Io92 HARVARd LAW REVIEW [Vol. 85: IoS9 The state not only has to decide whom to entitle, but it must also simultaneously make a series of equally difficult second order decisions. These decisions go to the manner in which entitlements are protected and to whether an individual is allowed to sell or trade the entitlement. In any given dispute, for example, the state must decide not only which side wins but also the kind of protec tion to grant. It is with the latter decisions, decisions which shape the subsequent relationship between the winner and the loser, that this article is primarily concerned. We shall consider three types of entitlements titlements protected by property rules, en- titlements protected by liability rules, and inalienabl e entitle ments. The categories are not of course, absolutely distinct; but the categorization is useful since it reveals some of the reasons which lead us to protect certain entitlements in certain ways An entitlement is protected by a property rule to the extent that someone who wishes to remove the entitlement from its holder must buy it from him in a voluntary transaction in which the value of the entitlement is agreed upon by the seller. It is the form of entitlement which gives rise to the least amount of state intervention: once the original entitlement is decided upon, the state does not try to decide its value. It lets each of the parties say how much the entitlement is worth to him, and gives the seller a veto if the buyer does not offer enough. Property rules involve a collective decision as to who is to be given an initial entitle- ment but not as to the value of the entitlement Whenever someone may destroy the initial entitlement if he is willing to pay an objectively determined value for it, an entitle ment is protected by a liability rule. This value may be what it is thought the original holder of the entitlement would have sold it for. But the holder's complaint that he would have demanded more will not avail him once the objectively determined value is set. Obviously, liability rules involve an additional stage of state intervention: not only are entitlements protected but their trans fer or destruction is allowed on the basis of a value determined by some organ of the state rather than by the parties themselves An entitlement is inalienable to the extent that its transfer is not permitted between a willing buyer and a willing seller. The state intervenes not only to determine who is initially entitled and to determine the compensation that must be paid if the en "A property rule requires less state intervention only in the sense that inter- vention is needed to decide upon and enforce the initial entitlement but not for the separate problem of determining the value of the entitlement. Thus, if a par- alar property entitlement is especially difficult to enforce- for example, the right personal security in urban areas-the actual amount of state intervention can e very high and could, perhaps, exceed that needed for some entitlements pro- tected by easily administered liability rules. HeinOnline 85 Harv. L Rev. 1092 1971-1972HARVARD LAW REVIEW The state not only has to decide whom to entitle, but it must also simultaneously make a series of equally difficult second order decisions. These decisions go to the manner in which entitlements are protected and to whether an individual is allowed to sell or trade the entitlement. In any given dispute, for example, the state must decide not only which side wins but also the kind of protec￾tion to grant. It is with the latter decisions, decisions which shape the subsequent relationship between the winner and the loser, that this article is primarily concerned. We shall consider three types of entitlements - entitlements protected by property rules, en￾titlements protected by liability rules, and inalienable entitle￾ments. The categories are not, of course, absolutely distinct; but the categorization is useful since it reveals some of the reasons which lead us to protect certain entitlements in certain ways. An entitlement is protected by a property rule to the extent that someone who wishes to remove the entitlement from its holder must buy it from him in a voluntary transaction in which the value of the entitlement is agreed upon by the seller. It is the form of entitlement which gives rise to the least amount of state intervention: once the original entitlement is decided upon, the state does not try to decide its value.' It lets each of the parties say how much the entitlement is worth to him, and gives the seller a veto if the buyer does not offer enough. Property rules involve a collective decision as to who is to be given an initial entitle￾ment but not as to the value of the entitlement. Whenever someone may destroy the initial entitlement if he is willing to pay an objectively determined value for it, an entitle￾ment is protected by a liability rule. This value may be what it is thought the original holder of the entitlement would have sold it for. But the holder's complaint that he would have demanded more will not avail him once the objectively determined value is set. Obviously, liability rules involve an additional stage of state intervention: not only are entitlements protected, but their trans￾fer or destruction is allowed on the basis of a value determined by some organ of the state rather than by the parties themselves. An entitlement is inalienable to the extent that its transfer is not permitted between a willing buyer and a willing seller. The state intervenes not only to determine who is initially entitled and to determine the compensation that must be paid if the en- ' A property rule requires less state intervention only in the sense that inter￾vention is needed to decide upon and enforce the initial entitlement but not for the separate problem of determining the value of the entitlement. Thus, if a par￾ticular property entitlement is especially difficult to enforce - for example, the right to personal security in urban areas - the actual amount of state intervention can be very high and could, perhaps, exceed that needed for some entitlements pro￾tected by easily administered liability rules. 1092 [VOL. 85:1o89 HeinOnline -- 85 Harv. L. Rev. 1092 1971-1972