Editing Private property (section)

== Theory ==
[[File:Hallesche Maschinenfabrik.jpg|thumb|320x320px|Factories and corporations are considered private property.]]
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]]—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 law|natural rights]], which has led to the presentation of private market exchange and private property rights as "natural rights" inherent in nature.<ref>{{cite book |last=O'Hara |first=Phillip |title=Encyclopedia of Political Economy, Volume 2 |publisher=Routledge |date=2003 |isbn=0415241871 |pages=782–783 |quote=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'.}}</ref>

[[Economic liberals]] (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 (economics)|value]] protected by the [[landowner]]. If the owners must pay [[property taxes]], 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]] or as [[Collateral (finance)|collateral]]. Private property thus is an important part of capitalization within the [[Economic system|economy]].<ref>{{cite web |last=Connell |first=Shaun |title=Property Rights 101: The Foundation of Capitalism Explained |url=http://www.capitalisminstitute.org/property-rights/ |publisher=Capitalism Institute |access-date=25 October 2012 |url-status=dead |archive-url=https://web.archive.org/web/20121029222343/http://www.capitalisminstitute.org/property-rights/ |archive-date=29 October 2012 }}</ref>

[[Socialist economists]] are critical of private property as socialism aims to substitute private property in the means of production for [[social ownership]] or [[public property]]. Socialists generally argue that private property relations limit the potential of the [[productive forces]] in the economy when the productive activity becomes a collective activity, where the role of the capitalist 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-capitalism|post-capitalist economic system]].<ref>''The Political Economy of Socialism'', by Horvat, Branko. 1982. Chapter 1: Capitalism, The General Pattern of Capitalist Development (pp. 15–20)</ref>

In response to the socialist critique, the [[Austrian School]] economist [[Ludwig Von Mises]] 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.<ref>{{cite web |url=http://www.economictheories.org/2008/08/socialist-calculation-debate.html |title=The Socialist Calculation Debate |author=ZERA |date=2013 |website=economictheories.org |access-date=2020-03-21}}</ref>

In [[capitalism]], 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 a 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.<ref>{{Cite web |url=https://sites.ualberta.ca/~klumpp/docs/PropertyRightsFinal.pdf |title=Property Rights and Capitalism |access-date=2018-03-18 |archive-date=2018-04-22 |archive-url=https://web.archive.org/web/20180422120145/https://sites.ualberta.ca/~klumpp/docs/PropertyRightsFinal.pdf |url-status=live}}</ref><ref>{{Cite web|url=https://s3-us-west-2.amazonaws.com/cans/440_Litman.pdf|title=Property Law 440|access-date=2018-09-28|archive-date=2018-11-13|archive-url=https://web.archive.org/web/20181113014245/https://s3-us-west-2.amazonaws.com/cans/440_Litman.pdf|url-status=live}}</ref> In [[Marxian economics]] and socialist politics, a distinction is made between "private property" and "[[personal property]]". The former is defined as the means of production about private ownership over an economic enterprise based on [[Socialization (economics)|socialized production]] and [[wage labor]] whereas the latter is defined as [[consumer goods]] or goods produced by an individual.<ref>Gewirth, Alan. (1996). The Community of Rights. [[University of Chicago Press]]. p. 168</ref><ref>''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 the 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 (Marxist theory)|capitalist mode of production]] stands on its own feet, then the furtsocializationtion of labor 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 laborer working for himself, but the capitalist exploiting many laborers."</ref> Prior to the 18th century, private property usually referred to [[Landed property|land ownership]].