Legal Theory Lexicon 113: Property Theory

Property is almost always a first year subject. Decades ago, it was most likely a year-long course, but today the course is typically offered in the Fall or Spring. The 1L property course typically begins with possession (capture cases like Pierson v. Post), moves through estates in land and future interests, and then takes up landlord-tenant law, easements, servitudes, nuisance, and (in some courses) takings. Along the way, students encounter a familiar metaphor: property is a “bundle of sticks.” Each stick represents a particular legal entitlement — the right to possess, the right to use, the right to exclude, the right to transfer, and so on. The bundle metaphor is the conceptual default in most casebooks. But the metaphor is also contested. In this Lexicon entry, I introduce the major theoretical approaches to property: the bundle of rights tradition, the new essentialism, information theory, law and economics, personhood theory, and progressive property. As always, the entry is written with first-year law students in mind.

Property theory is a big topic — so, this entry is necessarily selective and simplified! Many interesting topics will be left out, including interpretation of the Takings Clause, intellectual property, and more sophisticated economic theories of property.

A word on terminology. “Property” covers three regimes: common property (resources available for use by all members of a community, like a town green or a public park), collective property (resources whose use is determined by the community as a whole, like a military base or a state-owned enterprise), and private property (resources assigned to particular individuals, like a home or a car). This entry focuses on private property; common and collective property are not considered in depth.

Early Foundations: Locke, Blackstone, and Hume

The philosophical engagement with property predates the modern legal tradition by two millennia — Aristotle argued in the Politics that private property promotes virtues like prudence and responsibility, and Thomas Aquinas held that the rich have moral obligations to the poor that qualify any defense of private ownership. But the Anglo-American legal tradition’s modern engagement could be said to begin with John Locke and William Blackstone. Locke’s Second Treatise of Government (1689) begins with the idea of a “state of nature” and advances the thesis that in such a state real property can be acquired by individuals who mix their labor with the land, for example, by clearing a field and planting a crop. Locke’s theory included the famous “Lockean Proviso,” which stipulates that the right to acquire property is contingent on leaving “as much and as good” for others.

Another important development in property theory is associated with the works of William Blackstone. In his Commentaries on the Laws of England (1765–1770), Blackstone offered the following conception: property is “that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.” The “sole and despotic dominion” passage is the canonical statement of what is sometimes called the dominium conception (the idea that ownership is a unitary, absolute relation between a person and a thing). Blackstone himself qualified the claim in subsequent passages — but the rhetoric stuck. The bundle of sticks tradition, discussed below, developed in part as a reaction against the Blackstonian picture.

A third foundational figure is David Hume. In A Treatise of Human Nature (1739–1740), Hume argued that property is neither natural nor independent of social arrangements. There is no natural “mine” or “thine” — what counts as property is fixed by social convention, which emerges because the alternative is endless conflict over scarce resources. On Hume’s view, an individual’s relation to a thing becomes a property relation only once a society has stabilized expectations about possession; until then, there are objects and there are people who hold them, but there is no property. The Humean account anticipates two important strands in later property theory: the relational view that property is a set of relations between persons (which the bundle theorists would develop), and the contemporary view, associated with Liam Murphy and Thomas Nagel, that property has no pre-political existence and therefore cannot supply a moral obstacle to redistribution.

The Bundle of Rights

Twentieth century property theory was profoundly influenced by the bundle of rights conception of property, associated with Wesley Newcomb Hohfeld, A.M. Honoré, and the American legal realists. The core idea is that property is not a single, unitary relation between a person and a thing. Property is instead a set of jural relations between persons with respect to things. The conception developed in three steps.

