Freedom in One Lesson

22.

A Cliché of Socialism:
Under Public Ownership,
We the People Own It

Leonard Read always has an ear out for widely accepted but misleading clichés that serve to aggrandize government power and limit liberty. In his 1965 article “A Cliché of Socialism: Under Public Ownership, We the People Own it!” (Read 1965a), he focuses his attention on the large gap between public ownership of assets and the idea that “we the people” own them.

Read points out that not only is public ownership misunderstood but goods privately owned by another party are in fact much more available to an individual’s control than goods supposedly owned in common.

Public ownership and government control are synonymous terms—two ways of expressing an identical concept. The popular notion is that a resource or service is the possession of we, the people, when it is under government ownership and dispensation, and that we, the people, are objects of exploitation when resources are under private ownership and willing exchange. Socialism—public ownership—will continue to expand as long as this notion dominates.

Read argues that those who view government ownership as the solution to exploitation, which supposedly characterizes private ownership, have their argument backward. Private ownership prevents irresponsible government management as well as the exploitation of the alleged owners of government assets. Until that error is recognized, public control will expand and individual control will shrink.

Public ownership, so-called, contrary to popular notions, is definitely not we-the-people ownership. If it were, we could exchange our share in TVA or the Post Office for dollars, just as we can exchange a share of corporation stock for dollars.

At least two conditions are necessary for ownership to exist: (1) having title, and (2) having control. . . . Without control, ownership is pure fiction.

While in some vague way “we, the people,” are supposed to have title to TVA, for instance, we have not even a vestige of control. . . . “But,” some will counter, “neither do you control the corporation in which you hold stock.” True, I do not perform the managerial function, but I do control whether or not I’ll retain or sell the stock, which is to say, I control whether or not I will share in the gains or losses. Further, I am free to choose whether or not to work for the corporation or to buy or refrain from buying its products. My control in the nongovernmental corporate arrangement is very real, indeed.

Who controls—has real authority over—what we the people supposedly own?

Who, then, does control and thus own TVA, the Post Office, and the like? At best, it is a nebulous, shifting control—often difficult to identify. Rooted in political plunder, government ownership and operation is an irresponsible control; that is, there is never a responsibility in precise alignment with authority. The mayor of a city may have complete authority over the socialized water system, but responsibility for failure is by no means commensurately assumed by him. . . . Most people crave authority provided responsibility doesn’t go with it. This explains, in part, why political office is so attractive and why “we, the people,” do not even remotely own what is held in the name of public ownership.

An individual has more potential control over what someone else privately owns than over what the public supposedly owns. There is generally no way for an individual to exert real control over a government’s decision about one of its assets, but all that is needed to control a privately held asset is to negotiate a voluntary sale.

One truly owns those things to which he holds exclusive title and exclusive control, and for which he has responsibility. . . . The things that are privately owned by others are far more available for one’s own title and control than is the case in “public ownership.”

Public ownership often creates . . . attractive illusions. For instance, people served by TVA are using twice as much power and light as the national average. Why? TVA charges less than half the price. Because of lower production costs? Indeed, not! The rest of us around the nation are taxed to cover the TVA deficit. But power and light acquired in this manner can no more classify as “ours” than can any good or service forcibly extorted from true owners. . . .

. . . Observe that the “public” ownership of water has all but dried up the availability of water for private use. What kind of a social service is it that, by depriving individuals of title and control, finally denies them the service!

If private availability—ownership in the sense of use, title, control—is what interests us, then we will do well to preserve private ownership and an open, willing-exchange market.

Leonard Read’s understanding of the difference between private and public ownership was important when he wrote about it, but seems even more important now. Just consider how popular it is now to demean opponents of leftism as fascists. Fascism maintains a gloss of private ownership over assets controlled by government so that people will blame capitalism for the abuses that result. But virtually every policy supported by those who hurl such ad hominem insults represents just such government control without accountability. They hypocritically support fascist policies while calling their opponents fascists. Read’s insight can help us sort out who is more fascist. We only have to ask who supports the policies that reduce the control of private owners over their assets and vests it in bodies over which those owners have no control.