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Private property is a legal designation for the ownership of
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
by non-governmental legal entities. Private property is distinguishable from public property and
personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...
, which is owned by a state entity, and from
collective A collective is a group of entities that share or are motivated by at least one common issue or interest, or work together to achieve a common objective. Collectives can differ from cooperatives in that they are not necessarily focused upon an ...
or
cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-contro ...
property, which is owned by a group of non-governmental entities. Private property is foundational to
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...
, an
economic system An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entit ...
based on the private ownership of the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as a ...
and their operation for
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
. The distinction between private and
personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...
varies depending on
political philosophy Political philosophy or political theory is the philosophical study of government, addressing questions about the nature, scope, and legitimacy of public agents and institutions and the relationships between them. Its topics include politics, ...
, with
socialist Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the ...
perspectives making a hard distinction between the two. As a legal concept, private property is defined and enforced by a country's political system.


History

Ideas about and discussion of private property date back to the Persian Empire, and emerge in the Western tradition at least as far back as
Plato Plato ( ; grc-gre, Πλάτων ; 428/427 or 424/423 – 348/347 BC) was a Greek philosopher born in Athens during the Classical period in Ancient Greece. He founded the Platonist school of thought and the Academy, the first institution ...
. Prior to the 18th century, English speakers generally used the word "property" in reference to land ownership. In
England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...
, "property" came to have a legal definition in the 17th century. Private property defined as property owned by commercial entities emerged with the great European trading companies of the 17th century. The issue of the
enclosure Enclosure or Inclosure is a term, used in English landownership, that refers to the appropriation of "waste" or " common land" enclosing it and by doing so depriving commoners of their rights of access and privilege. Agreements to enclose land ...
of agricultural land in England, especially as debated in the 17th and 18th centuries, accompanied efforts in philosophy and political thought—by
Thomas Hobbes Thomas Hobbes ( ; 5/15 April 1588 – 4/14 December 1679) was an English philosopher, considered to be one of the founders of modern political philosophy. Hobbes is best known for his 1651 book '' Leviathan'', in which he expounds an influ ...
(1588–1679), James Harrington (1611–1677) and
John Locke John Locke (; 29 August 1632 – 28 October 1704) was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers and commonly known as the "father of liberalism". Considered one of ...
(1632–1704), for example—to address the phenomenon of property
ownership Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...
. In arguing against supporters of
absolute monarchy Absolute monarchy (or Absolutism as a doctrine) is a form of monarchy in which the monarch rules in their own right or power. In an absolute monarchy, the king or queen is by no means limited and has absolute power, though a limited constituti ...
, John Locke conceptualized property as a "natural right" that God had not bestowed exclusively on the monarchy; the labour theory of property. This stated that property is a natural result of labor improving upon nature; and thus by virtue of labor expenditure, the laborer becomes entitled to its produce. ''Property Rights in the History of Economic Thought: From Locke 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). Influenced by the rise of
mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce ...
, Locke argued that private property was antecedent to and thus independent of government. Locke distinguished between "common property", by which he meant
common land Common land is land owned by a person or collectively by a number of persons, over which other persons have certain common rights, such as to allow their livestock to graze upon it, to collect wood, or to cut turf for fuel. A person who has ...
, and property in consumer goods and producer-goods. His chief argument for property in land ownership was that it led to improved land management and cultivation over common land. In the 18th century, during the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
, the moral philosopher and economist
Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——� ...
(1723–1790), 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 employee and employer and identified that property and civil government were dependent upon each other, recognizing that "the state of property must always vary with the form of government". Smith further argued that civil government could not exist without property, as government's main function was to define and safeguard property ownership. In the 19th century, the economist and philosopher
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...
(1818–1883) provided an influential analysis of the development and history of property formations and their relationship to the technical productive forces of a given period. Marx's conception of private property has proven influential for many subsequent economic theories and for
communist Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, ...
,
socialist Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the ...
and
anarchist Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not necessar ...
, political movements, and led to the widespread association of private property—particularly private property in the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as a ...
—with
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...
.


