A related argument for property rights as solving a coordination problem is David Friedman’s A Positive Account of Property Rights. In a nutshell, his argument is that:
Continuous bargaining is time-consuming and hard. Suppose that you and I are given a dollar to divide between ourselves. It is my incentive to argue for getting as large of a share as possible, and it is your incentive to argue that you get as large of a share as possible. We could in principle spend a lot of time on this. For instance, I might say that I’m going to insist on getting 70 cents and that I will settle for nothing less. You suspect that actually, I am willing to settle on 60 cents, so you refuse to let the deal go through until I lower my demand.
However, there exists a unique proposal for sharing the dollar: that both of us get 50 cents. What’s more, both of us know (and know each other to know) that the 50-50 split is a unique coordination point for situations like this one. As a consequence, if I say that I’m going to insist on getting 50 cents and will settle for nothing less, then this is a believable claim.
As Friedman says: ”… suppose there is one outcome that is seen as unique. A player who proposes that outcome may be perceived as offering, not a choice between that outcome, another slightly different, another different still, . . . but a choice between that outcome and continued bargaining. A player who says that he insists on the unique outcome and will not settle for anything less may be believable, where a similar statement about a different outcome would not be. He can convincingly argue that he will stand by his proposed outcome because, once he gives it up, he has no idea where he will end up or how high the costs of getting there will be.”
Extending this, let’s imagine that we live in a Hobbesian society with no rule of law. Even without courts to enforce contracts, it can still be beneficial for us to formally make a contract. A contract establishes another unique commitment point: I expect you to uphold your part of the bargain, and you expect me to uphold mine. If you violate the contract, I can make a credible commitment to retaliating until the previous contract has been upheld. If not for the contract, we would again be in the position of endless bargaining, where I can threaten to hurt you if you don’t do what I want, but you might doubt my commitment to this threat.
Extending this further gets a system of norms about property in general: we could have endless negotiations about who gets to use what, but if an accepted system of property rights exists, this coordination cost is eliminated. This is similar, though slightly different, from your argument: you focus on the fact that property allows a single decision-maker to act without needing to consult other people. Friedman’s argument is that property rights save us from paying the transaction cost of endless negotiation to establish who gets to use what.
To use your example of a landlord, suppose that we didn’t have a system of laws and norms establishing impersonal property. Now, someone who owned a house could offer to rent it out to other people, but once those people were in the house, they could suddenly decide that they didn’t want to pay the rent anymore. The (ex-)landlord would then be forced to figure out whether paying the cost of forcefully evicting them would be worth it, and have an incentive to bluff that (s)he did, and the people in the house would need to figure out whether the threat was credible… and so on again.
I believe I have now resolved the apparent paradox of contracting out of the Hobbesian jungle. The process of contracting changes the situation because it establishes new Schelling points, which in turn affect the strategic situation and its outcome. The same analysis can be used from the other side to explain what constitutes civil society. The laws and customs of civil society are an elaborate network of Schelling points. If my neighbor annoys me by growing ugly flowers, I do nothing. If he dumps his garbage on my lawn, I retaliate—possibly in kind. If he threatens to dump garbage on my lawn, or play a trumpet fanfare at 3 A.M. every morning, unless I pay him a modest tribute I refuse—even if I am convinced that the available legal defenses cost more than the tribute he is demanding.
If a policeman arrests me—even for a crime I did not commit—I go along peacefully. If he tries to rob my house, I fight, even if the cost of doing so is more than the direct cost of letting him rob me. Each of us knows what behavior by everyone else is within the rules and what behaviour implies unlimited demands, the violation of the Schelling point, and the ultimate return to the Hobbesian jungle. The latter behaviour is prevented by the threat of conflict even if (as in the British defense of the Falklands) the direct costs of surrender are much lower than the direct costs of conflict.
A related argument for property rights as solving a coordination problem is David Friedman’s A Positive Account of Property Rights. In a nutshell, his argument is that:
Continuous bargaining is time-consuming and hard. Suppose that you and I are given a dollar to divide between ourselves. It is my incentive to argue for getting as large of a share as possible, and it is your incentive to argue that you get as large of a share as possible. We could in principle spend a lot of time on this. For instance, I might say that I’m going to insist on getting 70 cents and that I will settle for nothing less. You suspect that actually, I am willing to settle on 60 cents, so you refuse to let the deal go through until I lower my demand.
However, there exists a unique proposal for sharing the dollar: that both of us get 50 cents. What’s more, both of us know (and know each other to know) that the 50-50 split is a unique coordination point for situations like this one. As a consequence, if I say that I’m going to insist on getting 50 cents and will settle for nothing less, then this is a believable claim.
As Friedman says: ”… suppose there is one outcome that is seen as unique. A player who proposes that outcome may be perceived as offering, not a choice between that outcome, another slightly different, another different still, . . . but a choice between that outcome and continued bargaining. A player who says that he insists on the unique outcome and will not settle for anything less may be believable, where a similar statement about a different outcome would not be. He can convincingly argue that he will stand by his proposed outcome because, once he gives it up, he has no idea where he will end up or how high the costs of getting there will be.”
Extending this, let’s imagine that we live in a Hobbesian society with no rule of law. Even without courts to enforce contracts, it can still be beneficial for us to formally make a contract. A contract establishes another unique commitment point: I expect you to uphold your part of the bargain, and you expect me to uphold mine. If you violate the contract, I can make a credible commitment to retaliating until the previous contract has been upheld. If not for the contract, we would again be in the position of endless bargaining, where I can threaten to hurt you if you don’t do what I want, but you might doubt my commitment to this threat.
Extending this further gets a system of norms about property in general: we could have endless negotiations about who gets to use what, but if an accepted system of property rights exists, this coordination cost is eliminated. This is similar, though slightly different, from your argument: you focus on the fact that property allows a single decision-maker to act without needing to consult other people. Friedman’s argument is that property rights save us from paying the transaction cost of endless negotiation to establish who gets to use what.
To use your example of a landlord, suppose that we didn’t have a system of laws and norms establishing impersonal property. Now, someone who owned a house could offer to rent it out to other people, but once those people were in the house, they could suddenly decide that they didn’t want to pay the rent anymore. The (ex-)landlord would then be forced to figure out whether paying the cost of forcefully evicting them would be worth it, and have an incentive to bluff that (s)he did, and the people in the house would need to figure out whether the threat was credible… and so on again.