Disagreement Over the Emergence of Property Rights

Carl Menger's story of the emergence of money is considered an exemplary account of an evolutionary theory of institutions, among Austrian School economists and many non-Austrians. One would therefore expect Austrians to provide a similar evolutionary account of the emergence of property rights, an institution which emerged prior to the use of money. In this working paper, Beaulier and Prychitko demonstrate that Austrians do not offer a unified theory, and appear instead to promote contradictory views. Mises and Bohm-Bawerk offered a rationalistic or goal-oriented account of property rights emergence. By contrast, Hayek, influenced by Menger, offered an evolutionary account, arguing that property rights emerge, like the institution of money, as a strictly unintended consequence of choice. The authors argue that the Bohm-Bawerk and Mises approach fails if understood to be a universal explanation of property rights emergence. It is best equipped to explain property rights emergence in contemporary society (such as under socialist transition). Hayek's approach, by contrast, addresses a different historical context -- the earliest origins of property rights. It's an exercise, like Menger's, in speculative history. Both positions might be defended--even in light of Vanberg’s functionalist charge against Hayek--if limited to their proper historical context.