Hohfeld’s Analytical Framework. Hohfeld, in two articles published in the Yale Law Journal in 1913 and 1917, identified eight basic jural relations, arranged in correlative and opposite pairs: right/duty, privilege/no-right, power/liability, and immunity/disability. Hohfeld argued that talk of “ownership” or “title” obscures the underlying structure of legal relations. Once the Hohfeldian framework is applied, property is revealed as a complex of these elemental relations — rights to exclude others, privileges to use, powers to transfer, immunities against expropriation, and so on. The Hohfeldian framework is foundational; it set the stage for everything that followed. If you are interested in Hohfeld, see Hohfeld: Legal Theory Lexicon 034.

Honoré’s Eleven Incidents. A.M. Honoré’s essay Ownership (1961) catalogued the standard incidents of liberal ownership. Honoré identified eleven: the right to possess, the right to use, the right to manage, the right to the income, the right to the capital, the right to security, the incident of transmissibility, the incident of absence of term, the prohibition of harmful use, liability to execution for debt, and the residuary character of ownership. Honoré did not claim that all eleven incidents were necessary or sufficient for ownership. His point was that “ownership” picks out a cluster of incidents that typically travel together but are conceptually separable.

Legal Realism and the Restatement. The American legal realists embraced the bundle conception. Morris Cohen’s Property and Sovereignty (1927) used the framework to argue that property is a delegation of sovereign power, not a pre-political natural right. The Restatement (First) of Property (1936) adopted Hohfeldian terminology, defining property in terms of rights, privileges, powers, and immunities. By the middle of the twentieth century, the bundle picture had become the orthodox view in American legal academia.

Why the Bundle Picture Was Attractive. The bundle picture had several attractions. It dissolved the Blackstonian image of property as a unitary, absolute dominion. From the perspective of politically progressive realists, the bundle of rights approach had a further attraction: it conceptualized property as subject to regulation. If property is a bundle of separable sticks, the legislature can rearrange the sticks without disturbing some essential core.

The bundle of rights approach had another implication: it supported the relational view that property concerns relations between persons, not between persons and things. And it permitted fine-grained analysis of complex transactions — leases, easements, future interests, security interests — by treating each as a particular configuration of Hohfeldian relations.

The New Property

Charles Reich’s article The New Property (1964) extended the property concept in a new direction. Reich argued that old property (land, chattels, and intangibles such as bank accounts) had been joined by the new property (welfare benefits, occupational licenses, government contracts, subsidies, and franchises). The new property functioned as the modern equivalent of traditional property, providing the economic security that real and personal property once supplied. Reich’s argument depended on the bundle picture: once property is understood as a set of separable legal relations rather than a unitary dominion over tangible things, the extension to government entitlements becomes available. The doctrinal payoff came in Goldberg v. Kelly (1970), which held that the termination of welfare benefits required procedural due process. First-year students may encounter the new property in Civil Procedure, Constitutional Law, Legislation and Regulation, or Administrative Law.

The New Essentialism and the Right to Exclude

By the late 1990s, a reaction against the bundle picture had emerged. The reaction is sometimes called the “new essentialism,” because its proponents argued that property has an essence after all. The essence, on this view, is the right to exclude. The new essentialists argued that the right to exclude is what enables an owner to exercise the other incidents of ownership — to use, to manage, to transfer — because without the power to keep others off the resource, none of the remaining incidents can be reliably exercised.

If you want to learn about the new essentialism, Thomas Merrill’s article Property and the Right to Exclude (1998) is the place to start. Merrill argued that the right to exclude is not merely one stick among many but the irreducible core of the property concept. Take away the right to exclude, and what remains is no longer recognizable as property. Merrill’s argument was partly conceptual and partly historical: he showed that across diverse legal systems and historical periods, the right to exclude appears as the defining feature of property.

J.E. Penner, in The Idea of Property in Law (1997), developed a parallel view from within analytical jurisprudence. Penner argued that property is best understood as the right to use things, with exclusion as the negative formulation of that right. Property rights are in rem: they run against the world, not against particular individuals identified by name. The in rem character of property distinguishes it from contract, where rights run against identified counterparties. The bundle picture, by treating property as a collection of bilateral relations, obscured what Penner saw as a basic structural feature of property.

