100 Iowa L. Rev. 2341 (2015)

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Abstract

The property rights literature has had an extensive debate over the extent to which systems of property rights can be spontaneously generated by custom and common practice, without the positive intervention of the state. This Essay takes a divided view on that question, noting that these property rights, often with uncertain stability, can be created when it is possible to create a system of absolute priorities, as with land, or a system of proration, as with riparian property rights. The simple definition of rights, easily known and scalable, make this possible, so that government intervention, often through statutes of frauds and recordation are used to improve the overall stability, not to reconfigure those rights. More complicated systems—such as those used for preserving fish wildlife, for creating prior appropriation of water rights, pooling of oil and gas rights—require complex regulatory interventions, which should be crafted in a form that seeks by using principles of just compensation, the prior rights holders under simpler legal regimes.