How Could New Communities Overcome Institutional Limitations?

...an issue which has been on my mind for quite a while, and there are any number of ways to address it. While wrapping up a recent post, the last paragraph seemed to open up more questions than it answered. What stands in the way of a positive response from the U.S., to vast resource potential at international levels? Many diverse growth opportunities still linger, seemingly just over the horizon. However, state and national institutions are no longer able to coordinate patterns of resource use effectively. What new paths could local economies take, which would give broader applicability to services and resource use?

Before anyone takes further action, it helps to remember: the early reaction on the part of developed nations to globalization was unproductive. In particular, financial limitations and interventions on the part of real estate interests, need to be rethought. Both now serve primarily to inhibit ownership potential and economic vitality. However, problematic legalities in this regard also exist at a more personal level, which have scarcely even been noticed because of where their legal designation lies.

Too much of the initial response to globalization, was on the "backs of citizens" in government defined terms, in order to maintain state control over the proceeds. Perhaps this has bearing as to why aggregate spending capacity was dropped like a stone, when policymakers lost faith in growth capacity. But thus far, no central banker or policymaker has openly considered that citizens could redefine prosperity on new terms. To be sure, governments everywhere were capable of generating growth from the previous model...up to a point.

When a substantial portion of product manufacture moved to the shores of less developed nations, developed nations compensated by generating comprehensive requirements (hence overhead) for asset structures, in order to "properly" fund services. Among other concerns, this often stretched the capacity of lower income citizens to participate, either in terms of production or consumption. In order for citizens to once again be able to take advantage of the gains of globalization, their governments need to step back from tight definitions as to wealth structures, so that the real fruits of a globalized world are not lost.

Present day property structures in particular - once so beneficial to progress - are proving increasingly inflexible in a world where land use struggles to keep up with transitional realities. However, part of the problem is not just government intervention, but a lack of clarity regarding land ownership involving more than one individual. Neither government (at any level) or its legal system (at least in the U.S.) has adequate incentive to improve legal clarifications for property use and responsibility. After all, both governments and legal representatives directly benefit from the complexities which the system has imposed.

As a result, recent reversals to economic mobility and growth exist across a broad spectrum. The same rights to title and property which once meant greater ease of buying, selling and flexibility, have often become bogged down in legal battles which have few good means for resolution. Incentives to maintain and utilize land (and buildings) productively are too often lost. Indeed, unsolvable property issues are behind too many serious crimes involving family members. These issues increase community tensions and create unnecessary losses for wealth and economic vitality in general. One is reminded what happened to Russia, regarding empty storefronts in the early nineties. As Michael Heller indicated in "The Gridlock Economy",

In an ordinary market economy, the usual way to privatize is to transfer coherent bundles of property rights in ordinary spaces.  For example, you would sell the state owned bakery to new owner Alexa, the collective bookstore to new owner Catarina, and so on.

At a moment when Russia was poised to move closer to the adoption of free markets, Soviet reformers were in a rush. Rights to sell, lease and manage were broken up among various interests, which blocked the ability of all concerned to act in a coherent manner with the property in question.

Think land laws in the U.S. are a lot "smarter" than that? Perhaps not. One day (some years ago) I went to the courthouse to pay property taxes, only to discover a "family" member (by previous marriage to my husband) had already paid them. When the employee at the courthouse said nothing could be done, she probably did not appreciate the Russian reference on my part. This was the rural southern U.S. after all! Does any reader still wonder why I support extensive land use reform, which would allow land, property and building construction to keep pace with the resource use possibilities of the present?

In all fairness, land and property use rules regarding familial ownership, are still in an early stage of evolution. Their present day form was sufficient to generate greater mobility and prosperity for decades. It's difficult for anyone to closely scrutinize these factors and relate them to the bigger picture because - after all - they are stuck in the messy domestic details of family law.

Hence, letters to state offices detailing negative economic and social effects of said regressive laws, may simply end up in the first trash can within reach (That's where my letter to the governor ended up). In some regions of the U.S. however, communities, their inhabitants and structures have begun to suffer noticeably, from the fallout of legal neglect. Particularly given the fact, that housing wealth (unfortunately) remains the primary wealth which many individuals presently have.

Sometimes, governments gain more ongoing benefit from those structures in taxes, than individuals are able to eke out in actual living needs and circumstance. Who can move and start over economically if a judge refuses because of shared ownership...even though another owner has long since left the premises? Why should anyone have to remain imprisoned in what was once a shared space? Everyone needs ownership options for wealth holdings that are a vital part of ongoing economic flow - not yesterday's realities - so as to have real security and viability for the course of a lifetime.

One of the few actual benefits about properties under mortgage, is that they make the process of property negotiations less problematic, when it becomes necessary to realign property ownership. In these circumstance, all parties remain responsible for payments on said property - hence more willing to negotiate with one another. Real difficulties can ensue when properties are owned free and clear. Then, it often becomes the interest of mutual owners not to negotiate with one another, especially if one or more owners are economically underrepresented in any respect.

Unfortunately, communication breakdown and family "dysfunction junctions" remain a  prime means for governments to reclaim property. It would be in everyone's interests to have understandable property contracts between individuals and governments throughout the entire ownership process - let alone the fact such contracts could lead to more beneficial management of the proceeds all around. Much social discord and fallout could be avoided, by land holdings and leasing on the part of entire communities, particularly for lower income levels which can ill afford legal fees which are not capable of doing the job that needs to be done.

Rural areas especially need major roles in new land and property use options, so that their citizens are not forced to rely on distant cities for necessary services. Prior to widespread use of the automobile, many rural neighbors lived and worked in close proximity to one another. Rural residents on limited incomes would especially benefit from new formations for service economies, which could recreate some of those earlier patterns.

Before wrapping up this post: None of this is to suggest that family ties are not important, for that is certainly not my intention. However, by supporting individual ownership rights on social, legal and economic terms, family formation remains possible to a much greater extent, than it otherwise would. No conservative program to ensure the protection of families would be complete without consideration of the legal thickets which make family formation so difficult to maintain, particularly at lower income levels.

What's more, lower income levels are far from the only ones affected by legal thickets. Small business formation also suffers from murky ownership capacity as well. Not everyone is strong enough to endure the legal backlogs and waiting time which go on endlessly, while individuals, families and societies languish. Often, too much is lost as people and economies alike are forced to put life on indefinite pause until the eventual decrees are handed down. Sometimes, everything dies on the vine as it waits for the legal results.

This post was written in large part, for the memory of what my husband had to endure.