Legal and real world aspects

Private property is a legal concept defined and enforced by a country's political system. The area of law that deals with the subject is called
property law Property law is the area of law that governs the various forms of ownership in real property (land) and personal property. Property refers to legally protected claims to resources, such as land and personal property, including intellectual pro ...
. The enforcement of property law concerning ''private'' property is a matter of ''public'' expense. Defence of property is a common method of justification used by defendants who argue that they should not be held liable for any loss and
injury An injury is any physiological damage to living tissue caused by immediate physical stress. An injury can occur intentionally or unintentionally and may be caused by blunt trauma, penetrating trauma, burning, toxic exposure, asphyxiation, o ...
that they have caused because they were acting to protect their
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
.
Court A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in acco ...
s have generally ruled that the use of force may be acceptable. In many political systems, the government requests that owners pay for the privilege of ownership. A
property tax A property tax or millage rate is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or net wealth, taxes on the change of ownership of property through inher ...
is an
ad valorem tax An ''ad valorem'' tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). A ...
on the value of a property, usually levied on
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...
. The tax is levied by the governing authority of the jurisdiction in which the property is located. It may be imposed annually or at the time of a
real estate transaction A real estate transaction is the process whereby rights in a unit of property (or designated real estate) is transferred between two or more parties, e.g. in case of conveyance one party being the seller(s) and the other being the buyer(s). It can ...
, such as in real estate transfer tax. Under a property-tax system, the government requires or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value. The four broad types of property taxes are land, improvements to land (immovable man-made objects, such as buildings), personal property (movable man-made objects) and
intangible property Intangible property, also known as incorporeal property, is something that a person or corporation can have ownership of and can transfer ownership to another person or corporation, but has no physical substance, for example brand identity or ...
. The social and political context in which private property is administered will determine the extent to which an owner will be able to exercise rights over the same. The rights to private property often come with limitations. For example, local government may enforce rules about what kind of building may be built on private land (
building code A building code (also building control or building regulations) is a set of rules that specify the standards for constructed objects such as buildings and non-building structures. Buildings must conform to the code to obtain planning permissi ...
), or whether a historical building may be demolished or not. Theft is common in many societies, and the extent to which central administration will pursue property crime varies enormously. Some forms of private property are uniquely identifiable, and may be described in a
title A title is one or more words used before or after a person's name, in certain contexts. It may signify either generation, an official position, or a professional or academic qualification. In some languages, titles may be inserted between the f ...
or a certificate of ownership. The rights to a property may be transferred from one "owner" to another. A transfer tax is a tax on the passing of title to property from one person (or entity) to another. An owner may request that, after death, private property be transferred to family members, through
inheritance Inheritance is the practice of receiving private property, titles, debts, entitlements, privileges, rights, and obligations upon the death of an individual. The rules of inheritance differ among societies and have changed over time. Of ...
. In certain cases ownership may be lost to the public interest. Private real estate may be confiscated or used for public purposes, for example to build a road.


Theory

The legal framework of a country or society defines some of the practical implications of private property. There are no expectations that these rules will define a rational and consistent model of economics or social system. Although contemporary
neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...
—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 private market exchange and private property rights as "natural rights" inherent in nature.
Economic liberals Economic liberalism is a political and economic ideology that supports a market economy based on individualism and private property in the means of production. Adam Smith is considered one of the primary initial writers on economic liberalism, ...
(defined as those who support a private sector-driven market economy) consider private property to be essential for the construction of a prosperous society. They believe private ownership of land ensures the land will be put to productive use and its
value Value or values may refer to: Ethics and social * Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them ** Values (Western philosophy) expands the notion of value beyo ...
protected by the landowner. If the owners must pay
property taxes A property tax or millage rate is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or net wealth, taxes on the change of ownership of property through inherit ...
, this forces the owners to maintain a productive output from the land to keep taxes current. Private property also attaches a monetary value to land, which can be used to
trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exc ...
or as collateral. Private property thus is an important part of capitalization within the
economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...
.
Socialist economists Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the eco ...
are critical of private property as socialism aims to substitute private property in the means of production for
social ownership Social ownership is the appropriation of the surplus product, produced by the means of production, or the wealth that comes from it, to society as a whole. It is the defining characteristic of a socialist economic system. It can take the form o ...
or public property. Socialists generally argue that private property relations limit the potential of the productive forces in the economy when productive activity becomes a collective activity, where the role of the
capitalist Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...
becomes redundant (as a passive owner). Socialists generally favor social ownership either to eliminate the class distinctions between owners and workers and as a component of the development of a post-capitalist economic system. In response to the socialist critique, the
Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian scho ...
economist
Ludwig Von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberalism. He is ...
argued that private property rights are a requisite for what he called "rational" economic calculation and that the prices of goods and services cannot be determined accurately enough to make efficient economic calculation without having clearly defined private-property rights. Mises argued that a socialist system, which by definition would lack private property in the factors of production, would be unable to determine appropriate price valuations for the factors of production. According to Mises, this problem would make rational socialist calculation impossible. In
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...
, ownership can be viewed as a “bundle of rights" over an asset that entitles its holder to a strong form of authority over 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 value generated by it, exclude others from using it and the right to transfer the ownership (set of rights over the asset) of it to another holder. In
Marxian economics Marxian economics, or the Marxian school of economics, is a heterodox school of political economic thought. Its foundations can be traced back to Karl Marx's critique of political economy. However, unlike critics of political economy, Marxian ...
and socialist politics, there is distinction between "private property" and "
personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...
". The former is defined as the means of production in reference to private ownership over an economic enterprise based on socialized production and
wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power unde ...
whereas the latter is defined as
consumer goods A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, b ...
or goods produced by an individual. Prior to the 18th century, private property usually referred to land ownership.


