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The importance of property rights

Summary:
There’s something entirely true being said here:However, free markets do not exist in a vacuum and need a legal framework that includes strong property rights and freedom from corruptionQuite so, quite so. Property rights meaning, in the end, the ability to dispose of said property as one wishes. If you can’t do that then it’s not really, fully, yours. If, for example, it requires the voted agreement of the workforce to be sold then in an important manner ownership is split with the workforce. If it requires the acquiescence of the government then ownership is split with whatever group of baby kissers happens to be in office. This week, the Government introduced the National Security and Investment Bill (NSIB), which will allow it to block the takeover of companies in 17 key sectors,

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There’s something entirely true being said here:

However, free markets do not exist in a vacuum and need a legal framework that includes strong property rights and freedom from corruption

Quite so, quite so. Property rights meaning, in the end, the ability to dispose of said property as one wishes. If you can’t do that then it’s not really, fully, yours. If, for example, it requires the voted agreement of the workforce to be sold then in an important manner ownership is split with the workforce. If it requires the acquiescence of the government then ownership is split with whatever group of baby kissers happens to be in office.

This week, the Government introduced the National Security and Investment Bill (NSIB), which will allow it to block the takeover of companies in 17 key sectors, including data infrastructure, communications, quantum technology, advanced materials and computer hardware.

This is thus a reduction in those property rights.It also put limits on free markets – the core of the capitalist system that has generated our wealth.

However, free markets do not exist in a vacuum and need a legal framework that includes strong property rights and freedom from corruption – so restrictions such as those introduced by the NSIB fit into this framework.

This is thus something we should not be doing as it undermines those property rights which are the basis of the capitalist and free market system that has made us one of the richest societies ever to bestride the globe.

It is, clearly, possible to think that perhaps this sort of management should apply to the design of the latest super-tank or hypersonic drone. But:

One recent example of this was when a Chinese gaming firm bought dating app Grindr.

After being developed in Los Angeles, it was it was bought by Beijing Kunlun in 2016 for $93m (£71m). The deal was eventually examined by the Committee on Foreign Investment in the United States, which told the Beijing-based parent company that its ownership of Grindr constituted a national security threat.

The fear was that Chinese actors could use personal data collated by the app to compromise or influence individuals in Western countries. Following US pressure, Grindr was sold in March this year to US-based San Vicente Acquisition.

Which bloke is seeking which other bloke for a quickie is no longer - unlike in Turing’s time - such a matter of national security. But that is clearly how such laws are going to be used for they already are so used.

As so often this accrues power to the state the effect of which will be to make us all poorer.

Don’t do it.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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