Forms of Ownership

University ofInternational Business
Term paper by disciplineManagement
«Forms of Ownership»
Almaty, 2010.

CONTENTS
INTRODUCTION
CHAPTER 1. Propertyand socio-economic relations. The theory of propertyrights.
1.1 The history of the ownership and development of itsforms.
1.2Property as an economic category.
1.3 The theory of property rights.
CHAPTER 2 Forms ofownership and their classification.
CHAPTER 3 Change ofownership
3.1 Change of ownership is an essential condition for the formationof the market.
3.2 Ownership in transition economies
CONCLUSION
REFERENCES

INTRODUCTION
The property is among the most important and complicatedproblems of economics and economic theory. History of economic life duringperiods of increased social activity tends to redistribute objects and propertyrights. Economy is primarily farming. But, where is the economy, there should be a master. Each economicentity, every resource, every product must have its master. From an economicpoint of view the master is a person who induces an object in the economicprocesses, seeking to use it in the best way to extract more value from it.Where there is an economic activity, there is always a problem of ownership.Property relations permeate the entire system of economic relations and escort theman from the moment of his birth to leaving in another world. Everywhere weconstantly come upon one common fundamental question: Who owns the economicpower, who assigns the material conditions of human existence, the owner of theland, factories, and spiritual wealth?
The social nature of these relations is an expressioninherent to the society in the economic relations of property. Today we areready to sue the state, which has assigned and squandered our labor savings,does not pay us wages, pensions. In this respect civilization has not moved farfrom the animal world, where everyone defends their environment, claims aparticular «piece» or territory. It is recognized that the questionof ownership is probably one of the most important issues determining thegeneration, the existence and the development of human society. On how and bywhom it was raised, addressed and regulated in a given time, including thepresent historical period, the sustainability, prosperity, and often the veryexistence of any society for that matter, and each individual member of societydepend.
Factor of limiting the life of wealth and economicresources requires not only a certain order of their distribution, but alsoestablishing some rules of control over them. Final goods and economicresources, if limited, can not be equally accessible for disposal, use byabsolutely all members of society. If this were so, then thesociety would come into mess.
As soon as the man has picked up a stick, it becomes notonly an instrument of labor, but also in his private club, his property. Weaponsdefense and attack, objects of labor, fire, shelter, clothing, and householdgoods gradually go into possession of an individual or a group, or a tribe.
Ownership is ensuring the right to control economicresources and life benefits for the set of economic actors. In households,there is a point of view that property is the relationship between the man and hispossessions, control over it. Aspirations of a man to property ownership areconsidered at the same time as a born instinct. However, in economics thedominance of the social, and not natural, basis of property is increasinglyrecognized. And in this sense we can, to some extent, recognize the approval P.Proudhon: «Property is a theft» — because no one would argue that ifone person is the owner of the thing, then others are denied the opportunity tohave it in their possession.
In every historical epoch, property as an economiccategory reflects the entire system of socio-economic relations. Forms ofownership and its variations correspond to the prevailing socio-economic systemat all levels. The issue of ownership is extremely multilateral and with eachnew stage of development of economic thought new aspects of this problem are discovered.
So, do we need private property or not? We can not replythis question instantly, we need to understand in more detail the advantagesand disadvantages of different forms of ownership. Thus, the aim of this work isto study, review and analyze ownership structure: its social, legal andeconomic aspects; as well as studying diverse forms of ownership, mainly privateand public, as the main form of ownership; analysis of property development andinteraction of public and private property.

CHAPTER 1. PROPERTY AND SOCIO-ECONOMICRELATIONS. THEORY OF PROPRIETARY RIGHTS
1.1 The history of the ownership anddevelopment of its forms
Property as an economic relation is formed at the dawncreation of the human society. Labor and its division between individuals,tribes have a significant influence on the emergence and development of formsof property. Possession of means of production has become one of thedetermining conditions of life, and production of necessary means of existence.At the same time, productive work made it possible to obtain economic productto a greater extent than was necessary to ensure the simplest necessities oflife of the period. There is accumulation of the property; its type emerges inthe form of wealth.
