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The bases of every market are the property rights of the individuals that participate in the market. Without property rights there would be no exchange and difficult to establish contract laws. Property rights were taken for granted for much of history and are now used to establish all sorts of theories, philosophies and regulation. Two excellent examples of this are the Libertarian political party and the Coase Theorem. As for the value of these two applications of private property it is important to evaluate the practicality of them. To understand both two separate historical figure will be consulted. The first being Ludwig Von Mises and his study of Libertairnism and the second will be R. H. Coase and his Coase Theorem. Each

Stated simply the Coase Theorem is as follows,

If property rights are clear and enforceable, all economic

agents have full information regarding the situation at hand,

and transaction costs are low, then there is no need for

government intervention to correct externalities because the

economic agents themselves can bargain to achieve a Pareto optimal allocation of resources. Furthermore, the ability of

economic agents to bargain among themselves to achieve a

Pareto optimal allocation of resources does not depend on

which economic agent has the property. (Zilberman 1)

To begin with the Coase Theorem addresses the market problem of externalities, or otherwise known as the Spillover Effect. The problem of externalities occurs when a person other than the original purchaser of a specific good shares in the cost and benefits of the purchased good. A common and easy to understand example of this is the placement of a new airport near residential area. Residents receive positive effects in the form of an increase in business due to the new airport but must also deal with the negative effects of...