Difference Between Private Property in Capitalism & Communism

by Dell Markey
Capitalism's existence depends on private property.

Communism and capitalism take opposite approaches to private property. For capitalists, private property is both the motivator and the reward for economic progress. Capitalists believe that one of government's main functions is to protect the property rights of individuals – and, by extension, the rights of owners of businesses. The main goal and tenet of communism is the elimination of private property in favor of communal ownership of all resources and means of production.

Rights of Control

In capitalist thinking, those who own any given asset have the right to control how that asset is used. Theoretically, this should lead to the optimum use of assets because capitalism assumes that most people will act in their own self-interest. In communism, assets relating to production are owned by society as a whole, and their use should be determined by what benefits society most. Theoretically, each person would be allowed to use assets as needed and each person would contribute as able to ensure that all assets are optimally used.

Claim to Value Produced

In a capitalist system, someone who owns private property is entitled to any value associated with that property. This includes both the property's intrinsic value and any value which is gained by using the property. For example, someone who owns a car owns the value of the car itself and could also rent it out or otherwise use the car to earn an income. Within pure communism, any value produced by the community's assets also belong to the community. No country follows a completely capitalist or a completely communist system. Nations such as the former Soviet Union that have tried to implement communism have found it necessary to allow workers to keep at least some of the value of the products they produce. Nations with capitalist economic systems likewise generally tax income and property and use the revenue for programs geared towards benefiting society as a whole.

Right to Exclusivity

In capitalism, ownership of property implies the right to keep other people from using it. If a person owns a piece of land, he has the right to insist that others stay off of it, if he so chooses. Communism teaches that privatized property that relates to production is the basis of class struggle and exploitation. The prohibition on private property doesn't mean that a person can't possess personal property. Only property relating to production belongs to society as a whole.

Right to Transfer Ownership

In capitalism, a person who owns private property has the right to sell, give or otherwise divest that property to others. For example, if someone in a capitalist society owns a bakery, the owner has the right to get out of the bakery business, sell the building, ovens and other assets to someone else and use the money from the sale at will. Within communism, the baker does not own the bakery -- society does. Should the baker no longer need the bakery and its equipment, a communist society would allow someone else to use them. The communist baker would not realize any direct gain from the transaction. Within communist thinking, however, society would meet the needs of the former bake.

About the Author

Dell Markey is a full-time journalist. When he isn't writing business spotlights for local community papers, he writes and has owned and operated a small business.

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