The new essentialism does not require a return to Blackstonian dominion. The exclusion theorists do not deny that property is subject to extensive regulation. Their claim is conceptual: whatever the precise contours of regulation, the right to exclude is what makes a legal relation a property relation rather than something else.

Henry Smith’s Information Theory

Henry Smith, often in collaboration with Thomas Merrill, has developed an information-cost theory of property that extends the new essentialism. The theory has become an influential alternative to the bundle picture.

Smith’s starting point is a distinction between two strategies for delineating (i.e., defining) use rights: exclusion and governance. The exclusion strategy delegates use decisions to a single owner by erecting a boundary and excluding others from crossing it. The governance strategy specifies particular permitted or prohibited uses directly. Exclusion is informationally cheap: a dutyholder need only know “stay off” or “do not take.” Governance is informationally expensive: dutyholders must learn the specific rules that apply. Smith argues that property law economizes on information costs by relying on exclusion at the core — possession, alienation — while reserving governance for the periphery, in nuisance, servitudes, and regulatory regimes. The theory has clear normative implications. Because governance strategies are expensive, they must be justified by benefits that outweigh their costs.

Two further ideas are central to Smith’s account. The first is modularity: property is organized into discrete units — the parcel of land, the chattel (material object) — which keep legal relations bounded and reduce what third parties must learn in order to comply with property rules. The second is the numerus clausus principle, the rule that property forms are limited to a closed set. On Smith’s account, the numerus clausus limits information costs across the system as a whole.

Smith’s contributions to property theory are among the most important developments in private law theory as a whole. If you are interested in the state of contemporary property theory, you must read Smith.

Property and Law and Economics

The economic analysis of property is a substantial body of scholarship, much of it independent of the debates between the bundle theorists and the new essentialists. Here are six of the most important ideas developed through an economic approach to property law.

The framework for most of this work is Ronald Coase’s analysis of social cost. Coase’s The Problem of Social Cost (1960) showed that, in a world without transaction costs, the initial allocation of legal entitlements does not affect the efficient use of resources: bargaining will reallocate entitlements to their highest-valued use. The corollary is the one that matters for property theory: in the real world, where transaction costs are positive, the initial allocation of rights matters, and the design of property institutions shapes how resources are used. The Coase Theorem is treated in Legal Theory Lexicon 002: The Coase Theorem.

Harold Demsetz’s Toward a Theory of Property Rights (1967) offered an account of the emergence of property institutions. Demsetz argued that property rights emerge when the benefits of internalizing externalities exceed the costs of defining and enforcing the rights. The classic illustration is the development of property rights in beavers among indigenous communities of Labrador in response to the European fur trade.

Guido Calabresi and A. Douglas Melamed’s Property Rules, Liability Rules, and Inalienability: One View of the Cathedral (1972) distinguished three modes of protecting legal entitlements. Property rules permit transfer only with the holder’s consent. Liability rules permit transfer at a price determined by an external decisionmaker. Inalienability rules forbid transfer altogether. The Calabresi-Melamed framework remains a standard analytical tool. For more, see Legal Theory Lexicon 052: Property Rules and Liability Rules.

Garrett Hardin’s The Tragedy of the Commons (1968) gave the field one of its most enduring frameworks. Hardin argued that resources held in common — pastures, fisheries, the atmosphere — tend toward overuse, because each user captures the full benefit of additional use while bearing only a fraction of the cost. The tragedy is collective: rational individual behavior produces collectively destructive outcomes. Hardin’s argument is a property-theoretic application of a more general structure familiar from the prisoner’s dilemma. For an introduction to that structure, see Legal Theory Lexicon 007: The Prisoners’ Dilemma.

Michael Heller’s The Tragedy of the Anticommons (1998) identified the mirror image of Hardin’s commons tragedy. When too many persons hold rights to exclude with respect to a single resource, the resource is underused. Heller’s work has been particularly influential in patent theory and post-socialist transition economies.