The emergence of the rich and poor, the desire to expandtheir holdings generate a war for possession of the territories, wealth,property, property begins to pass from hand to hand. Growing populations havemore and more land, natural resources, engaged in production. As aresult, all that is available to the man is segregated, captured, appropriated,divided, i.e. becomes the property.
The emergence of states contributed to the birth ofpublic property. In this way the diversity ofownership in the form of personal, family, tribal, state was developed. Tribal,and then the inter-state wars, capturing and inheritance of wealth gave birthto the ugliest forms of property — slavery and serfdom, the objects of whichare people.
In the era of feudalism subsistence is tightly bound byties of land ownership, means of productions, and the cattle to the owningfeudal lord. Under capitalism, the means of production becomes the property ofthe owner of capital. Private property blossoms, the relationship betweensubjects and objects of ownership increasingly divide into the ownership,disposal and use. In the future, private property is modified. There is ajoint-stock form of ownership. Along with the ownership of land, naturalresources, buildings, equipment and other real estate property, the role ofgold and jewels, cash, securities constantly increases. The problems ofintellectual property on a spiritual product, and ownership of informationemerge.
The ongoing revolutions in certain countries transform,convert forms and property relations. In particular, the socialist revolutionstry to abolish the private ownership of means of production, replacing it withthe public, state. But an economy based on the overwhelming dominance of stateproperty is ineffective. As a result, the modern economic world that has becomebasically the world market economy is based on private property and on thefeasibility of coexistence of different forms of ownership.
1.2 Property as an economic category
Representations of the property have been forming inscience and life for thousands of years, while ownership has become, above all,the official target of legal institutions and philosophy. For a long time theproperty as a special social relationship was the immediate object of law(especially civil law), but with the further development of social production theproperty along with legal became also the determining economic category. Theconcept of property relations includes on one hand relation of an owner to theirbelongings, i.e. property relationship between subjectand object. The subject of property (the owner)is the active side of property relations, having objects of property,possessing, controlling and using them. It should be noted that theproperty can not be subjectless. As to theorphan objects, things that did not have or have lost their owner, then theycease to be property.
The object of ownership is a passive side ofproperty relations in the form of objects of nature, matter, energy,information, possessions, spiritual, intellectual property, wholly or in somedegree belonging to the owner. Often the object of property is called simply theproperty.
In fact, property can not be imagined withoutindividuals or groups considering their specific things, conditions andproducts of production as theirs, and others as belonging to strangers. From thatit obviously follows that the property is the individual’s attitude to things.In this case, since this is the attitude of different people to the sameconcrete thing, then there is evidence of ownership as the relationship betweenindividuals about things. Being legally settled by state, they take the form ofownership, which include the authority of the owner to possess, use and disposeof property. In the more complete definition of the deployment of property asan economic category, various economists used different static or dynamic basesin this category, its main manifestations in the everyday practice, its classand historical character and so on. From my point of view, the most functionalthing to do, in terms of the present study, is to determine the owner of thething through the main manifestations of the economic domination: thepossession, use, and disposal.
In the most general form the ownership can be defined asthe relationship between economic agents regarding the attribution of economicresources and consumer goods. Also in the most general terms we can say thatthe appropriation of economic resources is the primary determinant in regard tothe appropriation of consumer goods. Consequently, in any society or anycountry the rich and poor stratification of the population stems mainly on thedifferent attitudes to economic resources as belonging to one or others.
It is possible to understand the essence of property, ifwe consider it in conjunction with all other economic relations of society: theproduction, distribution, exchange and consumption of goods. It is exactly theproperty that fully reflects the socio-economic character of the epoch. All existing economic systems differ in theirattitude, especially in the ownership of the means of production. There areseveral historic property types, characterized by different methods ofconnecting the producer and the means of production and distribution ofproducts of the social product among the members of society. It is accepted to distinguishthe primitive, slave, feudal and capitalist types of property. Until recently,the socialist type of property was also highlighted, for which, apparently, therewere not sufficient grounds. Socialism actually was built in none of the countries that were once partof the socialist community. Direct producers in these countries were stillexploited, the reunification of the means of production with production workersin fact did not occur. The type of property under totalitarian regime (sometimesovertly, but in many cases disguised) that appeared in these countries,intricately combined the characteristics peculiar to ownership types of earlierages and now existing.
