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Why is private property, and the protection of property rights, so crucial to the...

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pamela0317 | Student, College Freshman | (Level 2) Honors

Posted January 4, 2012 at 10:26 AM via web

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Why is private property, and the protection of property rights, so crucial to the success of the market economy?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted January 4, 2012 at 10:42 AM (Answer #1)

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A market economy only works if people are free to do what they want (within reason) with their property.  They are allowed to have money and are free to buy what they want.  They are allowed to have property (like land or machinery) and use it how they will.  This allows consumers to buy what they want and manufacturers to make what they think will sell.  This is the basis of a market economy.

In addition, if people cannot be secure in their property, a market economy cannot develop.  Who would spend money building a factory if the government might come and take it away from them?  If people fear the government will not respect their property rights, they will not do the things that are needed to build a market economy.

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