Proprietary Communities Research Articles

Settling the Final Frontier: The ORBIS Lease and the Possibilities of Proprietary Communities in Space

The law and economics of space policy has recently become an important research area. In this paper I contribute to the literature on legal frameworks for outer space activities, and specifically space settlement. Article II of the 1967 Outer Space Treaty forbids the extension of state territorial jurisdiction to outer space. Barring revision of this fundamental tenet of international space law, rules for human conduct in space must come from somewhere other than states. I propose privately owned and operated communities (proprietary communities) as a model for space settlement and residence. I survey the mechanisms that make such communities likely to supply good governance. I also explore a model lease for such proprietary communities: the ORBIS lease, drawn up by famed scholar of proprietary communities Spencer MacCallum. I conclude by discussing why the voluntarist model would be expected to outperform other models, as well as implications for state policy.

Defense as a Natural Monopoly, and its Privatization by Proprietary Communities

National defense is the textbook example of a public good – being non-rivalrous and non-excludable. In fact, however, defense is both rivalrous and excludable. Defense is better characterized as a natural monopoly with increasing returns to scale and spatial externalities. The efficient production of defense requires competitively discovering the optimal scale of production. Moreover, defense is not necessarily a public good because it can create bads and negative externalities, both foreign and domestic. Therefore, defense requires monitoring and constraints to internalize these negative externalities. Minimization of production costs is not sufficient to efficiently produce defense. Instead, the sum total of both production and monitoring costs must be minimized. These considerations suggest that the optimal scale for defense may not be national, and there may be advantages to the decentralization of military defense. If it remains true that defense should be provided by national government, the justification must be other than the public goods argument.

The Anarcho-Calculus of Consent: Proprietary Communities as Substitutes for the State

James Buchanan pioneered constitutional political economy, especially in The Calculus of Consent (with Gordon Tullock) and The Limits of Liberty. While he briefly considered private clubs and associations, he mostly limited his analysis to the traditional state. However, privately governed proprietary communities are capable of providing most public goods and internalizing most externalities. We argue that such proprietary communities offer a viable and feasible means for implementing a non-state-based constitutional political economy which satisfies Buchanan's own standards. The state is not necessary to accomplish Buchanan's goals, and Buchanan's works carry unrecognized anarchist implications.

Restricted Mobilities: Access to, and Activities in, Public and Private Spaces

Privatization of public spaces in the contemporary city has increased over the past few decades, but only a few studies have approached this trend from a mobility perspective. Therefore, this article seeks to make a contribution to the field by exploring two Australian examples of private spaces in the city, gated communities and shopping centres, through the ‘mobility’ lenses. The article illustrates how different mobility systems enable and/or restrict public access to private–public spaces, and it points out that proprietary communities create an unequal potential for human movement and access in the city. The main argument in the article is that many mobility systems enable specialization of places that are targeted at a special section of the population. This means that various forms of mobilities (e.g. automobility, virtual mobile communication technologies) not only create new opportunities for urban life, but also serve as one of the most critical components in the production of new exclusion and stratification. In conclusion, the article therefore suggests that future urban research and planning also need to apply the mobility perspective in order to understand the mechanisms between flows of movement and the understanding fixed spaces in the cities, and how different mobility systems play an important role in sustaining the exclusiveness that often characterizes private/public spaces. Likewise, from a mobility perspective, the specific consequences that the proprietary communities have on the surrounding communities seem to be an important further question for research and planning.

The Henry George Theorem and the Entrepreneurial Process: Turning Henry George on his Head

AbstractThis chapter offers an interpretation of the Henry George Theorem (HGT) that brings it squarely into the study and analysis of entrepreneurship somewhat loosening its ties to the subfield of urban economics. I draw on the pioneering work of Spencer Heath whose insights about the viability of proprietary communities were developed further by his grandson, Spencer Heath MacCallum who, in 1970, recognized that private real estate developers sometimes make their capital gains (mostly) by creating useful public spaces that others enjoy. I also draw inspiration from Fred Foldvary's effort in 1994 to synthesize the pubic goods problem in economics with the Henry George Theorem in urban economics. While the real estate owner—developer does emerge on my pages in a somewhat more favourable light than as originally portrayed by Henry George in his Progress and Poverty in 1879, I offer a realistic appraisal of the duplicitous behaviours required of such entrepreneurs. in the context of the modern regulatory state. Real estate development remains a ‘hot button’ item in local politics, and real estate developers must become genuine ‘political entrepreneurs’ if they are to complete their projects in a timely way and capture business profits. It is a complicated story that the HGT helps make intelligible in terms of human action.

Anarchy, Monopoly, and Predation

The ‘folk theorem’suggests that the shadow of the future coupled with the threat of lost business can create cooperation without government. Although institutions rooted in this theorem can support self-enforcing exchange in a wide variety of contexts, their potential to create cooperation is not limitless. In particular, the folk theorem may break down when some agents are physically stronger than others. Stringham’s [2006] system of vertically integrated proprietary communities relies on the folk theorem to prevent proprietors from preying on their customers. I show that while innovative, this system does not work. A monopoly proprietor maximizes pro…ts by optimally extorting his tenants in violation of voluntary contracts. The result is a predatory rather than voluntary system.

