3/11/2019 Private property - Wikipedia

Private property
Priv ate property is a legal designation for the ownership of property by
non-gov ernmental legal entities. [1 ] Priv ate property is distinguishable
from public property , which is owned by a state entity ; and from collectiv e
(or cooperativ e) property , which is owned by a group of non-
gov ernmental entities. [2][3] Priv ate property can be either personal
property (consumption goods) or capital goods. Priv ate property is a legal
concept defined and enforced by a country 's political sy stem. [4]

Contents
History
Economics
Criticism
See also Proprietas Privata (PP) British period
References marker in San Martin, St. Paul's Bay,
External links Malta

History
Ideas about and discussion of priv ate property date back at least as far as
Plato. [5] Prior to the 18th century , English speakers generally used the
word "property " in reference to land ownership. In England, "property " did
not hav e a legal definition until the 17 th century . [6][7 ] Priv ate property as
commercial property was inv ented with the great European trading
companies of the 17 th century . [8]

The issue of the enclosure of agricultural land in England, especially as

debated in the 17 th and 18th centuries, accompanied efforts in philosophy Gate with a private property sign
and political thought—by Thomas Hobbes (1588–167 9), James Harrington
(1611–167 7 ) and John Locke (1632–17 04), for example—to address the
phenomenon of property ownership. [9]

In arguing against supporters of absolute monarchy , John Locke conceptualized property as a "natural right" that
God had not bestowed exclusiv ely on the monarchy . Influenced by the rise of mercantilism, Locke argued that
priv ate property was antecedent to and thus independent of gov ernment. Locke distinguished between "common
property ", by which he meant open-access property ; and property in consumer goods and producer-goods, the
latter of which referred to land. His chief argument for property in land was improv ed land management and
cultiv ation ov er common open-access land. Locke dev eloped a normativ e theory of property rights based on labor,
which stated that property is a natural result of labor improv ing upon nature; and thus by v irtue of labor
expenditure, the laborer becomes entitled to its produce. [1 0]
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In the 18th century , during the Industrial Rev olution, the moral philosopher and economist Adam Smith (17 23–
17 90), in contrast to Locke, drew a distinction between the "right to property " as an acquired right and natural
rights. Smith confined natural rights to "liberty and life". Smith also drew attention to the relationship between
employ ee and employ er and identified that property and civ il gov ernment were dependent upon each other,
recognizing that "the state of property must alway s v ary with the form of gov ernment". Smith further argued that
civ il gov ernment could not exist without property , as gov ernment's main function was to safeguard property
ownership. [1 0]

In the 19th century , the economist and philosopher Karl Marx (1818–1883) prov ided an influential analy sis of the
dev elopment and history of property formations and their relationship to the technical productiv e forces of a giv en
period. Marx's conception of priv ate property has prov en influential for many subsequent economic theories and for
anarchist, communist and socialist political mov ements, and led to the widespread association of priv ate property
with capitalism.

Economics
Although contemporary neoclassical economics—
currently the dominant school of economics—rejects some
of the assumptions of the early philosophers underpinning
classical economics, it has been argued that neoclassical
economics continues to be influenced by the legacy of
natural moral theory and the concept of natural rights,
which has led to the presentation of priv ate market
exchange and priv ate property rights as "natural rights"
inherent in nature. [1 1 ]
Factories and corporations are also considered private
Economic liberals (defined as those who support a priv ate
property
sector-driv en market economy ) consider priv ate property
to be essential for the construction of a prosperous
society . They believ e priv ate ownership of land ensures the land will be put to productiv e use and its v alue protected
by the landowner. If the owners must pay property taxes, this forces the owners to maintain a productiv e output
from the land to keep taxes current. Priv ate property also attaches a monetary v alue to land, which can be used to
trade or as collateral. Priv ate property thus is an important part of capitalization within the economy . [1 2]

Socialist economists are critical of priv ate property as socialism aims to substitute priv ate property in the means of
production for social ownership or public property . Socialists generally argue that priv ate property relations limit
the potential of the productiv e forces in the economy when productiv e activ ity becomes a collectiv e activ ity , where
the role of the capitalist becomes redundant (as a passiv e owner). Socialists generally fav or social ownership either
to eliminate the class distinctions between owners and workers and as a component of the dev elopment of a post-
capitalist economic sy stem. [1 3]

In response to the socialist critique, the Austrian School economist Ludwig Von Mises argued that priv ate property
rights are a requisite for what he called "rational" economic calculation and that the prices of goods and serv ices
cannot be determined accurately enough to make efficient economic calculation without hav ing clearly defined
priv ate-property rights. Mises argued that a socialist sy stem, which by definition would lack priv ate property in the
factors of production, would be unable to determine appropriate price v aluations for the factors of production.
According to Mises, this problem would make rational socialist calculation impossible. [1 4]

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In capitalism, ownership can be v iewed as a “bundle of rights" ov er an asset that entitles its holder to a strong form of
authority ov er it. Such bundle is composed of a set of rights that allows the owner of the asset to control it and decide
on its use, claim the v alue generated by it, exclude others from using it and the right to transfer the ownership (set of
rights ov er the asset) of it to another holder. [1 5] [1 6]

In Marxian economics and socialist politics, there is distinction between "priv ate property " and "personal property ".
The former is defined as the means of production in reference to priv ate ownership ov er an economic enterprise
based on socialized production and wage labor whereas the latter is defined as consumer goods or goods produced
by an indiv idual. [1 7 ][1 8] Prior to the 18th century , priv ate property usually referred to land ownership.