Thus, the property as an economic category is defined as the relation ofindividuals or community of individuals to things as belonging to them, whichis expressed in the ownership, the use and the disposal of property, as well asin addressing the impact of all other actors in the sphere of economicdomination, into which the power of the owner extends, that is to say, thepublic attitudes on the ownership, control and disposal of the thing.
1.3 The theory of property rights
In a society with the state legal structure the economicrelations of property inevitably receive legal consolidation. This is expressedeither as a system of legal rules governing these relations and the Instituteof ownership, or in securing some measure of legal authority for a specificperson who is the owner of the thing. In the first case we speak of ownershipin the objective sense, in the second sense we speak of the subjective sense orof the subjective ownership.
Ronald Coase was at the root of property rights. According to his theory: «the property is not resources, notfactors of production, and but a set of rights or share of rights to useresources.» Contents of property rights comprise, belonging to theowner, authority to own, use and dispose of the thing. These powers, as well as the subjective right of property in general,constitute legally supporting behavior capabilities of the owner; they belongto him as long as he remains the owner. In cases where the owner isunable to effectively exercise these powers, such as the arrest of its propertyfor the debts or where the property unlawfully was held by another person, he doesnot lose either the powers themselves or the property rights in general. Todisclose the content of property rights, it is necessary to define each of thepowers belonging to the owner. Let’s start with ownership.
Competence of ownership is the legally backed possibility of economicdomination of the owner of the thing. It concerns the economic dominion overthe thing, which does not require that the owner is in direct contact with it. For example, leaving on a long trip, the owner remainsthe owner of his apartment and the belongings located in it.
Possession of a thing may be illegal. By lawpossession is called legal, if it is based on any legal basis, i.e. thelegal title of ownership. Legal ownership is often referred to as having title.Illegal possession cannot have a legal basis, soit has a title. Things, as a general rule, are in the possession of those whohave a right to own them. This circumstance makes it possible indisputes over things to use the presumption of legality of actual possession. In other words, one who has the thing is expected tobe entitled to its possession until proven otherwise.  Illegal owners in turn are subdivided into honest and dishonest.The owner is conscientious, if he neither knew nor shouldhave known of the illegality of his possession. Owneris unscrupulous, if he knew about it or should have known. In accordance withthe general presumption of conscientiousness people participating in civil rights and responsibilities, weshould act upon the assumption of good conscientious of the owner.
The division of the illegal owners in those withconscientious and without is important in settlements between owners about theincome and expenditure, when the owner claims his thing by the court claim, aswell as in deciding whether the owner can buy property right of ownership byprescription or not.
Competence to use is the legally backed possibility ofextracting useful properties from things in its personal or industrial use andfor production purposes. For example, a sewing machine can be used for clothingnot only for one’s own family, but also on the side for a fee. Competence touse is usually based on the entitlement of ownership. But sometimes you can usethe thing, and not owning it. For example, musical instruments rental studio deliversinstruments for rent with the condition that tool use occurs indoor of thestudio, for example, at certain hours and days. The same is true when using theslot machines.
Competence of orders is the legally secured possibilityto determine the fate of things by making the legal acts in respect of thething. There is no doubt that in cases when the owner sells his thing, lends it,pledges it, transfers it as a contribution to a business entity or partnershipor as a donation to the charity fund, it carries out the disposal of the thing.It is significantly more difficult to legally characterize the actions of theowner in respect to things when he or she destroys the thing that has becomeuseless to him or her, or throws it, or when a thing is by its propertiesdesigned for use in only one act of production or consumption. If the ownerdeletes something or throws it, he disposes of a thing by making one-sideddeal, because the will of the owner is directed for abandonment of propertyrights. But if the ownership is terminated as a result of single-use of theitem, the will of the owner is not directed towards the termination of theright of ownership, but towards extracting useful properties out of the things.Therefore, in this case there is an exercise only of the right to use thething, but not the right to dispose it.
