Question

The first and second article of the Virginia Declaration of Rights adopted unanimously by the Virginia Convention of Delegates on June 12, 1776 and written by George Mason, is: That all men are by nature equally free and independent, and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety. Discuss the importance of property rights in promoting economic growth and prosperity: Why is it virtually impossible for prosperity to take place without clear –and properly enforced– property rights?

Answer 1

There is a high correlation between economic growth and property rights. Also, there is a causal link between prosperity and property right. A clear property right is taken as a vital variable by the economists and the policymakers of the country. The property rights give the owner to exact right to use as they wish. It creates an efficient outcome and generates a better living condition of the people. The better property right resolves the contractual disputes among the individual, and it leads to the long term prosperity. With property rights, the exchange comes and creates prices. This prices will promote the efficient use of the resources, and the relative prices will give the information to the owners on the value of their asset. This asset will create more profit and profit will provide more technological advancement and productivity, and it leads to the economic growth of the country.