conversation with John, I discovered that the core fault line, or one of the core fault lines, between those who feel that socialism is, if you will, the way to go, versus those such as myself who favor a free market economy, or as free as we can make it—one of the core differences was the respect in one case, mine, or the disrespect in the case of John and other socialists, is the importance of private property.
In a free market economy, the coin of the realm, when you drill right down, capitalism depends upon vigorous defense of the concept of private property—that it is moral, it simply has a moral basis, that if one acquires property in the broadest sense and acquires it lawfully, without fraud or coercion or force, then that owner of property has the moral right to retain it and exclude others from its use and enjoyment. In a socialist society, one can say private property is not eliminated, but its importance is diminished, and there’s more shared property. There’s less belief in what’s mine is mine and what’s yours is yours. And I was challenged on the show as to, “Well, hold it, Bob. You say it is moral for one to be able to retain exclusive use of property which was lawfully acquired. Well, where is that written? What is the morality underlying that? Why is that moral? Why? It’s not automatic.”
Introducing Bart Wilson and Experimental Economics [01:01]
Bob Zadek: And it got me thinking about the concept of property. And frankly, after the show, I had some difficulty until I worked it through in defending the morality of the concept of property. Why was that more moral than shared property, that nobody owns anything? And there I was thinking about it quite a bit, and to my extreme delight and as a matter of serendipitous good fortune, I find that we have invited this morning’s guest to help us understand at its core the concept, the core concept of property.
And so I only had to worry about this issue for a couple of days, and to my delight and with that introduction, I’m delighted to welcome to the show Professor Bart Wilson. Bart has just published The Property Species: Mine, Yours, and the Human Mind. A gift to Bob, a gift to all of us, to help us understand why there is such a thing in the human species as the concept of property. Is it primal? Is it inherent in our collective DNA, or is it taught? Does it have to be enforced, or is it natural? What are the benefits of the concept of property? Does the human society benefit with property rights, or are property rights more exclusionary and prevent everybody from enjoying the benefits which one can get from living on this planet? These are hard questions, and Bart is here to help us work through these and other issues through his experiments and study into the field—and it seems like an enormous field, and it is—of the, I’ll call this is now my label, the primal roots, the anthropological roots of the concept of property. Once we understand that, I have found that everything else falls into place.
So, Bart, with that introduction and with great gratitude for the work you have done in your book, welcome to the show this morning.
Bart J. Wilson: Thank you for having me. Glad to be here.
Bob Zadek: Now, Bart, your book is The Property Species. You are an economist. You teach economics. As well, you are an attorney. You have taught at Chapman University and at the Fowler School of Law. You have founded, with Vernon Smith, the Smith Institute for Political Economy and Philosophy. So your disciplines seem to span law, economics, anthropology, and philosophy. You bring a lot to the table, which I hope you’ll be able to share with us in the hour we have this morning. Now, tell us the elevator pitch view of what your book, the topic, what your book explains to all of us. And along the way, your book relies quite a bit for its data on experimental economics, a concept that many of us may not be familiar with. So tell us conceptually what the thesis is of your book and along the way explain what experimental economics is all about.
Bart J. Wilson: Well, I’ll start with the last part, because that tells me how I got into writing the book. So, I’m an experimental economist, which is a way of studying my own priors as an economist and how I think economics works by using the laboratory. And so what we do is we bring undergraduates into our computer laboratory, we create virtual worlds for them to participate in. They can be market worlds, they could be free-ranging worlds, they could be worlds looking at trust and accounting and things like that. And then we pay the participants to make decisions, and we want to see what kind of decisions they make, to see if what we think is true is actually what they do. And so, the better decisions they make, the more money they earn.
And so, part of this research project was to see how markets grow from the ground up and to see what happens if we don’t have anyone enforcing ownership over things. And so, we created a world where people could discover that they could trade stuff, and they could discover that they could move stuff to and from each other. What we found was things flying all over the screen, and it was very unstable. And we were rather surprised by this because a lot of things that we’ve discovered in experimental economics, that when people try to sell above their costs and try to buy below their values, that this market is highly efficient and that without any real training, people find ways to get all the gains from trade out of the system. But in this world we had created, things worked miserably.
