Friday, December 14, 2007

Finders Keepers?

One of the headlines today on Yahoo! News is a story about a contractor who found $182,000 of Depression-Era money while remodeling a house. In the story, the contractor tries to claim "finders keepers" rule, saying that because he found the money, he is entitled to 40% of the value of the money (the homeowner has countered by offering 10%).

To me, in this situation, Finders Keepers laws really aren't relevant. The money found in the wall, in my opinion, is the property of the homeowner, who purchased it along with the home from the previous homeowner, and so on, back to the person who originally hid the money in the walls.

I went to do some reading on Finders Keepers laws. This article on a Jewish Law website raises some interesting points. The second-to-last section, titled Unstated Premise, says that in a standard contract, it is assumed that a contractor cannot simply walk away with what he finds. The contract is only to perform a certain labor for a specified amount of work. I would agree with this point, but perhaps in the future everyone should be specifying this when they hire contractors!


Bart said...

I don't think economics has the answer as to why the homeowner offered anything to the contractor, nor why the contractor would assume he's entitled to apply the property rights of finders keepers laws to this situation.

George Goodling said...

Personally, I would give a great deal of credit to the laborer. How easily could he have simply pocketed the money and walk off. Although I see this more as a moral argument I believe we should see some form mutual exchange. As in our mutual trust experiment the laborer handed over the entire sum to the owner, what will the owner do? Keep it all or split it 50-50 or 40-60 as the labor is requesting?

Zachary Piso said...

Taken from the concept of a cost-benefit approach, what is the benefit of paying the contractor? Certainly, you'd wish to satisfy his desire somewhat, as to ensure he does the job he was contracted to do. Alternatively, you'd have to get a different contractor, and since I believe this is a union position I suspect such act would not guarantee a job well done.

Secondly, you'd want to make sure he wouldn't walk off with anything else he found, in this job or in future jobs. For a normal home-owner, future remodeling hopefully wouldn't require tearing the walls down again, and if it did I'd suggest the homeowner not hide another hundred thousand in those walls. But if such person professionally sought depression era buildings, it might be good to set a precedent that you are willing to split the money.

I'd say pay him $20,000. If the homeowner is willing to pay 10%, this isn't far off. However, at twenty grand it is not a matter of choosing a logical percentage-thereby implying that the contractor has some right to the money-but rather paying him for "good moral conduct". The contractor would feel duly reward (I doubt he really expects 40%) and would likely confess any future discoveries as to walk away with it would generate guilt, for he received compensation for being "moral".

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty