Heller's New Book Looks At Gridlocked Economy
PROF. MICHAEL HELLER HAS DISCOVERED AN ECONOMIC PARADOX
“The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives” Published July 15, 2008
Erin St. John Kelly [email protected]
212.854.1787 cell: 646.284.8549 Public Affairs Office: 212.854.2650
July 15, 2008 (NEW YORK) – Every so often an idea comes along that transforms how we understand the world. Columbia Law School Professor Michael Heller has discovered a market dynamic that will fundamentally change the way people think about economics.
Usually, private ownership creates wealth, but too muchownership has the opposite effect – it creates what Heller terms “gridlock.” This paradox is at the center of Heller’s new book, The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation and Costs Lives, published July 15, 2008 by Basic Books. Heller shows how fixing gridlock would jump-start innovation, unleash trillions in productivity, and help revive our slumping economy.
“I made these discoveries about how wealth was created and I wanted to reach an audience of people who can put them into practice. People like entrepreneurs, citizen activists and policy makers,” Heller said.
“Why doesn’t my phone work like my friends’ do in Japan? Why in this country am I sitting in this airport with yet another flight delay? Why have so many of my African American students’ families lost their family farms? I realized that all these problems were really the same problem and that solving the underlying problem could provide some value for the economy and people’s lives,” said Heller, (at left), the Lawrence A.Wien Professor of Real Estate Law. These questions were the genesis of his book.
“For me, legal theory comes out of very concrete puzzles and experiences, things I can touch and see,” he said. “It’s why I teach property law and not constitutional law.”
Today’s leading edge of innovation—in high tech, biomedicine, music, film, real estate—requires the assembly of separately owned resources. But gridlock blocks the way. When too many people own pieces of one thing, cooperation breaks down, wealth disappears and everybody loses.
Even in the venerable act of writing a book Heller experienced gridlock. He said it was impossible to assemble the rights to all the images he wanted to use in the book. In some cases he couldn’t find owners to ask permission of, and in others he settled for “no objection letter,” as from Pepsi, the possible owner of the rights to the Quaker Oats “Big Inch” deed, a central image the book is organized around. Heller, who grew up with a Big Inch deed stashed in a drawer, uses it as an example of how gridlock looks and how to resolve it.
In the late 1950s Quaker bought twenty acres of the Klondike, subdivided it into one million parcels of one square inch each and put the deeds into cereal boxes. When subdivided that small, the land is useless. As a whole piece, something productive could be done on it, but just finding and bargaining with all the owners would have been prohibitive.
Eventually, unpaid taxes mounted and the Big Inches were forfeited back to the Yukon, which auctioned the land to a single private owner and by doing so, it was returned it to economic use. “The law did the right thing. Real estate taxes were the hidden hand that gathered up the Big Inches and averted gridlock,” Heller wrote in his book.
“Today, the leading edge of wealth creation requires assembly. From drugs to telecom, software to semiconductors, anything high tech demands the assembly of innumerable patents,” Heller writes. “And it’s not just high tech that’s changed – today, cutting edge art and music are about mashing up and remixing many separately owned bits of culture. Even with land, the most socially important projects, like new runways, require assembling multiple gridlocked parcels. Innovation has moved on, but we are stuck with old-style ownership that’s easy to fragment and hard to put together.”
Heller’s book discusses:
- How gridlock is blocking innovation and entrepreneurship (such as life-saving drugs, faster cell phones, easier air travel, and more)
- What steps governments and businesses are taking to fix gridlock—and what still must be done
- How we can learn to recognize gridlock and take steps to prevent it
- How gridlock harms the average American in his or her daily life
- Why the U.S. suffers from gridlock more than many other countries
Heller’s book offers a lively tour of gridlock battlegrounds, from the sub-prime mortgage crisis to controversial land confiscations. Each tale offers insights in how to spot and fix gridlock. With some simple policy tweaks and new business practices, Heller argues, these problems could be solved. Unlocking the grid is a key challenge for our time.
To schedule at interview or obtain a review copy of the book, contact Erin Kelly at (212) 854-1787 or [email protected] Heller is also available directly at (212) 854-9763
Columbia Law School also has a TV and radio studio on campus equipped with IFB and ISDN lines. Reporters or producers wishing to schedule live or taped interviews can contact the Law School’s Public Affairs office at 212-854-2650.
Heller teaches courses in property, land use, real estate, and international law and development. His scholarship explores property theory in a wide range of settings. Last year, Heller published Corporate Governance Lessons from Transition Economy Reforms (Princeton University Press, 2006), co-edited with Columbia Law Professor Merritt Fox, a collection of essays that uses post-socialist economic experience to illuminate the fundamentals of corporate governance.
Heller has published articles on takings law, corporate governance, natural resources, restitution, and post-socialist transition in numerous journals and edited volumes. He joined the Columbia faculty in 2002. From 1994 to 2002, he taught at the University of Michigan Law School where he received the L. Hart Wright Award for excellence in teaching. He has been a term member of the Council on Foreign Relations. During 1990-94, Heller worked at the World Bank on post-socialist property law transition. He is a graduate of Stanford Law School and Harvard College.
Columbia Law School, founded in 1858, stands at the forefront of legal education and of the law in a global society. Columbia Law School joins traditional strengths in international and comparative law, constitutional law, administrative law, business law and human rights law with pioneering work in the areas of intellectual property, digital technology, sexuality and gender, and criminal law.