Poor private property rights can kill economies/investments

The issue and theory of "private property" has been analyzed to a level of depth that even I find somewhat tedious, and I don't really have interest at this time in contributing at that level. At a macroscopic level, though, I think it's important to understand what this seemingly "theoretical" concept, this "tool of greedy capitalists" gives people. To that end, I saw a conversation recently amongst people interested in the possibility of investing in land in India:

Yep, the lack of transparency is a big issue.

No one knows who owns the land as the govt. records are not reliable/can be forged. Apartments/houses are a little

better as u get the keys and can rent/occupy. :)

Off late, the Indian land investments have become a typical pyramid scheme with the land changing hands

multiple times within a short period.

Even if it is scrutinized carefully and the deal is closed, you never know who can show up at your doorsteps tomorrow claiming that it’s their property, by creating fake documents and using political influence and sometimes anti-social forces.

Private property - like all contracts - provides *predictability*. A simple and basic result from computational theory is that the accuracy of a computation is limited by the predictability of the processes being computed. When people are making decisions, that is a computation: it's a computation in which we are trying to optimize "future value" over the set of possible decisions (I'm attempting here to use just enough of the language of computational theory to be illustrative, without having to give a primer on the entire field). It follows, then, that for people to make good decisions, they need predictability in the systems within which they are making those decisions. Private property and contracts in general are a wonderful manmade tool for providing that predictability and thus driving good decision-making and an efficient economy and society for all people.

We see here the opposite: without reliable private property conventions/laws, predictability goes out the window, and the ability to make good decisions goes with it. We are left either with people who make bad decisions (e.g. those that are getting taken in by the pyramid schemes mentioned above), or those unwilling to participate at all because they know that they can't make good decisions.

Pragmatically, the cost here is less investment in Indian real estate and thus lower real estate values even for those that are honest and above-board. And who is *really* getting screwed here? It's not the rich: they are the ones abusing the system, sitting on top of the pyramid schemes, using their influence with government to get decisions to go their way. It's the rest of society that is paying: entrepreneurs trying to pull themselves up out of their economic level get rebuffed as their property is taken by influence and fraud, the poor who invest in their property to make it better and lose on that investment, etc.

It's ironic that many people see private property as an instrument of the rich against the poor, when it is fact a *protection* of the poor from the rich (or at least, the dishonest rich).