Social democrats and private property

One of the key divergences between social democrats and Marxists is the issue of private property. As is well known, a key and fundamental part of Marxism is the demand for the abolition of private property. This is reflected in the Manifesto of the Communist Party:

In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property¹.

Let us first define what private property is. The Modern Economic Dictionary states: “It is customary to refer to private property as individual, corporate, joint-stock, and non-state property”². The Great Law Dictionary says the following: “one of the forms of ownership, meaning the absolute, legally protected right of a citizen or legal entity to specific property, including the means of production”³. The Encyclopedia of a Lawyer: “a collective term to denote the belonging of the means of production and other items to private (non-state and non-public) individuals who use this property to achieve their interests”⁴. The Cambridge Dictionary definition: “Something, especially land or buildings, that belongs to a particular person or company, but not to the state”⁵. We see that most dictionaries define this term as follows: private property is non-state property. All other definitions are not generally accepted.

Marxists and the concept of private property

Marxists believe that they will succeed in making some other definition of private property generally accepted (while not believing that they are being used by its propagandists and agents of influence to push for the nationalization of property for the benefit of the nomenklatura). However, they will not succeed in this for the following reasons:

1. Already existing definitions are objectively not recognized as controversial, contradictory to each other, or obsolete;
2. The classics of Marxism do not provide a clear definition of private property. If in the first volume of “The German Ideology” they call a coat private property⁶, then in the “Manifesto of the Communist Party” they write that in “present society, private property is already done away with for nine-tenths of its members”⁷. It is clear that they use different definitions; otherwise, it would mean that nine-tenths of the members of society cannot afford a coat, which does not correspond to reality. Therefore, it is more convenient to use definitions from dictionaries;
3. Marxists want to link the definition of private property to the means of production. However, it will be very difficult to form criteria for the means of production so that this category does not include a personal computer, a ballpoint pen, a car, and other personal items;
4. There is no clear understanding of the method of abolishing private property. Some say that the abolition of private property means its nationalization. Others cite the classics stating that “the Social-Democratic party has nothing in common with so-called state socialism, a system of nationalization for fiscal purposes, which puts the state in the place of the private entrepreneur and thereby unites in one hand the power of economic exploitation and political oppression of the worker”⁸ and “the appropriation of the total productive forces by the united individuals destroys private property”⁹. That is, in essence, this is the establishment of collective property, which in the system of generally accepted terminology is private (however, no specific program for such socialization has been developed by any Marxist, and such work is not being seriously conducted by anyone). And the result is that every Marxist has their own definition of private property and their own method for its abolition. But how can one believe a movement that calls for destroying something, yet does not even know clearly what it is calling to destroy and what it proposes instead? Of course, people will be afraid that their toothbrushes will be taken away and given to the state. And in this case, it is not the people who are wrong, but the Marxists calling for the abolition of private property. Because people live in the real world of generally accepted concepts, while such Marxists live in their own.

And this contradiction is a dead end for Marxists. They will not reach a unified definition among themselves due to the lack of clear definitions in the classics, and without this, their definition of private property will dissolve without a trace into the generally accepted one.

Let us consider, for example, how the Marxist resource “Vestnik Buri” (Storm Herald) views the issue of private property:

Basically, we — the left — are the ones declaring the necessity of abolishing private property, so it is worth clarifying one important nuance: we are for the abolition of private property, but not personal property. That is, we are talking about property in the means of production.

Personal property is what you use yourself together with your family, without using it to generate profit. That is, the apartment you live in, the garden plot whose produce you use only for yourself, a car as a means of your transportation — all of this is personal property, not private. Private property, in our understanding, is what is used exclusively for profit: premises and lands rented out, factories, enterprises, construction and transport companies, etc.¹¹

What is this assertion backed by? What sources? No authoritative studies are cited, dictionary definitions are ignored — it turns out that Marxists simply invent their own definitions and try to force people to believe in them. They are trying to substitute the generally accepted meaning of terms with “our understanding”. Most people will wonder what this “our understanding” will become for them tomorrow and whether it will soon be about their apartments, furniture, and so on. Therefore, it is fitting here to recall the legendary joke about the “nuance”.

What does the slogan of abolishing private property mean today?

