Question

Discuss the role of property rights in explaining the concepts of Public Goods and Common Resources. Include a discussion of Jamestown and the role of government in providing transportation.

Answer 1

The Role of property rights in explaining the concepts of Public Goods and Common Resources :

Property rights lie at the heart of economic analysis. In market economies, private property rights are central. This has not always been the case. In traditional or tribal societies, private property rights over resources are rare. Resources important to the life of the tribe are either held in common (as with a common grazing ground) or are not owned at all (as with animals hunted for food). Economically developed societies—we like to think of ourselves as “advanced” societies—have generally evolved elaborate systems of property rights covering most resources as well as most goods and services. But even modern industrialized nations have resources, goods, and services difficult to categorize as property. Common-property resources are those owned by a community, without specific assignment of private property rights to individuals or firms. Various possible systems for managing such resources include traditional use customs and government management. No rules limit the use of open-access resources, which leads to overuse and sometimes to the collapse of the resource’s ecological functions.

The Economics of a Fishery

A classic example of a common-property resource is a fishery. Inland and coastal fisheries often are governed by private, traditional, or government management systems. Fisheries in the open ocean are typically open-access resources. (An open-access resource can be defined as a common-property resource that lacks any system of rules governing its use.) Anyone can fish in nonterritorial waters, which means that no one owns the basic resource, the wild stock of fish. We will use this example to apply some of the basic concepts of production theory to an open-access resource.

When the settlers arrived in 1607, Jamestown was located on a narrow peninsula bordered on three sides by the James River.   Today, Jamestown is located on an island in the James River. Location and physical characteristics influenced the decision to settle at Jamestown. Advances in transportation, communications, and technology have contributed to Virginia’s prosperity and role in the global economy. Advances in transportation, communications, and technology have facilitated migration and led to economic development in Virginia Virginia’s transportation system (highways, railroads, and air transportation) move raw materials to factories and finished products to markets.

In 1619, the first representative legislative assembly in the New World met at the Jamestown church. It was here that our American heritage of representative government was born. Since New England was outside the jurisdiction of Virginia's government, the Pilgrims established a self-governing agreement of their own, the "Mayflower Compact."

the federal government has played a central role in the development of our nation’s infrastructure since the late 1700s. Our forefathers knew that in order for our fledgling nation to prosper, trade, and commerce had to thrive. So, the federal government invested in roads, locks, inland waterways, and harbors. As history has shown, these leaders got it right because not only did our nation’s economy thrive due to their wise investments; it grew into the strongest economy in the world.

Our nation’s intermodal transportation network continues to serve as the backbone of our economic security and competitiveness, as well as our quality of life. It facilitates the movement of people and goods and links our communities to each other and the world. It is the foundation of America’s economy.

While the U.S. transportation network remains the envy of the world, we are losing ground. Without a renewed commitment to providing the vision and leadership to rebuild and expand these systems, this situation will continue to get worse.

Our nation’s rail infrastructure lacks the capacity to alleviate this crisis. In fact, over the past 75 years, the nation’s private railroads have significantly shrunk their networks by abandoning over 100,000 route miles of track.

• In 1930 the nation’s rail network was 249,000 route miles
• By 1957, the network had shrunk to 202,000 route miles
• 1970—176,000 route miles
• 2006—140,810 route miles

  The public sector—federal, state, and local governments—has played a major role in the development of the intermodal transportation network throughout our nation’s history.

  One of the first acts of the 1st Congress was the “Lighthouse Act of 1789,” which authorized the construction of a lighthouse at the mouth of Chesapeake Bay, as well as the collection of duties to pay for this and other maritime projects (i.e. laying buoys, registering vessels, etc.) Since that time, the public sector has been very involved in the development of the nation’s transportation infrastructure.

  In terms of highways and bridges, many focus on the Interstate Highway System -- one of the foremost engineering and construction feats in world history -- as the beginning of the large-scale federal involvement in developing the nation’s roadway network. While the Interstate truly revolutionized our transportation network and ignited our economy, our nation’s public sector commitment to developing a road network to link our nation goes back well before the Interstate.