Transaction cost became a prominent consideration in discussions related to externalities and ownership arrangements during the last half-century, Demsetz is now convinced that its importance in these matters is much overstated. Demsetz explains why he thinks so in this Essay. His focus is on ownership arrangements, since this conference has met to discuss one such arrangement—the gridlock economy. With less detail, he also comments on the role claimed for transaction cost in regard to externality problems.
This Essay reviews Michael Heller’s book *The Gridlock Economy*, focusing especially on its conceptual priors. The book assumes as true the conception that follows from Calabresi and Melamed’s Cathedral framework, whereby property consists of a right to exclude others and invasions of the right to exclude may be remedied by a property rule. This definition departs significantly from the conception of property that informs social practice and private law, whereby property consists of a normative interest in determining exclusively the use of an external asset. More
This Article critiques Michael Heller’s important contribution in *The Gridlock Economy*. At no point does this Article take the position that gridlock, or the associated anticommons, is not a serious issue in the design of a legal system. But gridlock is not the major source of social dislocation; nor is private ownership the major source of gridlock. More concretely, this Article examines the other important sources of economic distortion that are unrelated to economic gridlock from private action. More
Tragedy of the anticommons occurs when property rules fail to enable efficient social coordination. In radio spectrum, rights issued to airwave users have traditionally been severely truncated, leaving gains from trade unexploited. The social losses that Ronald Coase asserted, appealing to basic theories of resource allocation, are now revealed via intense under-utilization of the TV Band. More
Michael Heller’s *The Gridlock Economy* popularizes a concept that Heller has developed over nearly two decades of influential academic writing: the notion that, when it comes to property rights, too many rights-endowed cooks really can spoil the broth. I was asked in this conference to apply Heller’s insight to the Google Book Search project, and the request at first seemed natural. Heller himself suggested that Google Book Search might be an apt poster child for the gridlock phenomenon; Google likewise can often be heard to complain, in Heller-esque tones, that the only way to build a comprehensive search engine for books is to take the books without asking. This Essay, however, questions the example and offers a refinement on Heller’s theory. Gridlock, I argue, is not simply a catch-all for situations where a large number of permissions are in play. It is more narrowly a reference to situations where a large number of permissions are in play, and those permissions intertwine.
Not everyone believes in the desirability of Intellectual Property (IP) rights for individual creators, but almost everyone believes that even when these rights make sense the cost of moving them around is a major headache. One aspect of anticommons theory is the observation that the cost of assembling and aggregating property rights (including IP) is an important and often hidden downside of the logic of individual ownership. Put simply, no one has much of a good word to say about transaction costs. More
When Michael Heller proposed that excessively fragmented property rights in land can frustrate its commercial development, patent scholars began debating whether Heller’s anticommons theory applies to property rights in inventions. Do “patent thickets” exist? The rise and fall of the first American patent thicket—the Sewing Machine War of the 1850s—confirms that patent thickets do exist and that they can frustrate commercial development of new products. But this historical patent thicket also challenges the widely held assumption that this is a modern problem arising from allegedly new issues in the patent system, such as incremental high-tech innovation and the impact of “patent trolls.” More
Nearly fifty years after Federal Communications Commission Chairman Newton Minow notoriously labeled television a “vast wasteland,” the FCC has an opportunity to transform the barren terrain of broadcast spectrum into a verdant oasis of connectivity. The long-dormant “white spaces” around broadcast television channels may soon be opened, creating major opportunities for wireless broadband access as well as innovative new communications systems. The white spaces also illustrate persistent misunderstandings about property rights. TV broadcasting today represents a tragedy of the anticommons: a government- engendered misallocation of property rights, resulting in under-consumption of a valuable resource. Advocates of exclusive spectrum rights go astray by insisting that spectrum itself is the scarce resource, and assuming a centralized service delivery model. The FCC’s unlicensed approach will best unlock the potential of the white spaces. However, both the exclusive and unlicensed models have a place in the broadcast bands. A hybrid approach can avoid gridlock and maximize the value of “the people’s airwaves.”
Over the past decade, pedicabs—bicycles with chariots attached that carry passengers for a fee—have grown from a quaint novelty to a full-grown industry in the United States. Once a relic of Southeast Asia, pedicabs can now be found transporting tourists and residents alike in dozens of American cities. Born out of the minds of several entrepreneurs, American pedicabs got their start in New York and San Diego, and these cities combined now have more than a thousand operating pedicabs. But the pedicab industry’s growth has been resisted by competing businesses that fear the loss of customers—notably the taxicab industry—and by local governments concerned about public safety. This Note examines the evolution of pedicab regulations in New York and San Diego, and then analyzes whether the various regulations each city has adopted truly benefit the public. The Note then culls the best regulations for inclusion in a list of provisions for a Model Pedicab Code.
The question of how to analyze the marriage of a transsexual person has been difficult for courts: if a person could be considered either male or female, who may that person marry? Most American jurisprudence follows *Corbett v. Corbett*, an English case from 1970, which held that a transsexual person’s “true sex” is set at birth for purposes of marriage. However, as medical science and social norms advance, the “true sex” model has become increasingly difficult to justify. More
The Arizona Supreme Court recently issued opinions in two appeals of capital sentences in which the jury found that the murder was especially cruel. Although the two opinions were issued within one week of each other, they utilized different standards of review pursuant to statutory changes adopted in Arizona in 2002. In *State v. Chappell*, where the defendant drowned a two-year-old in a swimming pool, the court—using an abuse of discretion standard—determined that there was sufficient evidence presented at trial for the jury to find that the cruelty prong of the (F)(6) aggravator had been established and to impose a death sentence. In *State v. Snelling*, where the defendant strangled a woman with an electrical cord, the court—reviewing the record de novo because the murder predated the statutory changes—found the cruelty prong unproven and vacated the death sentence. More
Arizona Case Note
The Arizona Supreme Court’s interpretation of a law affecting criminal procedure becomes, in theory, the “law of the land” in Arizona. In practice, uniform application of the law can be complex. Because the Court lacks enforcement power, it must rely on law enforcement officers to effectuate its interpretation of a law. This, of course, requires officers to understand the Court’s interpretation and how that interpretation affects their daily duties. Presumably, this starts at an institutional level. That is, law enforcement agencies must inform their officers of evolving case law, provide guidance to their officers for how to comply with that law, and adjust their internal policies accordingly. In Arizona, there are approximately 162 law enforcement agencies, each of which has the authority to set its own training practices and internal policies. Given this latitude among agencies and the inherent difficulty in understanding case law, is it a flawed assumption that the “law of the land” uniformly becomes the “law on the street”?
Arizona Case Note