Michael Heller's Gridlock Economy. 

Reading between the lines.
July 14 2008 7:22 AM

Move Over, Marx

How too many property rights wreck the market.

(Continued from Page 1)

And Heller inevitably runs up against instances when the anti-commons is, rather than a bug in the system, a key feature. In the 1950s, for example, New York city planner Robert Moses proposed to tear down much of SoHo and Greenwich Village to build better freeways—but was stopped, thank God, by Jane Jacobs, property owners, and other protesters. Their anti-commons saved Manhattan. This leads to the somewhat unhelpful conclusion that an anti-commons is a bad thing, except when it isn't. More generously, you might say that an anti-commons is the enemy of change, and that deciding when you want change is a harder question. It takes us back to the tension between property and markets—property can act as a preserver while markets tend toward creative destruction. All this is satisfying to academics who love questions that lead to harder questions. But it may leave lovers of black-and-white feeling a little gray.

A different critique of Heller's book will come from classically trained economists, who are awfully hard to impress and are poised to complain that Heller isn't telling them anything new. I was once at a conference where someone said, "Michael Heller calls this an anti-commons—we used to just call it transactions costs—but God bless him."

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Yet I don't buy the notion that Heller has just slapped a fancy name on something known since God created economic man out of Adam's tailbone. The function of a phrase like anti-commons isn't to discover something new. It is to use a phrase to put front and center a set of questions that other modes of thought may overlook or downplay. I think Heller would admit that the anti-commons problem is created by transaction costs, in the sense that Harley Davidson would agree that a motorcycle is just a very loud bunch of molecules. Heller's phrases, gridlock economy and anti-commons, are a test that forces us to ask when property, designed to liberate, is doing the opposite.

In the end, what matters is that Heller passes the brain-infection test. His idea, once it gets into your head, takes root and explains quite a lot. In my own field, intellectual property, the problems of mass permission are everywhere: Nearly every venture in the media or entertainment field is shaped by the potential need to get permissions from millions of copyright stakeholders. There would be no YouTube—and no Google or Yahoo, either—if those firms had started by asking their lawyers to seek approval from the owners of a gazillion different copyrighted works. Netflix would not exist if it needed permission to buy movies and ship them through the mail—its whole business is premised on an exception to copyright called the "first sale doctrine." Without the law-breaking shock of Napster and KaZaA, Apple's iTunes store might never have started. Meanwhile, electronic books have had real problems getting off the ground because of the need to clear so many rights held by so many different people.

Getting permission sounds nice, and quite polite. But Heller reminds us that the need for too much permission, in matters personal or public, can become a quiet form of strangulation.

Correction, July 21, 2008: Tim Wu originally neglected to mention that Michael Heller, the author under review, is his colleague at Columbia Law School. (Return to the corrected sentence.)