Elinor Ostrom’s Governing the Commons (1990) challenged the Hardin assumption that common-pool resources inevitably tend toward overuse. Ostrom documented many successful community-managed commons regimes and identified eight design principles for sustainable common-pool resource management. Ostrom was awarded the Nobel Prize in Economics in 2009. Ostrom’s framework has been extended to “cultural commons” — knowledge, scientific data, traditional knowledge, and other intangible resources — most prominently in the work of Charlotte Hess, Michael Madison, Brett Frischmann, and Katherine Strandburg.

Lee Anne Fennell’s Slices and Lumps (2019) addresses what she calls the configuration problem: how property law slices resources into parcels and lumps them into bundles. The size, shape, and divisibility of property entitlements shape what owners can do, what transactions are feasible, and what spillovers escape the boundary. Fennell’s earlier work develops related themes. The Unbounded Home (2009) examines the neighborhood effects and spillovers that cross parcel boundaries despite the legal fiction that the parcel is the relevant unit. Fee Simple Obsolete (2016) argues that the fee simple is poorly adapted to contemporary urban conditions and that property law would benefit from more flexible entitlement forms.

Personhood Theory

Margaret Jane Radin’s Property and Personhood (1982) drew on Hegelian themes to argue that some forms of property are constitutive of personhood. Radin distinguished personal property from fungible property. Personal property — one’s home, one’s wedding ring, one’s wheelchair — is bound up with the owner’s identity and self-development. Fungible property — a share of stock, a vacant lot held for investment — stands at arm’s length from the owner. Radin argued that personal property deserves stronger legal protection than fungible property.

Personhood theory has been influential in particular doctrinal pockets: the law of takings (where Radin’s framework supports stronger protection for homes than for commercial investments), the law of bankruptcy exemptions, and the debates over commodification of body parts, sexual services, and reproductive labor (the subject of Radin’s later book Contested Commodities).

Progressive Property

Another recent development is the “progressive property” movement, associated with Gregory Alexander, Eduardo Peñalver, Joseph William Singer, and Laura Underkuffler. The progressive property scholars share a commitment to grounding property in human flourishing, social obligation, and the public dimension of ownership.

The 2009 “Statement of Progressive Property,” coauthored by Alexander, Peñalver, Singer, and Underkuffler, set out the framework’s commitments. Property serves plural values: liberty, autonomy, human flourishing, democratic self-governance, and equal access to resources necessary for participation in social life. Owners owe obligations to the communities in which they hold property. Property law should reflect these values and obligations. Although this work is framed as “progressive,” similar ideas are present in both traditional natural law theory and in the more recent emergence of virtue jurisprudence, both of which emphasize human flourishing as the end or object of law. For more, see Legal Theory Lexicon 031: Virtue Jurisprudence.

Gregory Alexander’s Commodity and Propriety (1997) traced two competing traditions in American property thought: a commodity tradition emphasizing market exchange and individual autonomy, and a propriety tradition emphasizing the social role of ownership in sustaining the polity. Alexander’s later work, including Property and Human Flourishing (2018), develops an Aristotelian account of property grounded in objective human goods. Joseph Singer’s Entitlement: The Paradoxes of Property (2000) develops a relational account of ownership obligations. Eduardo Peñalver’s work, including (with Sonia Katyal) Property Outlaws (2010), examines the role of disobedience and dissent in property’s development.

The progressive property scholars are critical of the exclusion theorists. On their view, the new essentialism understates the social and relational dimensions of property, and elevates one value — autonomy understood as non-interference by others — over the plural values that property institutions ought to serve.

