Coase-Sandor Working Paper Series in Law and Economics

Property as the Law of Complements

Lee Anne Fennell


Resources often produce more value in combination than they do separately: think of segments of a highway or parts of a machine. I argue that property’s defining purpose is to group together complements, and that property law and theory should focus on identifying and realizing valuable bundles of resources. While some complementarities align with traditional asset boundaries and can be protected by exclusion rights, realizing others requires crossing or eschewing boundaries to recombine resources in ways that further larger social, economic, or ecological objectives. The gains associated with the entrenching and excluding functions of property thus vie with the gains that come from breaking through those entrenchments to reconfigure resources and rights. Conceptualizing property as complementarity – a kind of bundling machine – allows both sorts of projects to be accommodated within a common analytic structure. A law-of-complements view thus offers a new way to understand, in functional terms, what is distinctive about property. Taking complementarity seriously also has dramatic distributive implications, given that some of the most valuable complementarities exist between human capital and property.