Valentine's Gifts
by Joseph Rowlands
Tomorrow is Valentine's Day. Romance is in the air. Little red hearts are on every storefront. Young couples are planning to celebrate their love. Yes tomorrow, Cupid is in command. What more fitting a time could there be to talk about property rights!
One of the big Valentine traditions is the giving of gifts between lovers. Whether it's roses, chocolates, or a romantic trip for two, gift giving is an integral part of the holiday. But without property rights, this expression of love would lose its meaning. And to see this, we have to see what happens when property rights disappear.
Let's look at what happens when the boundary of property rights is blurred between just two people. Occasionally a couple will decide to combine their assets into a single pool, and declare joint ownership of the money. The reasons for this may vary, but they're not important. What is important is the effect of this blurring of the boundary.
Imagine a man and woman join their property. Let's imagine the man is very generous. We'll find the man giving gifts to friends, loaning money to family, offering to pay for dinner, etc. When it was his property, this characteristic may have appeared positive in the eyes of the woman. After all, it shows that he cares more about his friends then about money. And she probably benefited from the generosity quite a bit herself.
But after the property is joined, she no longer sees it in the same light. Suddenly it's her money that he's being generous with. While she's careful with her money, he lives extravagantly. A penny saved is not a penny earned, because the bigger the pile of cash, the more freely he spends. Suddenly generosity creates feelings of resentment instead of admiration.
What about her? Doesn't she benefit from his gift giving? He still showers her with gifts, right? But the gifts aren't seen in the same light. There might be a benefit, but there's a cost as well. She may like the dozen roses he spontaneously buys her, but she doesn't like the price tag at all. The more expensive the gift, the bigger the cost.
So already we can see the beginning of the problem. With joint ownership, gifts suddenly have a cost associated with them. In fact, the cost may be larger than the benefit. When someone else spends your money on you, it's just inefficient. It's unlikely that they'd spend it the way you would choose. There might be some romantic/spontaneous value that comes with getting a gift, but there's no guarantee that it will be greater than the loss through inefficiency. And that romantic quality may wear thin pretty quickly.
The lack of clear property boundaries has actually inverted the gift-giving process. Where before a bigger, more expensive gift was usually considered better, with joint property it's more likely to be worse. She might appreciate the dozen roses that only cost $20, but if you surprise her with a new house, you better be damn sure that's the house she wanted and she'd be okay with the purchase. The inefficiency on big gifts easily overcomes the value of romantic intentions.
This is true with joint ownership, and it would be true under a system of communal ownership. If the dreams of countless socialists came to pass, and all property was unowned, to be disposed of how any person wishes, then gift giving would be impossible. They would have equal right to your so-called "gift", so the process of handing it to them would mean nothing. It already belongs to them. If they want to consume the box of candies, they don't need your approval or permission.
Many of our holidays are celebrated by giving presents to those that we care about. So in turn, we should celebrate the requirement of this process. Long live property rights, and have a happy Valentine's Day.
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