Common ownership refers to holding the assets of an organization, enterprise, or community indivisibly rather than in the names of the individual members or groups of members as common property. Forms of common ownership exist in every
economic system
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within an economy. It includes the combination of the various institutions, agencies, entities, decision-making proces ...
socialist
Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...
political movements as it is seen as a necessary democratic mechanism for the creation and continued function of a communist society. Advocates make a distinction between collective ownership and common property (the
commons
The commons is the cultural and natural resources accessible to all members of a society, including natural materials such as air, water, and a habitable Earth. These resources are held in common even when owned privately or publicly. Commons ...
) as the former refers to property owned jointly by agreement of a set of colleagues, such as producer
cooperative
A cooperative (also known as co-operative, coöperative, co-op, or coop) is "an autonomy, autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned a ...
s, whereas the latter refers to assets that are completely open for access, such as a public park freely available to everyone.
Christian societies
The
Early Church of Jerusalem
The Early Church of Jerusalem is considered to be the first community of early Christianity. It was formed in Jerusalem after the crucifixion of Jesus. It proclaimed to Jews and non-Jews the resurrection of Jesus Christ, the forgiveness of sins ...
shared all their money and possessions (Acts of the Apostles 2 and 4). Inspired by the early Christians, many Christians have since tried to follow their example of
community of goods
Common ownership refers to holding the assets of an organization, Business, enterprise, or community indivisibly rather than in the names of the individual members or groups of members as common property. Forms of common ownership exist in ever ...
and common ownership. Common ownership is practiced by some Christian groups, such as the Hutterites (for about 500 years), the Bruderhof Communities (for some 100 years), and others. In those cases, property is generally owned by a charity set up for the purpose of maintaining the members of the religious groups. Christian communists typically regard biblical texts in Acts 2 and Acts 4 as evidence that the first Christians lived in a communist society. Additionally, the phrase " To each according to his needs" has a biblical basis in Acts 4:35, which says "to the emissaries to distribute to each according to his need".
In capitalist economies
Common ownership is practiced by large numbers of voluntary associations and non-profit organizations, as well as implicitly by all public bodies. While cooperatives generally align with collectivist and socialist economics,
retailers' cooperatives
A retailers' cooperative is a type of cooperative which employs economies of scale on behalf of its Retailing, retailer members. Retailers' cooperatives use their purchasing power to acquire discounts from manufacturers and often share marketing e ...
in particular exhibit elements of common ownership, and their retailer members may be individually owned. Some individuals and organizations intentionally produce or support free content, including open source software,
public domain
The public domain (PD) consists of all the creative work to which no Exclusive exclusive intellectual property rights apply. Those rights may have expired, been forfeited, expressly Waiver, waived, or may be inapplicable. Because no one holds ...
works, and
fair use
Fair use is a Legal doctrine, doctrine in United States law that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to bal ...
media. Mutual aid is a form of common ownership that is practiced on small scales within capitalist economies, particularly among marginalized communities, and during emergencies such as the
COVID-19 pandemic
The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
Marxist
Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
,
anarchist
Anarchism is a political philosophy and Political movement, movement that seeks to abolish all institutions that perpetuate authority, coercion, or Social hierarchy, hierarchy, primarily targeting the state (polity), state and capitalism. A ...
, reformist, and communalist movements, advocate the common ownership of the means of production by all of society as an eventual goal to be achieved through the development of the productive forces, although many socialists classify socialism as public ownership or cooperative ownership of the means of production, reserving common ownership for what
Karl Marx
Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...
and
Friedrich Engels
Friedrich Engels ( ;"Engels" ''Random House Webster's Unabridged Dictionary''.upper-stage communism", or what other socialist theoreticians, such as
Vladimir Lenin
Vladimir Ilyich Ulyanov ( 187021 January 1924), better known as Vladimir Lenin, was a Russian revolutionary, politician and political theorist. He was the first head of government of Soviet Russia from 1917 until Death and state funeral of ...
,
Emma Goldman
Emma Goldman (June 27, 1869 – May 14, 1940) was a Russian-born Anarchism, anarchist revolutionary, political activist, and writer. She played a pivotal role in the development of anarchist political philosophy in North America and Europ ...
, and
Peter Kropotkin
Pyotr Alexeyevich Kropotkin (9 December 1842 – 8 February 1921) was a Russian anarchist and geographer known as a proponent of anarchist communism.
Born into an aristocratic land-owning family, Kropotkin attended the Page Corps and later s ...
, simply termed "communism". From Marxist and anarchist analyses, a society based on a superabundance of goods and common ownership of the means of production would be devoid of classes based on ownership of productive property.
Common ownership in a hypothetical communist society is often distinguished from primitive communism, in that communist common ownership is the outcome of social and technological developments leading to post-scarcity and thus the elimination of material scarcity in society. From 1918 until 1995, the "common ownership of the means of production, distribution and exchange" was cited in Clause IV of its constitution as a goal of the British Labour Party and was quoted on the back of its membership cards. The clause read:
To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.
Antitrust economics
In
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
economics, common ownership describes a situation in which large investors own
shares
In financial markets, a share (sometimes referred to as stock or equity) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Sha ...
in several firms that compete within the same industry. As a result of this overlapping ownership, these firms may have reduced incentives to compete against each other because they internalize the profit-reducing effect that their competitive actions have on each other. The theory was first developed by Julio Rotemberg in 1984. /ref> Several empirical contributions document the growing importance of common ownership and provide evidence to support the theory. Because of concern about these anticompetitive effects, common ownership has "stimulated a major rethinking of antitrust enforcement".. Several government departments and intergovernmental organizations, such as the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the U.S. government that oversees the domestic enforcement of Law of the Unite ...
, /ref> the
Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) United States antitrust law, antitrust law and the promotion of consumer protection. It ...
, /ref> the
European Commission
The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
, /ref> and the
OECD
The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
, /ref> have acknowledged concerns about the effects of common ownership on lessening product
market competition
In economics, competition is a scenario where different Economic agent, economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the s ...
.
Contract theory
Neoclassical economic theory analyzes common ownership using contract theory. According to the incomplete contracting approach pioneered by Oliver Hart and his co-authors, ownership matters because the owner of an asset has residual control rights. This means that the owner can decide what to do with the asset in every contingency not covered by a contract. In particular, an owner has stronger incentives to make relationship-specific investments than a non-owner, so ownership can ameliorate the hold-up problem. As a result, ownership is a scarce resource (i.e. there are limits to how much they can invest) that should not be wasted. In particular, a central result of the property rights approach says that joint ownership is suboptimal. If there is a start with joint ownership (where each party has veto power over the use of the asset) and move to a situation in which there is a single owner, the investment incentives of the new owner are improved while the investment incentives of the other parties remain the same; however, in the basic incomplete contracting framework, the suboptimal aspect of joint ownership holds only if the investments are in
human capital
Human capital or human assets is a concept used by economists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a subs ...
while joint ownership can be optimal if the investments are in physical capital. Several authors have shown that joint ownership can actually be optimal even if investments are in human capital. In particular, joint ownership can be optimal if the parties are asymmetrically informed, if there is a long-term relationship between the parties, or if the parties have know-how that they may disclose.