Other Approaches

Several additional approaches deserve brief mention. Arthur Ripstein’s Force and Freedom (2009) develops a Kantian theory of property grounded in the equal freedom of persons. On the Kantian view, property is necessary to give effect to the right of each person to set and pursue their own ends, but property requires a political community — a state — to be legitimate. Jeremy Waldron’s The Right to Private Property (1988) offers a careful philosophical reconstruction of the Lockean and Hegelian justificatory arguments. Adam Mossoff and other natural rights theorists have developed neo-Lockean accounts of property, often in connection with intellectual property. Stephen Munzer’s A Theory of Property (1990) develops a pluralist account grounded in three principles — utility and efficiency, labor-desert, and personality — and remains a leading book-length treatment of property’s normative foundations. Hanoch Dagan, in Property: Values and Institutions (2011), develops a pluralist account that recognizes multiple property forms serving distinct values.

A second cluster of work approaches property from outside the dominant philosophical traditions. Robert Ellickson’s Order Without Law (1991) examined how community norms substitute for formal property rights among ranchers in Shasta County, California. Carol Rose’s Property and Persuasion (1994) explored the rhetorical and narrative dimensions of property institutions, arguing that property depends on shared stories about acquisition and entitlement. Critical race theorists, beginning with Cheryl Harris’s Whiteness as Property (1993), have examined the racial dimensions of property institutions.

Conclusion

Property theory is now pluralistic. The bundle of sticks picture remains the default framework in most American casebooks, but it is no longer the unchallenged orthodoxy it was in the second half of the twentieth century. The exclusion theorists, the information theorists, the personhood theorists, the progressive property scholars, the law-and-economics scholars, and the Kantians offer competing accounts of what property is and what it is for.

Here are three takeaways for first year law students — and maybe first time property law teachers or scholars as well. First, the bundle metaphor carries theoretical commitments; it is not a neutral description. The choice of metaphor reflects substantive commitments about whether property has an essential core. Second, much of first-year property doctrine reflects unstated theoretical commitments. The rules governing capture, finders, adverse possession, easements, and nuisance can be illuminated by asking which theory best explains them. Third, theoretical disagreements have doctrinal consequences. Whether a regulatory taking has occurred, whether a covenant runs with the land, whether a tenant may exclude the landlord — questions like these are answered differently depending on which theory of property one accepts.

Property theory is among the most active fields in contemporary legal theory. The first-year student who attends to the theoretical debates will find that the doctrine looks different — and more interesting — once the theoretical commitments are made explicit.

For a philosophical companion to this entry, the Stanford Encyclopedia of Philosophy’s entry on Property and Ownership by Jeremy Waldron is the standard introduction.

Related Lexicon Entries

Bibliography

Alexander, Gregory S. Commodity and Propriety: Competing Visions of Property in American Legal Thought, 1776-1970. Chicago: University of Chicago Press, 1997.

Alexander, Gregory S. Property and Human Flourishing. New York: Oxford University Press, 2018.

Alexander, Gregory S., Eduardo M. Peñalver, Joseph William Singer, and Laura S. Underkuffler. A Statement of Progressive Property, 94 Cornell L. Rev. 743 (2009).

Aquinas, Thomas. Summa Theologiae. ca. 1265–1274.

Aristotle. Politics. Translated by Benjamin Jowett.

Blackstone, William. Commentaries on the Laws of England. Oxford: Clarendon Press, 1765-1770.

Calabresi, Guido, and A. Douglas Melamed. Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089 (1972).

Coase, R.H. The Problem of Social Cost, 3 J.L. & Econ. 1 (1960).

Cohen, Morris R. Property and Sovereignty, 13 Cornell L.Q. 8 (1927).

Dagan, Hanoch. Property: Values and Institutions. New York: Oxford University Press, 2011.

Demsetz, Harold. Toward a Theory of Property Rights, 57 Am. Econ. Rev. 347 (1967).

Ellickson, Robert C. Order Without Law: How Neighbors Settle Disputes. Cambridge, MA: Harvard University Press, 1991.

Fennell, Lee Anne. The Unbounded Home: Property Values Beyond Property Lines. New Haven: Yale University Press, 2009.

Fennell, Lee Anne. Fee Simple Obsolete, 91 N.Y.U. L. Rev. 1457 (2016).

