Private property is the ownership of property by non-governmental legal entities. Private property is distinguishable from public property, which is owned by a state entity; and collective property, which is owned by a group of non-governmental entities. Private property is further distinguished from personal property, which refers to property for personal use and consumption.
In the 19th century, the economist and philosopher Karl Marx provided an influential view on the history and development of private property. In Marx's definition, "private property" refers to ownership of productive (value-producing) assets, termed the "means of production", by a small group of owners who received the value generated by the means of production. In a capitalist economy, the surplus value takes the form of profit. This conception of private property has been influential for many socialist political movements and economic theories since the 19th century.
Economic liberals (defined as those who support a private sector-driven market economy) consider private property to be essential for the construction of a prosperous society. They believe private ownership of land ensures the land will be put to productive use and its value protected by the landowner. If the owners must pay property taxes, this forces the owners to maintain a productive output from the land to keep taxes current. Private property also attaches a monetary value to land, which can be used to trade or as collateral. Private property thus is an important part of capitalization within the economy.
Austrian School perspective
Austrian School economists Ludwig Von Mises and Friedrich August Hayek argued that private property rights are a requisite for what they called "rational" economic calculation and that the prices of goods and services cannot be determined accurately enough to make efficient economic calculation without clearly defined private-property rights.
In general, socialists view private property relations as limiting the potential of productive forces in the economy. They believe private property becomes obsolete when it concentrates into centralized, socialized institutions based on private appropriation of revenue until the role of the capitalist becomes redundant. With largely reduced capital accumulation from the original class of owners, private property in the means of production is to be replaced with a free association based on public or common ownership of socialized assets.
In Marxian economics and socialist politics, there is distinction between "private property" and "personal property". The former is defined as the means of production in reference to private ownership over an economic enterprise based on socialized production and wage labor; the latter is defined as consumer goods or goods produced by an individual. Prior to the 18th century, private property usually referred to land ownership. According to Norman Levine, when Marx called for the abolition of private property, he was not referring to privately owned personal property such as clothing and furniture that was not used to produce the "social wealth," but to productive property.
Personal property versus means of production
There is some connection between personal property and means of production. Personal property is considered private property that is movable, as almost an extension of one's person and does include property from which one has the right to exclude others. These objects can range from CDs to houses, depending on one's perspective, but definitions tend to include personal items such as clothing, books, food, or records. However where personal property explicitly differs from private property is in its productive capacity. Not all forms of personal property have productive capacity, whereas private property like land and machines might have some productive capacity. From the socialist perspective, private property refers to capital or means of production that is owned by a business or few individuals and operated for their profit. As mentioned above, personal property refers to tangible items and possessions individuals own. Socialism does not advocate the abolition of personal property, believing that it is an acceptable form of ownership of an item, unlike private property.
From the Marxist perspective, which is very similar to the socialist perspective, private property is a social relationship, not (as with personal property) a relationship between person and thing. It also describes personal property, as above, as those objects which are personal, or an extension of one's self. The Marxist perspective also does not advocate the abolition of personal property: it believes that it is only private property that should be done away with.