I have made the case before (elsewhere, not here) that private property, besides simply requiring more copies to fulfill the same demand, creates a large amount of economic overhead. I have compiled data from the IBISWorld U.S. Industry report, adding together the revenues (costs) of industries that exist solely for the creation, maintenance, and support of private property rights. I’ve tried to keep it as conservative as possible and have created several figures that include more or less controversial categories. The data table can be found here.
- Exclusivity: This category includes industries whose sole purpose is to exclude others from using property, including fencing, security, and DRM. The total revenue of this industry is $96.151Bn
- Legal: This category includes legal services, such as law firms, patent licensing, corrections, and so on. This includes only the private sector legal services. Total revenue: $419.1Bn
- Finance & Insurance: This is self-explanatory, and the largest category by revenue. Total revenue: $5365.6Bn
- Publishing: It’s not clear that this sector would not exist in lieu of private property, it is clear that information would otherwise be free. For this category, I used the sector’s profit rather than revenue. Total profit: $106.4501Bn
- Gambling: There is no reason for a huge gambling sector in a non-private economy. Total revenue: $165.5Bn
- Defense: This one may be more controversial than the others; It includes space vehicle & missile manufacturing, tank & armored vehicle manufacturing, and guns & ammunition manufacturing. Total revenue: $50.5Bn
- Transfer: This is the industry based on transfer of property, either physically or legally. Total revenue: $74.6Bn
I believe the least controversial categories to be exclusivity, legal, gambling, and transfer. This is the most conservative figure, and in this case, the overhead is 1.44% of GDP.
Including defense and publishing, the overhead increases to 2.39% of GDP.
When finance is included, the overhead shoots through the roof. In this case, it’s a massive 34.67% of GDP, over $5.7 trillion.
The results show the finance and insurance sector alone requires monstrous input for what amounts to little more than moving money around. These sectors serve the purpose of high-level allocation, though given the extensive misallocation which results in global inequality and large-scale deprivation, there is little reason to consider this a worthwhile cost. Even excluding finance and insurance, however, the 1.44-2.39% overhead is still tremendous on the national scale. It should also be noted that these figures would be driven up quite a bit if legislative government, courts, law enforcement, and the military were included. The overhead figures here may not be perfectly accurate, but they do illustrate that the cost of private property, even excluding duplication, is significant.