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Private Property, Common Property or Collective Property?

Henri Cartier Bresson

photo by Henri Cartier Bresson

(source)

A traditional objection to private property is that it tends to result in very unequal distributions. Wealth begets wealth, and even when it doesn’t it’s certainly the case that luck, effort, injustice etc. can leave some people with too much and others with barely enough property to survive. So, the logical step would be to switch to a system of common property: if something is the common property of all, then everyone, by definition, can make equal use of it and no one is left with nothing or a bare minimum.

However, when taking this seemingly logical step, we’ll fall over the first hurdle. The “tragedy of the commons” makes everyone worse off, even if everyone has equal access. If, for example, everyone has an equal right to use a piece of land for cattle, then no one has an incentive to avoid over-use. On the contrary, it’s in every individual’s interest to brings as many cows as possible. Someone who tries to act in a responsible way and limit his use of the common land bears the cost of his self-restraint while all other irresponsible users benefit from his self-restraint. The benefits of overuse are immediate and certain, while the benefits of restraint are in the future and conditional upon equal self-restraint of all users. Because everyone has an incentive to get as much out of the shared resource and as quickly as possible, the resource will be rapidly depleted, and everyone will be worse off in the end.

tragedy of the commons

(source)

The next logical step to remedy this deficiency of common ownership is to switch to collective ownership. Collective ownership means that the community as a whole decides how the commonly owned resources should be used. The self-destructive logic of common ownership results from a lack of trust and collective action among the users. This logic can be countered if there’s a collective decision on the rules that govern the use of the shared resources. For example, a collective decision could prohibit use above a certain level. Such a rule can enforce self-restraint.

The problem is that this step also fails. Collective ownership is perhaps possible when we’re dealing with one or a few resources (e.g. land and cattle), but a modern economy is too complex: there are too many resources and too many decisions to take. It doesn’t seem possible for a single human mind, let alone a very inclusive collective, to take all necessary decisions about resources. (Communist central planning was a failure in this respect, with wasteful resource allocation and huge inefficiencies).

Victory of the 5 Year Plan A Blow to Capitalism

“Victory of the 5 Year Plan A Blow to Capitalism”, Soviet propaganda poster

(source)

That is why we’ll have to reconsider private property, combined with a market system based on prices. If people own their own things and their own share of the total pool of resources, then resources will not be depleted but instead be used productively. No one has an incentive to deplete their own private property; on the contrary, the incentive is to use it wisely and productively.

When individual owners are then also allowed to trade their surplus production in a free market system based on the price system, then this price system will signal over or under-use of resources (in certain cases at least). Producers and consumers responding to these price signals will then switch to underused resources, something which again promotes efficient resource use and avoids depletion (at least some of the time). But they will only respond to price signals when there is private property and when the loss of not responding or the gain of responding is theirs and theirs alone.

However, this brings us back to our starting point and the initial problem of private ownership: very unequal ownership and unequal use of resources, so unequal in some cases that certain people don’t have enough to survive in a decent way. Of course, those people can sell their labor power in order to acquire some property, but this will not always suffice. Given the various beneficial functions of private property – some of which are commonly neglected – people need more of it than we usually assume. The price system doesn’t always work, and the price of labor (the wage) isn’t always a fair one, or at least not one that allows the laborer to acquire all the necessary private property. Also, one has to take seriously the alienating consequences of wage labor and the unjust distribution of property resulting from luck and theft. Hence, we can only settle on private property as the least problematic form of property in our modern economies if we include a robust redistributive principle.

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2 thoughts on “Private Property, Common Property or Collective Property?

  1. Pingback: Commons » OSINT Commons

  2. Pingback: The Extent of Private Property Rights | P.a.p.-Blog // Human Rights Etc.

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