Property Law: Making the Market

Throughout the course, we will study several controversies, concepts and legal doctrines that normally make up the field of property law in most Canadian law schools. As in your other courses, you will gain a solid understanding of legal rules “on the books” that address a range of issues (local, national and global) and you will see how those rules have changed and been adapted over time. But we will also address legal rules with a specific goal in mind–one that goes beyond a basic proficiency in the common law or legislation. Our goal is to understand and develop a thoughtful answer to the following question:

In other words, we will take a social institution—the market economy—and try to develop a story about how law has realized one actual and particular version of that institution over time in the Canadian context.¹ A “liberal” market economy is one based on certain political values like privacy and individual freedom. We will have much more to say about this concept of a liberal market economy and its relationship to property law in later classes.

The idea that Canada has one kind of market economy, with its specific distribution of benefits and burdens, is not predestined. Nor is it an accident. Legal rules—property foremost among them—are the product of societal choices that create background conditions for both market exchange and its regulation by the state.² By taking a critical look at those choices we have a better chance of understanding our current economic conditions, as well as their potential for change.

The problem is that, too often, we take these legal rules that structure the market for granted, and we accept that the resulting benefits and burdens are the natural consequences of market competition. Legal rules are seen mainly as interventions by government in free exchanges between individuals, with the goal of mitigating the market’s adverse or unequal effects. But this perspective overlooks the expansive infrastructure of legal rules in property and other areas that make such exchanges possible in the first place.

We can start to address this problem of perspective–and thereby engage the question of how property rules underpin Canada’s liberal market economy–by focusing on three key assumptions about law and economic markets that we often make in debates and discussions about social and economic policy. After you review these three assumptions below, the exercise that follows asks you to identify them in a real-world example.