2. Property as a triadic social relation

Undoubtedly, the whole history of economic thought addressed the issue of property. Nevertheless, institutional and ecological economics provide valuable insights into the very essence of property as a ‘primary’ social institution (Ciriacy-Wantrup and Bishop, Reference Ciriacy-Wantrup, Bishop, Ciriacy-Wantrup, Bishop and Andersen1985: 26). Institutions are seen here as the formal and informal ‘working rules’ (Commons, Reference Commons1995 [1924]: 6) of a group or a society that both liberate and constrain human behaviours (Hodgson, Reference Hodgson2006: 2). In defining what is socially acceptable and what is not, that is, what individuals and groups may, can, cannot and must or must not do (Commons, Reference Commons1995 [1924]: 6) they establish mutual expectations among individuals and groups in dealing with each other (Bromley, Reference Bromley1989: 44). Indeed, they are the source of rights, duties, liberties and exposures (Commons, Reference Commons1995 [1924]: 6), determining the relation of individuals and groups among each other.

Ciriacy-Wantrup and Bishop define property as a ‘primary’ social institution both because of its own importance and because several important ‘secondary’ institutions such as credits and markets (Heinsohn and Steiger, Reference Heinsohn and Steiger1996, Reference Heinsohn, Steiger and Smithin2000) are derived from it (Ciriacy-Wantrup and Bishop, Reference Ciriacy-Wantrup, Bishop, Ciriacy-Wantrup, Bishop and Andersen1985: 26). Accordingly, property is not a physical object but rather defines a triadic relation between persons with regard to something of value (Bromley, Reference Bromley1991). The triad emphasizes the fact that property describes not a relation between a person and something of value, but rather a relation of one person to another with respect to something of value. It thus underlines that property is primarily a social and not an individual relation involving right holders, duty bearers and something of value: the benefit stream (Bromley, Reference Bromley1991; Hallowell, Reference Hallowell1943).

However, as pointed out by Hallowell (Reference Hallowell1943: 130), ‘property, considered as a social institution, not only implies the exercise of rights and duties with respect to objects of value by the individuals of a given society; it also embraces the specific social sanctions which reinforce the behaviour that makes the institution a going concern.’ Property considered as a ‘primary social institution’ thus involves a minimum of three parties to constitute a social relation of rights and duties – ‘two inferiors and one superior’ (Commons, Reference Commons1995 [1924]: 87). It follows that rights are only secure as long as there is a superior authority that agrees to protect those rights by enforcing all others to comply with duties. In other words, ‘a legally enforceable right presumes a corresponding legally enforceable duty’ (Cole and Grossman, Reference Cole and Grossmann2002: 318). If the authority – for whatever reason – is unwilling or unable to ensure that compliance with duty, then rights are meaning less (Bromley, Reference Bromley1991: 22) or ‘formal statements of ideals, wishes and hopes that may or may not be realized’ (Commons, Reference Commons1995 [1924]: 123).

Combining both interpretations of a triad: one involving a right holder, a duty bearer and a benefit stream, and another comprehending a right holder, a duty bearer and a superior authority, the next section will show that property is a potential to two benefit streams: an immaterial benefit stream, called property premium (Heinsohn and Steiger, Reference Heinsohn and Steiger1996, Reference Heinsohn, Steiger and Smithin2000: 67)Footnote ³ or immaterial economic potential and a material benefit stream also referred to as material economic potential (Steppacher, Reference Steppacher and Steiger2008: 327). A property right, in turn, is a de jure claim on both benefit streams that a superior authority will agree to protect through the assignment of duty to others who may covet, or somehow interfere with either the immaterial, or the material, or both benefit streams. When a claim on both benefit streams exists, that is, when there is an expectation that a superior authority will protect and enforce that right against all others,Footnote ⁴ then there is property. However, when only a claim on the material benefit stream exists (that a superior authority will protect and enforce), but no claim on the immaterial benefit stream, then there is no property, there is only possession. Finally, when there is neither a claim on the immaterial benefit stream, nor a claim on the material benefit stream (that a superior authority will protect and enforce), then there is no property and no possession; there is only open access.

