Henderson on UCLA on EconTalk
Russ Roberts: Now, you mention property rights. Both Alchian and Demsetz emphasized the importance of property rights, the applications of property rights. And, we’ll talk a little bit about Demsetz’s contribution in particular. But I want to start with an example from your book, which is the power of private property and a lesson that you use about Robert Barro, past EconTalk guest and a first-rate economist.
David Henderson: Yeah. Bob Barro was at University of Chicago at the time. One of his favorite colleagues to talk to was Bob Lucas. Bob Lucas–I don’t know if he was literally a chain smoker, but he smoked a lot. And, Barro hated cigarette smoke. So, Barro had a sign on his door, ‘No smoking except for Bob Lucas.’ And, the idea was, the trade-off with other people wasn’t worth it. Like: You want to come and talk to me, don’t smoke. With Bob Lucas, I’m gaining so much from you, Bob, that I am willing to suffer with that cigarette smoke.
Russ Roberts: And, it’s a beautiful example of the subtlety of property rights. And, also by the way of free association, the idea that you can let people into your house if you choose–
David Henderson: Yes–
Russ Roberts: and you can keep them out if you choose. That’s, in a way, the essence of private property. And here, because he–in theory, I mean, he literally didn’t own his office–but he had, there was a norm established about who could come into his office.
This is from “David Henderson on the Essential UCLA School of Economics,” Econtalk, September 20, 2021. Russ interviews me on David R. Henderson and Steve Globerman, The Essential UCLA School of Economics, published by the Fraser Institute.