Private property rights are Central to the capitalist economy, its implementation and its legal protection. Capitalism is built on the free exchange of goods and services between the various parties, and nobody has the right commercial real estate they don’t own. On the contrary, property rights provide the legal framework for the prosecution of aggression against involuntary ways of getting resources; there is no need to trade in the capitalist society, where people could just take from others what they want, by force or threat of force.
Private property, ownership and homesteading
Modern ideas of private ownership derived from the theory of 18th century philosopher John Locke in Wikipedia. In this theory, people have the right of ownership of natural resources through the act of initial dilution or misappropriation; Locke used the expression “mixing of labor”. For example, if a person discovered an unknown island and began to clear the land and build a shelter, he is the legitimate owner of this land. Since most resources are already claimed, at some point in history, modern acquire property is through voluntary trade, inheritance, gift or as collateral for a loan or gambling.
Private Property Promotes Economic Efficiency
Most political theorists and almost all economists argue that capitalism is the most efficient and productive transfer system. Private property promotes efficiency by providing the owner of the resources, the incentive to maximize its value. The more valuable the resource, the more trading power it provides to the owner of the resource. This is because in a capitalist system, someone who owns property has the right to any value associated with the property.
When property is not private property, but rather General, the failure of the market occurs is known as the “Tragedy of the Commons”. The fruits of any work carried out with public assets do not belong to the laborer, but lives among many people. There is a gap between labour and cost, incentives to increase value or production. People interested to wait for someone else to do the hard work and then swoop down to reap the benefits without much cost.
The owners of private property have the right to transfer of possession as they see fit. This naturally cultivates the trade between those with different resources and different wants. Since most people want to maximize the value of their trade, bids are accepted to obtain a higher exchange value. The owners of this kind of resources to compete with each other for exchange value. This system of competition creates demand and supply.
Consider this simple example: someone owns goats and chickens would prefer. He decides to sell his goat to buy poultrey. All sellers are chickens to fight for their money, which drives lower prices. It must also compete with other goat sellers at the trade of his goats.
Private property and the law
The reason people are willing to compete with each other in voluntary trade because there are laws that protect private property. That man got property, he considers valuable, it needs to provide a service that someone thinks is valuable. All success in ex-Ante sense.