3. Possession and property

Possession is ‘understood as the core institution of non-capitalist societies (or of possession-based sectors within capitalist societies)’ (Steppacher, Reference Steppacher and Steiger2008: 326). Possession refers to a bundle of rights and correlated duties regarding the physical use of goods and resources and the returns thereon, including the right to change their substance and form, as well as the right to their alienation. Alienation here does not imply the right to sale or lease, but only the right to exchange goods and resources in the form of gifts, assignments or – occasionally – inheritance. (Heinsohn and Steiger, Reference Heinsohn and Steiger2006; Steiger, Reference Steiger2006: 186). Possession rights thus define ‘who, in what manner, at what time and place, to what extent, and by exclusion of whom, may physically use goods and resources and change their substance and form’ (Heinsohn and Steiger, Reference Heinsohn and Steiger2006; Steiger, Reference Steiger2006: 186) and therefore apply to what scholars of the theory of property rights (or new institutional economics) and of common property conceptualize in terms of property rights. Referring to possession rights, Steppacher notes, ‘rules about these questions exist in all societies, whether tribal, feudal, capitalist, socialist or whatever the future may offer. In this sense, institutions of possession respond to an [eternal], universal question: they determine how to actualize a universal [material economic] potential’ (Steppacher, Reference Steppacher and Steiger2008: 327), namely to physically use goods and resources. Needless to say, the answers given to that question and the chosen forms of that actualization are culture-specific and exhibit great diversity and variety (Steppacher, Reference Steppacher and Steiger2008: 327).

In line with Heinsohn and Steiger (Reference Heinsohn and Steiger2006) and Steppacher (Reference Steppacher and Steiger2008), Bhalla (Reference Bhalla1992: 81–84) maintains that

Property, in contrast, is ‘understood as the core institution of capitalist societies (or of property-based sectors within non-capitalist societies)’ (Steppacher, Reference Steppacher and Steiger2008: 326). Unlike possession, property is not an eternal, universal institution (Heinsohn and Steiger, Reference Heinsohn and Steiger1996, Reference Heinsohn, Steiger and Smithin2000). It is brought about by a legal act (i.e. discontinuous institutional change) that transforms de facto possession into de jure possession, and adds a bundle of immaterial de jure property rights (and duties) in this process (Steiger, Reference Steiger2006).Footnote ⁵ As soon as property is created – ex nihilio – it carries a second economic potential: the immaterial economic potential (called property premium by Heinsohn and Steiger, Reference Heinsohn and Steiger1996, Reference Heinsohn, Steiger and Smithin2000) contained in the security of legal property titles to enter into credit relations both as a creditor and as a debtor (Steppacher, Reference Steppacher and Steiger2008: 327). Accordingly ‘property rights are de jure claims. They entitle their holders to immaterial (non-physical) capacities which first constitute economic activities: (i) to burden property titles in issuing money against interest; (ii) to encumber these titles as collateral for obtaining money as capital; (iii) to alienate or exchange including sale and lease, and (iv) to enforce’ by independent lawFootnote ⁶ (Heinsohn and Steiger, Reference Heinsohn and Steiger2006; Steiger, Reference Steiger2006: 186).

There can be no doubt that the immaterial economic potential embodied in the institution of property does not derive from the physical use of goods and resources, but from the addition of de jure property titles to de facto possession rights (Heinsohn and Steiger, Reference Heinsohn, Steiger and Smithin2000: 81). Unlike possession, property thus embodies both a bundle of possession rights (and duties) and a bundle of property rights (and duties) entitling property-rights holder not only to the physical use but also to the non-physical use of goods and resources. It is this immaterial economic potential contained in the security of legal property titles that has traditionally been neglected in mainstream economics and that makes property – on the condition that property is titled, registered, protected and enforced – the core institution of capitalist societies (Steppacher, Reference Steppacher and Steiger2008: 328).Footnote ⁷

4. Possession and resource management regimes

The foregoing introduced Heinsohn and Steiger's core differentiation between possession and property, by placing particular emphasis on de jure property rights and duties regarding the non-physical use of goods and resources. The issue now is to focus on the physical use of goods and resources and the returns thereon (possession) by drawing a distinction between different resource management regimes. The latter are defined as structures of rights and duties characterizing the relationship of individuals and groups to one another with respect to a particular natural resource (Bromley, Reference Bromley1991: 22).