Disclosure of the content of property rights is notcompleted by defining powers belonging to the owner. The fact is that thepowers of the same name may belong not only to the owner, but to anotherperson, including the bearer of the economic management right or of the life inheritablepossession right. It is therefore necessary to identify a specific trait thatis inherent to the specified competence exactly asauthority of the owner. It is in the fact that the owner uses the powers vestedin him at its discretion. As to the property rights, the exercise of the rightat discretion including disposal means that the power (the will) of the owneris based directly on the law and exists independently of the authorities of allother persons in respect of the same things. Authorities of all other persons arenot only based on the law, but also are dependant on the authority of theowner, affected by it.  Ownership has the property ofelasticity. This means that it has an inherent ability to recover in the samevolume as soon as the connections of limitations no longer exist.
Ownership is among the exclusive rights. This means that the owner isentitled to exclude the impact of all third parties to the belonging-to-himscope of economic domination, including through the measures of self-defense.This, however, does not mean that the power of ownership over belongings is boundless.In accordance with the permissible thrust of civil regulation, the owner canactually perform, with respect to his property, any action, but not contrary tothe laws and other legal acts. The owner is obliged to take measures to preventharm to the health of citizens and the environment, which may be caused in theexercise of his rights. He must refrain from conduct which brings anxiety tohis neighbors and others, and especially from the actions perpetrated solelywith the intent to cause someone harm. The owner also has the obligation, onthe terms and conditions and within the limits prescribed by law and otherlegal acts, to allow limited use of his property by others. These circumstancesmust be considered in formulating a common definition of property rights.Finally, giving the definition of property rights should be based on a commondefinition of subjective civil right, which extends to the right of ownership.
As for the right of property this general definition should beelaborated taking into account the specific traits inherent to the right ofownership. The purpose of the use of any property right is to obtain economicbenefit. In law the basic rights of property arecomplemented by a number of provisions that reinforce and develop those rights,it is the right of inheritance, the indefinite possession, receipt of incomefrom the use of goods belonging to the social protection system, etc.

CHAPTER 2. OWNERSHIP FORMS AND THEIRCLASSIFICATION.
Ownership is called its type that is characterized, aboveall, by who is the owner. Ownership type determines the identity of variousobjects of property to the subject of a single unified nature, say, a person,family, group, team, people. We cannot understand the economy, if we do notlearn how to classify the property. That is, we must be able to distribute therelations of classes and assign them to subordinate species, specific forms,depending on their common characteristics. Classification assignmentis largely hampered by the fact that there are two types of property relations- in the economic and legal sense. Hence, there are two distinct grounds forclassification.
The basis for the classification of property in its economic sense is thedegree of cooperation of labor and production. This test shows how many peopleare united in the process of labor and during the process appropriate funds andthe results of production. Thus, the real property socialization level isdetermined.  In its scope socialized production has three mainlevels:
1) the lowest level — one-man assignment (small enterprise, on which oneperson or his family are based);
2) the average scale of socialization (more or less a large enterprise orbusiness association, which is united under the work of many people);
3) the highest level — a national complex (labor is cooperated in thenational scale).
Classification of property in the legal sense is grounded in differentkinds of powers of the owners and the character of the property. The followingare different: the nature of attribution and the relationship between propertyowners and not owners;
1) the ability or inability to freely share the commonproperty among individual owners at their discretion.
Sometimes the form of ownership in general is reduced totwo types: private and public, to facilitate their consideration and study. Inlight of the above let’s concentrate on the three forms of ownership, which onthe one hand have received wide recognition in science, but on the other handare among the most common.
In the vast majority of countries private ownership is nowprevailing in varying degrees. The use of private property is one of the basicelements of a mixed economic system. Much of the capital is privately owned.Private ownership of capital, produced goods and services, and the receivedrevenues are essential to support the free enterprise system. Property iscalled private, in relation to which the owner is personified, isolated as anindividual. Private ownership requires a certain rejection of others, notrelated to the number of owners; it requires the right of control over certainobjects — capital, land, income, final goods, etc. All of those arepersonalized and have concrete owners. In other words, property is consideredprivate if the right to it belongs either to one person or a relatively smallgroup of people, each of which has a partnering owner, has his or her personal shareof the property.
