Property rights are an incentive to produce and exchange goods because:
- One will want to produce more in order to get more profit, which leads to technological development.
- One has an incentive to invest in order to obtain more profit.
- Property rights should also be extended to intellectual property, in which intellectual work is rewarded through patents.
Contract enforcement
- It provides assurance of the rights and obligations that both parties have to fulfill.
- It lowers the costs both for producing and exchanging goods, people know what to expect.
- Lowers the costs that come with uncertainty.
Standards for weights and measures
- It provides a common trading ground lowering the costs that are associated with uncertainty.
- Makes trade easier by providing equivalences.
- Unifies trade and makes it faster.