Can a State Own the Economy Without Owning the Individual?
An investigation into state ownership, individual freedom, political participation, entrepreneurship and economic independence.
The central question: Can a government control the country's major economic resources while allowing its citizens to remain economically independent, politically free and personally autonomous?
This question takes the debate about communism beyond the ownership of factories, banks, mines and infrastructure.
It examines something more fundamental: the relationship between the power of the state and the freedom of the individual.
A government may own the country's major industries in the name of collective prosperity. It may provide employment, healthcare, education, housing and social protection. It may coordinate national development and direct resources towards strategic priorities.
But what happens when the same government also controls the institutions through which citizens earn a living, establish businesses, access financial resources and participate in economic decisions?
Can people genuinely be independent when their economic opportunities depend heavily on institutions controlled by the state?
And can the state claim to represent society collectively if individuals have little freedom to disagree with its economic decisions?
This is not simply an argument about capitalism versus communism.
It is a question about the limits of government authority and the conditions necessary for individual freedom.
The investigation needs to distinguish between three concepts:
State ownership: Government ownership of productive assets and enterprises.
State control: Government authority over economic decisions, investment, production and distribution.
Individual autonomy: A person's ability to make independent economic, political and personal decisions.
These concepts can overlap, but they are not identical.
A government can own a public utility without controlling every aspect of an individual's life. Equally, a government can allow private businesses to exist while retaining extensive political control over citizens.
The real issue is not ownership alone. It is how far economic authority extends into everyday life.
The fundamental contradiction: Collective ownership versus individual independence.
Consider a country where the government owns:
Electricity generation and distribution.
Major transport infrastructure.
Strategic mineral resources.
National banking institutions.
Telecommunications infrastructure.
Major industrial enterprises.
Large agricultural production facilities.
There are legitimate reasons for public ownership in some of these sectors.
Strategic infrastructure can require enormous investment. Essential services may not be accessible to everyone if they are left entirely to market forces. Governments may also want to prevent monopolies from controlling resources essential to national development.
However, a problem emerges when public ownership becomes comprehensive economic control.
Imagine an individual who wants to establish a manufacturing company.
They need electricity, financing, industrial land, equipment, telecommunications, skilled workers and access to markets.
If the government controls nearly every institution providing these resources, the entrepreneur may have to obtain approval from multiple government agencies.
The state does not necessarily own the individual.
But it may control many of the conditions under which that individual can exercise economic independence.
This is the distinction between owning productive assets and possessing the power to determine what individuals can do with their lives.
The philosophical challenge is to prevent collective economic ownership from becoming comprehensive political authority.
2. The Soviet Union: When economic dependence became political dependence
The Soviet Union provides an important historical example.
The state controlled most major productive assets, while the Communist Party exercised dominant political authority.
Employment, industrial production, housing allocation, professional advancement and access to important resources were heavily influenced by state institutions.
This arrangement delivered significant social and economic changes, including industrialisation, mass education and extensive public employment.
But it also created a relationship of dependence.
When the state is the principal employer and controls the major economic institutions, losing employment or falling out of political favour can have consequences beyond losing a salary.
It can affect housing, career advancement and access to other opportunities.
The Soviet nomenklatura system also created advantages for politically connected officials, demonstrating that public ownership did not eliminate unequal access to resources.
The historical issue is therefore not whether every Soviet citizen was directly controlled in every decision.
It is whether the concentration of economic authority reduced the practical independence of citizens.
Investigative question: Can a worker be economically free when the institutions governing employment, advancement and access to resources are largely controlled by one political system?
China: Can private enterprise exist without complete economic independence?
China offers a particularly interesting case because it combines extensive private enterprise with Communist Party political dominance.
Since the economic reforms initiated under Deng Xiaoping, private businesses have become important contributors to employment, manufacturing, technology, exports and economic growth.
This means that China is not simply a state-owned economy.
However, private ownership does not necessarily mean complete independence from political authority.
