chapter  1
Property Rights
Pages 32

In every society, economic activity is organized via a network of institutions that makes it possible to specialize and to cooperate in production and exchange, and thus to solve the economic problem of allocating scarce resources among com­ peting needs. This problem has an efficiency dimension concerned with stretch­ ing resources as far as possible and a social priorities dimension concerned with deciding what mix of goods to produce and how to distribute them. In all cases, there are many more potential needs for a nation’s resources than they can possibly be made to serve. Therefore, choices are necessary, and the nature of a society’s institutions plays a major role in determining how these choices are made.