s that government, through intervention in the economy, attempts to correct. Proponents of well-defined private property rights in all areas of economic activity contend that when gains from the use of property accrue to residual claimants, incentives will be greater to conserve resources than would be true if such gains accrued to a common pool. This line of reasoning is used to contend that attempts to conserve or preserve a resource, such as the environment, through governmental regulation is both economically inefficient and ineffective in goal attainment. The underlying presumption is that, as government regulators have no personal private property interest in the resource, they will not have the incentive to effectively preserve or conserve the resource. By contrast, however, if property rights to a common resource were privatized, and those holding such rights were permitted to both define and enforce such rights, then, according to this line of reasoning, sufficient incentive would exist to assure that the resource would be conserved and preserved, and that such conservation and preservation would occur in an economically efficient manner. If, on the other hand, the property rights to a common resource were privatized, but the definition and enforcement of such rights remained the prerogative of the commons, then the contention is that no improvement over tenancy in common would necessarily occur because the holders of the privatized rights would be encouraged to dissipate their gains.
2. Corporate form of business organization: Advantages and disadvantages.
In free enterprise, capitalist economies, the form of business organization has a direct impact on the financial structure and financial performance of a firm (3:31). This impact is the result of differences in income tax liabilities for different types of business forms, and differences in the abilities of the different types of business to generate capital. O...