Forms of Ownership

Private property belongs only to individuals. A variation is a private individual ownership. Individual, private firms, which form a legal entity, are small and are represented in a few sectors: handicrafts and agricultural production, services of all kinds, including the most modern, such as consulting. Their owners are either one person or a small number of individuals; the natural work (one person or family, as it takes place on farms in the countryside) prevails, but in addition thereto paid employment may be applied. Worldwide, there are several hundred million such households, but they are characterized by a huge rotation: every year a large number of such firms go bankrupt and are liquidated, but replaced with new ones. Besides small firms, individual private property category includes used-for-income property objects of individual entrepreneurs (small traders, artisans and liberal professions), working on the relevant resolution (patents, licenses) from the authorities and not forming a legal entity. Intermediate position between the private and public ownership is common property of a number of subjects. Common property is divided into a joint and shared. The common joint property is owned by all the owners together and not divided between them to pieces. The common share ownership is divided into shares, parts. In cooperatives, societies the share of each owner is called eral resources. In many cases, shared ownership extends only to the value of ownership property, it gives the right to participate in the management of the subject, but the owner can not withdraw their share in tangible, physical form, pick up "a piece".

Common share ownership is difficult to distinguish from the private; the boundary between them is blurred. For example, stock ownership can be considered both private and commonly shared, as the shareholder contributes its share to the capital of stock company. Stock ownership is also called the corporate as it is the property of a single corporation. Corporative enterprises exist wherever the technological base of an industry involves formation of medium or large-scale production, which requires large amounts of capital. These companies exist in the form of companies (corporations and limited liability companies), partnerships (complete, in faith, and others), cooperatives, non-profit organizations (foundations, associations). The subjects of common property can be any property owners, including the state. If the owner separates their part of the common property, it becomes private property.

The common property understood in the broadest sense extends from the narrow sectional to state property. The subject of property as an individual is not stressed in public property, and property rights apply to all citizens. At the same time, it would be inappropriate to assume that in the public property (sometimes called social) the individual as an owner does not appear. State property is something that belongs to all, together and separately, i.e. every member of society at least to some minimal but to some extent has the rights of the owner. Often, public property is identified with the state that is not quite correct.

The overall, including the national, property is sometimes divided on a territorial basis. In that case, those forms of ownership are distinguished as a regional (territorial) and municipal (local). Separation of those forms of ownership emphasizes the fact that the property to a certain extent is managed by the authorities of the territory, say, the municipality. Municipal property adjoins directly to the public, which, however, in the West, and in Kazakhstan is qualified as differing by the state. Nevertheless, in its economic nature, they are related to each other. The only difference is that municipal ownership is linked with the budget of the lower level and operates in geographically limited areas of national economy; ownership of a region does not extend to the entire country.

State ownership is ensuring for the state the right to control objects. State ownership in the developed capitalist countries today is concentrated in a very limited range of industries, which for one reason or another are low profit or even unprofitable, which makes them unattractive to private capital. These are mainly the socio-economic infrastructure (railways, utilities, education). In other industries there is only "point" of state participation in the form of stakes in companies. The average for developed countries of the share of public enterprises in the creation of GDP does not exceed 7%. In developing countries and countries with transition economies, the figure is 11 and over 40%. Companies that referred to as the state company, either are wholly owned or the state owns a controlling stake (or at least, has a solid blocking minority). Legally the owners in federal states are the federal land agencies (such as the land of Germany or U.S. states), and in unitary states the owners are the relevant central and regional institutions.

Companies and institutions (e.g. educational or health) in which the state participates at a level below a blocking minority could be called mixed.

In countries with a federal system the government property is divided into federal and sub-national, i.e. it is the property regions, subjects of the federation.

To clearly distinguish between the state and public property is difficult. The objects of public property, logically, should be good, generally available to all citizens on an equal basis, such as vacant land, water and river spaces, public parks and beaches, forests. If the possibility of using them by all the people is limited, then there is the principle of priority applied. And such places as zoos, nature reserves, which are administered by state governments, as well as are already in state ownership, as well as state enterprises, institutions, the main types of natural resources, defense facilities.

