Private property is used in legal terms to refer to a non-government legal entity’s ownership of property. While ownership of public property is by a government or state entity, ownership of cooperative or collective property is by a group of entities not part of the government or state. Private property is distinct from both collective and public property. In contrast to private property, personal property is used to describe property designated for personal consumption and use.
Typically, a state upholds the right for an entity to own private property in line with the social-political principle that a person may not be prevented or prohibited by another party from being able to trade, hold, and acquire property that is not already owned by another entity. The right to own private property is meant to enjoy both legal protection and respect within society.
Before the 1700s, the term property was used by those who spoke English to describe ownership of land. The word was not given a legal definition until the 1600s in England, and the use of private property for commercial reasons came into the scene in the 1600s when the great trading companies of Europe were operating in full swing.
It was Karl Marx’s views of private property that have largely resulted in the connection commonly made between capitalism and private ownership of property, however, long before Marx, philosophers and economists of the highest calibre had been debating the role of private property and its best use, as well as how it ought to be distributed.
Locke sought to refute the argument of those who were in support of absolute monarchy. He insisted that land was not the exclusive right of a monarch, but a gift from God, a natural right that had been bestowed on man. He argued that because private property was there before the government, with the government meeting it there and not the other way around, it had to be independent of the government.
Locke made a clear distinction between property in producer goods (by which he meant land) and consumer goods, and common property which referred to property which was open to be accessed by anyone. His normative theory of property rights stood on the basis that since property naturally resulted from labour’s attempt to improve upon nature, it would only be fair for the labourer to have an entitlement to the produce of his labour.
During the 18th-century Industrial Revolution, Smith took a different stance than Locke. He distinguished between the natural and acquired rights to ownership of property. While restricting the scope of natural rights to life and liberty, he insisted that civil government and property depended on one another, drawing on the employer/employee relationship. Smith believed that the form of government had to inform the state of property.
While some of the assumptions found in classical economics made by early philosophers have been rejected by neoclassical economics, the now ruling school of economics is thought to be influenced by the concept of natural rights. This has resulted in private property rights and private market exchange being referred to as natural rights which nature has given freely.
Economic liberals are those who believe the best economy is a market economy driven by the private sector. Those belonging to this school of thought regard private property as being crucial for the actualisation of a prosperous human society. they are of the opinion that with the prevalence of private property, the value of the land will be protected by the one who owns it and it will be put to good use. They also argue that private property is a crucial component of capitalisation in any economy. With private ownership of property comes the attachment of monetary value to a piece of real estate or land, which may then be used as collateral or to trade if the need arises.
Socialist economists are supporters of socialism and believe that the best system is public ownership of property and not private property. They argue that unlike social ownership of property, private ownership of property actually limits the productivity of elements within the economy when collective activity derives from productive activity, resulting in the redundancy of the capitalist. They believe with social ownership of property, the class distinction between workers and owners can be eliminated.