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Common ownership

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.

Forms of common ownership exist in every economic system. Common ownership of the means of production is a central goal of communist 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]


While virtually all societies have elements of common ownership, societies have existed where common ownership extended to essentially all possessions. Another term for this arrangement is a "gift economy" or communalism.[citation needed] Many nomadic societies effectively practiced common ownership of land.[citation needed]



Marxist theory (specifically Friedrich Engels) holds that hunter-gatherer societies practiced a form of primitive communism as based on common ownership on a subsistence level.[citation needed]

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. Common ownership is practiced by some Christian groups such as the Hutterites (for about 500 years), the Bruderhof (for some 100 years) and others.[5][6] In those cases, property is generally owned by a charity set up for the purpose of maintaining the members of the religious groups.[7][8]

Common ownership in capitalist economies

Common ownership is practised by large numbers of voluntary associations and non-profit organizations as well as implicitly by all public bodies. Most co-operatives have some element of common ownership, but some part of their capital may be individually owned.

Marxist theory

Many socialist 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 of the means of production, reserving common ownership for what Karl Marx termed "upper-stage communism".[9] From a Marxist analysis, 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.[10]

Therefore, public or state ownership of industry is seen as a temporary measure to be adopted during the transition from capitalism to socialism, which will eventually be displaced by common ownership as state authority becomes obsolete as class distinctions evaporate.[11][12] Common ownership in a hypothetical communist society is distinguished from primitive forms of common property that have existed throughout history, such as Communalism and primitive communism, in that communist common ownership is the outcome of social and technological developments leading to the elimination of material scarcity in society.[13]

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.[14]


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.[15][16] 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 that should not be wasted. In particular, a central result of the property rights approach says that joint ownership is suboptimal.[17] 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 sub-optimality 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.[18] Recently, several authors have shown that joint ownership can actually be optimal even if investments are in human capital.[19] In particular, joint ownership can be optimal if the parties are asymmetrically informed,[20] if there is a long-term relationship between the parties,[21] or if the parties have know-how that they may disclose.[22]

See also


  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.
  3. ^ "Acts 2:1–47". Biblia. Retrieved 2017-12-01.
  4. ^ "Acts 4:1–37". Biblia. Retrieved 2017-12-01.
  5. ^ "BBC - Inside The Bruderhof - Media Centre". Retrieved 2019-10-10.
  6. ^ "Bruderhof - Fellowship for Intentional Community". Fellowship for Intentional Community. Retrieved 2017-11-08.
  7. ^ "Community Of Goods". Hutterites. 2012-02-24. Retrieved 2017-12-01.
  8. ^ "Eberhard Arnold: Founder of the Bruderhof". Retrieved 2017-12-01.
  9. ^ Marx, Karl. "Critique of the Gotha Program". Die Neue Zeit. Bd. 1 No. 18 – via Marxist internet Archive.
  10. ^ Engels, Friedrich (Spring 1880). "Socialism: Utopian and Scientific". Revue Socialiste – via Marxist Internet Archive.
  11. ^ "Where We Stand" (PDF). International Socialist. International Socialist Organization. November 2017. pp. 20–21. Retrieved April 2, 2018.
  12. ^ "The Midwest Is Red: May Day Announcement of the Formation of KCRC". Red Guards Kansas City. 1 May 2016. Retrieved 2 April 2018. ii)...Because of the transitional nature of socialism and the existence of the state as a marker of irreconcilable differences between classes Maoism also recognized the existence of class struggle under socialism which could be of a low-level of intensity or of a higher one (cultural revolution) but which would exist until the dissolution of classes and the state with it. iii) In the realm of scientific socialism Maoism is marked by the theory of class struggle and its existence during the dictatorship of the proletariat as well as it’s centrality in the construction of socialism. It is also characterized by the strategy and tactics of the revolution through People’s War led by the revolutionary Communist party of the proletariat, proletarian feminism, the national question, the mass line as well as the classline.
  13. ^ Engels, Friedrich. "The Principles of Communism". Vorwärts – via Marxist Internet Archive.
  14. ^ Adams, Ian (1998). Ideology and Politics in Britain Today (illustrated, reprint ed.). Manchester University Press. pp. 144–145. ISBN 9780719050565
  15. ^ 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.
  16. ^ Hart, Oliver; Moore, John (1990). "Property Rights and the Nature of the Firm". Journal of Political Economy. 98 (6): 1119–1158. CiteSeerX doi:10.1086/261729. JSTOR 2937753.
  17. ^ Hart, Oliver (1995). Firms, contracts, and financial structure. Oxford University Press.
  18. ^ Schmitz, Patrick W. (2013). "Investments in physical capital, relationship-specificity, and the property rights approach" (PDF). Economics Letters. 119 (3): 336–339. doi:10.1016/j.econlet.2013.03.017.
  19. ^ Gattai, Valeria; Natale, Piergiovanna (2015). "A New Cinderella Story: Joint Ventures and the Property Rights Theory of the Firm". Journal of Economic Surveys. 31: 281–302. doi:10.1111/joes.12135. ISSN 1467-6419.
  20. ^ Schmitz, Patrick W. (2008). "Joint ownership and the hold-up problem under asymmetric information". Economics Letters. 99 (3): 577–580. doi:10.1016/j.econlet.2007.10.008.
  21. ^ Halonen, Maija (2002). "Reputation and the Allocation of Ownership" (PDF). The Economic Journal. 112 (481): 539–558. CiteSeerX doi:10.1111/1468-0297.00729. JSTOR 798519.
  22. ^ Rosenkranz, Stephanie; Schmitz, Patrick W. (2003). "Optimal allocation of ownership rights in dynamic R&D alliances". Games and Economic Behavior. 43 (1): 153–173. doi:10.1016/S0899-8256(02)00553-5.

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