Now let’s turn the important question: which of the considered forms of ownership is better? Usually this question is in the form of a dilemma: public or private property? In fact, such an alternative formulation of the question is counterproductive. It should go about finding the most rational, optimal combination of both forms. Criterion for evaluation can be only one: what kind of property in a given historical moment and in longer term, offers higher level needs satisfaction of the population, while taking into account the indicators of life quality. From the combination of these criteria, preference should be given to private property, which is now the core of the developed market economies of the West. To create just such an economic system, developing and former socialist countries are striving. It contains the profit motive and competition, the realization of which brings the highest economic efficiency and better meets the needs. However, private ownership has its drawbacks, especially regarding employment and unemployment. After all, the profit motive and competition is forcing businesses constantly to seek perhaps a greater reduction in production costs, including economy in labor force. In Western countries, a wave of privatization in the 80's, the first half of the 90's led to a reduction in the proportion of state ownership in the production of GDP from 9 am to 7% on average, that means overcoming the legacy of the prewar and early postwar years. In the 30-ies state's direct participation in the economy expanded in the process of overcoming the deepest crisis in the history of capitalism of 1929 - 1933 years. State ownership in the prewar years in most Western countries was significantly strengthened as a sort of "backup" of private enterprises, that had revealed the sequential weaknesses, and as an instrument of maintaining the strength of the social system. In the late 40's - 50's in Western Europe and Japan, private capital was temporarily weakened by war damage and certain other circumstances. Such a gap as a need occurred was filled by the state, what is now not necessary.

The potential for further privatization in the Western countries has largely been exhausted. The state share in it, at least in the medium term, will remain approximately at current levels with slight changes in some countries. However, in some cases to deal with the possible appearance of unemployment, in labor-intensive industries (especially in infrastructure) new enterprises can be created through public investment. Programs of Western social democracy, which came in power recent years, in several countries, including France, Britain, Germany and Italy, provide for such measures. In developing countries in the same period, the mentioned rate remained at 11%. On one hand, this was due to the influx of foreign private investment, through which the creation of new private enterprises was possible. On the other hand, the weakness of national private capital forced the state to maintain a relatively high level of its presence in the economy. As in the medium term, we can not expect a massive increase in inflows of direct investment from Western countries, as well as other reasons, the current figure is unlikely to change significantly in the foreseeable future.

Former socialist countries have embarked on the transition from planned to market economy mainly at the turn of the 80's and 90's. Market transformation, of course, first of all requires displacement of state ownership with private through privatization and the creation of new private enterprises. In this regard countries with economies in transition since the early 90's had already passed (each in varying degrees) a significant segment of the path. However, the share of government property in the production of the GDP of these countries, on average, still accounts for 20 - 30% or more, i.e., noticeably exceeds the corresponding figure for developed and developing countries.

CHAPTER 3. Change of ownership

3.1 Change of ownership is an essential condition for the formation of the market

For the successful development of the property it is necessary to satisfy many economic and social conditions, in particular, it requires a review of the relationship to the property in the new economic conditions.

Modern economics today anew considers many of the processes occurring in our society. This applies to issues of ownership, the ratio of plan and market methods to regulate economic activity, direct and indirect methods of management of public processes.

With the democratization of our society motives of transition to a market economy appeared, therefore, attempts were made to implement this goal, sometimes not very successful, but, in our opinion, worthy of consideration, since it is with them that a slow and painful break-up of our old economic stereotypes began.

Adjustment period was marked by increasing attention to the plight of the Soviet people. Nevertheless, the essence of economics lies in the fact that the sympathy and desire to help taken separately here do not decide anything. For us to live better, we must produce more goods and services of high quality. Unfortunately, we still have not mastered this art. But the government performed an active social policy through increased emissions, but if adequate quantities of goods are not produced for this money, then it does not increase the standard of living, but increases queues, shortages and profiteering, as observed in the early stages of transition to a market economy.

We believe that for the transition to a market we need, above all, in general terms, be aware of something that moves our society: what the modern market is.