Private property belongs only to individuals. Avariation is a private individual ownership. Individual, private firms, whichform a legal entity, are small and are represented in a few sectors:handicrafts and agricultural production, services of all kinds, including themost modern, such as consulting. Their owners are either one person or a smallnumber of individuals; the natural work (one person or family, as it takesplace on farms in the countryside) prevails, but in addition thereto paidemployment may be applied. Worldwide, there are several hundred million suchhouseholds, but they are characterized by a huge rotation: every year a largenumber of such firms go bankrupt and are liquidated, but replaced with newones. Besides small firms, individual private property category includesused-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 positionbetween the private and public ownership is common property of a number ofsubjects. Common property is divided into a joint and shared. The common jointproperty is owned by all the owners together and not divided between them topieces. The common share ownership is divided into shares, parts. Incooperatives, societies the share of each owner is called eral resources. Inmany cases, shared ownership extends only to the value of ownership property,it gives the right to participate in the management of the subject, but theowner can not withdraw their share in tangible, physical form, pick up «apiece».
Common share ownership is difficult to distinguish fromthe private; the boundary between them is blurred. For example, stock ownershipcan be considered both private and commonly shared, as the shareholdercontributes its share to the capital of stock company. Stock ownership is alsocalled the corporate as it is the property of a single corporation. Corporativeenterprises exist wherever the technological base of an industry involvesformation of medium or large-scale production, which requires large amounts ofcapital. These companies exist in the form of companies (corporations andlimited liability companies), partnerships (complete, in faith, and others),cooperatives, non-profit organizations (foundations, associations). Thesubjects of common property can be any property owners, including the state. Ifthe owner separates their part of the common property, it becomes privateproperty.
The common property understood in the broadest senseextends from the narrow sectional to state property. The subject of property asan individual is not stressed in public property, and property rights apply toall citizens. At the same time, it would be inappropriate to assume that in thepublic property (sometimes called social) the individual as an owner does notappear. State property is something that belongs to all, together andseparately, i.e. every member of society at least to some minimal but to someextent has the rights of the owner. Often, public property is identified withthe state that is not quite correct.
The overall, including the national, property issometimes divided on a territorial basis. In that case, those forms ofownership are distinguished as a regional (territorial) and municipal (local).Separation of those forms of ownership emphasizes the fact that the property toa certain extent is managed by the authorities of the territory, say, themunicipality. 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 onlydifference is that municipal ownership is linked with the budget of the lowerlevel 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 countriestoday is concentrated in a very limited range of industries, which for onereason or another are low profit or even unprofitable, which makes themunattractive to private capital. These are mainly the socio-economicinfrastructure (railways, utilities, education). In other industries there isonly «point» of state participation in the form of stakes incompanies. The average for developed countries of the share of public enterprisesin the creation of GDP does not exceed 7%. In developing countries andcountries with transition economies, the figure is 11 and over 40%. Companiesthat referred to as the state company, either are wholly owned or the stateowns a controlling stake (or at least, has a solid blocking minority). Legallythe owners in federal states are the federal land agencies (such as the land ofGermany or U.S. states), and in unitary states the owners are the relevantcentral and regional institutions.
Companies and institutions (e.g. educational or health)in which the state participates at a level below a blocking minority could becalled mixed.
In countries with a federal system the governmentproperty is divided into federal and sub-national, i.e. it is the propertyregions, subjects of the federation.
To clearly distinguish between the state and publicproperty is difficult. The objects of public property, logically, should begood, generally available to all citizens on an equal basis, such as vacantland, water and river spaces, public parks and beaches, forests. If thepossibility of using them by all the people is limited, then there is theprinciple of priority applied. And such places as zoos, nature reserves, whichare administered by state governments, as well as are already in stateownership, as well as state enterprises, institutions, the main types ofnatural resources, defense facilities.
