Taxation & Estate Planning

Heir Property and The Gridlock Economy

By Joel A. Schoenmeyer

I wrote recently about the issue of "heir property" here. Next week I start my second business school class, Advanced Economic Analysis with Professor Kevin Murphy. This is supposed to be a VERY intense class, so during my month break between quarters, I've been reading all of the economics information I can get my hands on (which includes trying to educate myself about our current financial crisis). The book I'm currently reading is entitled The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives, by Michael Heller. Professor Heller is a law professor at Columbia (he actually taught at the University of Michigan Law School while I was there, although I never had a class with him). His book is about what he refers to as the "tragedy of the anti-commons," meaning the problems that arise (underuse, mostly) when property is owned by too many different people or entities.

I'm only about half-way through the book, most of which has focused on drugs, and the inability of researchers to move forward with new discoveries because such discoveries may involve many different patents. If just one of the patent holders holds out, the research can be derailed -- hence the gridlock of the title. On pages 121-5, Professor Heller actually brings up the issue of heir property, and how the gridlock as a result of multiple owners has caused farm ownership by black families to drop from about 1 million (in 1920) to 19,000 today.

Full post as published by Death and Taxes Blog on September 25, 2008 (boomark / email).