Having decided to build a market economy, we must, above all, create its image, to see at least the outlines, to assimilate the essence of market relations. However, there are several reasons that prevent deep perception and understanding of the market for a Soviet man.

First, we have seen and known a true market economy in all its many manifestations, almost never. If anyone was in the countries of the free market, then he or she saw only of its appearance, without delving into the essence of the internal mechanisms of market relations.

Secondly, we are not taught the market economy. In schools, colleges, institutes, radio and television, we were told that overseas was decaying crisis economy with exploitation and enslavement of the working people. Textbooks containing the true description of the market and the market economy, the works of so-called bourgeois economists were either not translated or published or became known only to a narrow circle of specialists.

Third, those natural associations of the word "market", which occur in each of us in one way or another, are connected with the collective farm market, i.e. with market forms that existed in the Soviet economy. But these analogies are very far from real civilization of the modern market and, hence, give rise to a distorted view of true market economy.

The terms "market" and "market economy" in our country are usually treated only as an exchange of commodities and commodity-money relations, in other words, as trade, exchange, but such representation is primitive.

The market is a whole system of diverse economic relations between people, resulting in the production, distribution, exchange and consumption, based on certain principles, the main among which is freedom of economic activity.

The main property of market-oriented economy is to promote market relations in all economic spheres, their penetration into all sectors, and coverage of all regions of the country. This property can be called the universality of market relations.

3.2 Ownership in transition economies

Transformation of ownership - from monopoly to pluralism forms

Changes in property relations have become mainstays of economic reforms in the former Soviet republics. In the theoretical plan transformation of the property required to address: to what level the proportion of state ownership should decrease, at what pace and what way it goes lower, to whom public ownership should transit.

In Kazakhstan and other CIS countries embarked on the transition to a system, combining private (individual and group), public and mixed ownership of the means of production. This is logical interfaces with the course of the transition to the market. Since the market supposes freedom of industrial and commercial activities, competition between manufacturers, then domination of any one form of ownership must be overcome. It should be replaced by complementing each other various forms of ownership, each of which would be best adapted to the specific field of economy, to economic activity.

State property in the transition

The peculiarity of the relations between subjects and objects of ownership at the state level are due to the following circumstances:

• The results of the management of state property affect the fate of many people, determining their standard of living, social security, health, intellectual development, security and many other recognized human values;

• state property are distinguished by great variety of institutional and legal diversity, covers a wide range of national economy sectors and are intended for use in a variety of directions;

• The implementation of State's right to property objects is achieved through the system of state property management, which is a three-tier hierarchical structure.  Public ownership is likely to retain its relevance and function of the foundation of the entire economic chain. Privatization process, leading to the expansion of individual and group ownership, does not mean that state ownership will be fully uninstalled. There are sectors of the economy, which are inappropriate for division on elements.

This applies primarily to large, the most important system operating in the interests of the entire state. Obviously, in Kazakhstan energy, transportation and some other industries should remain in state property. This should include the material resources of science, especially fundamental science.

The recommendations of various authors are that the share of state property should be 50-30% of fixed production assets.

Still for a long time ahead the public sector will have a significant position in the national economy and the sector requires adequate system of control over it. Apparently, all state enterprises can be divided into two categories: the first is under the direct control of the state, the second is on full commercial grounds.

An important issue in the development of state property is to overcome monopoly characteristic of the administrative-command system. By the end of 1990 in the engineering industry of the former Soviet Union the share of monopolized production reached 72%. With the transformation of the former republics into independent states monopoly was further complicated as many copying enterprises were on different sides of the new states boundaries.

It is clear that de-monopolization of production, based on state property is a long and complicated process. Partly overcoming of the monopoly can be done by downsizing, mechanical section on their part. For the construction of new copying enterprises, it would require too much money, which is currently not available for our country.

It can be assumed that breaking monopolies will go through diversification of production at existing plants, which are in power to use spare capacity (or expand existing) for the production of scarce goods.