Now let’s turn the important question: which of theconsidered forms of ownership is better? Usually this question is in the formof a dilemma: public or private property? In fact, such an alternativeformulation of the question is counterproductive. It should go about findingthe most rational, optimal combination of both forms. Criterion for evaluationcan be only one: what kind of property in a given historical moment and inlonger term, offers higher level needs satisfaction of the population, whiletaking into account the indicators of life quality. From the combination ofthese criteria, preference should be given to private property, which is nowthe core of the developed market economies of the West. To create just such aneconomic system, developing and former socialist countries are striving. Itcontains the profit motive and competition, the realization of which brings thehighest economic efficiency and better meets the needs. However, privateownership has its drawbacks, especially regarding employment and unemployment.After all, the profit motive and competition is forcing businesses constantly toseek perhaps a greater reduction in production costs, including economy inlabor force. In Western countries, a wave of privatization in the 80’s, thefirst half of the 90’s led to a reduction in the proportion of state ownershipin the production of GDP from 9 am to 7% on average, that means overcoming thelegacy of the prewar and early postwar years. Inthe 30-ies state’s direct participation in theeconomy expanded in the process of overcoming the deepest crisis in the historyof capitalism of 1929 — 1933 years. State ownership in the prewar years in mostWestern countries was significantly strengthened as a sort of«backup» of private enterprises, that had revealed the sequentialweaknesses, and as an instrument of maintaining the strength of the socialsystem. In the late 40’s — 50’s inWestern Europe and Japan, private capital was temporarily weakened by wardamage and certain other circumstances. Such a gap as a need occurred wasfilled by the state, what is now not necessary.
The potential for further privatization in the Western countries haslargely been exhausted. The state share in it,at least in the medium term, will remain approximately at current levels with slightchanges in some countries. However, in some cases to deal with the possible appearanceof unemployment, in labor-intensive industries (especially in infrastructure) newenterprises can be created through public investment. Programs of Westernsocial democracy, which came in power recent years, in several countries,including France, Britain, Germany and Italy, provide for such measures. Indeveloping countries in the same period, the mentioned rate remained at 11%. Onone hand, this was due to the influx of foreign private investment, throughwhich the creation of new private enterprises was possible. On the other hand,the weakness of national private capital forced the state to maintain arelatively high level of its presence in the economy. As in the medium term, wecan not expect a massive increase in inflows of direct investment from Westerncountries, as well as other reasons, the current figure is unlikely to changesignificantly in the foreseeable future.
Former socialist countries have embarked on thetransition from planned to market economy mainly at the turn of the 80’s and90’s. Market transformation, of course, first of all requires displacement ofstate ownership with private through privatization and the creation of newprivate enterprises. In this regard countries with economies in transitionsince the early 90’s had already passed (each in varying degrees) a significantsegment of the path. However, the share of government property in theproduction of the GDP of these countries, on average, still accounts for 20 — 30% or more, i.e., noticeably exceeds the corresponding figure for developedand developing countries.

CHAPTER 3. Change of ownership
3.1 Change of ownership is an essential condition forthe formation of the market
For the successful development of the property it isnecessary to satisfy many economic and social conditions, in particular, it requiresa review of the relationship to the property in the new economic conditions.
Modern economics today anew considers many of the processes occurring inour society. This applies to issues ofownership, 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 transitionto a market economy appeared, therefore, attempts were made to implement thisgoal, sometimes not very successful, but, in our opinion, worthy ofconsideration, since it is with them that a slow and painful break-up of ourold economic stereotypes began.
Adjustment period was marked by increasing attention to the plight of theSoviet people. Nevertheless, the essence ofeconomics lies in the fact that the sympathy and desire to help takenseparately here do not decide anything. For us to live better, we mustproduce more goods and services of high quality. Unfortunately, we still havenot mastered this art. But the government performedan active social policy through increased emissions, but if adequate quantitiesof goods are not produced for this money, then it does not increase thestandard of living, but increases queues, shortages and profiteering, asobserved 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: whatthe 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 theessence of market relations. However, there are several reasons that prevent deepperception and understanding of the market for a Soviet man.
First, we have seen and known a true market economy inall its many manifestations, almost never. If anyone was in the countries ofthe free market, then he or she saw only of its appearance, without delvinginto the essence of the internal mechanisms of market relations.
Secondly, we are not taught the market economy. Inschools, colleges, institutes, radio and television, we were told that overseaswas decaying crisis economy with exploitation and enslavement of the workingpeople. Textbooks containing the true description of the market and the marketeconomy, the works of so-called bourgeois economists were either not translatedor 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 connectedwith the collective farm market, i.e. with market forms that existed in theSoviet economy. But these analogies are very far from real civilization of themodern market and, hence, give rise to a distorted view of true market economy.
The terms «market» and «marketeconomy» in our country are usually treated only as an exchange ofcommodities and commodity-money relations, in other words, as trade, exchange,but such representation is primitive.
