The interdependence between the definition of the economic good and actor’s legal position

Stefano Solari (Padova)

Abstract

Ronald Coase, in his seminal 1960 contribution to the notion of social costs, introduced the idea of individual legal position, including a whole set of organizational and rule arrangements in which the allocation of resources takes place. This includes property rights in strict terms and general rules affecting the use of property, the access to goods as well as the way governance of exchanges is organized. This is an explicit acknowledgement that property rights were intended by Coase as a far more complex notion than a simple, typical real right. The idea of transaction cost, which is a very synthetic notion, further highlighted the complexity of factors affecting the pursuit of economic interests.
The problem of this perspective is that it considers the notion of “good” as non problematic. Most of economics, when dealing with goods, implicitly is referring to commodities, to industrial goods. Actually, the idea of economic good proposed by many economists is fundamental to define the boundary of economics. Say developed the idea of immaterial good, which was discussed for a long time. Carl Menger (1871), building on the research of Hermann, Roscher and Schäffle, adopted the widest interpretation of economic good as whatever is in causal relationship with the satisfaction of a human need and is scarce. He proposed the distinction between material goods and useful actions and omissions. Whatever can be important for the individual can be an economic good. Later, Robbins (1933) would propose a similarly wide view of what is a good. On the other hand, Menger and the majority of the other economists had no clear analysis of how to integrate need, moral or legal elements. The general tendency is to keep a pragmatic definition of the good and a separate definition of rules and rights. The latter have consequently been shaped as property rights, stretching this notion to limits that have little relation with law. That determined a difficulty to understand the individual legal position in cases in which the good is relevantly shaped by the legal system (including the ethical dimension) and is not defined as simple property.
Today, our economic system is increasingly dependent on the consumption of goods that are defined by the artificial construction of rules and rights. They include access rights or platform services. We may include in this category also carbon permits or any administered rationing of relevant inputs of production or limited access to commons. The aim of the paper is analysing the notion of individual legal position in relation with the definition of good. After a rapid historical account of different positions, a framework will be sketched to supply a reasonable characterisation of the problem of individual choice in a legal context.

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