As indicated earlier, much literature on natural resource management, including the works of Ostrom (Reference Ostrom1990, Reference Ostrom2007), Ciriacy-Wantrup and Bishop (Reference Ciriacy-Wantrup, Bishop, Ciriacy-Wantrup, Bishop and Andersen1985) and Bromley (Reference Bromley1989, Reference Bromley1991), applies the terms ‘property’ and ‘property regimes’ when dealing with ‘possession’ and ‘possession regimes’ only. To be consistent with Heinsohn and Steiger's core differentiation between possession and property, this section will interpret these terms as ‘possession’ and ‘possession regimes’, respectively, when referring to the mere physical use of goods and resources and the returns thereon.

Before distinguishing between different resource management regimes, however, some general misconceptions about ‘the tragedy of the commons’ as identified by Hardin (Reference Hardin, Daly and Townsend1993 [1968]) are addressed first.

5. Property, possession and resource management regimes

The foregoing introduced Bromley's distinction between state, private or common possession regimes, on the one hand, and open access on the other. The issue now is to link the latter distinction with Heinsohn and Steiger's core differentiation between possession and property in order to better comprehend the meaning of implicit/explicit rights transfers (Bromley, Reference Bromley1991: 160, 161) involving shifts from one resource management regime to another.

Indeed, connecting the insights gained from institutional economics (e.g. Bromley) and property economics (e.g. Heinsohn and Steiger) enables one to distinguish between at least seven general types of resource management regimes: (1) state property regimes, (2) state possession regimes,Footnote ¹³ (3) private property regimes, (4) private (or individual) possession regimes (Steiger, Reference Steiger2006: 190; Steppacher, Reference Steppacher and Steiger2008: 349),Footnote ¹⁴ (5) common property regimes, (6) common possession regimes and (7) open access (see Figure 1). The different types of resource management regimes are ideal types in the sense of Max Weber (Reference Weber, Roth and Wittich1978 [1922]), that is, analytical constructs that are not meant to correspond to all of the characteristics of any particular case.

Figure 1.

Different types of resource management regimes in relation to property and possession

Source: Steppacher (Reference Steppacher and Steiger2008: 349) (slightly modified)

Considering Figure 1, it becomes apparent that an explicit possession rights transfer, that is, the process of shifting the same basic structure of de facto possession rights and duties attached to a particular resource from one type of resource user to another (e.g. from an individual (4) to a group of co-equal possessors (6), or from a group of co-equal possessors (6) to the state (2), or from the state (2) to an individual (4), or vice versa) implies an alteration in the nominal structure, but not in the real structure of rights and duties (Bromley, Reference Bromley1989: 160). The same holds true for explicit property rights transfers when shifting the same basic structure of de jure property rights and duties among different types of resource users.

