Common ownership

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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.

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Forms of common ownership exist in every economic system. Common ownership of the means of production is a central goal of socialist 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 as the former refers to property owned jointly by agreement of a set of colleagues, such as producer cooperatives, whereas the latter refers to assets that are completely open for access, such as a public park freely available to everyone. [1] [2]

Christian societies

The first church in Jerusalem shared all their money and possessions (Acts of the Apostles 2 and 4). [3] [4]

Inspired by the Early Christians, many Christians have since tried to follow their example of community of goods and common ownership. [5] Common ownership is practiced by some Christian groups such as the Hutterites (for about 500 years), the Bruderhof (for some 100 years) and others. [6] [7] In those cases, property is generally owned by a charity set up for the purpose of maintaining the members of the religious groups. [8] [9]

Christian communists typically regard biblical texts in Acts 2 and Acts 4 as evidence that the first Christians lived in a communist society. [10] [11] [12] 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". [13] [14]

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, socialist economics, retailers' cooperatives in particular exhibit elements of common ownership, while their retailer members may be individually owned.

Some individuals and organizations intentionally produce or support free content, including open source software, public domain works, and fair use media. [15] [16]

Mutual aid is a form of common ownership that is practiced on small scales within capitalist economies, particularly among marginalized communities, [17] [18] [19] [20] and during emergencies such as the COVID-19 pandemic. [21] [22] [23] [24]

In socialist economies

Many socialist movements, including Marxist, anarchist, 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 and Friedrich Engels termed "upper-stage communism" [25] or what Vladimir Lenin, [26] Emma Goldman, [27] and Peter Kropotkin [28] each 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. [29] [27]

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 the elimination of material scarcity in society. [30]

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. [31]

Antitrust economics

In antitrust economics, common ownership describes a situation in which large investors own shares 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. [32] Several empirical contributions document the growing importance of common ownership and provide evidence to support the theory. [33] Because of concern about these anticompetitive effects, common ownership has "stimulated a major rethinking of antitrust enforcement". [34] The United States Department of Justice, [35] the Federal Trade Commission, [36] the European Commission, [37] and the OECD [38] have all acknowledged concerns about the effects of common ownership on lessening product market competition.

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. [39] [40] 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 so-called 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. [41] If we start in a situation 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 while joint ownership can be optimal if the investments are in physical capital. [42] Recently, several authors have shown that joint ownership can actually be optimal even if investments are in human capital. [43] In particular, joint ownership can be optimal if the parties are asymmetrically informed, [44] if there is a long-term relationship between the parties, [45] or if the parties have know-how that they may disclose. [46]

See also

Related Research Articles

Libertarian socialism is an anti-authoritarian and anti-capitalist political current that emphasises self-governance and workers' self-management. It is contrasted from other forms of socialism by its rejection of state ownership and from other forms of libertarianism by its rejection of private property. Broadly defined, it includes schools of both anarchism and Marxism, as well as other tendencies that oppose the state and capitalism.

Socialism is an economic and political philosophy encompassing diverse economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes the economic, political, and social theories and movements associated with the implementation of such systems. Social ownership can take various forms, including public, community, collective, cooperative, or employee. As one of the main ideologies on the political spectrum, socialism is considered the standard left wing ideology in most countries of the world. Types of socialism vary based on the role of markets and planning in resource allocation, and the structure of management in organizations.

State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are nationalized as state-owned enterprises. The definition can also include the state dominance of corporatized government agencies or of public companies in which the state has controlling shares.

<span class="mw-page-title-main">Anti-capitalism</span> Political ideology and movement opposed to capitalism

Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as socialism or communism.

<span class="mw-page-title-main">State ownership</span> Ownership of industry, assets, or businesses by a public body

State ownership, also called public ownership or government ownership, is the ownership of an industry, asset, property, or enterprise by the national government of a country or state, or a public body representing a community, as opposed to an individual or private party. Public ownership specifically refers to industries selling goods and services to consumers and differs from public goods and government services financed out of a government's general budget. Public ownership can take place at the national, regional, local, or municipal levels of government; or can refer to non-governmental public ownership vested in autonomous public enterprises. Public ownership is one of the three major forms of property ownership, differentiated from private, collective/cooperative, and common ownership.

<span class="mw-page-title-main">Economic system</span> System of ownership, production and exchange

An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.