Property as a Universal Human Custom [03:01]
Bart J. Wilson: And so that pushed me back to thinking, “Well, what are the foundations of what we call property rights?” And so I started reading David Hume and John Locke, and I noticed that they didn’t use the word “property rights,” they used the word “property.” And they used these quaint phrases like “they have property in X.” And that got me interested into wondering, “What is property? How does it work?” And there’s tension from my kind of research. I work with people both in the humanities colleges and in biology. And I would talk to my friends in biology and they would say, “Well, all sorts of animals have property. You know, baboons respect harems, the males in a harem and don’t go after the females in other groups. And chimpanzees seem to patrol their territories, wolves patrol territories, birds even will protect their caches of food from theft by re-hiding them if another bird is watching them while they’re hiding it.”
And so, they would say all sorts of animals have property. And then I would talk to my friends in the humanities and they’d say, “No, no, property is this Western European construction, male-dominated kind of thing that’s kind of been imposed on the world.” And so in one part of campus, you have the idea that property is all over the animal kingdom, and another part of campus, it’s just kind of some people on the planet have it. And that was kind of the thrust—like, I thought both of those in my intuitions were wrong. There’s got to be something common to all human beings, but yet they’ve got to have a way of trying to explain why some groups look at this and what we notice about property works differently.
And so that’s what I set out to study and kind of came to this conclusion that property is a universal and uniquely human custom. It’s universal in that all human groups have property in some small set of things, probably tools, utensils, and ornaments. But that only human beings have property in tools, utensils, and ornaments and things. And so, that is my way of going down the middle and making nobody happy.
Property as Conflict Avoidance [04:01]
Bob Zadek: So property, which is, as you said, first a custom, then later as society develops embodied in the law, in statutes, and therefore enforced by government with ways to—where the government will support one’s claim to property. So property evolved first as a custom. Now, what function, as we learn when we study biology, anthropology, the development of the law, property and other customs develops in order to make things better. As humanity evolves, it learns and discovers how to make life better. So what was the need that the creation of the concept of property—because and we’ll discuss whether one is born with it or not in a moment—but what was the need that was filled by the invention, if you will, of the concept of property? How did property per se make things better?
Bart J. Wilson: Well, so imagine that there’s this thing in the world, let’s call it a tool, a spear. And if two people want to use that spear, but only one person can use it, you now have the potential for conflict. And you have to decide who gets to actually use the thing. And so, if one person makes a claim on it, and the other person also makes a claim on it, you have this potential for violence. They’re going to fight over it. And even worse in the human species is that we’re groupish. We have our—you and I both want to go after this same spear, I’m going to bring my buddies to it if you’re going to take it from me, and you’re going to bring your buddies to it. And we’re going to have potentially a real problem with violence because once it gets going, it doesn’t temper. And that’s the real problem that needed to be solved, that can we find a way that such that you’re not going after some things and I’m not going after other things and that then we’re not making us less fit to survive.
Bob Zadek: So the concept of property is really a concept of conflict avoidance. That with property rights, the conflict isn’t eliminated, but the prospect of conflict and the things to fight over is diminished. And clearly society is better with less conflict. Obviously, that doesn’t have to be explored. That’s certainly a given, obviously. And so therefore, the rule of property simply makes things, if you will, more civilized. There’s less fighting and therefore people are not—society is not diminished by fewer people and everybody becomes more productive. Is that overly simplistic or reasonably accurate?
Bart J. Wilson: That’s basically accurate. That’s at the core of it. It could be just keeping property, keeping relations within your little community calm and things. But the big question is how can you then export that broader way to more and more groups where we are groups who don’t know each other personally also respect those things that people call their own. And that’s where the whole real problem of getting this off the ground goes.
Is Property Innate or Taught? [05:26]
Bob Zadek: Does property have to be taught? That is to say, a young child will be born without any inherent sense of property and it has to be taught, or does it—is it part of the DNA that one acquires, this vague sense of property? You do a lot of work in your book about the concept of “it’s mine” and how that influences the behavior of very young children. And I’m asking the question to see if strong property rights are the more natural, the automatic, the default way that people are, and the lack of respect—and respect for property has to be taught out of you, or does the respect for property have to be taught into you? Help us understand childhood development and the concept of property to see which, in your opinion, is more, if you will, natural.