In contrast, adding de jure property titles to de facto possession rights and duties attached to a particular resource (e.g. turning state possession (2) into state property (1), private possession (or individual possession, respectively) (4) into private property (3), or common possession (6) into common property (5)) represents an implicit rights transfer (Bromley, Reference Bromley1991: 161), that is, a process of changing the real structure, but not the nominal structure of rights and duties. Indeed, that change in legal entitlements involves an alteration in the use to which the resource can be put to: as soon as property titles are created by a legal act, it entitles the property rights holders to the immaterial (non-physical) use of that resource: to burden and to encumber property titles as collateral in credit relations (Heinsohn and Steiger, Reference Heinsohn and Steiger2006; Steiger, 2066: 186). It is precisely the creation of property titles through an appropriate implementation of property law for each and every member of society that first triggers economic development. Put somewhat differently, it is the introduction of property in general, whether state, private or common property, and not – as scholars of the theory of property rights (or new institutional economics) assume – the introduction of private property in particular that results in changed microeconomic behaviours of economic actors which give rise to the economic development lacking so far in developing and transitional countries (Steiger, Reference Steiger2006). Therefore, as Steiger notes, ‘recommendations for development programs based on new institutional economists’ theory of property rights, favouring privatization, are misleading’ (Steiger, Reference Steiger2006: 202).

Referring to the commons, Steppacher suggests that, in most instances, commons are possession regimes (6) rather than property regimes (5) as they lack genuine property titles to be used as collateral in credit relations (Steppacher, Reference Steppacher and Steiger2008: 349).Footnote ¹⁵ Considering Figure 1, it becomes evident that a shift from common possession (6) to private property (privatization) (3) or to state property (nationalization) (1) – as suggested by scholars to overcome the alleged ‘tragedy of the commons’ – is more than an explicit rights transfer. Indeed, it is first and foremost an implicit rights transfer, that is, a process of turning de facto possession into de jure possession and of adding a bundle of de jure property rights and duties in this process.

However, adding a bundle of de jure property rights and duties in this process involves not only a change in the use to which the resource can be put, but also a change in the point of view from which to judge the outcomes of economic activities: as soon as economic actors (resource users) engage their property titles as collateral in credit contracts and thus finance their economic activities with money advanced as capital, economic rationality gradually becomes dominant over substantive (or value) rationality. The gradual shift from substantive (or value) to economic rationality holds particularly true against the background of particular economic pressures (i.e. pressure for economic growth, cost pressure and time pressure) prevailing in property-based societies or sectors.

Finally, Figure 1 reveals that privatization is more than what Harvey (Reference Harvey, Panitch and Leys2003) recently conceptualized in terms of ‘accumulation by dispossession’ including the ‘conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights’ (Harvey, Reference Harvey, Panitch and Leys2003: 74). When dealing with common possession (6) or state possession (2), privatization implies not only the conversion of (common, state) property (5, 1) into exclusive private property (3). First and foremost, it involves the addition of de jure property titles to de facto possession rights and duties, thereby changing the legal entitlements running with the resource transferred. Indeed, it is this implicit rights transfer that has traditionally been neglected by both proponents and opponents of privatization by focusing on explicit rights transfers only.

Gerber and Veuthey (Reference Gerber and Veuthey2011) shed light on distinct types of possession and property regimes that are at the origin of socio-environmental conflicts over industrial tree plantations between local Bulu communities and commercial planters in Cameroon. Providing a historical outline of property in Cameroon, the authors state that prior to colonization, property as a primary social institution did not exist in the Bulu society. As in many other forest-dependent societies, local Bulu communities manage and control their agro-forests as common possession, where several lineages coexist in a same village and share a wider forest area for hunting and collecting plants. Common possession includes lineage possession, based on the genealogical rights of a lineage over the agro-forest as well as individual possession, rooted in the axe rights within a given lineage-owned area (Gerber and Veuthey, Reference Gerber and Veuthey2011: 834). The various types of (common, individual and lineage) possession regimes are subject to the cyclic nature of shifting agriculture. When a forest is transformed into a field, lineage or common possession turns into individual possession. After 10 years, when the field is reconverted into a secondary forest, individual possession disappears and the field becomes available to other lineage members or, if not – with enough time – to other community members or future generations.

