his short piece challenges conventional views among many regarding ownership patterns and socialism offering new definitions of private ownership, state ownership, and social ownership. It also argues how replacing private ownership with state ownership does not suggest any step forward towards communism. 

Individual Ownership and Social Ownership

In primitive communism, there is individual property. It means a bow used by one specific hunter only. But the hunt that is paid off by the bow is distributed according to need with the entire tribe. So the service of the individual property bow remains social. So this individual property is social ownership and not private ownership.

Rise of Private Ownership

But when the tribe collapsed and the hunt from the bow went to the bow owner only and he is to determine how much to be given to whom. It is then that the service of the same bow i.e. individual property becomes private. So then the same individual property becomes the private property and lost its social ownership character. So only when you begin to see service from a means of production from the perspective of equivalent exchange (payment according to the ability to work), a means of production become private ownership. When service from a means of production is distributed according to the needs of society and not according to the ability of one who is controlling the means of production it is social ownership.

Historically rise of land and animal husbandry based on agriculture and the growth of the division of labor due to the rise of trade and various industries (artisan, craftsmen, etc) gave the option for the controller of means of production to exchange his product or service with what he needs or wants. This was impossible before when the range of products was quite less. Hence we can say with rising of agriculture, trade, and industries private property grew stronger and stronger. If society has the right to service of means of production (payment according to needs) we call it social ownership. If only means of production user/controller has right on service from it (payment according to the ability to work) we call it private ownership. Social property became private property when the concept of commodity exchange i.e. equivalent exchange (payment according to the ability to work) started to grow. It mainly grew when productive forces develop to the level that agriculture/animal husbandry became the main livelihood and hunting-gathering became marginal.

Rise of Class along with Private Property

Along with private property, a class distinction emerged in society. By Marxian literature, class appears when few people can force the greater population to work involuntarily for their own purpose. Those few people who are forcing others to work involuntarily either by threat/punishment or by lust/reward are called ruling class and those being forced to work are called ruled class. The ruling class creates the institution called the state to control and suppress the ruled class. So commodity exchange (private property) and class (state) are two offshoots of growth of productive forces when hunting-gathering society became marginal. Thus state and private property both are children of a definite historical epoch which Marxists believe will wither away over time.

Communism is classless and private property less society

Communism is a stage where humans engage in voluntary activities only and so there is neither any equivalent exchange (when humans are enjoying an activity, he or she will not want to get paid for doing it, especially if seeking payment reduces the chance of making such activity) nor there will be any class (as automation do all necessary but disliked activities and so no humans will have any need for any other human to do those activities). Since there will not be any equivalent exchange, there will not be any private property and since there is no class there will not be any state. The basic point is both private property and state will be withered away over time as productive forces will raise the level of automation to a certain level.

So transforming private ownership to state ownership is not a way to achieve communism because both are equal problems for Marxists which have to be withered away by developing productive forces and nourishing class struggle, national struggle, and gender struggle in the right directions.

Role of State and Private Property in Socialism

Socialism is the intermediate stage between capitalism and communism. In socialism, the state becomes one tool (not only a tool) of the advanced working class which can be used against the capitalist class, feudal, speculators, imperialists, and petty capitalists. So state ownership of industries and other means of production can be used by communists after seizing state power. But similarly advanced working class can entitle their own men on the board of directors of private ownership to control capitalists.

Similarly, keeping private ownership alive but controlling it by state owning financial institutions may be another way. Controlling private innovating companies by controlling patents held by the state. Controlling private by using doctors, academicians, religion can be there too. The last 170 years of economic development have taught us that state ownership works excellently in long gestation investment projects (infrastructure, school, universities, R&D, finance) while private ownership works best in consumer goods and services where consumers reveal their preference for those products by offering price. Profit in the later case acts as an indicator of sustainability. This is why rampant privatization has de-industrialized Russia. But keeping state ownership in core sectors and allowing private consumer products made China/Vietnam prosperous.


Socialist states must keep raising productive forces. This will result in over-accumulation of capital when demand will fall short of supply in the economy. This creates the material condition which will make profitable investments dependent on nonprofitable demand creating investments.  Socialism must struggle to reduce class and gender differences within the country and differences in the development of productive forces between different countries and must take care of the environment. In the next step, the socialist state must also make room for more and more people to work by loving the job rather than work for money. Thus more people must be encouraged and empowered to become researchers, innovators, entertainers.

The more disliked but necessary activities can be automated, the more room for enjoyable activities can be provided for humanity. Automation can be raised by not only inventing new things but also applying those inventions into consumable goods and services, marketing those consumable goods and services into social needs, and letting inventions, goods, services, and humans flow into a socialist state to and from outside. Thus socialism has to depend on twin pillars of private and state ownership for a long time till productive forces become high enough to end private property and state. Turning all private property into state property is never going to work. The Chinese approach is almost perfect.

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.