The relationship between the Communist Party and private business has evolved through several stages.
Research by Bruce Dickson, published in The China Quarterly, examines how the Communist Party incorporated private entrepreneurs into its political system, including through party membership and selective political participation.
More recent research by Brødsgaard and Beck, published in 2026, examines the expansion of party organisations within private enterprises and the strengthening of party-state involvement in business governance.
This raises three important distinctions:
A person can own a private company without having independent political influence.
An entrepreneur can become wealthy without having the same political authority as senior party officials.
A business can operate commercially while remaining subject to extensive political and regulatory influence.
There is also evidence that political connections can affect business opportunities. Research published in the Journal of Banking and Finance found associations between entrepreneurs' political participation and preferential access to financing, tax treatment, subsidies and regulated industries.
The central issue is therefore not whether China permits entrepreneurship. It clearly does.
It is whether entrepreneurs can operate independently of political networks and whether economic success can translate into autonomous political participation.
Investigative question: Can an entrepreneur be economically independent when the political system retains significant influence over the institutions governing finance, regulation and access to markets?
Cuba: When the state controls the principal economic opportunities
Cuba offers another important example.
The government maintains ownership and operation of major enterprises, while reforms have gradually expanded opportunities for private business.
The legalisation of micro, small and medium-sized enterprises in 2021 represented a significant change.
Nevertheless, the state retains a dominant role in strategic sectors, capital allocation and economic regulation.
The 2026 Bertelsmann Transformation Index country assessment describes continuing restrictions and uncertainty surrounding private-sector activity, including government emphasis on controlling rather than simply expanding private enterprise.
This creates a difficult economic relationship.
An individual may be permitted to establish a small business but still face constraints involving:
Access to imported materials.
Financing and foreign currency.
Business expansion.
Pricing regulations.
Employment arrangements.
Access to international markets.
The distinction is important.
Legal permission to establish a business is not necessarily the same as having the institutional freedom to develop it.
Cuba also illustrates the other side of the debate: public ownership and government provision can support universal social services, even where private economic opportunities remain restricted.
The question is how to preserve social protection without unnecessarily limiting individual initiative.
Investigative question: Can a government protect social equality while allowing citizens sufficient freedom to create independent sources of income and economic opportunity?
Entrepreneurship: Does the state create opportunities or control them?
Entrepreneurship is one of the clearest ways to examine individual economic independence.
An entrepreneur needs more than permission to open a business.
They need the practical ability to:
Identify a commercial opportunity.
Obtain financing.
Acquire equipment and materials.
Hire workers.
Set competitive prices.
Develop new products.
Enter markets.
Retain a reasonable share of the rewards of success.
Close or restructure a failing business.
Challenge unfair government decisions.
A state can support these activities through infrastructure, education, financial assistance and fair regulation.
But it can also restrict them through excessive licensing, political favouritism, state monopolies and arbitrary administrative decisions.
The World Bank's 2023 report, The Business of the State, examined approximately 76,000 companies across 91 countries with at least 10% government ownership.
It found that almost 70% operated in sectors where private-sector competition could be more efficient. Its analysis associated a larger state business footprint with reduced business dynamism, greater market concentration, fewer new market entrants and weaker private investment.
This is not evidence that every state-owned enterprise performs poorly. Public enterprises can provide essential infrastructure and services.
It does, however, establish an important policy question:
Should governments compete with entrepreneurs in commercial markets, or should they concentrate on creating the conditions in which entrepreneurs can compete fairly?
A healthy economic system must distinguish between regulation that protects the public and regulation that protects incumbent institutions from competition.
Political participation: Can citizens control the state that owns their economy?
This is where the economic question becomes a constitutional and political question.
If the government owns major productive assets, citizens need effective ways to influence how those assets are managed.
Otherwise, public ownership can become ownership in name only.
Consider four essential democratic safeguards.
1. The right to disagree
Citizens must be able to criticise government economic policies without facing economic punishment or political exclusion.
