Comments on: The Tragic Flute

By: Potpourri

Potpourri — Tue, 16 Mar 2010 04:01:17 +0000

[...] Will Wilkinson gives a very Kinsellian answer (in terms of his “Against Intellectual Property” article) to a [...]

By: Rimfax

Rimfax — Wed, 09 Sep 2009 03:38:35 +0000

It reads like an economic trolley problem, and as such demands to be studiously dismissed.

By: Rimfax

Rimfax — Tue, 08 Sep 2009 20:38:35 +0000

It reads like an economic trolley problem, and as such demands to be studiously dismissed.

By: Micha Ghertner

Micha Ghertner — Sun, 06 Sep 2009 23:33:30 +0000

The Coase theorem only tells us that it doesn't matter how we assign initial property rights in a world without transaction costs. But we do not live in such a world. Coase's point was precisely that we do not live in the world of perfect competition and zero transaction costs, and therefore, initial property rights allocation may matter a great deal in cases where transaction costs are prohibitively high enough to prevent efficient rearrangement through trade.

Finality and speed of judicial decisions are important to Coase, no doubt, but I don't think he would be willing to throw fairness out the window either. That way leads to madness (and ugly smears of Coase by people who do not understand what Coase intended by his theorem).

By: John David Galt

John David Galt — Sun, 06 Sep 2009 19:13:53 +0000

The Coase Theorem tells us that it doesn't matter which girl gets the flute, as long as one of them does (= has a clear property right) and she is allowed to sell it. Whichever one you give it to, the flute will wind up with the potential owner who values it most.

I'd still try to choose fairly, which in my view means the girl who made it gets it. But per Coase, it's more important to decide quickly (and finally) than fairly.

By: LoganBoettcher

LoganBoettcher — Sun, 06 Sep 2009 17:16:45 +0000

Great insight, Yancey. I'd like to add on that the two children that did not make the flute would not have been able to argue over the claim of the flute had it not been for the child that actually made it bringing it into existence. It is obvious that they should defer to the creator of the flute its ultimate fate, because without the creator, the flutist would not have an opportunity to play and the poor child the opportunity to have a toy.

Furthermore, why would a flute maker who cannot play a flute (I assume this because the scenario is set up to make the first child the sole flutist in the group; if all the children could play the flute, the first child would have no special distinction in which to claim ownership over the other children) choose to keep the flute, let alone produce one, and have no plans to transfer it to someone who wants the flute? The child just puts in a lot of labor for the joy of being able to deny others the joy of playing with the flute? It's kind of puzzling to me.

By: yanceyward

yanceyward — Sun, 06 Sep 2009 12:41:44 +0000

The really interesting question to me is how many people reading this thought experiment would even have the insight to ask how the decider came to hold the flute. I willing to write that the answer is “very few”.

By: Bob Murphy

Bob Murphy — Sat, 05 Sep 2009 01:42:53 +0000

Great post, Will. I was about to shout, “Give it back to the girl who made it!!” when your own (superior) answer made me realize what I was leaving out. Nice.

By: patrick stephens at psjs.net » Property

patrick stephens at psjs.net » Property — Fri, 04 Sep 2009 13:40:46 +0000

[...] From Will Wilkinson: [...]

By: Michael Drake

Michael Drake — Fri, 04 Sep 2009 00:20:56 +0000

Sen isn't “assuming away the relevance of property rights.” What he's assuming is a background of stable property conventions – from which reliably flow undesirable outcomes in certain classes of cases. What is the solution? Not to put words in Sen's mouth, but he at least appears to think that “MORE, AND MORE AWESOME, MARKET MECHANISMS!” is an incomplete approach. Of course we need to improve market mechanisms and clarify property rights. But the earthly performance of markets, like the neurological implementation of rationality, is bounded in its perfection. So as with our imperfect brains, we need to consider supplementing our imperfect markets with other methods of intelligent allocation. This in turn requires that we think as clearly as we can about, among other things, desert, need, and fairness.