Introduction
With the first part of this book addressing the principles of valuation and the second part addressing the practice of valuation, the following chapters will consider economic, planning, policy, finance and valuation principles with this chapter considering legal principles.
It is assumed that the reader already has an understanding of Western concepts such as title and Western legal applications such as Spencer in the context of valuation, with this chapter addressing much more fundamental concepts of ownership and use, reconciling indigenous concepts and Western concepts through a detailed examination of culture and belief.
Real property ownership is often conflated with its use, but a distinction is important for understanding how societies use and value land. Andrew Reeve (1986) recognised that it is not real property itself that is owned, but only rights to its use. Property as a âbundle of rightsâ is now well accepted and the structure of those rights make up the property interests that valuers appraise. The question of property rights is complicated by the different ways that various cultures understand them, which can cause challenges for the valuer.
Australia is home to at least two distinct cultural approaches to property rights. This makes a careful understanding of the nature and significance of property rights especially relevant here. The valuer is usually called upon to value property within the English, or Anglo-Australian culture; however, the perspective of indigenous Australians has also become important, especially since 1992. This second perspective will be referred to as customary property rights in this chapter.
This chapter will examine the cultural foundations of property rights in general using examples from Anglo-Australia and indigenous Australia. It will outline a framework for interpreting all property rights systems and demonstrate how Anglo and indigenous property rights may be understood as parts of their respective cultures. From this framework, practical aspects relating to commerce in and valuation of property rights, both within and across the two cultures, will be considered.
Real property rights and valuation
The valuation of property may be described as the estimation of the commercial value of those property rights that are contained within a particular property interest. While this might appear to be a non-contentious definition, almost every part of it conceals controversial elements. These are most apparent when they concern intercultural property rights tensions.
Commercial value is a common enough notion within Western cultures, especially those of English, or Anglo origins. For many cultures commercial values are only one of several systems of value operating in the community and can even be looked down upon as an inferior class of value. Anglo cultures, adopting the Enlightenment thought of David Hume and Adam Smith, tend to view all values as either material or subjective.
Material values may always be equated to money, or commercial values. Subjective values relate to personal tastes and beliefs and are more difficult to express in money terms. Self-respect or family ties are values of this type. In many other cultures there are values that are objective, though neither material nor reducible to money equivalents, with Ernst Schumacher (Schumacher, 1974) arguing that these also had a place in economic thought.
Property rights and property interests differ from culture to culture. Until recently it has been too easy to assume that there is a âbestâ system of property and that it is embodied in the contemporary system of private property that has dominated in the West for the last half millennia. This view has been weakened by the persistent objections of indigenous people who assert that the Western approach is inferior to their own. While this view has only gathered prominence over the last half century, they are not the only challenges to Western private property but merely the most recent and most independent.
The nineteenth century saw the beginning of a challenge to Western private property that threatened to destabilise Western economic order, before exhausting itself in the last two decades of the twentieth century. Communistic socialism was born out of the social failures of the absolute private property of the West. Its battle cry was the proclamation of Pierre-Joseph Proudhon that âproperty is theftâ. Despite setting out to establish its own moral, political and economic order, communistic socialism suffered from the fatal flaw of being based on the same intellectual foundations as the system is opposed. It was materialist in its metaphysics and individualist in its anthropology.
Indigenous peoples are neither materialists nor individualists. As such they are almost completely unintelligible to the modern Western mind, either on the political right or left, and even more inscrutable to the Anglo cultures who, by an accident of history, came to dominate them in many parts of the world including Australia. Despite their geographical isolation, indigenous people across the world reveal remarkable similarities in their approaches to property rights. What can be even more alarming to the Western mind is the fact that contemporary indigenous peoples also share essential resonances in their approaches to property with the West's own history that predate modern absolute private property and its accompanied economic and political strength (Simon, 1995) (Rogers, 1884).
This historical reality means that the Western approach to property rights is less secure in its claim to dominance and its merits are closely related to the persuasiveness of Herbert Spencer's theory of social evolution. It is no surprise that, as the theory of social evolution fell from popularity during the twentieth century, indigenous people gained confidence in pursuing recognition of their property rights.
Conversely, parallel forces appear to be behind the continued self-consciousness of Western economic apologists regarding private property. Richard Weaver (Weaver, 1948) asserted that property ownership was âthe last metaphysical rightâ in his attempt to show that private property ownership was a natural thing. Nobel Prize winner Milton Freidman (1980) and Michael Novak (1982) are representative of the tendency for defences of capitalism to include chapters arguing the merits of absolute private property. Others such as Tom Bethell (1998) and Hernando DeSoto (2000) are more focused on arguing that private property is the foundation for economic success. Regardless of the merits of their arguments, the fact that they are arguing their cause itself implies that it is not nearly as settled as they would like it to appear.
The merits of absolute Western private property have never been unambiguously evident and a series of historians, philosophers and other intellectuals have mounted various critiques that are neither socialist nor customary. While there is a tendency for apologists for Western private property to dismiss its critics as socialists, these make up its less persuasive opponents.
Thorold Rogers (1884) was no socialist, but his analysis of English economic history demonstrated several major shortcomings of English private property and advocated instead widely distributed private property. William small had earlier arrived at a similar conclusion by a study of the architectural heritage of rural England (Cobbett, 1830). A more subtle and global view was presented by the sociologist Carle Zimmerman (1947) who observed that great civilisations rose using property systems that resembled today's indigenous customary property, but that they fell after transitioning into absolute private property of the sort now common in the West. A similar view can be seen in the work of historian Christopher Dawson (1956). Both Zimmerman and Dawson were strongly opposed to socialism, but this did not mean that they were blind to the shortcomings of Western private property.
Discussion on property rights appears to extend back into ancient history with both Plato and Aristotle considering its importance. Aristotle (Aristotle, 1981) presented a developed theory of property in the fourth century BC which has largely framed the discourse ever since. In particular, Aristotle's dual theory of property concluded that property should be privately owned while simultaneously still used in common. This theory provides a key tool for interpreting the appropriateness of any system of private property. Within this framework modern private property of the sort defended by Friedman, DeSoto and others is more correctly termed absolute private property to identify its distinction from the conditional private property advocated by Aristotle and manifest in property systems such as medieval feudalism. Communism took the opposite extreme by advocating absolute common property despite, in reality, being absolute state-owned private property.