2. Independent representation
Workers need organisations capable of representing their interests independently of government and ruling political parties.
3. Accountability
Public enterprises must disclose their finances, explain their decisions and face independent audits.
4. The right to participate
Citizens should have meaningful opportunities to influence major economic decisions, directly or through accountable elected representatives.
The distinction is between a government acting on behalf of the population and a government claiming that its decisions automatically represent the population.
These are not the same thing.
A government may be democratically elected and still exercise excessive economic power. Equally, a public enterprise may be efficiently managed without giving citizens meaningful participation.
The question is whether the public has enforceable rights over the institutions exercising public ownership.
Worker ownership: Could employees control production without government domination?
There is an alternative worth examining.
Instead of transferring ownership of all productive assets to the central government, workers could collectively own and govern enterprises.
This is the principle behind worker cooperatives and certain forms of market socialism.
Under a cooperative model:
Employees participate in ownership.
Members elect representatives.
Members have voting rights.
Profits can be distributed according to agreed rules.
Management is accountable to the membership.
The organisation can retain independence from government.
The International Labour Organization's Recommendation No. 193 on the Promotion of Cooperatives establishes principles of democratic member control, equal voting rights and cooperative autonomy.
The Spanish Mondragon Corporation provides an important real-world example of a large cooperative network.
This approach raises an important possibility: collective ownership does not have to mean government ownership.
However, cooperatives also face challenges:
Raising sufficient investment capital.
Competing with large corporations.
Managing complex international operations.
Balancing employee interests with long-term reinvestment.
Preventing internal management from becoming unaccountable.
The lesson is not that cooperatives solve every economic problem.
It is that collective ownership can take forms other than centralised state administration.
Public ownership without personal domination: What safeguards are necessary?
The question is not whether governments should own anything.
Many countries have successfully used public ownership to provide electricity, water, transport, banking, healthcare infrastructure and other essential services.
The more important question is how that ownership is governed.
The OECD's 2024 guidelines on state-owned enterprises emphasise professional ownership arrangements, transparent governance, clear public objectives and safeguards against undue political interference.
A system seeking to preserve both public ownership and individual independence would need several safeguards.
Institutional safeguard | Purpose |
|---|---|
Independent judiciary | Protect citizens against arbitrary government decisions |
Freedom of association | Allow independent unions and organisations |
Freedom of expression | Enable criticism of economic and political policies |
Private enterprise rights | Preserve independent sources of income |
Independent regulators | Prevent state-owned companies from abusing market dominance |
Transparent public finances | Prevent political misuse of public resources |
Competitive procurement | Reduce patronage and corruption |
Cooperative ownership | Expand economic participation |
Independent financial institutions | Reduce excessive dependence on political allocation |
Constitutional protection | Prevent governments from arbitrarily withdrawing individual rights |
These safeguards are relevant to state-owned enterprises in democratic and authoritarian systems alike.
The World Bank's research also stresses the importance of competition between public and private enterprises on a level playing field, alongside strong regulatory institutions.
A crucial distinction emerges:
A government can own an enterprise as a public asset without treating that enterprise as an extension of the ruling political party.
That requires separating the functions of government, ownership, management and regulation.
Africa and Asia: What lessons should developing economies learn?
This debate has particular relevance for developing economies.
Many African and Asian countries possess strategic resources but struggle to convert them into broad-based industrial development.
Consider a country with substantial deposits of lithium, copper, cobalt, oil, gas or other minerals.
Should the government own those resources?
There are strong arguments for public ownership or public participation where resources are nationally strategic.
But ownership alone does not guarantee that ordinary citizens benefit.
The country still needs:
Transparent licensing.
Competent resource management.
Independent auditing.
Competitive industrial development.
Local manufacturing capacity.
Skills development.
Fair revenue distribution.
Protection against political patronage.
Opportunities for independent entrepreneurs.
Consider two hypothetical approaches.