Fennell, Lee Anne. Slices and Lumps: Division and Aggregation in Law and Life. Chicago: University of Chicago Press, 2019.

Frischmann, Brett M., Michael J. Madison, and Katherine J. Strandburg, eds. Governing Knowledge Commons. New York: Oxford University Press, 2014.

Hardin, Garrett. The Tragedy of the Commons, 162 Science 1243 (1968).

Harris, Cheryl I. Whiteness as Property, 106 Harv. L. Rev. 1707 (1993).

Heller, Michael A. The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 Harv. L. Rev. 621 (1998).

Hess, Charlotte, and Elinor Ostrom, eds. Understanding Knowledge as a Commons: From Theory to Practice. Cambridge, MA: MIT Press, 2007.

Hohfeld, Wesley Newcomb. Some Fundamental Legal Conceptions as Applied in Judicial Reasoning, 23 Yale L.J. 16 (1913).

Hohfeld, Wesley Newcomb. Fundamental Legal Conceptions as Applied in Judicial Reasoning, 26 Yale L.J. 710 (1917).

Honoré, A.M. Ownership. In A.G. Guest, ed., Oxford Essays in Jurisprudence, 107-147. Oxford: Oxford University Press, 1961.

Hume, David. A Treatise of Human Nature. London, 1739–1740.

Locke, John. Second Treatise of Government. 1689.

Merrill, Thomas W. Property and the Right to Exclude, 77 Neb. L. Rev. 730 (1998).

Merrill, Thomas W., and Henry E. Smith. Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 Yale L.J. 1 (2000).

Merrill, Thomas W., and Henry E. Smith. What Happened to Property in Law and Economics?, 111 Yale L.J. 357 (2001).

Mossoff, Adam. What is Property? Putting the Pieces Back Together, 45 Ariz. L. Rev. 371 (2003).

Munzer, Stephen R. A Theory of Property. New York: Cambridge University Press, 1990.

Murphy, Liam, and Thomas Nagel. The Myth of Ownership: Taxes and Justice. New York: Oxford University Press, 2002.

Ostrom, Elinor. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press, 1990.

Peñalver, Eduardo M., and Sonia K. Katyal. Property Outlaws: How Squatters, Pirates, and Protesters Improve the Law of Ownership. New Haven: Yale University Press, 2010.

Penner, J.E. The Idea of Property in Law. Oxford: Clarendon Press, 1997.

Radin, Margaret Jane. Property and Personhood, 34 Stan. L. Rev. 957 (1982).

Radin, Margaret Jane. Contested Commodities. Cambridge, MA: Harvard University Press, 1996.

Reich, Charles A. The New Property, 73 Yale L.J. 733 (1964).

Restatement (First) of Property. Philadelphia: American Law Institute, 1936.

Ripstein, Arthur. Force and Freedom: Kant’s Legal and Political Philosophy. Cambridge, MA: Harvard University Press, 2009.

Rose, Carol M. Property and Persuasion: Essays on the History, Theory, and Rhetoric of Ownership. Boulder, CO: Westview Press, 1994.

Singer, Joseph William. Entitlement: The Paradoxes of Property. New Haven: Yale University Press, 2000.

Smith, Henry E. Exclusion versus Governance: Two Strategies for Delineating Property Rights, 31 J. Legal Stud. S453 (2002).

Waldron, Jeremy. The Right to Private Property. Oxford: Clarendon Press, 1988.

Waldron, Jeremy. Property and Ownership. In Stanford Encyclopedia of Philosophy, edited by Edward N. Zalta. First published September 6, 2004; substantive revision January 21, 2026.

Created May 25, 2026.

Link to the Most Recent Version of this Lexicon Entry

Legal Theory Lexicon 113: Property Theory

This Lexicon entry is part of the Legal Theory Stack on Substack. To receive new entries by email and support the Legal Theory Lexicon and Legal Theory Blog, please subscribe at https://lsolum.substack.com/subscribe.