In overcoming the monopoly, the use of Western countries experience can play a positive role. Many of them are antitrust laws. In particular, in the United States in 1890 Clayton Act, prohibiting horizontal merger of companies, if it could destroy the competition was adopted by the Sherman Act ("charter of economic freedom"), in 1914. -. Law Zeller-Kefovera (1950) extended this prohibition on a vertical merger. For violation of antitrust laws legal responsibility is provided (a fine of up to 100 thousand dollars from executive officers and imprisonment of up to 3 years). Court may make the monopoly compensate for damages in triple size the amount for a company that has suffered from monopoly.

In some Western countries there are administrative bans on a high degree of monopolization. In the U.S. monopoly reaching 90% of the market has a compulsory division of the company into parts, if reaching 60% and higher the monopoly is placed under state control. In Germany, one entrepreneur can own no more than 30% of the market of products, 2-3 firms can own no more than 50%, 4-5 can own no more than 70%. The upper bracket for a single firm in the UK is set at 20% of the market, and in Norway and India at 25%.

Nevertheless, one of the major theoretical and practical problems was the deregulation, the definition and use of the most efficient ways, models of privatization. Privatization is the transfer of state property into the hands of individual citizens, labor groups, entities, or the emergence of state-owned enterprises on the basis of various mixed forms of ownership. After the privatization the subjects of property become a private citizen, an employee of privatized enterprises, the labor collective, joint stock companies, holding companies, etc. The objects of privatization may be trade and services enterprise, housing, small, medium and large enterprises of industry and agriculture.

World practice has gained some experience in privatization. In countries where the process of nationalization took relatively large scale (the UK, France), privatization took place, for example, in the UK through: sales and free distribution of shares, contract for services, sale of public housing tenants; waiver from the state monopoly in order to promote competition. This process is lengthy. In Western Europe it lasted 10-15 years. Privatization was preceded by a lot of painstaking work. The basic directions: free transfer of property, the redemption of enterprises on preferential terms, the sale of shares, delivery companies in the rental, sale of small businesses at auctions, etc.

The objectives of privatization are associated with an increased efficiency of economic activities through market development and the formation of a layer of private owners, entrepreneurs, encouraging employers to increase the efficiency of enterprises, expansion of individual liberties and creating a competitive environment, attracting foreign investment, promotion of the economy’s democratization.

Privatization is aimed at social protection and development of social infrastructure by means of privatization.

The process of privatization in Kazakhstan started before the concept of privatization formed, and the concept of private property was recognized officially. As a result, there is a peculiar privatization of public financial resources. Change of ownership does not lead to effective management. In the economy the rule of natural monopolies firmly established, economic and financial crisis deepened. In this regard, the following actions are needed, which were previously used in other countries:

• a differentiated approach to privatization of large state facilities to establish an economic structure with a reasonable balance of small, medium and large enterprises, with a reasonable degree of competition between enterprises in different industries and with adequate participation of foreign investors;

• variety of ways to transfer public property into private hands, providing short-term loans with the guarantee of state enterprises whose activities are under qualified supervision, to finance the salaries and obligations to vendors, etc.

CONCLUSION

Property as an economic relationship began at the dawn of the human society. All the important forms of non-economic and economic compulsion to work hold on the monopolization of various property objects. Economic compulsion to work is based on the ownership of the conditions of production or ownership of capital.  The social thought has always paid great attention to the issue of ownership. Special treatment to it can be found in history, philosophy and literature. Rich tradition and the material has been accumulated in the legal literature, in frames of which a number of directions in the study of property rights has established.

The property belongs to such concepts around which for centuries best minds of mankind have been crossed. In the socio-economic literature there is the widespread definition of property as the appropriation by an individual or group of production products within and through specific social form, or as a very social form itself through which the assignment takes place. Forms of property are different combinations of characteristics (powers). I have considered them, beginning from the simplest to the most complex.

As a result of my work, I have considered such an important issue as: privatization, exploring it in stages, and also used the experience of foreign countries. It can be concluded that privatization in Kazakhstan was carried out in a radical version of the character, scale, pace, timing and methods.

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