Those socialists who believe that the slogan of abolishing private property will bring them closer to the real socialization of enterprises and fair forms of organization and distribution do not take into account the fact that without a concrete program for such socialization (which does not exist), the chances of its implementation tend toward zero. Therefore, this slogan works for the other part of the “socialists” — for the part that advocates for the nationalization of private property. They have a program of action remaining from the times of the Stalinist USSR. Therefore, proponents of socialization do not decide anything in this matter and are merely a “support group” for Stalinists.

The effect of eliminating private property

The slogan of abolishing private property itself was implemented in the Stalinist USSR. What are the results of its implementation?

At the beginning of 1951, payments to ministers of the USSR amounted to 20 thousand rubles per month, and to their deputies — 10 thousand rubles¹². Meanwhile, the monetary income of a peasant household in 1950 per capita amounted to less than 100 rubles per month¹³. Doctor of Historical Sciences Oleg Khlevniuk also writes that “at the same time, a significant part of the payments to leading officials was tax-exempt, while taxes on the population were constantly growing”¹⁴. The difference between a minister and a village resident was at least 200 times. Not counting privileges that cannot be bought for any amount of money. That is, it is documentarily proven that a planned economy and the liquidation of private property do not reduce social inequality by themselves; the reduction of inequality is ensured by a complex of other mechanisms. The slogan of liquidating private property seems like hypocrisy if one knows that under Stalin they formally liquidated private property and exploitation, while in the meantime the guard staff for the apartment and dacha of the General Secretary consisted of 335 people¹⁵. Additionally, we analyzed in detail the “high standard of living” as a result of the Stalinist liquidation of private property in a separate article. In another article, we examined all the “charms” of a planned economy based on state property.

Marxists generally think that the liquidation of private property means that the capitalists will have their factories and palaces taken away, and all the profit will go to the workers. However, in all countries where there are no guarantees of private property rights, the elite expropriates property from the rest of the citizens — the petty bourgeoisie, workers, and intelligentsia. Because if there is no guarantee of property rights, there are no mechanisms to prevent this expropriation.

This happened not only in the Stalinist USSR with its collectivization — for example, in the DPRK, there was also a ban on private property. Did it lead to equality and prosperity? North Korea is currently one of the poorest countries in the world outside of Africa. A telling example is the monetary reform when in 2009 the DPRK nomenclature decided to conduct a denomination, after which one hundred old won became equal to one new won. Citizens had to exchange old money within a week, and the government announced that one could exchange only an amount not exceeding one hundred thousand won (later, however, the amount was increased to five hundred thousand). One hundred thousand won on the black market was worth about forty dollars¹⁶. This is quite enough to understand how much cash a DPRK citizen could have had left. Meanwhile, the leader of the DPRK, Kim Jong Un, has at his disposal a seven-story entertainment palace¹⁷ equipped with a bar with a karaoke system and a mini-cinema. On the first floor, there is a huge pool with a wave machine where Kim likes to swim on a board equipped with a small motor¹⁸. According to sales statistics of the French company Hennessy, Kim’s cognac budget amounted to up to 800 thousand dollars per year¹⁹. If the ban on private property really helped to reduce inequality, then such a situation would simply be impossible. However, other mechanisms help to reduce inequality. And the ban on private property in the DPRK led to the fact that people were left with no incentives to invest, work hard, or at least maintain their previous labor productivity²⁰.

In 1974, Marxists came to power in Ethiopia and nationalized land property, including all urban and rural land, as well as almost all private property. Did this lead to prosperity? As a result of the coup, a personal dictatorship of Colonel Mengistu was established — after he dealt with his comrades-in-arms whom he viewed as a threat to his personal power. He chose the Great Palace of Emperor Selassie, which had stood abandoned since the abolition of the monarchy, as his residence. During celebrations, the dictator sat on a gilded throne, just as the emperor once did, and received a parade. Dawit Wolde Giorgis, one of Mengistu’s associates and ministers, recounts in his memoirs:

At the beginning of the Revolution, all of us refused to have anything to do with the old times. We did not drive cars or wear suits, and a tie was considered almost a crime. Any detail of appearance that made you look well-groomed and bourgeois, anything that hinted at well-being and refinement, was rejected by us as part of the old order.

