Glamor Economics

Chapter 23

Chapter 4 Section 4 The First Premise of Market Transactions—Property Rights

The emergence of market transactions must meet a basic condition - different property rights.The act of exchange occurs because the means of production and the product of labor belong to different owners.It can be said that property rights are the first prerequisite for market transactions to proceed.So, what is property rights?Different economic theories and factions have different definitions for it. The definition accepted by most schools of thought is as follows: property rights do not refer to the relationship between people and things, but refer to the existence of things and their use. mutual recognition of behavioral relationships between people.This definition sounds difficult to understand, we might as well give an example to illustrate.

Xiao Huang owns a house, which he rents out to Xiao Li, who pays Xiao Huang 5 yuan a year.

Xiao Huang owns the complete property rights of this property, specifically:

1. Owning the right of possession of the house.This right of possession is exclusive, that is, the property right belongs to Xiao Huang. While he owns the real estate, it means that other people cannot occupy the real estate.

2. Own the right to use the house.Xiao Huang can independently decide the right to use the real estate. For example, he can choose to live by himself or rent it out. He has the right to dispose of the real estate independently.

3. Own the transfer right of the house.Xiao Huang's real estate can be bought and sold freely in the market, and property rights can be freely traded and transferred like any commodity.

4. Own the beneficial right of the house.The owner can obtain and occupy the benefits brought about by the use and transfer of the property, also known as the residual claim.For example, the annual rental fee of 5 yuan that Xiao Huang collected from Xiao Li is the income from the property rights of the house.

The issue of property rights has attracted people's attention because property rights are closely related to efficiency.If there is no property rights system, it will lead to waste of resources, low efficiency and other consequences.Through the definition of property rights, resources can be effectively protected and utilized, and at the same time, market transactions can be continued.The institutional foundation of a market economy is clear property rights.The reason why property rights are important is that property rights align the rights and responsibilities of owners, that is, owners have the right to use their own resources, enjoy the benefits they get, and also bear the responsibility for improper use.In this case, the owner makes the most efficient use of his resources.

[links to related words]

Intellectual property rights are an intangible property right, which refers to the exclusive rights enjoyed by citizens or legal persons in accordance with the provisions of the law to intellectual products produced by intellectual creation or innovation activities, also known as "intellectual achievement rights", "intellectual achievement rights", " Intangible property rights", mainly including industrial property rights consisting of invention patents, trademarks, and industrial designs, and copyright (copyright) consisting of natural sciences, social sciences, and literature, music, drama, painting, sculpture, photography, etc. part.

The modern property rights system is the institutionalized property rights relationship or the institutionalization of property rights, a series of rules for dividing, determining, defining, protecting and exercising property rights. The meaning of "institutionalization" is to clarify the existing property rights relationship, rely on rules to make people recognize and respect, and reasonably exercise property rights. If it violates or violates it, it will be subject to corresponding restrictions or sanctions.

Establishing a modern property rights system with clear ownership, clear rights and responsibilities, strict protection, and smooth circulation is the basis for the existence and development of a market economy and an inherent requirement for improving the basic economic system.

(End of this chapter)