Property Rights and Capitalism

Abstract This article explores why private property is essential for the working of capitalist economies. It does not attempt to illuminate all aspects of property rights but focuses on the relationship between property rights and capitalism. The article is organized as follows. It begins with a definition of property rights as a bundle of rights, noting the various practical limitations. Then it briefly describes the historical and philosophical development of private property rights. It discusses the functions of property rights in capitalist systems, in particular the creation of wealth by facilitating efficient resource use and development, trade, capital accumulation, and the peaceful resolution of conflict. It discusses the creation of property rights to intellectual resources. Then it takes the reverse perspective examined previously and focuses on the role of capitalism for the creation and continued evolution of property rights.