Criticism

Private property in the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as a ...
is the central element of capitalism criticized by socialists. In Marxist literature, private property refers to a social relationship in which the property owner takes possession of anything that another person or group produces with that property and capitalism depends on private property. The socialist critique of private ownership is heavily influenced by the Marxist analysis 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 validity of certain aspects of Marxist analysis, the majority of socialists are sympathetic to Marx's views on exploitation and alienation. Socialists critique the private appropriation of property income on the grounds that because such income does not correspond to a return on any productive activity and is generated by the
working class The working class (or labouring class) comprises those engaged in manual-labour occupations or industrial work, who are remunerated via waged or salaried contracts. Working-class occupations (see also " Designation of workers by collar colou ...
, it represents exploitation. The property-owning (capitalist) class lives off passive property income produced by the
working population The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic regio ...
by virtue of their claim to ownership in the form of stock or private equity. This exploitative arrangement is perpetuated due to the structure of capitalist society. Capitalism is regarded as a class system akin to historical class systems like
slavery Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
and
feudalism Feudalism, also known as the feudal system, was the combination of the legal, economic, military, cultural and political customs that flourished in medieval Europe between the 9th and 15th centuries. Broadly defined, it was a way of structu ...
. Private ownership has also been criticized on non-Marxist ethical grounds by advocates of
market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...
. According to the economist James Yunker, the ethical case for market socialism is that because passive property income requires no mental or physical exertion on the part of the recipient and its appropriation by a small group of private owners is the source of the vast inequalities in contemporary capitalism, social ownership in a market economy would resolve the major cause of social inequality and its accompanying social ills. Weyl and Posner argue that private property is another name for monopoly and can hamper allocative efficiency. Through the 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. The justifications for private property rights have also been critiqued as tools of empire which enable land appropriation.Bhandar, Brenna. “Introduction: Property, Law, and Race in the Colony”. ''Colonial Lives of Property''. Duke University Press, 2018. According to academic commentator Brenna Bhandar, the language implemented in property legislation dictates colonized peoples as unable to effectively own and utilize their own land. It is suggested that personal rights are interchangeable with property rights, that therefore communities which utilize communal methods of land ownership are not equally validated by private property ideals. It is also argued by critical race theorist
Cheryl Harris Cheryl I. Harris is a critical race theorist and professor of civil rights and civil liberties at the UCLA School of Law. Harris is widely known for "Whiteness as Property", published in the June 1993 edition of the ''Harvard Law Review''. In ...
that race and property rights have been conflated over time, with only those qualities unique to white settlement recognized legally. Indigenous use of land, focusing on common ownership, is distinguished from private property ownership and western understandings of land law.Keenan, Sarah. “Subversive Property: Reshaping Malleable Spaces of Belonging”. ''Social & Legal Studies''. 19(4) 423–439


See also

* Common ownership *
Enclosure Enclosure or Inclosure is a term, used in English landownership, that refers to the appropriation of "waste" or " common land" enclosing it and by doing so depriving commoners of their rights of access and privilege. Agreements to enclose land ...
*
Personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...
*
Property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
*
Property income Property income refers to profit or income received by virtue of owning property. The three forms of property income are rent, received from the ownership of natural resources; interest, received by virtue of owning financial assets; and profit, ...
* Property rights (economics) * Public property * Rule of law


References


Further reading

*


External links

{{Authority control Private sector Political economy Property Property law