Criticism
Priv ate property in the means of production is the central element of capitalism criticized by socialists. In Marxist
literature, priv ate property refers to a social relationship in which the property owner takes possession of any thing
that another person or group produces with that property and capitalism depends on priv ate property . [1 9] The
socialist critique of priv ate ownership is heav ily influenced by the Marxian analy sis of capitalist property forms as
part of its broader critique of alienation and exploitation in capitalism. Although there is considerable disagreement
among socialists about the v alidity of certain aspects of Marxian analy sis, the majority of socialists are sy mpathetic
to Marx's v iews on exploitation and alienation. [20] Socialists critique the priv ate appropriation of property income
on the grounds that because such income does not correspond to a return on any productiv e activ ity and is
generated by the working class, it represents exploitation. The property -owning (capitalist) class liv es off passiv e
property income produced by the working population by v irtue of their claim to ownership in the form of stock or
priv ate equity . This exploitativ e arrangement is perpetuated due to the structure of capitalist society . From this
perspectiv e, capitalism is regarded as class sy stem akin to historical class sy stems like slav ery and feudalism. [21 ]

Priv ate ownership has also been criticized on non-Marxist ethical grounds by adv ocates of market socialism.
According to the economist James Y unker, the ethical case for market socialism is as follows: because passiv e
property income requires no mental or phy sical exertion on the part of the recipient and because its appropriation
by a small group of priv ate owners is the source of the v ast inequalities in contemporary capitalism, social
ownership in a market economy would resolv e the major cause of social inequality and its accompany ing social
ills. [22] Wey l and Posner argue that priv ate property is another name for monopoly and can hamper allocativ e
efficiency . Through use of taxation and modified Vickrey auctions, they argue that partial common property
ownership is a more efficient and just way to organize the economy . [23]

See also
Common ownership
Enclosure
Ideology
Personal property
Public property
Property
Property income
Property rights (economics)
Rule of law

References
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1. McConnell, Campbell; Brue, Stanley; Flynn, Sean (2009). Economics. Boston: Twayne Publishers. p. G-22. ISBN 978-
0-07-337569-4.
2. Gregory and Stuart, Paul and Robert (February 28, 2013). The Global Economy and its Economic Systems. South-
Western College Pub. p. 30. ISBN 978-1285055350. "There are three broad forms of property ownership – private,
public, and collective (cooperative)."
3. "?" (http://www.businessdictionary.com/definition/public-property.html).
4. Bertrand Badie; Dirk Berg-Schlosser; Leonardo Morlino (2011). International Encyclopedia of Political Science. SAGE
Publications, Inc. p. 2132. ISBN 978-1412959636. "Private property cannot exist without a political system that defines
its existence, its use, and the conditions of its exchange. That is, private property is defined and exists only because of
politics."
5. Garnsey, Peter (2007). Think ing about Property: From Antiquity to the Age of Revolution (https://books.google.com/boo
ks?id=f_roIy7ceEsC). Ideas in Context. 90. Cambridge University Press. p. 1. ISBN 9781139468411. Retrieved
2018-08-28. "The defence of private property has been a feature of philosophical, theological and legal discourse from
antiquity to the present day. [...] I begin with Plato's thoughts on property in the Republic [...]."
6. The Meaning and Definition of "Property" in Seventeenth-Century England, 1980"
7. The Meaning and Definition of "Property" in Seventeenth-Century England, by G. E. Aylmer, 1980. Oxford University
Press. Past and Present, No. 86 (Feb., 1980), pp. 87–97.
8. Compare: Bertrand Badie; Dirk Berg-Schlosser; Leonardo Morlino (2011). International Encyclopedia of Political
Science. SAGE Publications, Inc. p. 2132. ISBN 978-1412959636. "Oliver Letwin, a British conservative theorist,
observed that the private sector had to be invented. This occurred with the great European trading companies, such as
the British and Dutch East India companies, founded in the 17th century. Notions of property before the Renaissance
assumed that different actors had different relations to the same property."
9. Thompson, Paul B (2014). "agriculture" (https://books.google.com/books?id=h5jrAgAAQBAJ). In John, Barry.
International Encyclopedia of Environmental Politics. Routledge. p. 8. ISBN 978-1-135-55403-3. Retrieved 2014-08-05. "
[D]ebates [on enclosure] […] laid down many of the basic terms for political debate about private property, and
especially property in land."
10. Property Rights in the History of Economic Thought: From Lock e to J.S. Mill, by West, Edwin G. 2001. Property
Rights: Cooperation, Conflict, and Law, ed. Terry Lee Anderson and Fred S. McChesney, Princeton University Press,
2003, Ch. 1 (pp. 20–42).
11. O'Hara, Phillip (September 2003). Encyclopedia of Political Economy, Volume 2. Routledge. pp. 782–83. ISBN 0-415-
24187-1. "The derivation of natural moral theory has provided the foundation for the use of economic theory to support
specific ideological viewpoints. The main strength of the legitimating role of economic theory is that it allows one set of
ideological viewpoints to posture as if their conclusions were unbiased scientific conclusions, while those opposing
them were merely expressing their value laden opinions. At its apex, this tendency has justified laissez-faire economic
policies as if they were based on natural laws. Always behind the legitimization activities of economists is the belief that
markets are ‘natural’ institutions and market outcomes are natural outcomes, and the institutions necessary for
markets, such as private property rights, are ‘natural rights’."
12. Connell, Shaun. "Property Rights 101: The Foundation of Capitalism Explained" (https://web.archive.org/web/201210292
22343/http://www.capitalisminstitute.org/property-rights/). Capitalism Institute. Archived from the original (http://www.cap
italisminstitute.org/property-rights/) on 29 October 2012. Retrieved 25 October 2012.
13. The Political Economy of Socialism, by Horvat, Branko. 1982. Chapter 1: Capitalism, The General Pattern of Capitalist
Development (pp. 15–20)
14. "?" (http://www.economictheories.org/2008/08/socialist-calculation-debate.html).
15. "PROPERTY RIGHTS AND CAPITALISM" (https://sites.ualberta.ca/~klumpp/docs/PropertyRightsFinal.pdf) (PDF).
16. "PROPERTY LAW 440" (https://s3-us-west-2.amazonaws.com/cans/440_Litman.pdf) (PDF).
17. Gewirth, Alan. (1996). The Community of Rights. University of Chicago Press. p. 168

