Against the tide: Connecticut oystering, hybrid property, and the survival of the commons.

AuthorArnold, Zachary C.M.

NOTE CONTENTS INTRODUCTION I. THE EMERGENCE OF PROPERTY RIGHTS: EFFICIENT PRIVATIZATION AND ITS CRITICS A. The Conventional Account: Efficient Privatization B. Critique of the Conventional Account: Politics May Prevail C. Critique of the Conventional Account: Common Property May Be More Efficient D. Alternatives to Privatization: Homogeneity and Hybridity E. Extending the Semicommons II. BASIC ELEMENTS OF THE NINETEENTH-CENTURY OYSTER INDUSTRY A. The Oyster and Its Ecosystem B. Harvesting Oysters C. Cultivating Oysters III. TESTING THE PRIVATIZATION NARRATIVE: CHANGES IN THE LAW, 1762- 1881 A. The Conventional Narrative Corroborated: Early Regulation 1. Early Abundance 2. Regulation of the Commons 3. The Advent of Enclosure B. The Conventional Narrative Challenged: Technological Change and Property Law Hybridity 1. A Technological Revolution 2. The Need for Legal Change 3. The Legislative Response: Preserving Inefficiency? IV. EXPLAINING CONNECTICUT'S SYSTEM: THE POLITICAL AND ECONOMIC VIRTUES OF HYBRID PROPERTY A. The Efficiencies of Hybridity 1. Informal Governance 2. Efficiency-Improving Interaction Between Territories B. Politics and the Hybrid Regime CONCLUSION APPENDIX: OYSTER GROUNDS OFF BRIDGEPORT AND STRATFORD INTRODUCTION

At the turn of the twentieth century, Connecticut was known for its oysters, and the men who harvested them were of two basic types. Henry Rowe was a prominent example of the first. Rowe was a prosperous business owner and a leader of Connecticut's major oyster cultivators. His firm raised oysters on thousands of acres of seabed, to which Rowe possessed legal title. He used the latest cultivation techniques, and his employees piloted handsome steamers on the grounds he owned--each steamer capable of taking up hundreds of bushels of oysters a day. (1)

Captain Bob was a typical example of the second sort of oysterman. (2) Unlike Rowe, Captain Bob went to sea in a sail-powered sloop, the Broadbill, with only a few hired hands to help him haul in the dredges. Nor was Captain Bob an owner of the seabed. Instead, he worked the public grounds off Bridgeport, where hundreds of small boats like his competed to gather wild oysters. At the end of the day, if conditions were favorable, he might have forty bushels to show for his labor.

Henry Rowe and Captain Bob were both important players in a booming business. During the late 1800s, diners from California to the British Isles enjoyed Connecticut oysters on the half shell, and business and government leaders across America looked to Connecticut's industry as a model for their own. (3) At the core of this industry was an unusual property rights regime. Connecticut oystering simultaneously encompassed both a regulated commons for natural oyster grounds (that is, Captain Bob's turf) and a private property regime for other areas of the seabed (where Rowe reigned). These radically different legal sub-regimes coexisted more or less peacefully through decades of profound technological and economic change, ferocious public controversy, and repeated attempts at simplification. (4)

This history is especially surprising in light of the conventional account of the development of property rights. In this account, law evolves toward efficiency, and in turn, valuable resources are subjected to private ownership in order to maximize production and minimize waste. (5) Indeed, the law and economics literature has specifically cited oystering as evidence for the proposition that privatization promotes efficiency. (6) According to the conventional account, then, one might have expected comprehensive enclosure of oyster grounds from an early date. Connecticut's stable and productive bifurcated system of property in oyster grounds, under which common ownership persisted for decades, seems to contradict this narrative.

In this Note, I explain Connecticut's somewhat puzzling two-tiered property regime. Drawing extensively on primary source material, I demonstrate that this regime enabled the use of efficient modern technologies while simultaneously preserving an open-access resource cherished and depended upon by multitudes. Moreover, I show that dividing the Long Island Sound into private and public territories generated productive biological and trade interactions across territorial boundaries, mitigating the efficiency losses associated with the partial preservation of the commons. Because of these economic and political advantages, the hybrid regime survived and thrived.

