An outstanding feature of modern economic life is the institution of private property. By private property, we mean the things owned exclusively by a person or group of persons with the rights to use them as they desire. It differs from public property in the sense that public property is owned by the community at large and administrated by individuals or groups as agents of the community. For example, railways are public property.
The private property may be distinguished from public property in respect of the following points.
(i) Private property is owned by a person, group of persons where as public property is owned by the community.
(ii) Private property is usually used by its owner for his own good while public property is used for public good.
(iii) Private property is subject to regulations by the state while public property belongs to the state itself and is not subject or regulation by any external group. In other words, private property rights are subject to supervision, regulation and control by the state.
The institution of private property has gathered a great controversy around itself. It has both its strong supporters and bitter critics. On the one hand, if it regarded as essential for social progresses on the other it is called “theft”. The economic institution of capitalism is based on private property.
Advantages of private property
The advantages of private property are as follows.
(i) Incentive to work
It is said that man in general needs an incentive to work. The rights to private property provide such an incentive.
It makes people work and work hard; none would like to exert oneself if one has no incentive. Thus, the institution of private property induces a man to work hard which is ultimately beneficial to the community,
(ii) Satisfaction of natural instinct
Man has an acquisitive instinct. He wants to acquire something, which he can call his own. He wants to have a house, an automobile and several other things of comfort and luxury. He works hard to get these things and when he gets them, he feels pleasure.
(iii) Security against future
1. A man of property has security against starvation. He can afford to pursue intellectual tastes. Poverty means a life of want and uncertainty. Property is a foreguard against the want of the narrow and those who have no property are uncertain whether the narrow will give them the means of life.
(iv) Ethically sound
Private property is justified on the ground that it is the reward to an individual for his labor. The builder of a railway, the inventor of a safety razor and the discoverer of a patent medicine all have put in hard labor. Therefore, whatever they gain on account of their hard labor rightfully belongs to them.
(v) Nurse of virtues
It has also been argued by some thinkers that private property creates social virtues like love of one’s family generosity, energy, philanthropy etc., the man who has private property has a great stake in the country lost his property may be looted by foreign invaders. It is on this account that some political thinkers have suggested that the right to vote should be given only to those who have some property.
(vi) Economic progress
This incentive to private property leads peoples to exert themselves almost for earning money. This has lead to many inventions in the field of industry, agriculture and business, which have contributed to economic progress.
(vii) Historical justification
The institution of private property is also justified on the basis of history, it is said that al! Progressive societies are those, which are built upon the system of private property. The United States is a progressive society as it is based on the institution of the private property and free enterprises.
Disadvantages of private property
But, all the advantages of the private property are said to be fallacious. The power to acquire a property may defeat more incentives than it creates. In Soviet Russia, the right to property is severely limited yet the Russians are no less hard working than the Americans are. A person in order to acquire more property may indulge in unsocial or antisocial activities like adulteration, smuggling, hoarding etc. This profession may not necessarily be related to socially useful function. Production may be built more picture palace when more houses are needed because picture palaces bring more income.
The owner of private property gets control over the lives of those who have no property. Private property may create the vices of prostitution, gambling and drinking in the man who has a large amount of it. The cultivation of civic virtues does not necessarily depend on private property. A property less person may be more virtuous than a propertied one. Usually private property is associated with ill-gotten gains. Soviet Russia is no less economically advanced than the United States. Therefore, it is not true to say that, only those societies are civilized which are built on the institution of private property.
Thus, the various arguments advanced in favor of private properly do not hold any validity upon deeper examination. Besides, private property gives birth to the following consequences,
(i) Greed for property
Private, property makes man greedy. He wants to earn more and more money by any means. He does not care even for morality. Private property thus leads to moral degeneration also.
(ii) Destruction of human values
In a private property system, everything is measured in terms of money. All values of human .life such as love, sympathy, benevolence and affections are evaluated in terms of silver coins. Every person wants to get the maximum. The sole criterion is property not value.
(iii) Basis of capitalism
The institution of private property is the basis of capitalism. In capitalism, every person has the right to earn and maintain property. The right to property is considered sacred capitalism is injurious to both the individual and society.
Private property is a source of inequality, it creates wide gap between the haves and the have nots. The ownership of private property gives power to direct the lives of those who have no property. The propertied class gets control of the political machinery and uses it for its personal advantage. Their interests clash with the best interests of the community. In a social system based on private property the property less man has no social value of rights.
(v) Economically inadequate
The system of private property is economically inadequate because, it fails to distribute the wealth. It creates as to offer necessary condition of health and security to those who live by its processes. It has lost the allegiance of the vast majority of the people. It is regarded with hate and indifference by them. Much of private property is earned by a person without being paid for simply owning the owners and absentee owners. They get productive instruments rather than for doing any kind of work.
In view of its evils, the institution of private property has been challenged by ideologies of the life. Syndicalism, Socialism, Communism bitterly criticizes the property system. Each of them sees the members of the working class pitted against the propertied class. They want to establish collective ownership of property. The challenge to these ideologies has necessitated a restricting of the institution of private property and its adjustment to the changing social system.