The market is a whole system of diverse economicrelations between people, resulting in the production, distribution, exchangeand consumption, based on certain principles, the main among which is freedomof economic activity.
The main property of market-oriented economy is topromote market relations in all economic spheres, their penetration into allsectors, and coverage of all regions of the country. Thisproperty can be called the universality of market relations.

3.2 Ownership in transition economies
Transformation of ownership — from monopoly to pluralismforms
Changes in property relations have become mainstays of economicreforms in the former Soviet republics. In the theoretical plan transformationof the property required to address: to what level the proportion of stateownership should decrease, at what pace and what way it goes lower, to whompublic ownership should transit.
In Kazakhstan and other CIS countries embarked on the transition to asystem, combining private (individual and group), public and mixed ownership ofthe means of production. This is logicalinterfaces with the course of the transition to the market. Since the market supposesfreedom of industrial and commercial activities, competition betweenmanufacturers, 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, toeconomic activity.
State property in the transition
The peculiarity of the relations between subjects andobjects of ownership at the state level are due to the following circumstances:
• The results of the management of state property affectthe fate of many people, determining their standard of living, social security,health, intellectual development, security and many other recognized humanvalues;
• state property are distinguished by great variety ofinstitutional and legal diversity, covers a wide range of national economysectors and are intended for use in a variety of directions;
• The implementation of State’s right to propertyobjects is achieved through the system of state property management, which is athree-tier hierarchical structure.  Public ownership is likely to retain its relevance and functionof the foundation of the entire economic chain. Privatization process, leadingto the expansion of individual and group ownership, does not mean that stateownership will be fully uninstalled. There are sectors of the economy, whichare inappropriate for division on elements.
This applies primarily to large, the most importantsystem operating in the interests of the entire state. Obviously, in Kazakhstanenergy, transportation and some other industries should remain in stateproperty. This should include the material resources of science,especially fundamental science.
The recommendations of various authors are that theshare of state property should be 50-30% of fixed production assets.
Still for a long time ahead the public sector will havea significant position in the national economy and the sector requires adequatesystem of control over it. Apparently, all state enterprises can be dividedinto two categories: the first is under the direct control of the state, thesecond is on full commercial grounds.
An important issue in the development of state property isto overcome monopoly characteristic of the administrative-command system. Bythe end of 1990 in the engineering industry of the former Soviet Union the shareof monopolized production reached 72%. With the transformation of the formerrepublics into independent states monopoly was further complicated as manycopying enterprises were on different sides of the new states boundaries.
It is clear that de-monopolization of production, basedon state property is a long and complicated process. Partly overcoming of themonopoly can be done by downsizing, mechanical section on their part. For theconstruction of new copying enterprises, it would require too much money, whichis currently not available for our country.
It can be assumed that breaking monopolies will gothrough diversification of production at existing plants, which are in power touse spare capacity (or expand existing) for the production of scarce goods.
In overcoming the monopoly, the use of Western countriesexperience can play a positive role. Many of them are antitrust laws. Inparticular, in the United States in 1890 Clayton Act, prohibiting horizontalmerger of companies, if it could destroy the competition was adopted by theSherman Act («charter of economic freedom»), in 1914. -. LawZeller-Kefovera (1950) extended this prohibition on a vertical merger. Forviolation of antitrust laws legal responsibility is provided (a fine of up to100 thousand dollars from executive officers and imprisonment of up to 3years). Court may make the monopoly compensate for damages in triple size theamount for a company that has suffered from monopoly.
In some Western countries there are administrative banson a high degree of monopolization. In the U.S. monopoly reaching 90% of themarket has a compulsory division of the company into parts, if reaching 60% andhigher the monopoly is placed under state control. In Germany, one entrepreneurcan own no more than 30% of the market of products, 2-3 firms can own no morethan 50%, 4-5 can own no more than 70%. The upper bracket for a single firm inthe UK is set at 20% of the market, and in Norway and India at 25%.
