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Professor Henry Smith’s Property as the Law of Things urges a return to an older conception of property as rights with respect to things – and justifies this in terms of a very new conception of property based on modularity. Throughout, he highlights the importance of information costs in determining the structure of property law, starting with a baseline of in rem rights of exclusion supplemented by governance rules to deal with exceptional situations. I fully agree with his emphasis on the centrality of things in the law of property, the in rem nature of property, the primacy of exclusion rights, and the importance of information costs in understanding the structure of the property system. These ideas have featured prominently in previous writings I have coauthored with Smith.

The idea that property systems can be understood in terms of modularity is something Smith has developed independently, and I have not had occasion to comment publicly on it. My reaction is largely positive with reservations. The modularity model is an advance on the simple “optimal standardization” idea we jointly developed for explaining the numerus clausus or limited number of forms of property. One of the mysteries associated with the numerus clausus is that the same piece of property is governed by very different rules in terms of degree of standardization depending on who the relevant audience happens to be. The proverbial Blackacre presents a simple rule of exclusion insofar as the audience of strangers is concerned, a complex of formal rules when potential transactors enter the picture, and a potentially limitless diversity of rules and norms when the relevant audience consists of insiders such as co-owners. The modularity model Smith sketches provides a functional account that helps explain this important structural feature of the property system.


Jurisprudence | Law | Property Law and Real Estate