The nature of capitalism is criticized by left-wing anarchists, who reject hierarchy and advocate stateless societies based on non-hierarchical voluntary associations. Anarchism is generally defined as the libertarian philosophy which holds the state to be undesirable, unnecessary and harmful as well as opposing authoritarianism, illegitimate authority and hierarchical organization in the conduct of human relations. Capitalism is generally considered by scholars to be an economic system that includes private ownership of the means of production, creation of goods or services for profit or income, the accumulation of capital, competitive markets, voluntary exchange and wage labor, which have generally been opposed by most anarchists historically. Since capitalism is variously defined by sources and there is no general consensus among scholars on the definition nor on how the term should be used as a historical category, the designation is applied to a variety of historical cases, varying in time, geography, politics and culture.

Mutualism is an anarchist school of thought and anti-capitalist market socialist economic theory that advocates for workers' control of the means of production, a market economy made up of individual artisans and workers' cooperatives, and occupation and use property rights. As proponents of the labour theory of value and labour theory of property, mutualists oppose all forms of economic rent, profit and non-nominal interest, which they see as relying on the exploitation of labour. Mutualists seek to construct an economy without capital accumulation or concentration of land ownership. They also encourage the establishment of workers' self-management, which they propose could be supported through the issuance of mutual credit by mutual banks, with the aim of creating a federal society.

<span class="mw-page-title-main">Pre-Marxist communism</span> Overview of communist-oriented ideologies and practices prior to the works of Karl Marx

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Free association, also known as free association of producers, is a relationship among individuals where there is no private ownership of the means of production. A key feature of socialist economics, it has been defined differently by different schools of socialism, entailing either the individual, collective or common ownership of the means of production.

State socialism is a political and economic ideology within the socialist movement that advocates state ownership of the means of production. This is intended either as a temporary measure, or as a characteristic of socialism in the transition from the capitalist to the socialist mode of production or to a communist society. State socialism was first theorised by Ferdinand Lassalle. It advocates a planned economy controlled by the state in which all industries and natural resources are state-owned.

Types of socialism include a range of economic and social systems characterised by social ownership and democratic control of the means of production and organizational self-management of enterprises as well as the political theories and movements associated with socialism. Social ownership may refer to forms of public, collective or cooperative ownership, or to citizen ownership of equity in which surplus value goes to the working class and hence society as a whole. There are many varieties of socialism and no single definition encapsulates all of them, but social ownership is a common element shared by its various forms. Socialists disagree about the degree to which social control or regulation of the economy is necessary, how far society should intervene, and whether government, particularly existing government, is the correct vehicle for change.

<span class="mw-page-title-main">Pierre-Joseph Proudhon</span> French politician, philosopher, anarchist and socialist (1809–1865)

Pierre-Joseph Proudhon was a French socialist, politician, philosopher, and economist who founded mutualist philosophy and is considered by many to be the "father of anarchism". He was the first person to declare himself an anarchist, using that term, and is widely regarded as one of anarchism's most influential theorists. Proudhon became a member of the French Parliament after the Revolution of 1848, whereafter he referred to himself as a federalist. Proudhon described the liberty he pursued as "the synthesis of community and property". Some consider his mutualism to be part of individualist anarchism while others regard it to be part of social anarchism.

The socialist mode of production, also known as socialism or communism, is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of production for use-value, therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of "to each according to his needs"; Soviet models often distributed products based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management. Surplus value goes to the working class and hence society as a whole.

Social ownership is a type of property where an asset is recognized to be in the possession of society as a whole rather than individual members or groups within it. Social ownership of the means of production is the defining characteristic of a socialist economy, and can take the form of community ownership, state ownership, common ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Within the context of socialist economics it refers particularly to the appropriation of the surplus product produced by the means of production to society at large or the workers themselves. Traditionally, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society. However, the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy.

Market socialism is a type of economic system involving social ownership of the means of production within the framework of a market economy. Various models for such a system exist, usually involving cooperative enterprises and sometimes a mix that includes public or private enterprises. In contrast to the majority of historic socialist economies, which have substituted the market mechanism for some form of economic planning, market socialists wish to retain the use of supply and demand signals to guide the allocation of capital goods and the means of production. Under such a system, depending on whether socially owned firms are state-owned or operated as worker cooperatives, profits may variously be used to directly remunerate employees, accrue to society at large as the source of public finance, or be distributed amongst the population in a social dividend.

Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may take the form of autonomous cooperatives or direct public ownership wherein production is carried out directly for use rather than for profit. Socialist systems that utilize markets for allocating capital goods and factors of production among economic units are designated market socialism. When planning is utilized, the economic system is designated as a socialist planned economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind to value resources and goods.

<span class="mw-page-title-main">Utopian socialism</span> Political theory concerned with imagined socialist societies

Utopian socialism is the term often used to describe the first current of modern socialism and socialist thought as exemplified by the work of Henri de Saint-Simon, Charles Fourier, Étienne Cabet, and Robert Owen. Utopian socialism is often described as the presentation of visions and outlines for imaginary or futuristic ideal societies, with positive ideals being the main reason for moving society in such a direction. Later socialists and critics of utopian socialism viewed utopian socialism as not being grounded in actual material conditions of existing society. These visions of ideal societies competed with revolutionary and social democratic movements.

A classless society is a society in which no one is born into a social class like in a class society. Distinctions of wealth, income, education, culture, or social network might arise and would only be determined by individual experience and achievement in such a society. Thus, the concept posits not the absence of a social hierarchy but the uninheritability of class status. Helen Codere defines social class as a segment of the community, the members of which show a common social position in a hierarchical ranking. Codere suggest that a true class-organized society is one in which the hierarchy of prestige and social status is divisible into groups. Each group with its own social, economic, attitudinal and cultural characteristics, and each having differential degrees of power in community decision.

The following outline is provided as an overview of and topical guide to socialism:

References

  1. ↑ Public Ownership and Common Ownership, Anton Pannekoek, Western Socialist, 1947. Transcribed by Adam Buick.
  2. ↑ Holcombe, Randall G. (2005). "Common Property in Anarcho-Capitalism" (PDF). Journal of Libertarian Studies . 19 (2): 10. Archived from the original (PDF) on 2013-09-11. Retrieved 2014-09-13.
  3. ↑ "Acts 2:1–47". Biblia. Retrieved 2017-12-01.
  4. ↑ "Acts 4:1–37". Biblia. Retrieved 2017-12-01.
  5. ↑ Mangan, Lucy (2019-07-25). "Inside the Bruderhof review – is this a religious stirring I feel?". The Guardian. ISSN   0261-3077 . Retrieved 2019-12-23.
  6. ↑ "BBC - Inside The Bruderhof - Media Centre". www.bbc.co.uk. Retrieved 2019-10-10.
  7. ↑ "Bruderhof - Fellowship for Intentional Community". Fellowship for Intentional Community. Retrieved 2017-11-08.
  8. ↑ "Community Of Goods". Hutterites. 2012-02-24. Retrieved 2017-12-01.
  9. ↑ "Eberhard Arnold: Founder of the Bruderhof". www.eberhardarnold.com. Retrieved 2017-12-01.
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  12. ↑ Busky, Donald F. (2002). Communism in History and Theory: From Utopian socialism to the fall of the Soviet Union. Greenwood Publishing Group. p. 14. ISBN   978-0-275-97748-1 – via Google Books.
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  14. ↑ Berman, Marshall (2000). Adventures in Marxism. Verso Books. p. 151. ISBN   978-1859843093.
  15. ↑ Erik Möller, e.a. (2008). "Definition of Free Cultural Works". 1.1. freedomdefined.org. Archived from the original on 18 August 2016. Retrieved 2015-04-20.
  16. ↑ Stallman, Richard (November 13, 2008). "Free Software and Free Manuals". Free Software Foundation. Archived from the original on 15 August 2021. Retrieved March 22, 2009.
  17. ↑ NEMBHARD, JESSICA GORDON (2014). Collective Courage: A History of African American Cooperative Economic Thought and Practice. Penn State University Press. doi:10.5325/j.ctv14gpc5r. ISBN   978-0-271-06216-7. JSTOR   10.5325/j.ctv14gpc5r.
  18. ↑ Bacon, Jacqueline; McClish, Glen (2000). "Reinventing the Master's Tools: Nineteenth-Century African-American Literary Societies of Philadelphia and Rhetorical Education". Rhetoric Society Quarterly. 30 (4): 19–47. doi:10.1080/02773940009391187. ISSN   0277-3945. JSTOR   3886116. S2CID   144385631.
  19. ↑ Williams, Colin C.; Windebank, Jan (2000). "Self-help and Mutual Aid in Deprived Urban Neighbourhoods: Some Lessons from Southampton". Urban Studies. 37 (1): 127–147. Bibcode:2000UrbSt..37..127W. doi:10.1080/0042098002320. ISSN   0042-0980. JSTOR   43084635. S2CID   155040089.
  20. ↑ Hernández-Plaza, Sonia; Alonso-Morillejo, Enrique; Pozo-Muñoz, Carmen (2006). "Social Support Interventions in Migrant Populations". The British Journal of Social Work. 36 (7): 1151–1169. doi:10.1093/bjsw/bch396. ISSN   0045-3102. JSTOR   23721354.
  21. ↑ Sitrin, Marina; et al. (Colectiva Sembrar) (2020). Pandemic Solidarity: Mutual Aid during the Covid-19 Crisis. 345 Archway Road, London N6 5AA: Pluto Press. ISBN   978-0-7453-4316-7.{{cite book}}: CS1 maint: location (link)
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  23. ↑ "Gig workers have created a tool to offer mutual aid during COVID-19 pandemic". TechCrunch. Retrieved 21 March 2020.
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  25. ↑ Marx, Karl. "Critique of the Gotha Program". Die Neue Zeit. Bd. 1 No. 18 – via Marxist internet Archive.
  26. ↑ Steele, David (1992). From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation. Open Court Publishing Company. pp. 44–45. ISBN   978-0-87548-449-5. By 1888, the term 'socialism' was in general use among Marxists, who had dropped 'communism', now considered an old fashioned term meaning the same as 'socialism'. ... At the turn of the century, Marxists called themselves socialists. ... The definition of socialism and communism as successive stages was introduced into Marxist theory by Lenin in 1917 ... , the new distinction was helpful to Lenin in defending his party against the traditional Marxist criticism that Russia was too backward for a socialist revolution.
  27. 1 2 Goldman, Emma (1932). "There Is No Communism in Russia". The Anarchist Library. Retrieved 2024-01-29.
  28. ↑ Kropotkin, Pëtr (1901). "Communism and Anarchy". The Anarchist Library. Retrieved 2024-01-29.
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  30. ↑ Engels, Friedrich. "The Principles of Communism". Vorwärts– via Marxist Internet Archive.
  31. ↑ Adams, Ian (1998). Ideology and Politics in Britain Today (illustrated, reprint ed.). Manchester University Press. pp. 144–145. ISBN   9780719050565
  32. ↑ Rotemberg, Julio (1984), "Financial Transaction Costs and Industrial Performance", MIT Sloan School of Management, Working Paper No. 1554-84.
  33. ↑ Azar, José; Schmalz, Martin; Tecu, Isabel (2018), "Anticompetitive Effects of Common Ownership", Journal of Finance, 73 (4): 1513–1565, doi:10.1111/jofi.12698, hdl: 1721.1/49091 , S2CID   7965196
  34. ↑ Hemphill, Scott; Kahan, Marcel (2020), "The Strategies of Anticompetitive Common Ownership", Yale Law Journal, pp. 18–29.
  35. ↑ Solomon, Steven Davidoff (2018), "Rise of Institutional Investors Raises Questions of Collusion", New York Times.
  36. ↑ Federal Trade Commission (2018), "Competition and Consumer Protection in the 21st Century", FTC Hearings on Common Ownership.
  37. ↑ OECD (2017), "Competition in Changing Times", DG COMP.
  38. ↑ Vestager, Margrethe (2018), "Common Ownership by Institutional Investors and its Impact on Competition", Competition Committee.
  39. ↑ Grossman, Sanford J.; Hart, Oliver D. (1986). "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration" (PDF). Journal of Political Economy. 94 (4): 691–719. doi:10.1086/261404. hdl:1721.1/63378. JSTOR   1833199.
  40. ↑ Hart, Oliver; Moore, John (1990). "Property Rights and the Nature of the Firm". Journal of Political Economy. 98 (6): 1119–1158. CiteSeerX   10.1.1.472.9089 . doi:10.1086/261729. JSTOR   2937753.
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