Nevertheless, one of the major theoretical and practicalproblems was the deregulation, the definition and use of the most efficientways, models of privatization. Privatization is the transfer of state propertyinto the hands of individual citizens, labor groups, entities, or the emergenceof state-owned enterprises on the basis of various mixed forms of ownership.After the privatization the subjects of property become a private citizen, anemployee of privatized enterprises, the labor collective, joint stockcompanies, holding companies, etc. The objects of privatization may be tradeand services enterprise, housing, small, medium and large enterprises ofindustry and agriculture.
World practice has gained some experience inprivatization. In countries where the process of nationalization tookrelatively large scale (the UK, France), privatization took place, for example,in the UK through: sales and free distribution of shares, contract forservices, sale of public housing tenants; waiver from the state monopoly inorder to promote competition. This process is lengthy.In Western Europe it lasted 10-15 years. Privatizationwas preceded by a lot of painstaking work. Thebasic directions: free transfer of property, the redemption of enterprises onpreferential terms, the sale of shares, delivery companies in the rental, saleof small businesses at auctions, etc.
The objectives of privatization are associated with anincreased efficiency of economic activities through market development and theformation of a layer of private owners, entrepreneurs, encouraging employers toincrease the efficiency of enterprises, expansion of individual liberties andcreating a competitive environment, attracting foreign investment, promotion ofthe economy’s democratization.
Privatization is aimed at social protection anddevelopment of social infrastructure by means of privatization.
The process of privatization in Kazakhstan startedbefore the concept of privatization formed, and the concept of private propertywas recognized officially. As a result, there is a peculiar privatization ofpublic financial resources. Change of ownership does not lead to effectivemanagement. In the economy the rule of natural monopolies firmly established,economic and financial crisis deepened. In this regard, the following actionsare needed, which were previously used in other countries:
• a differentiated approach to privatization of largestate facilities to establish an economic structure with a reasonable balanceof small, medium and large enterprises, with a reasonable degree of competitionbetween enterprises in different industries and with adequate participation offoreign investors;
• variety of ways to transfer public property intoprivate hands, providing short-term loans with the guarantee of stateenterprises whose activities are under qualified supervision, to finance thesalaries and obligations to vendors, etc.

CONCLUSION
Property as an economic relationship began at the dawnof the human society. All the important forms of non-economic and economiccompulsion to work hold on the monopolization of various property objects.Economic compulsion to work is based on the ownership of the conditions ofproduction or ownership of capital.  The social thought has always paid great attention to the issueof ownership. Special treatment to it can be found in history, philosophy andliterature. Rich tradition and the material has been accumulated in the legalliterature, in frames of which a number of directions in the study of propertyrights has established.
The property belongs to such concepts around which forcenturies best minds of mankind have been crossed. In the socio-economicliterature there is the widespread definition of property as the appropriation byan individual or group of production products within and through specificsocial form, or as a very social form itself through which the assignment takesplace. 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 animportant issue as: privatization, exploring it in stages, and also used theexperience of foreign countries. It can be concluded that privatization inKazakhstan was carried out in a radical version of the character, scale, pace,timing and methods.

REFERENCES:
1. Course of economic theory. Textbook ed.Chepourin MN, Kiseleva EA Kirov: «ASA, 2001. with. 75-87.
2. Fundamentals of the economy. Textbook. Ed.Rayzberga BA. Moscow: Infra-M, 2002. with. 84-104.
3. RADYGIN A., Arkhipov S. Ownership, Corporate Conflictsand Performance, Journal „Problems of Economics» — № 11, 2000 p.114.
4. L.Reznikov is it necessary to develop relations of privately owned lands? “RussiaEconomic Journal» — № 5, 2000 p.42.
5.Economy. Textbook. Ed. Bulatov AS. — M: Lawyer,2001. with. 71-74, 663-669.
6.Economic theory. Textbook. Ed. Bazneva NI TurkoSP. M N: BTEU, 1997. p.71-82.
7.Economic theory. Textbook. Ed. Borisova E. FM:Yurayt-M, 2000. with. 47-68.
8.Economic theory. Textbook. Ed. Dobrynin, AI,Tarsevicha LS M: Litera, 2000. with. 67-75.
9.Economic theory. Textbook. Ed. Mchernogo S. M., et al: In, 2000. p.131-150.
10.Economic theory. Textbook. Ed. Nikolaeva IP M: Prospect, 1999. with. 157-175.