State ownership

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"State Property" redirects here. For the American hip hop group, see State Property (group). For the socialist concept of public ownership of the means of production, see Social ownership. For other uses, see State property (disambiguation).
A plaque marking state property in Riga, Latvia.

State ownership, also called public ownership, government ownership or state property, are property interests that are vested in the state, rather than an individual or private entity.[1]

State ownership may refer to state ownership or control of any asset, industry, or enterprise at any level, national, regional or local (municipal); or to common (full-community) non-state ownership. The process of bringing an asset into public ownership is called nationalization or municipalization. State ownership is differentiated from private ownership, cooperative ownership, and non-governmental common ownership.

In market-based economies, state-owned assets are usually managed and operated as joint-stock corporations with the government owning a controlling stake of the shares. This model is often referred to as a state-owned enterprise. A government-owned corporation (sometimes state-owned enterprise, SOE) may resemble a not-for-profit corporation as it may not be required to generate a profit. Governments may also use profitable entities they own to support the general budget. SOE's may or may not be expected to operate in a broadly commercial manner and may or may not have monopolies in their areas of activity. The creation of a government-owned corporation (corporatization) from other forms of government ownership may be a precursor to privatization. State capitalist economies are capitalist market economies that feature high degrees of government ownership of business enterprise.

In Soviet-type economies, state property was the predominant form of property for industry. The state held a monopoly on land and natural resources, and enterprises operated under the framework of a nominally planned economy. Enterprises in Soviet-type economies operated according to different criteria and under a different legal framework than state-owned enterprises in capitalistic market and mixed economies.

User rights[edit]

A plaque marking state property in Jūrmala.

When ownership of a resource is vested in the state, or any branch of the state such as a local authority, individual use "rights" are based on the state's management policies, though these rights are not property rights as they are not transmissible. For example, if a family is allocated an apartment that is state owned, it will have been granted a tenancy of the apartment, which may be lifelong or inheritable, but the management and control rights are held by various government departments.[2]

Public property[edit]

Main article: public property

There is a distinction to be made between state ownership and public property. The former may refer to assets operated by a specific organization of the state used exclusively by their operators or that organization, such as a research laboratory, while public property refers to assets and resources that are available to the entire public for use, such as a public park (see public space).

State-owned enterprise[edit]

A state-owned enterprise refers to a commercial enterprise that is owned by a government entity in a capitalist market economy or mixed economy. Governments may own commercial enterprises because the enterprise is a natural monopoly, or to promote economic development and industrialization.


Main article: Social ownership

Public ownership of the means of production by the state apparatus or a community body is one of the major forms of social ownership. Social ownership of the means of production is the defining characteristic of socialism. In the context of socialism, public ownership implies that the surplus product, or the economic profits, generated by publicly-owned enterprises accrues to all of society in the form of a social dividend as opposed to a separate class of private capital owners. There is a wide variety in forms of operation within state-run industry, ranging from technocratic management to direct workers' self-management.

In the non-market socialist perspective, public ownership consolidates the means of production as a precursor to the establishment of economic planning.

The argument for state ownership as a form of socialization is practicality. Proponents assume that public ownership by the state would serve the public interest.[3] Public ownership, as a form of social ownership, is usually contrasted with cooperative ownership and common ownership.

See also[edit]


  1. ^ Clarke, Alison; Paul Kohler (2005). Property law: commentary and materials. Cambridge University Press. p. 40. ISBN 9780521614894. 
  2. ^ Clarke, Alison; Paul Kohler (2005). Property law: commentary and materials. Cambridge University Press. p. 40. ISBN 9780521614894. 
  3. ^ Arnold, Scott (1994). The Philosophy and Economics of Market Socialism: A Critical Study. Oxford University Press. p. 44. ISBN 978-0195088274. For a variety of philosophical and practical reasons touched on in chapter 1, the most obvious candidate in modern societies for that role has been the state. In the past, this led socialists to favor nationalization as the primary way of socializing the means of production…The idea is that just as private ownership serves private interests, public or state ownership would serve the public interest.