Bart J. Wilson: Well, I’m going to come down in the middle and say it’s some of both. It has to have an element of both. And so the common part, the part that’s born into us, is that we have the DNA for a brain that creates a mind that will then take in this concept called “mine.” So in every human language, you can say, “This thing is mine.” And you can’t break down “this,” “thing,” and “mine” into any simpler concept. And so that makes it possible between any two human beings on the planet to communicate with each other if you can figure out what those lexical exponents are in each of the different languages, you can map that out.
But so that’s the innate part, that so however human beings are socially and then with our DNA, every human group has those concepts. But how you use them and how you apply them have to be taught. And so no kid has to be taught to claim something as mine. But that’s not really the abstract concept of mine, that is the kind of very pre-abstract thinking of “I want this,” which is what all animals have in a sense. They’re always going after food, mates, and territory in some way or another, maybe not in an abstract way, they want something. And kids want something, and they hear this word and they hear “mine,” they call it and they grab it.
But it isn’t really mine until they’re taught when they can say that. What are the circumstances under which they can do that? And it becomes property when they understand what “yours” means. And “yours” is very simple: “You can say about this thing, it is mine.” And again, all of those kind of “you” and “say” and “can” are all these primitive concepts that are in every single language. And so once the kid is taught when they can say “mine” and “yours,” then you have the kind of social part, the part that’s taught within a community, starting. And that’s where you can see why it might vary from group to group around the planet. That different things are things by which people can call mine in different groups, different communities, and they’re taught that then from their elders.
And I’ll give you a sense of what is natural and innate and what is taught. For almost—I don’t know about you, but almost every kid I certainly learned this, and I remember at one point going to the grocery store for the first time and walking in and seeing, “Whoa, look at all these great things around here.” And you want to—first thing you want to do is you want to grab that lollipop. And it’s just there. And if you’re out on the playground, you’re out walking around, you go see things, you can just grab them. Why not just grab the lollipop? And so you don’t have to be taught to grab things and claim them when you grab them and find them. But your parents, of course, don’t let you get away with that. That’s not yours. You might call it mine, but you have to learn that until you exchange something for it, it’s not yours. And that’s the part that has to be taught—those kind of rules about which you can make those claims, and then you use those innate ideas of mine and then “you can say about it, this is mine,” and put them together in a situation that creates the whole custom that is property. So it comes from both who we are as a species and also who we are as a community as taught by our mentors.
The Evolution of Property: From Tools to Ideas [06:26]
Bob Zadek: Some societies, I am sure, have been established and have existed with far more diminished respect for private property. And I guess private property and property are the same thing—“private” doesn’t add anything. But there are some societies that have always existed with a diminished effect of private property. More property is owned in the commons, it’s owned by everybody for everybody’s enjoyment. “The commons,” if you will, is a phrase in those societies, which means pasture land that anybody can use to the extent they want. So societies have various—give more or less importance to private property. How have those societies performed? In what ways has life in those societies been better with a diminished respect for private property as compared with societies with a more refined and stronger respect for private property, or are there no differences?
Bart J. Wilson: In some communities, kind of hunter-gatherer societies, if you create a tool yourself, that is going to be something you can call mine. But if you have to work with somebody else and build the canoe together, no one can say that canoe is mine. And so it depends on kind of the customs of how they go about their lives in meeting their needs, and that you’ll come up with the things that you need to call mine and what you don’t need to call mine.
