On Socialist Distinctions between Private and Personal Property

Earlier in the month, I posted an article about how libertarianism’s and socialism’s theories of property are incompatible and how, as a result, a free society would not allow voluntary socialism. The socialist theory of property makes the distinction between private and personal property. So while under socialism it would not be legitimate for a capitalist to privately own means of production, an individual may own day-to-day items like clothes, toothbrushes and other consumer goods. The People’s Toothbrush is absent from socialist literature. But any attempt to make an objective, universal distinction between private and personal property must be done arbitrarily. In his Lessons for the Young Economist, Robert Murphy writes,

[T]here are items that are certainly useful, and which would allow Crusoe to achieve more of his goals if he had more of such items—hence they are goods—but they are not directly useful to him. They are only indirectly useful because they help Crusoe to obtain more consumer goods. For example, a long stick, in and of itself, doesn’t do anything for Crusoe, and if it were the only object on the island, Crusoe would not consider it a good at all. But because there are coconuts hanging on trees—some of which are out of Crusoe’s reach—suddenly the stick acquires value indirectly. […] Economists call items such as the hypothetical stick producer goods or factors of production or means of production.

As with goods in general, the distinction between consumer versus producer goods is in the mind of the acting individual. For example, if the Incredible Hulk should wash up on Crusoe’s island, he might consider the stick a great device for scratching that hard-to-reach spot between his shoulder blades. To the Hulk, the same physical stick would be a consumer good.1

One could also think of goods commonly seen as consumer goods (personal property) that, to some clever person, would also be a factor of production (private property). While many socialists consider a motor vehicle to be personal property, to an entrepreneurial car-owner it may be a production good, as he can use it to deliver pizzas to those who value extra time spent on their couch or with their family over driving to the pizzeria. If the entrepreneur bakes fabulous cakes that all the neighbors love and are willing to trade some wealth to consume, his oven is a factor of production to him, even if it is the same model found in every other house in town. Even something as lowly and seemingly insignificant as a broom is a production good to someone who can sweep with twice the efficiency of the other members of society.

Distinctions between private and personal property can only apply to single individuals. Because all individuals have a different set of knowledge, preferences and talents, these distinctions cannot be generalized across any two individuals, much less across all of society. The chemist’s Erlenmeyer flask is just an oddly shaped vase to the shepherd whose sheep shears are just a ponderous pair of scissors to the chemist. Attempts to prohibit individual ownership of certain goods based on how some members of society use them can only diminish the utility of those who may have different uses for them.


1. Robert P. Murphy, Lessons for the Young Economist (Auburn, AL: Ludwig von Mises Institute, 2010), 52-53.

One comment

  1. I agree with your examples that some things could be either personal property or a means of production.

    Can you envisage a situation where a steel mill is anything other than a means of production? Is there anyone who would regard a steel mill as “personal property”?

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