Ownership Vs Possession — Talking About Property Rights

You’ve probably seen that Nollywood film where someone kills his business partner and pockets all the money the company makes. Or where a brother dies and the relatives simply move in and take over the dead man’s property, depriving the man’s wife(ves) and kid(s). Have you ever wondered why it is so easy in our society to simply take over someone’s property simply because they are no longer there?

And we’ve also watched or read the story where a young guy in Western countries who didn’t know anything and was just going about their life and struggling suddenly got a knock on their door the day they turned 18 and they were told their uncle who they have never met left them a fortune to be given to them on the day they turned 18 and they entered wealth. Have you also ever wondered why this has happened in Nigeria like, NEVER?

Well, the kill and takeover scenario used to happen a lot, and more brutally too, in the west at some point in their history? What changed? Three things, and I think it is instructive to how they moved the incentive system so that it is not rewarding to simply use might to take possession of property.

First is that they fixed identity and records. How is it possible that they system tracked that child so that they knew when he became 18. Or knew where exactly that 18year old was and how to reach him on said day so that they could find him and give him his property? And then how were the records so accurate that they could tell who owned what with such accuracy? We have not gotten round to fixing identity management in Nigeria. NIMC was promising, but I think we are not serious about it. Funny thing is technology makes it relatively cheaper than ever to collect and maintain identity information about citizens, yet as with many things, we have made this into rocket science in Nigeria. Of course most of this is political — there is a larger incentive to keep population figures indeterminate and by extension identity management is impossible.

Second is that government will enforce property ownership over and above possession the west. You cannot simply take over the company because you murdered your co-founder in the west. The fact that I have died doesn’t mean my brother can now come, throw my family out of my house and move in and start cruising my cars around. Even if you have the power to take possession of my property, you better find a way to get me to legally transfer ownership to you otherwise you are fooling yourself. This therefore removes the incentive for me to kill you to take ownership of your property; i have to find means that the government will recognize my new ownership. This is so important that if it discovered that I don’t own what I claimed I owned and took possession of and it is discovered (which is fairly easy to do when identity and records are sorted), the government will ensure that every benefit I have derived from my years of possession are taken from me and given to the rightful owner. This extends to not just physical property, but intellectual property as well.

What these two things do to the psyche of the people is to create the right incentives. First, because I know I cannot simply be muscled out of ownership of value I’ve created while the government looks away, I have a strong incentive to do all I can to create more and more value that will outlast me even when I’m gone from the world, whether intellectual property or physical property. It also allows long term planning to happen and businesses have been built around holding and transferring ownership as specified by the owners because the current owner trusts that the person or organization in custody will not usurp (and will be unable to anyway) ownership but will transfer it as they have specified. These are huge incentives.

All this thinking is because I’m wondering why no one has left me a fortune. LOL. Have a great weekend.

A Beautiful Mind

A Beautiful Mind