Now, the thing about the concept of mine and mine and yours is that it is abstract. And so it might have gotten off the ground—and that’s what my book is about. I argue that it was tool-making is the source of this notion of property. We tend to think in the modern world it comes with land and territories, but I think all of that is very late in human history compared to the creation of tools and these very unique and complex tools relative to the rest of the animal kingdom. And so those—that idea is abstract, and that some communities then start applying these notions of property more broadly and around for different things. And so if your community is built upon migratory hunting and you follow the hunts around, follow the prey around, then you’re not going to have notions of calling land mine. But if you become agrarian, and then you’ve got to try to solve these other problems like Western Europe did, they might start saying, “All right, now we’re going to call not just some tools mine, but these plots of land mine.” And this can continue. Right now in the modern Western world, we call ideas mine. Now, there’s some problems with that—they don’t have nice boundaries like land or like tools—but we still take that idea of being able to say, “This idea is mine.” And that allows and creates more—a broader scope for us to trade things and to create things, and therefore set in motion kind of the last 300 years of the great fact of wealth creation here in the world.
Property as a Dispute Resolution Device [07:49]
Bob Zadek: So that if a society simply has diminished respect for personal property, in comparing that to a society with a greater respect for private property—and I should say that it seems to us, I dare say, having grown up in a society with a very strong respect for private property, it seems to us that of course it is the natural way to behave, to have you own things and they are yours so long as you have acquired them without force or coercion or fraud, you’re entitled to them. However, when society awards the owner of private property, it is also denying everybody else the use of that private property. And I think an example that was mentioned, I think, in your Free Thoughts interview that you did a while ago, there was the thought of a billionaire owns beachfront property, beautiful pristine beachfront property, because the billionaire bought it and owns it. Well, that means that that property is owned by the billionaire, fair enough, but to the exclusion of everybody else on earth who is denied access to that beautiful property. So it is exclusionary. So there is a societal downside, if you will, to a respect for private property. In total, on the scorecard, what benefits and detriments are there in comparing two societies, one with diminished respect for private property, a more socialist, socialist, socialist, socialist, socialist economic system, as opposed to one with very protective rights on private property? Can you generalize about how each society is better than the other and is worse than the other in the long term?
Bart J. Wilson: Well, yes, in the sense of what’s the alternative to having a greater respect for property, a greater respect for property, if you put it that way? The alternative is that we are going to have multiple people trying to use the same thing, in which case throughout the conflict, we’re going to degrade the resource itself. And that’s the alternative. And if that’s not—well, if that’s what we have, then we’re going to be poor. And so the idea that because it’s exclusionary, therefore there’s this notion of something bad involved with it is not—is kind of not being tested in the economic sense of what’s the alternative? The alternative might be that two people are going after it, and in doing that we have a problem. And so that—and if we’re spending time trying to protect ourselves because people are trying to encroach on what I call mine, you’re trying to—I’m trying to encroach on what you call mine, we’re spending time doing that as opposed to being productive. Yes, the entire community, the society is going to be worse off because we’re not doing other things being productive.
Property, Abstract Thought, and the Origins of Trade [08:31]
Bob Zadek: Does one economic system that is breaking down economic systems as more respect or less respect for private property—is one more violence-inducing than the other? That is, can we say that to the extent that you have diminished emphasis on private property, that will for that reason alone invite more violence and dispute, or is the opposite true?
Bart J. Wilson: Well, it also depends on how much of a monopoly on violence the state or the government has at the time. So you could have kind of—you don’t actually see people fighting because they’re willing to get violence that’s going to come from some other source. But the general idea is that the less violence you have, the less you have to worry about violence about strangers coming up and saying, “No, that’s mine, I want to use that too.” That means the more that you don’t have to worry about those kind of things, the better place it’s going to be because we’re going to spend more time making other things.
Bob Zadek: This is Bob Zadek. I’m spending a wonderful hour talking with Bart Wilson. Bart has written The Property Species: Mine, Yours, and the Human Mind, where he has developed a wonderful line of scholarship through the use of experimental economics to discover how people acquire and behave with and without strongly developed roles of private property. We learn from the book that private property seems to be the core of conflict avoidance. We learn that it is—we don’t think of it this way, but we learn that private property is really a dispute resolution device. It resolves all kinds of issues, that is respect for private property, that would otherwise have to be resolved by force. It creates a system where it works for the common good even though there might be some of our species who are denied access to places and things that in a society with diminished respect for private property they would have access to.
