The Sunday Mail
Chris Chenga Open Economy
Property rights seem to be a fascinating topic; a topic that especially arouses the interest of both the political and legislative faculties.
Can there be a clear definition of what property rights are?
In fact, who goes about defining property rights anyway – in a global manner that is?
After all, the dominant capitalist system is firmly built along the assumed definitiveness of property rights. Yet, as testament to the wide interpretation and discretion of these rights, it seems the very creators of capitalism themselves – the Western world – has often been caught in instances of outright disregard for the sanctity of property rights.
Property rights seem to be a fascinating topic; a topic that especially arouses the interest of both the political and legislative faculties. That would make sense – one can argue that the conception of property rights may be born out of philosophies found in political and legal schools of thought.
In practicality as well, I do concede that property rights definitions should be devised between these two structures.
In most countries, including Zimbabwe, that is how it actually works.
However, even in granting power and authority of defining property rights to political and legislative branches, I would argue, however, that an understanding would best be constructed from the impulses of economic participants.
That is to say, as politicians and legislators go about defining property rights, they should do so conscious of and guided by their understanding of the individuals who find utility in these property rights – the economic agents.
For instance, a political and legislative definition of property rights, as represented by an enforced legal framework, may theoretically make sense and seem to attend to the ideals of politicians and legislators, but when the laws at hand do not meet the expectations of economic agents within that economy, these laws diminish in utility.
Consequently, economic agents become hesitant to take part within that jurisdiction.
Especially in a jurisdiction, which functions on a capitalist economic system, where wealth is achieved through ownership of property, property rights laws that do not meet the expectations and economic impulses of economic agents become a competitive disadvantage.
Capitalist economic agents abandon this respective jurisdiction and seek to apply themselves in another one that is better at satisfying their economic impulses.
The notion is simple, politicians and law-makers must be aware that their authority and power in determining the definition of property rights may very well be the law of the land, but for economic competitiveness, this authority and power is intrinsically dependent on satisfying the expectations of the same economic agents that will sustain the economy.
The less the satisfaction derived by economic agents, in essence, the less effective the authority and power of legislation that is being exercised by politicians and law-makers on the economy.
Economics tends to create that balance. It is not just about the rule of law, but the pragmatism and favourability of the rule of law.
In our sometimes sensitive political environment, some may interpret this notion as confrontational towards our political and legislative classes. That would be a misguided understanding. Instead, this notion is a prescription for political and legislative classes themselves to shy away from confrontational use of political and legislative authority when handling property rights. Shrewd incumbents, in fact, with an awareness of long term national economic prosperity, would be wise to see the virtues here of accommodative governance when dealing with economic agents over property rights.
We must comprehend that our livelihoods as a nation are subject to an economic system where competitiveness is greatly determined by satisfying capitalist impulses. Honest, introspective reflection on our part is necessary to assess how well we have been doing in satisfying these impulses, and further measuring the undesirable economic effects our shortcomings have inflicted on us where we have failed.
Particularly, the economic impulses existing within property rights include security, long term certainty, exclusive discretion on the use and means of owned property, and the preference of appraisal of valuations in selling property.
By property in this case, these impulses similarly apply through a number of asset types of which an individual may claim ownership; land, natural resources and financial assets.
It would be to our own benefit if we construct a political and legislative understanding that emphasises the upholding of these very impulses within our jurisdiction. Such an understanding not only improves the enthusiasm for our jurisdiction by indigenous economic agents, but eventually becomes a draw for the most upstanding and respectable capitalist economic agents from around the globe.
Over the last month or so, politicians and law-makers have been actively engaged in creating economically motivated legal frameworks; most notably the Corporate Governance Code and the tightening of retrenchment regulations.
Shall these legislative processes continue and move towards relevance in terms of property rights, may incumbents carry an understanding that the most economically desirable laws, tend to be the ones well-received by economic agents.