With the introduction of property imposed by European colonization during the 19th and 20th centuries, Gerber and Veuthey (Reference Gerber and Veuthey2011) observe the transformation of Cameroon's (agro)forests, managed and controlled as common possession, into industrial tree plantations, that is, large centrally administered agricultural estates organized to supply external markets with generally one single crop (Pryor, Reference Pryor1982) – in the case of Cameroon mainly cacao and rubber trees, the two main colonial products until the 1950s (Etoga Eily, Reference Etoga Eily1971, cited in Gerber and Veuthey, Reference Gerber and Veuthey2011: 836). The shift towards industrial tree plantations, managed and controlled as either private or state property, often implied the expulsion of local communities from their lands and the destruction of what they consider their forests (Gerber and Veuthey, Reference Gerber and Veuthey2011: 839). Provided with 99-year state concessions enabling concession holders to encumber their concessions (similar to property titles) as collateral in credit contracts, commercial planters, such as the HEVECAM (Hévéa Cameroon) – one of Africa's largest rubber tree monocultures in Southern Cameroon – often engage in credit contracts to obtain money as capital. As soon as they enter into credit relations, they face specific economic pressures (pressure for economic growth, cost pressure and time pressure) imposed by the obligation to refund the borrowed money at a fixed rate of interest within a specified period of time (Gerber and Veuthey, Reference Gerber and Veuthey2011). They are thus obliged to start a money-priced production of raw materials – in the case of HEVECAM natural rubber – which they have to sell on the market. Forced to repay a higher amount than the total of money advanced as capital, industrialization – along with a drastic simplification of the ecosystem –

According to Gerber and Veuthey (Reference Gerber and Veuthey2011), it is ‘the imperatives of credit relations – defining what is broadly referred to as “economic rationality” – [that] are at the origin of the conflict’ between local communities and commercial planters, such as HEVECAM. The imperatives impose economic growth to the detriment of social and ecological considerations such as the preservation of remaining (agro)forests managed and controlled as common possession. Pointing up to these imperatives, one villager resumes: ‘[HEVECAM] invaded our lands. They came and installed fences and started to evaluate land in monetary terms’ (Gerber and Veuthey, Reference Gerber and Veuthey2011: 839). The observation made by the villager summarizes perfectly the example given by Heinsohn and Steiger (Reference Heinsohn, Steiger and Smithin2000: 70) to illustrate the difference between the physical use of a field (possession) and the activation of a property title. According to Heinsohn and Steiger

Unlike commercial planters that subject their tree plantations to an economic use as pointed out by Gerber and Veuthey (Reference Gerber and Veuthey2011), local communities (as long as they are not indebted) are not subject to the same constraints of economic growth imposed by the imperatives of credit relations: their production tends to remain relatively stable within a multifunctional environment (Gerber and Veuthey, Reference Gerber and Veuthey2011: 844). Moreover, due to the cyclic nature of shifting agriculture local communities are able to regenerate their (agro)forests and – with enough time – distribute their land among their members (Gerber and Veuthey, Reference Gerber and Veuthey2011: 834). Contrary to commercial planters that manage and control their industrial tree plantations as private or state property, enabling them to disconnect from the physical reality of their resources and to make them live a disembedded life as capital by entering into credit relations (Soto, 2000), they remain firmly embedded in the physical reality of their resources. Guided by substantive (or value) rationality (or by an eco-social rationale as pointed out by Gerber and Veuthey, Reference Gerber and Veuthey2011), they are obliged to consider the given social and ecological conditions of their multifunctional environment to sustain their livelihoods.

In fact, it is the shift from substantive rationality (eco-social rationale) to economic rationality through the introduction of property as a primary social institution – along with other secondary institutions such as credits and markets into Cameroon's mere possession-based society that is at the origin of the conflict between commercial planters and local communities. In other words, it is the clash between possession-based resource management regimes on the one hand and property-based resource management regimes on the other that is at the roots of the conflict. The example of that conflict unveils the benefits from integrating the insights gained from institutional economics (i.e. the distinction between state, private and common possession regimes on the one hand and open access on the other) and property economics (i.e. the differentiation between possession and property) into one analytical framework. It underlines the crucial importance of the distinction between possession and property and its implication for natural resource management.