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18. Capital, Volume 1, by Marx, Karl. From "Chapter 32: Historical Tendency of Capitalist Accumulation": "Self-earned
private property, that is based, so to say, on the fusing together of the isolated, independent laboring-individual with the
conditions of his labor, is supplanted by capitalistic private property, which rests on exploitation of the nominally free
labor of others, i.e., on wage-labor. As soon as this process of transformation has sufficiently decomposed the old
society from top to bottom, as soon as the laborers are turned into proletarians, their means of labor into capital, as
soon as the capitalist mode of production stands on its own feet, then the further socialisation of labour and further
transformation of the land and other means of production into socially exploited and, therefore, common means of
production, as well as the further expropriation of private proprietors, takes a new form. That which is now to be
expropriated is no longer the labourer working for himself, but the capitalist exploiting many laborers."
19. "Glossary of Terms" (https://www.marxists.org/glossary/terms/p/r.htm). marxists.org. Retrieved 2 March 2017.
20. Arnold, Scott (1994). The Philosophy and Economics of Mark et Socialism: A Critical Study. Oxford University Press.
p. 50. ISBN 978-0195088274. "Though socialists have disagreed with Marx about how to conceptualize the notion of
class, about the dynamics of class societies, and indeed about a whole host of other matters, most socialists seem to
be broadly sympathetic to his views about what is wrong with the capitalist (free enterprise) economic system and, by
implication, capitalist society ... Marx’s critique attributes basically two systemic evils to capitalism’s economic
system: alienation and exploitation."
21. O'Hara, Phillip (September 2003). Encyclopedia of Political Economy, Volume 2. Routledge. p. 1135. ISBN 0-415-24187-
1. "Property income is, by definition, received by virtue of owning property ... Since such income is not an equivalent
return for any productive activity, it amounts to an entitlement to a portion of the aggregate output of others’ productive
activity. The workforce produces output, but surrenders part of it to people who have nothing directly to do with
production. Arguably, this occurs by virtue of a social system to which those in the workforce have never given their full
consent, i.e. that of private property. Alternatively, it occurs by virtue of a structure of power to which the workforce is
subject: property income is the fruit of exploitation. The fact that it is essential to capitalism makes the latter a class
system akin to such other historical cases as slavery and feudalism."
22. The Social Dividend Under Mark et Socialism, by Yunker, James. 1977. Annals of Public and Cooperative Economics,
Vol. 48, No. 1, pp. 93–133: "From the human point of view, return paid to non-human factors of production is unearned
and equivalent to a free gift of nature. It is the personal appropriation of this free gift of nature by a small minority of
society under contemporary capitalism which establishes the ethical unworthiness of capitalism and the desirability of a
socialist transformation...The employment of capital instruments and natural resources in economic production requires
no personal hardship or exertion from any human being. The economic services provided by these factors of production
are not corporeally inherent in human beings. The opposite is true of labor services, which can only be provided through
the physical and mental activity of human beings...the really grossly exaggerated personal incomes in society are
dominated by property income, and this source of inequality would be abrogated by the equalization of property income
distribution."
23. Posner, A. Posner and E. Glen Weyl. “Property is Monopoly: Creating a Competitive Market in Uses Through Partial
Common Ownership.” Chap. 1 in Radical Markets: Uprooting Capitalism and Democracy for a Just Society. Princeton:
Princeton University Press, 2018.

External links
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