My historical findings have several theoretical implications. In offering the first in-depth account of Connecticut's oyster property system and its origins, I join the many writers who have shown that reality often contradicts the conventional tale of evolution toward efficient formal privatization and that alternative property systems often prove viable because they fulfill important societal needs--economic and otherwise. My account also demonstrates that these viable alternative property systems include hybrid regimes--that is, regimes that impose different property rules at different points in space or time. There have been few studies of such hybrid regimes from any perspective. (7) In addition to expanding this small literature with a novel historical study, I make two contributions to our theoretical understanding of hybrid regimes. First, I show that regimes that are hybrid across geographic space, like Connecticut's, can give rise to efficiency-improving interactions among constituent territories subject to different property rules. Second, and more fundamentally, in contrast to existing studies of hybrid regimes--which heavily emphasize economic efficiency--I demonstrate that hybrid regimes can emerge and thrive because of their political functions.

This Note is organized in four Parts. Part I reviews the literature on the emergence of property rights, on alternatives to formal privatization, and on hybrid property systems, and it more fully situates this Note within these bodies of literature. Part II briefly provides context on the oyster and its cultivation. Part III looks back to the history of Connecticut oystering and shows that, although relevant law initially developed in apparent harmony with the typical tale of evolution toward efficiency, by the late nineteenth century Connecticut had chosen a different path--and succeeded nonetheless. Part IV explains this apparent anomaly with reference to both economic and political dynamics.

  1. THE EMERGENCE OF PROPERTY RIGHTS: EFFICIENT PRIVATIZATION AND ITS CRITICS

    1. The Conventional Account: Efficient Privatization

      Harold Demsetz's cost-benefit framework is the classic, if contested, starting point for theorists of the emergence and maintenance of property rights. Demsetz famously argued that property rights tend to change according to "the emergence of new or different beneficial and harmful effects" produced by those rights. (8) In brief, when changes in the circumstances of economic production make it more profitable to society as a whole to establish a new property regime, such a regime will tend to emerge, whether through legislation, judicial decisions, or the evolution of social mores. (9)

      Demsetz's framework has commonly been used to explain the gradual and seemingly universal advent of private property. (10) On this account, resources that are increasing in value are more likely to be subjected to private property regimes that help those who produce or safeguard those resources to fully capture the resulting benefits. (11) The shift to private property can be expected to occur as long as the resulting efficiency gains outweigh the costs entailed in establishing and maintaining private property, such as the basic costs of exclusion (fences, guards, and so on) and the extra vigilance needed to deter interlopers from absconding with rising-value resources. (12) Even critics of the cost-benefit paradigm have acknowledged that, in the real world, enclosure tends to follow rises in value, apparently vindicating Demsetz. (13) As Saul Levmore has observed, "the conventional story about the evolution or maturation of property rights. ... emphasizes that, with increases in value and economic activity, property rights become secure, strong, well defined though malleable and divisible, and increasingly private." (14)

    2. Critique of the Conventional Account: Politics May Prevail

      Demsetz's framework allows us to predict in broad strokes when private property may emerge, but is less helpful in exploring the mechanisms of private property's emergence.15 Nor does Demsetz clearly explain why efficiency-promoting revisions to property law, such as privatization, often fail to occur. (16) Later writers have attempted to fill in these gaps, with many calling particular attention to the complex political dynamics that tend to emerge around valuable resources. (17) In addition to the classic drivers of relative resource prices and technological developments, political power and legitimacy affect efforts to alter property regimes. (18) To quote Gary Libecap: "The key for understanding ... variation in property rights institutions is recognizing that the property rights that are devised to reduce the wastes of the common pool simultaneously define a distribution of wealth and political power." (19) Property reform debates "activate" both those who stand to gain from change and those who risk losses, in degrees proportional to each side's interest in changing the status quo. (20) These groups' strength, in turn, may depend on factors internal to the group that have little to do with the economic costs and benefits of enclosure. For example, Libecap emphasizes that the relative size, internal heterogeneity, and resources of interest groups, as well as the roles they play in the status quo, all contribute to determining property outcomes. Current owners of resources are also more likely to have developed strategic political ties and an...

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