Question

Explain how the US free market-oriented system is founded upon the concept of private property rights as stated in the US Constitution.

You must be explicit concerning which parts of the US Constitution apply and how they apply to private property rights and a market-oriented system.

Explain how private property rights relate to how a market-oriented economy answers the 3 fundamental questions of economics.

Explain how a command economy answers the 3 fundamental questions.

Answer 1

Even the economies that are mainly market-oriented have laws and regulations to support the operations of governments. These laws govern matters like safeguarding private property against theft. The private property owner rights are mentioned in the 5thn amendment. The US constitution makes regulation and seizure of property the same. It also asks it to provide a single forum in which property owners may seek injunctive relief and just compensation. This will make resource allocation as per the will and ability of private owners and the government cannot interfere. Seeking justice is easy so how and for whom to produce depends on individual ability.

Even if google became a trillion-dollar company. The government cannot claim it and nationalize it saying that its financial resources can be used for USA fiscal deficit balancing because the 5th and 14th amendments will bar the government from doing this.

If we contrast this with North Korea, in which the right to property has been taken away and which may assume the state may control any resources by paying compensation and there is a difference between regulation and seizure of property.