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Today is October 29, 2009, and my guest is Michael Heller of Columbia Law School and the author

of the Gridlock Economy. How too much ownership, wrecks markets, stops innovation, and costs

lives. Michael, welcome to Econ Talk. It's great to be here.

So I want to start with a quote from the book, early on you say very provocatively. Private

ownership usually creates wealth, but too much ownership has the opposite effect. It creates

gridlock. Gridlock is a free market paradox when too many people own pieces of one thing.

Cooperation breaks down, wealth disappears, and everybody loses. So let's start by explaining

what you meant by that quote.

Well, good. The notion of Gridlock, the notion of too many owners is a riff on a familiar

concept that many of us have of a tragedy of the commons. In a tragedy of the commons,

we have too few owners, and we end up often with overuse of a resource. So we have two

few owners on the ocean, and people over-efficient, or two few owners in the air, people pollute

it. So the solution, typically we have, to a tragedy of the commons. The solution to

the problem of too few owners is we privatize. We create private property rights, and that

is the great engine for conservation, a single decision maker who invests in the lake today

so that there's more fish tomorrow. So what I discovered with this book, Discusses,

is the possibility that privatization can overshoot. Instead of too few owners in a tragedy

...