‘Such property may be called passive property, or property for acquisition, for exploitation, or for power, to distinguish it from the property which is actively used by its owner for the conduct of his profession or the upkeep of his household. To the lawyer the first is, of course, as fully property as the second. It is questionable, however, whether economists should call it “property” at all … since it is not identical with the rights which secure the owner the produce of his toil, but is the opposite of them.’

The so-called private ownership of large-scale enterprises is in no way analogous to the simple property of the small landowner, craftsman, or entrepreneur. It is, as Tawney says, analogous to ‘the feudal dues which robbed the French peasant of part of his produce till the revolution abolished them’,

‘All these rights – royalties, ground- rents, monopoly profits, surpluses of all kinds – are “property”. The criticism most fatal to them … is contained in the arguments by which property is usually defended. The meaning of the institution, it is said, is to encourage industry by securing that the worker shall receive the produce of his toil. But then, precisely in proportion as it is important to preserve the property which a man has in the results of his labour, is it important to abolish that which he has in the results of the labour of someone else.’

To sum up:

A. in small-scale enterprise, private ownership is natural, fruitful, and just.

B. In medium-scale enterprise, private ownership is already to a large extent functionally unnecessary. The idea of ‘property’ becomes strained, unfruitful, and unjust. If there is only one owner or a small group of owners, there can be, and should be, a voluntary surrender of privilege to the wider group of actual workers – as in the case of Scott Bader & Co Ltd. Such an act of generosity may be unlikely when there is a large number of anonymous shareholders, but legislation could pave the way even then.

C. In large-scale enterprise, private ownership is a fiction for the purpose of enabling functionless owners to live parasitically on the labour of others. It is not only unjust but also an irrational element which distorts all relationships within the enterprise. To quote Tawney again:

‘If every member of a group puts something into a common pool on condition of taking something out, they may still quarrel about the size of the shares … but, if the total is known and the claims are admitted, that is all they can quarrel about..; But in industry the claims are not all admitted, for those who put nothing in demand to take something out.’

There are many methods of doing away with so-called private ownership in large-scale enterprise; the most prominent one is generally referred to as ‘nationalisation’.Excerpted from pages 806-811of ‘Small is Beautiful’ by EF Schumacher