Why private property is important

Proprietas Privata (PP) British period marker in San Martin, St. Paul's Bay, Malta
Private property is a legal concept defined and enforced by a country's political system.^[4] The area of law that deals with the subject is called property law. The enforcement of property law concerning private property is a matter of public expense.
Defence of property is a common method of justification used by defendants who argue that they should not be held liable for any loss and injury that they have caused because they were acting to protect their property. Courts have generally ruled that the use of force may be acceptable.
In many political systems, the government requests that owners pay for the privilege of ownership. A property tax is an ad valorem tax on the value of a property, usually levied on real estate. The tax is levied by the governing authority of the jurisdiction in which the property is located. It may be imposed annually or at the time of a real estate transaction, such as in real estate transfer tax. Under a property-tax system, the government requires or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value. The four broad types of property taxes are land, improvements to land (immovable man-made objects, such as buildings), personal property (movable man-made objects) and intangible property.
The social and political context in which private property is administered will determine the extent to which an owner will be able to exercise rights over the same. The rights to private property often come with limitations. For example, local government may enforce rules about what kind of building may be built on private land (building code), or whether a historical building may be demolished or not. Theft is common in many societies, and the extent to which central administration will pursue property crime varies enormously.
Some forms of private property are uniquely identifiable, and may be described in a title or a certificate of ownership.
The rights to a property may be transferred from one "owner" to another. A transfer tax is a tax on the passing of title to property from one person (or entity) to another. An owner may request that, after death, private property be transferred to family members, through inheritance.
In certain cases ownership may be lost to the public interest. Private real estate may be confiscated or used for public purposes, for example to build a road.
Theory[edit]

Factories and corporations are considered private property.

The legal framework of a country or society defines some of the practical implications of private property. There are no expectations that these rules will define a rational and consistent model of economics or social system.
Although contemporary neoclassical economics—currently the dominant school of economics—rejects some of the assumptions of the early philosophers underpinning classical economics, it has been argued that neoclassical economics continues to be influenced by the legacy of natural moral theory and the concept of natural rights, which has led to the presentation of private market exchange and private property rights as "natural rights" inherent in nature.^[10]
Economic liberals (defined as those who support a private sector-driven market economy) consider private property to be essential for the construction of a prosperous society. They believe private ownership of land ensures the land will be put to productive use and its value protected by the landowner. If the owners must pay property taxes, this forces the owners to maintain a productive output from the land to keep taxes current. Private property also attaches a monetary value to land, which can be used to trade or as collateral. Private property thus is an important part of capitalization within the economy.^[11]
Socialist economists are critical of private property as socialism aims to substitute private property in the means of production for social ownership or public property. Socialists generally argue that private property relations limit the potential of the productive forces in the economy when productive activity becomes a collective activity, where the role of the capitalist becomes redundant (as a passive owner). Socialists generally favor social ownership either to eliminate the class distinctions between owners and workers and as a component of the development of a post-capitalist economic system.^[12]
In response to the socialist critique, the Austrian School economist Ludwig Von Mises argued that private property rights are a requisite for what he called "rational" economic calculation and that the prices of goods and services cannot be determined accurately enough to make efficient economic calculation without having clearly defined private-property rights. Mises argued that a socialist system, which by definition would lack private property in the factors of production, would be unable to determine appropriate price valuations for the factors of production. According to Mises, this problem would make rational socialist calculation impossible.^[13]
In capitalism, ownership can be viewed as a “bundle of rights" over an asset that entitles its holder to a strong form of authority over it. Such bundle is composed of a set of rights that allows the owner of the asset to control it and decide on its use, claim the value generated by it, exclude others from using it and the right to transfer the ownership (set of rights over the asset) of it to another holder.^[14][15]
In Marxian economics and socialist politics, there is distinction between "private property" and "personal property". The former is defined as the means of production in reference to private ownership over an economic enterprise based on socialized production and wage labor whereas the latter is defined as consumer goods or goods produced by an individual.^[16][17] Prior to the 18th century, private property usually referred to land ownership.
Criticism