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The Gridlock Economy
Book

The Gridlock Economy

How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives

Michael Heller
Basic Books, 2008
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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Michael Heller has provided an informative, thought-provoking contribution to the discussion of property rights. Using real-life examples, he demonstrates the disaster that happens when too many people own small portions of a resource. Like squabbling siblings who inherit the family home, one holdout can prevent anyone from using or selling it. No one benefits. That’s gridlock. Similarly, overuse or neglect often spoil unregulated, unprotected public resources: Licensing requirements prevent companies from developing new drugs because all the potential components are separately patented. Overzealous trademarking and copyrighting undermine the traditions of fair use, blocking artists’ creativity. Heller’s book is surprisingly entertaining for a work on intellectual property, real-estate law and economics. After you read it, you will never think about resources and ownership in quite the same way again. getAbstract recommends it to lawyers, artists, economists, research and development professionals, and anyone who’s been wondering why you rarely see the characters in a screen play singing the happy-birthday song when they blow out the candles. (Answer: It’s under copyright until 2030.)

Summary

The “Commons” and the “Anticommons”

If everyone in a community decides to take advantage of a resource that the group holds in common, they may destroy it with overuse. Imagine a big-city parking lot with no gates or fees. You get there first and you have lots of room. You tell your friends and they tell their friends. When you return after a day of work, the lot is crammed, and cars are scratched and dented. You can’t even get out because cars are parked everywhere. This kind of overuse problem is sometimes called the “tragedy of the commons.”

Regulation is one way to preserve common resources; private ownership, which gives owners an interest in preserving their assets, is another. For example, the city could sell the parking lot to a private owner, who in return for collecting fees would have to run it efficiently, maintain it and set prices to keep supply in line with demand. Privately owned resources are called anticommons.

When the various owners of an anticommons resource decide to assert their exclusive rights to it, they can block everyone from using it. This kind of gridlock can be as destructive to its value as overuse. For example, imagine a regulating...

About the Author

Michael Heller, a professor at Columbia University, specializes in property and real-estate law.

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