Restoring Property Rights

Abstract

Property rights designation is a central issue in the economic problems that confront socialist economies in transition. After diverse experiences ranging from China to the Soviet Union, we all understand the inadequacies of central planning which was established through the abolition of private property, and we are aware of the functional deficiencies of an economy which is hierarchically organized and is subordinated to mandatory plans. Under socialism, neither the workers in the nationalized firms nor the members of the cooperatives and collective farms had property rights that permitted them to become real owners of the enterprises. They rather remained wage laborers and were obliged to work for or within the collective institutions, the socialist enterprises and the cooperatives that were assigned property rights. The incomes that were thereby earned minimally sustained the workers and their families.