Final answer:
Property rights allow individuals to control the use of their property, foundational for contractual rights and essential for economic growth and individual liberty. They must be clearly defined and protected by law to prevent disputes and ensure market efficiency.
Step-by-step explanation:
The right that allows a person to determine how others may use their property is known as property rights. These rights are fundamental to a market economy as they establish the legal ownership of resources, including both physical goods and intangible assets. Property rights provide the foundation for contractual rights, which enable individuals or firms to freely enter into agreements with others about the use of their property. Such agreements are enforceable through the legal system in case of disputes. This right to property is not only a central aspect of economic growth, but it is also a philosophical cornerstone of individual liberty, often intertwined with the pursuit of happiness and personal freedoms.
Recognizing the conflict between the pursuit of individual interests and the rights of others, scholars like Coase have pointed out the importance of well-defined and legally recognized property rights. In scenarios where property rights are ambiguous, disputes become common and can impede economic efficiency and growth. Therefore, clear and fair laws that protect property rights and are equally enforced among all members of society are imperative for the function of effective and efficient markets, as well as for the protection of individual liberties.