But in 1978, all this began to change. Material well-being gradually began to be considered acceptable, and then necessary. Fashionable clothing from the best European designers became the uniform of all high-ranking officials and members of the Provisional Council. We had all the chicest things — the best houses, luxury cars, chic whiskey, champagne, food. It was a complete abandonment of the ideals of the Revolution²¹.

The Mengistu regime was marked by mass terror, during which, according to various estimates, between 30²² and 500 thousand people were killed²³, and by mass famine, during which about a million people perished²⁴, and instead of an increase in the standard of living, there was an impoverishment of the population. As we can see, once again, the liquidation of private property did not affect the elites — the faces among them simply changed — but it struck the society. For Ethiopia, this was nothing new — back in the 18th century under the emperor, there was a complete lack of guarantees for property rights. The traveler John Bruce described the situation as follows:

All the land in the country belongs to the king. He gives it to those whom he favors, as long as he favors them, and takes it away at his discretion. When he dies, all the land he granted again comes under the disposal of the crown. Moreover, upon the death of an existing owner, no matter how long he had owned the plot by that time, the plot returns to the king and does not pass to the eldest son²⁵.

This is confirmed by the words of another traveler, Manuel de Almeida, who lived in Ethiopia from 1624:

It is a common thing for the emperor to replace land plots or take land away entirely from anyone who owns it, once every two or three years, sometimes every year, or even several times a year, so that no one is surprised by this. Often one person plows the land, another sows it, and a third reaps it. And so, it turns out that no one cares about the land they use. No one even plants trees, because everyone knows that whoever plants them can very rarely wait to see their fruits. Nevertheless, this is profitable for the king, because all subjects are completely dependent on him²⁶.

In Somalia, such insecurity even led to the fact that people practically stopped using writing. As discovered by historian Janet Ewald, who in the late 1970s worked on reconstructing the history of the Kingdom of Taqali, this was partly explained by the fact that the population resisted the use of written documents, as people feared that these documents would be used to control resources such as valuable pastures, and this would allow the king to seize them²⁷. In South Africa, the colonial government even deliberately eliminated private property to turn Africans into cheap labor. Communal property was declared over the land, over which the chiefs immediately took control. In 1940, economist George Findlay expressed the following postulate:

Tribal ownership is a guarantee that the land will never be properly cultivated and will never truly belong to the indigenous population. Cheap labor must have a cheap place to breed, so let the Africans equip it at their own expense²⁸.

The deprivation of property rights from African farmers was followed by mass impoverishment. This contributed to the emergence of so-called “Bantustans” and the policy of apartheid. Far more examples of how the lack of guarantees of property rights led to the impoverishment of the population are provided by renowned economists Daron Acemoglu (as of April 2020, he was the most cited economist in the world²⁹) and James A. Robinson in the book “Why Nations Fail”, citing the example of the Ottoman Empire, Afghanistan, Venezuela, Sierra Leone, China under the Qing dynasty, and so on. Examples where the insecurity of property does not hinder economic growth and an increase in the standard of living are rare—this is, for example, modern China, however, in it, economic growth is not due to the lack of guarantees of property rights at all, but on the contrary, to relaxations in this area after the regime of Mao Zedong, which was marked, again, by mass repression and famine. Here is a typical example of the development of a country where the property of ordinary citizens is not protected.

Acemoglu and Robinson, however, cite many counter-examples where the rule of law and the property protected by it became the foundation for economic growth and the reduction of inequality in rights and income. These are examples of England, the USA, and European countries in which the Napoleonic Code was in force³³; to this, one can add the Scandinavian countries, where property is also reliably protected. The authors take the example of one of the most prosperous countries in Africa — Botswana, where the main private property by the end of colonial rule was livestock. It was not expropriated from the owners; the right to own livestock was protected. By the time of acquiring independence, Botswana was one of the poorest countries in the world; it had only 12 kilometers of paved road and only 22 people who had a university education. Today, Botswana has the highest per capita income among all countries of Black Africa — it is at the same level as that of such states as Estonia or Hungary³⁴. As of 2019, Botswana, which has no access to the sea, and which was surrounded on all sides by countries with regimes unfriendly to it — South Africa, Namibia, Rhodesia — surpasses most African countries in the Human Development Index, including South Africa, Egypt, Libya, Morocco³⁵. Acemoglu and Robinson conclude on the basis of their research that protected private property rights are the central institution promoting economic growth, voluntary increases in labor productivity, and prosperity³⁶.

