A Fiduciary Theory of Property

Ownership rights give substantial power to owners to affect the lives of nonowners. Critics of ownership’s power have compared it to the power of political rulers. Drawing on this analogy, this paper proposes to reconceptualize property as a fiduciary power. In a fiduciary relation, a fiduciary is empowered to make decisions over a beneficiary, for the interest of that beneficiary. The power is held in trust. Political rulers can be seen as a fiduciary for their subjects. Can ownership also be seen as a fiduciary relation? Mainstream libertarian and egalitarian property theories reject this analogy, adhere to an absolutist notion of property, and hold that problematic forms of ownership power should be restricted, if at all, by state regulation. Fiduciary (or “stewardship”) property theories have so far been confined to religious and environmentalist property theories. This paper proposes an egalitarian, secular fiduciary property theory. First, it builds on Larissa Katz’s theory of ownership as an office: a legally created power that makes owners into fiduciaries for the legal system. Second, it argues that owners become fiduciaries for specific nonowners when they risk exploiting them. Exploitation happens when nonowners are unfairly taken advantage of; it requires the acceptance of a specific theory of justice. By avoiding exploitation, owners contribute to realizing a just society. Third, the paper argues that to implement fiduciary duties in legal practice, both court enforcement and democratization of ownership structures are possible legal pathways. Fourth, it compares this proposal to other duty-oriented property theories and defends it against objections.