<i>But it gets kind of interesting if you realize that all property titles are state-granted exclusionary privileges.</i><p>Insofar as current arrangements of a state holding eminent domain, yes. Not intrinsically.<p><i>Property rents, as a result of exclusive rights to scarce resources, could be seen as an externality, as a result of everybody else accepting those exclusive rights without compensation for being excluded.</i><p>A property owner may extend easement or some other non-possessory right to usage, so to immediately classify all property as an &quot;externality&quot; is flat out wrong. If anything, private property rights are a necessary (if not the primary) precondition to resolving externalities.