Now, in your book, you spend time discussing, of course, when one discusses property, you discuss what property provides, which is an opportunity to trade. And you help us understand the importance of trade in economic growth. It’s almost too obvious to explain, but many people when they think about this stuff, they don’t relate the two and they don’t really understand what the opportunity to trade does for all of us. So tie together, if you will, what you have learned and what you explain in your book about the interaction between firmly established rules of the game—so property rights they are called—and how that creates the opportunity to trade and how trade benefits everyone. Your experiments in your book point this out and share what you have learned with us.
Bart J. Wilson: So, well, first off, I just want to credit Matt Ridley who reoriented my mind as an economist, which I should—you know, as a biologist, he made the point which Adam Smith made, that no other animal trades one thing for another thing. And that that notion of exchange there is something that differentiates our species and makes what we see around us in the modern world possible—that we’re the only species that’s decreasing our infant mortality, the only species that’s extending our own lives, the only species that’s making our lives more comfortable than it was. And something has to be different about what we do. And Matt Ridley identified that in a great book called The Rational Optimist based upon that notion of exchange.
But there’s something else that has to make exchange possible. Why is it that humans are the only species to do this? And so I argue that that has to come from this abstract ability of ours to call something mine and put that kind of notion of mine inside the very thing itself. And so you can imagine how this might get off the ground if I have the ability and you have the ability to think about another person’s mind and to think about why the world might be different in the future. Because my—I work with primatologists at Georgia State, Sarah Brosnan, and she has worked really, really hard to try to get chimpanzees to trade stuff. They know which stuff they like more, and so they give it to the other animal and they’re trying to get them to exchange things, and they just won’t because they can’t get their minds out of right here, right now.
The Productivity of Property Rights [09:31]
Bart J. Wilson: But what abstract thought does is that it gets us out of the here and now and we can think and imagine the future. And that’s where trade happens, in the future. That is, if I have a cow and you have some chicken, I can imagine a future where I give you a cow and you give me a whole bunch of chicken. And that means that I have to think outside, like, “Oh, this cow is mine, but I want those chickens to be mine,” and you want this cow to be yours and you’re willing to let those chickens be mine. And that requires thinking about a future where the things have switched and the way we categorize them and classify them has switched.
And you can see how that’s just remarkable why one species on the planet does this and no others do that, that we can do that kind of abstract work in our head. And what it requires then is that we don’t go after and look at the—look over at the chicken and say, “Well, let me just take those,” and the same thing look at the cow, “Let me just take that cow” as an alternative. And so we created these worlds, these laboratory worlds, to see how—what it took for communities and these undergraduates recruited to our computer laboratory in these virtual worlds to get that off the ground and going.
And so we created the first person’s experiment, we gave people a little bit of a place where they could grow things and a place where they could consume them in a house. And then they produced the things and then they could move the things around. And they could talk about it. And the first thing, of course, when people discover things can be moved to them is they move just like two-year-olds—everything goes to their own hand, “mine, mine, mine.” They grab them and things are flying around, but then there’s no incentive for you to spend more time and specialize in the stuff that you’re good at producing. So no one does that, and the world is poor. Things are flying around and people are unhappy, and the participants are chatting back and forth. And these people, if that’s the way it stays, leave after an hour and a half’s work with about seven dollars. They’re not very happy.
But if they can discover that, “Oh, if the things are in your field and this little area, this little plot, you call those mine, and I’ll call these mine, and then we decide how much to move to each other—you give me something and I’ll give you something in return.” Then they can spend time not thinking about where just where to get anything they can get their hands on, but what is the best thing I can produce? What can I produce more of that I can then trade to you who can produce something else? And once they figure out that that’s—once they’ve decided where who can call things mine and what those things are, then they can spend time being productive, producing things, and then figuring out how to trade those to maximize their gains from trade. And once they figure out all that trading in our experiment, they can make at a rate of thirty-five dollars an hour. So they’re doing five times better because they’re spending time working on how to be productive and then finding something—someone to trade that stuff to. And that is kind of the heart of the problem that humans are trying to figure out: “How is it that we can get the most out of what we have right here? Most in terms of our time to be able to produce stuff and the most in being able to find a way to distribute that and exchange it in the most efficient way possible.” And if we’re spending time on all that and we’re not spending time thinking about protecting ourselves from being preyed upon.
Property as a Moral Custom [11:01]
Bob Zadek: You made a point which is so important that I want to be sure that it is not lost on our listeners. Once you develop the concept of private property, that automatically invites the concept of comparative advantage—that every—that each individual doesn’t have to be wholly self-sufficient. They don’t have to worry about not being good at gathering food because they are good at preserving it or preparing it or something else. And once you establish private property, then I, an individual, am free to do what I do best, because in my creation of my property, which has value to somebody else who will respect my rights in the property, that gives me something to share, to sell, which is my interest in property, and I can then trade that for your interest in your property which I need for my survival. Thus, each of us gets to do what we do best only because there are private property rights. And then once everybody is doing what they do best, the economy as a whole is profoundly more efficient with everybody doing what they do best without fear of not being able to do other things. So that gives birth to comparative advantage, which then gives birth to collective benefit. Accurate summary, Bart, or is there more to it?
Bart J. Wilson: No, that is the core. The core is spending times being productive when we could have been capricious and preying upon each other.
Bob Zadek: And the rule, as you have explained, the concept of property is a concept which says no need to fight, no need for the fittest to prevail because they have the greatest strength or the greatest weapons. That all you need is a property system, and the property system protects you against not being the fittest, the one with the most brawn or the one with the most weapons. It’s the property system that allows you to create and incentivizes you to create, because what you create will be protected. And Bart, that is especially true, as you pointed out earlier, in the abstract concept of intellectual property. There’s no incentive to be creative if all of your efforts are simply for the common good. So once again, firmly established rights in this case in intellectual property is the only incentive possible for one to produce.
Bart J. Wilson: Is that the only incentive? Yes, in the sense that it basically requires mutual respect. That’s what is needed to get property off the ground. And it’s right there in my claims. If I claim something as mine—a thing, land, an idea—and what I’m relying on if I want you to respect that, I’m relying on you to think of the concept of yours. And so I personally, if I want to claim something as mine and then have that confidence that it’s going to be respected, I need you to have the concept of yours. Well, if I can have the concept of mine and you can have the concept of yours, it can also go the other way. And that’s the kind of core of it, is putting everyone on the same reciprocal plane, that we are both mutually respecting these boundaries that we’re creating around things. And for intellectual property, the problem is the boundaries aren’t as clear. If it’s a thing, it stops at the border of the thing, but an ideas don’t have the same borders and that’s what makes it a lot trickier.
Bob Zadek: Now, you mention and you’ve said it several times during the course of this hour that property started as and is today—you use the phrase “custom.” It is a custom, a moral—it’s there’s a morality factor as well as a legal factor. What did you mean, what point are you helping us understand when you—and you use it quite a bit in your book—that property is a custom? Distinguish, if you will, custom and law as you use the phrase.
Bart J. Wilson: Well, we have to be taught from someone that we will respect their authority of and that they know what they’re doing and what they’re teaching us is valuable to us, that here are the rules of when you can claim something as mine. And that starts with parents and kids right when they, you know, at three years old once they start getting those—the abstract idea that there’s another person who has their own mind out there. That’s when we start teaching property. And that—and so it’s customary because kids aren’t born with it. It has to come from the prior generation. We have to be taught it. And it just so happens then when communities get bigger and bigger and we want to keep people who don’t know each other personally keep them all connected so we can keep these exchange networks going, that then we create these top-down versions of wanting to do the enforcement of that. But that enforcement comes or is put in place in the first place because there’s a ground respect for “this is what we want to be respected and how we want people to behave.”
