ABSTRACT
Economics, as defined by every introductory economics textbook, is the science of the allocation of scarce resources. Property in its various forms constitutes resources to the owner of the property. Property law is the legal structure that determines who owns the property (e.g., government or private persons), which resources are allocated and controlled (e.g., labor or capital), and how they are allocated and controlled (market or centrally planned by the government).
In this chapter, the basics of private property law are reviewed, including types of private property and ways by which private property may be owned. Understanding basic property law is necessary to understand the relationship between corporations and property, shareholders and property, and shareholders and corporations. It is important to understand the nature of private property and property laws in order to understand the allocation of resources of production and the economic theory of the firm.
