Privatization vs. Communization; In Search of Resolution

It is indeed the philosophies of ownership of property that sets economic/political parties apart, and often is the argument between private and public property, the privatization of goods and the communization of goods. For the longest time I’ve set my allegiances to the ideas of publicly owned goods/services, but the truth is that neither system is capable of a perfect society that we often read about in utopian literature.

The philosophies of hardcore libertarians (the conservative kind that is) on privatization are based on the ideals of John Locke, who essentially believed that a man has the unalienable right to the “fruits” of his labor. This is a moral that I essentially agree with, meaning that it is a set of moral principles that I believe society can be constructed on and are aligned with the qualities of human nature such as jealousy.

However, there are limitations to the implementation of such a notion. Not all things are a result of labor. For example, land is not a result of someone’s work. It exists independent of man. It is thus very difficult to justify someone’s ownership of land via Lockian ideals. The same applies for capital. Money from places such as inheritances is not a result of an individual’s effort. Simply privatizing everything creates contradictions within the morals of a society, which gives the sense that a society, which is supposed to be fair, is indeed not. Contradictions lead to conflicts and such is the way of world. These contradictions could possibly be relieved if those goods void of labor are publicized/communized or made non-excludable. The opposite of Lockian philosophy still holds in that no man has the right over the things that are devoid of his labor; it is simply not fair for one to claim something that is not “his” under the morals of “private property”.

However, implementation may be difficult. If all land and capital are in reality public and if all goods are produced from land and capital, then we are essentially saying that nothing is truly 100% “private”. For example a wooden chair is made from trees that came from a plot of land that was essentially public. The true value of someone’s labor remains in the difference between the value of the trees/land in their natural form and the value of the chair, the finished product. Mathematically this can be represented by the following equation:
Screen shot 2013-10-05 at 12.22.03 PM, where F represents the “fruit” of someone’s labor, the excludable value, Vf represents the value of the finished product (the wooden chair from the previous example), and Vo represents the value of the raw materials that were gathered and used, the non-excludable value.
F is the true value that a worker added through his efforts; it is the true value of the “fruit” of someone’s labor.

Although nothing is truly “private”, it does not solve the issue to publicize all goods and service, because the Lockian principles still exists as the under workings of our society. The mixed economies of today posses the potential to alleviate some of the contradictions that are a result of poor implementation by using both privatization and publication. And I do believe, this is the reason why they tend to be more successful. However, alleviating all contradictions as I discussed requires more precision, which may probe to be very difficult with the economic understandings we have today, but I do believe that resolution lies in solving this very contradiction.


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