In the end, it turns out that the interests of the broad masses are not at all expressed by the liquidation of private property, which, as practice shows, in the vast majority of cases ends in the creation of new elites, the formalization of their property as “public”, and the expropriation of the property of the masses. On the contrary, it is in the interest of the broad masses to protect the right of private property to the maximum, and to strive for the reduction of inequality and the concentration of power and capital by using those methods that really help achieve these goals (we described some of these methods in the articles about social-democratic economy and about why some countries are rich and others poor).

All these facts create a wonderful opportunity for the right to present sanity as their prerogative and gain popularity by criticizing those pseudo-leftists who consider dictionaries to be enemy propaganda or the sabotage of traitors (should one be surprised after this that the intelligentsia then moves to the side of the right — anything to stay away from such leftists).

The position of progressive social democrats

Progressive social democrats use the generally accepted definition of private property. Therefore (and also for the reason that a connection is observed between economic growth and the protection of citizens’ property rights), they do not call for its abolition — the nationalization of private property means the establishment of a dictatorship of the nomenclature, and the broad masses are not ready to take on the organization of production.

However, we do not exclude the growth of the share of collective forms of property in the case of:

• Popularization of collective types of property and management;
• Reform of the taxation system, introduction of a high burden on large capital;
• A course of the public sector and state policy toward the Fourth Industrial Revolution.

We examined such measures in more detail in the article on collective property. The completion of the Fourth Industrial Revolution on a global scale with the robotization of production, everyday life, and services can mark the transition to a society with the maximum reduction of social inequality. We spoke about this in a separate material. But what is very important is that social democrats do not make predictions about what forms property will take at the final stage. Only the process of development will show this.

Until the completion of the Fourth Industrial Revolution, progressive social democrats advocate for a broad representation of different forms of property in the economy and the assurance of property right guarantees. Does this mean that they advocate for the formation of elites and inequality in society? Not in the slightest. Precisely the triumph of one form of property means the strengthening of the influence of the stratum that will manage this property, which will form a new elite, leading to an increase in inequality. In the case of the triumph of the form of state property, this leads to the victory of the nomenclature (we wrote about the privileges of the nomenclature in the USSR here), in the case of the triumph of individual forms of property, this leads to the victory of large capital (and in the case of collective property, managers and administrators can become the new elite). The presence of as many equivalently represented forms of property as possible means a policy of mutual restraint between classes, which significantly complicates the formation of an elite that suppresses the rest of society.

Perhaps this will not allow minimizing inequality to the extent one would like. However, as productive forces develop, the division of labor may decrease, and the greater the number of forms of labor that are automated/robotized, the broader a role people will play in the organization of this automated labor, and this may lead to the minimization of inequality and class division. That is, to put it simply, machines will perform most of the work, and people will be engaged in organizing this work, which will lead to the class of engineers programming the machines becoming dominant, and it will be easier for them to organize a counterbalance to their employers and control over them (and, consequently, to ensure a fair distribution of resources).

At the transitional stage, progressive social democrats can develop or support those forms of property ownership that involve joint-stock or collective ownership and management, which, in conjunction with the social democrats’ tax apparatus, will minimize social stratification. It is funny that this might be that very “appropriation of the total productive forces by the united individuals” (of course, not instantaneous — to the question “is it possible to abolish private property at one stroke?” even the communist Friedrich Engels answered: “No, it is not possible, just as one cannot at one stroke increase the existing productive forces to the extent necessary for creating a communal economy. Hence, the proletarian revolution, which in all probability is impending, will be able only gradually to transform present society and will abolish private property only when the means of production are available in sufficient quantity”³⁷).

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26. Ibid., p. 320.
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34. Ibid., pp. 541-542.
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36. Daron Acemoglu. Why Nations Fail: The Origins of Power, Prosperity, and Poverty / Daron Acemoglu, James A. Robinson; trans. from English by D. Litvinov, P. Mironov, S. Sanovich. – 693 p. – Moscow: AST Publishing House, 2019. – pp. 105-107.
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