Proprietary Residential Communities in the United States

Proprietary residential communities constitute a major component in the evolving geography of urban America. In many metropolitan regions, proprietary residential communities or common‐interest developments, and associated forms of urban management, have emerged as the dominant form of residential development. Critical discourse on these communities and their residential community/homeowner associations has focused principally on the negative consequences for urban social and political life. It is argued here that many critical assessments are grounded in an idealistic view of contemporary society and an outdated conceptualization of citizenship. This article is intended to reenergize debate on these developments through a realist interpretation of the benefits and disbenefits of a form of residential development destined to exercise a major influence on the sociospatial structure of U.S. metropolitan areas in the early twenty‐first century.

Overlapping Jurisdictions, Proprietary Communities, and Competition in the Realm of Law

FREY [2001] and others propose subjecting governments to competition within their jurisdiction,but classical liberalsargue that having competing law enforcers cannot work. This article describes a hybrid system that relies on markets but has one lawenforcementagencyper region,withprofit motivatedproprietorspolicing their properties. Vertically integrated proprietary communities wishing to attract customers would need to police their property in a way that patrons desire. Although a monopoly on the use of force would exist, bundling law with real estate makes the law enforcer the residual claimant and creates incentives for them to not to expropriate their clientele. (JEL: D 740, H 100, K 400, L 330)

Liberating the Land

Despite the growing belief in the efficacy of market forces, the ownership and use of land in Britain are now '. . . subject to a greater array of statutory controls than at any time since the introduction of the 1947 Town and Country Planning Act'. 'Market failure' arguments are used in support of land use planning. However, in this radical attack on the present regime, Mark Pennington shows that such arguments are misguided. Planners, even if altruistic, could not gather and interpret the information which would be necessary to run an efficient land use planning system. In practice, planners have their own interests and are subject to pressure from special interest groups which benefit from the present regime. Fundamental change is required, according to Pennington. The system is over-centralised, there is too little experimentation, information is lacking and incentive structures are inappropriate. The costs of enforcing property rights could be reduced by entrepreneurial action in a market. Private covenants, deed restrictions and the establishment of proprietary communities are the way forward.

Property Rights and the Public Realm: Gates, Green Belts, and Gemeinschaft

Discussions about gated communities, shopping malls, and industrial parks—proprietary developments produced by entrepreneurs—frequently espouse overly simplistic notions of private and public realms, viewing the encroachment of the latter by the former as a threat. In this essay I develop the thesis that, in reality, cities naturally fragment into many small publics, each of which may be thought of as a collective consumption club. The club realm may, therefore, be a more useful—and theoretically more powerful—idea than the public realm. I argue that proprietary communities are a particular case of urban consumption club—one in which legal property rights over neighbourhood public goods are assigned by property-market institutions. In other respects, the club realms that they create are not dissimilar from club realms created by other urban governance institutions. Government, the markets, and voluntary community action can all effectively assign property rights over shared neighbourhood goods, and in so doing create a set of included ‘members’ and a set of excluded ‘nonmembers’. In contextualising the discussions of gated communities in this way, I draw connections between three interrelated concepts: public goods, the public domain, and the public realm.

Interlocking Directorates and Communities of Interest Among American Railroad Companies, 1905

The debate about the separation of ownership and control has focused primarily on internal control of corporations. This study examines the relationship between ownership and control at the interorganizational level. It investigates the relationship between the structure of interorganizational title, as indicated by proprietary communities of interest, and the structure of interorganizational control, as shown by clusters offirms that recruited their boards from the same sets of directors. Secondarily the paper investigates the structure of centrality in the interlocking directorates, for which managerial theory predicts a close relationship between size and centrality. Examining American railroads in 1905, the results show that (1) while ownership and control may or may not have been separate at the level of the individual firm, at the interorganizational level the structure of title conforms very closely to the structure of control; and (2) the structure of centrality exhibits no singular hierarchy, but distinct clusters. Moreover, major companies were not highly central in the entire network, but were instead dominant within particular clusters, suggesting that centralization does not always engender power. The paper concludes that the debate over ownership and control should focus on both organizational and interorganizational levels.

Jural Behavior in American Shopping Centers: Initial Views on the Proprietary Community

Contemporary American shopping centers, apartment houses, and other multi-occupancy units administered in leasehold parallel manorial systems in that political authority derives from land ownership. A summer 1963 survey of thirty-five California shopping centers and twelve mobile-home communities probed the role of the landlord as protector of community interests and arbitrator of internal disputes. Cases of private conflict resolution within proprietary communities are presented to show the evolution and use of lease law and custom in small-scale disputes.