Explainer Features of Capitalism

Private Ownership

Private ownership is sometimes described as the backbone of capitalism. This means that most assets – like land, buildings, machines, tools, factories, and financial investments like stocks – are owned by individuals or businesses, rather than by the government or by the community as a whole.

Let’s consider land. Ownership means having the legal right to control how that land is used, within limits set by law.

For example, a landowner can:

Sell or rent the land in exchange for money.

Use or sell certain resources on the land – by, say, cutting down the trees and selling the lumber.

Use the land for other money making ventures – like raising cows to sell milk and meat, building a factory to produce goods, and so on.

For example, a landowner can:

Sell or rent the land in exchange for money.

Use or sell certain resources on the land – by, say, cutting down the trees and selling the lumber.

Use the land for other money making ventures – like raising cows to sell milk and meat, building a factory to produce goods, and so on.

For example, a landowner can:

Sell or rent the land in exchange for money.

Use or sell certain resources on the land – by, say, cutting down the trees and selling the lumber.

Use the land for other money making ventures – like raising cows to sell milk and meat, building a factory to produce goods, and so on.

In a capitalist system, privately owned land is not just something a person owns – it is a resource they can use to generate income and create a profit.

The same goes for other forms of privately owned property. A corporation owns a factory, an entrepreneur owns delivery trucks and equipment, an investor owns shares of a company, an inventor owns her unique invention. Any of this privately owned property can be used to generate income.

Some argue that protecting private property encourages people to maintain, invest, innovate, and build because they can keep the rewards of their work. Why bother to invent something new if others can simply take your design and profit from it? Supporters of private property also reason that resources like land are often better cared for if they are owned. If no one person is responsible for a plot of land, what prevents it from being overused or neglected?

Others remind us that the concept of land as private property is relatively new in human history. In medieval Europe, for example, only kings and emperors owned land; common people had the right to hunt, fish, forage, and plant on lands that were held in common. Indigenous peoples of the Americas, Africa, and Australia practiced different types of communal land management for thousands of years.

Transforming land and natural resources into private property, these critics argue, made survival dependent on access controlled by owners and contributed to lasting inequalities. It also raises some broader questions: Is it right to treat certain parts of the natural world – or life-saving medicines and inventions – as things to be owned, bought, and sold? To what extent do systems built around ownership and profit encourage people to view nature, knowledge, and even human life primarily in terms of their economic value?