And so the custom part, I use that word because one of its meanings has kind of the force of what is right. Because if I make a claim that this is mine, that’s not just a factual claim, it’s a moral claim that’s in there right in the notion of it. Because it’s not the same as “I want this.” That doesn’t have to carry the same moral force. If I’m claiming this is mine, I’m also claiming that it’s not yours. And that if you and I—and if you’re trying to go for it, that there’s going to be a problem here and then there’s a moral problem here we’re going to create violence. And so that’s the part that is important to understand and why also various amounts of enforcement happen around the planet. You know, my first trip down to Argentina and I couldn’t believe that they were putting plastic around the suitcases. Because you can, you know, the way that airport system worked down there, you couldn’t trust that the stuff—your luggage wouldn’t be gone through, people would pick through it. Whereas that would never happen in the United States. I’ve never seen a place where they put plastic around it to ensure that it’s going to be shipped out. And it’s that kind of custom that, “Well, it’s just we accept it here,” or “That’s not acceptable here,” that makes property variable around the planet.
Bob Zadek: Your book is predicated upon the experiments you had your students help you with in the classroom. And by the way, Bart, when you were describing it, I said to myself as you were explaining the experiment, it sounded to me like students were getting three credits for playing economic video games where instead of having fancy weapons on the screen, they had wallets or credit cards. But that’s just an aside, no need to comment on that. But in your experimentation, when you performed the experiment, you were performing experiments to see what you could learn. Obviously, as somebody as knowledgeable as you are in economics and in the law, you had in the back of your brain what you assumed would be the result. You had some vision of what you expected to find. Were there any surprises in the experiment that caused you to say to yourself, “My goodness, I would have expected a different result,” and the experiments indicated something you found quite unexpected?
Bart J. Wilson: So, in general, it’s not a good project if I know it’s going to happen. In fact, I have to have a little bit of doubt for it to be a real science experiment in the sense of I’m putting something of myself on the line, but I’m not sure. And so actually every experiment I’ve run, I’ve always been surprised about something. And even the ones where I thought I was more confident what was going on. And so I want to make sure the design when I put it up there and put in the software and put it in the computer lab, that I actually have a little uneasiness of like, “Well, I really don’t—what could happen here? What might happen here?” And that’s when my mind is opened to learning about what the subjects are saying. So what are they trying to tell me by what they do? And you have to have that—that kind of slight doubt and like that maybe I don’t know what I think I know as much—I don’t know as much as I think I do.
And so the original experiment that I mentioned opened the show with, we were expecting fantastic amount of trade and exchange and specialization. We expected that because we’d seen it in other environments in the laboratory regularly. In the sense of when we give people really strong rules—so if we give them rules like the Chicago Board of Trade, and then you give them stuff and then say, “All right, now go—here are your costs and here are your values, now go out and trade, here are the rules of the Chicago Board of Trade.” People—I run it with fourth graders, they’re very good at it, they are excellent. The rules of the Chicago Board of Trade facilitate exchange so quickly that even fourth graders can evaporate all—take all the gains from trade home with them. And it was that kind of interest that we’re like, “Okay, well let’s see if people have to build it up with their own personal relationships, how does that work?” And we were surprised at how difficult it was, because you have to find the right person, you have to trust that person, then you have to work out the deal, and then you—and then if you don’t have enforcement of what you can call mine and yours, then you don’t even get that off the ground. And so what we found was how difficult it was to get bilateral trade turning multilateral and then building in a respect for mine and yours on top of it, that that is actually really special in our experiment. And then it took us trying to understand, “Well, why are they special as opposed to why are these other ones failing?” And once we figured out that, “Oh, it’s the social relationships, it’s putting your—when I say I’m not going to take something and then I stick to my word,” that those were the kind of economies that took off and grew and were very prosperous, we could see the foundations of kind of what makes a community rich. Those moral characters.
Bob Zadek: It sounds like the subjects of your experiments are in the process sent out into the world to all trade Bitcoins and become day traders in the market and buy commodity futures and starting to really appreciate the effect of the free market on the accumulation of wealth. Bart, you have done wonderful work with your experiments in sending out participants into a free market economy, and certainly in your book The Property Species: Mine, Yours, and the Human Mind, it encourages me tremendously as I learn that free markets are the natural order of things and government has to teach it out of people rather than teach it into people. So Bart, thank you very much for your work and for your book and for being such a wonderful guest on the show this morning. Bob Zadek saying so long to my new friend Bart Wilson and all my listeners out there. I’ll be back again next Sunday, I sure look forward to it.