Approach A — State monopoly
The government owns the mineral resources, mining companies, processing plants, transport infrastructure and principal financing institutions.
Potential benefit: Direct national coordination and control over strategic resources.
Potential risk: Political concentration, bureaucratic inefficiency and restricted private participation.
Approach B — Public resource ownership with competitive participation
The government retains strategic ownership and regulatory authority while allowing independently owned mining, processing, engineering and manufacturing businesses to compete under transparent rules.
Potential benefit: Public participation in national wealth alongside entrepreneurship, investment and industrial competition.
Potential risk: Corporate capture, corruption, unequal bargaining power and inadequate public oversight.
Neither approach guarantees success.
The real test is whether national resources create sustainable economic opportunities for citizens rather than simply transferring control from foreign corporations to domestic political elites.
For Africa, this raises a particularly important question:
Can governments retain sovereignty over strategic resources without becoming the gatekeepers of every economic opportunity available to their populations?
The emerging danger: AI, digital infrastructure and total economic dependence
The relationship between state ownership and individual freedom is becoming even more complicated in the age of artificial intelligence.
In the past, economic control involved factories, land, banks, transport and industrial production.
Today, economic power increasingly involves:
Digital identity systems.
Financial transaction infrastructure.
Telecommunications networks.
Personal and commercial data.
Artificial intelligence platforms.
Digital payment systems.
Cloud computing infrastructure.
Automated government services.
Imagine a government controlling the principal digital payment system, national identity infrastructure, telecommunications and major AI platforms.
Such infrastructure could improve public services, reduce fraud, increase financial inclusion and support economic development.
But it could also create the technical capacity to monitor economic activity, restrict transactions and influence access to essential services.
The question becomes more serious when AI is used to automate decisions.
Who determines which citizens receive financial assistance? Who controls access to digital services? Can an individual challenge an automated government decision? Can independent businesses operate without political interference?
This is a new dimension of the traditional debate about state power.
Could the state eventually control not only the principal means of production but also the digital infrastructure through which individuals participate in economic life?
The same questions apply to private technology monopolies. A corporation controlling essential digital infrastructure can also exercise substantial influence over individuals.
Therefore, the issue is not simply government versus business. It is the concentration of power over the infrastructure of everyday life.
The ultimate philosophical test: Does the economy belong to the people, or do the people belong to the economy?
There is a fundamental difference between a government owning national assets and a government possessing unrestricted authority over the people who depend on those assets.
Public ownership can serve legitimate purposes.
It can help finance infrastructure, provide essential services, support industrial development and ensure that strategic resources contribute to national welfare.
But public ownership must not become an excuse for political domination.
Similarly, private ownership can encourage entrepreneurship, innovation and economic independence, but it does not automatically guarantee freedom when corporations accumulate excessive economic and political influence.
The challenge is to protect both collective interests and individual autonomy.
A sustainable economic arrangement must allow:
Governments to protect national interests.
Citizens to challenge government decisions.
Entrepreneurs to establish independent businesses.
Workers to organise and negotiate.
Public enterprises to operate transparently.
Private companies to compete fairly.
Individuals to retain control over their personal lives and economic choices.
The ultimate distinction is between a government that owns assets on behalf of society and a government that assumes society exists to serve its institutions.
The state should be an instrument through which people organise their collective interests. People should not become instruments through which the state exercises its economic power.
And perhaps the most important question is this:
If citizens cannot independently earn, create, disagree, organise and participate in decisions affecting their economic future, can we genuinely say that the economy belongs to them?
Can Democracy Control Capitalism Without Destroying Entrepreneurship?
Investigate whether democratic governments can regulate corporate monopolies, redistribute economic opportunity, protect workers and prevent excessive wealth concentration without undermining investment, innovation and individual economic freedom.
Examine the United States, Nordic economies, Germany, Japan, South Korea and emerging African economies.
The central question: Who should control economic power, and what prevents that power from becoming political domination?
This would complete an important comparison in the series: the danger of excessive state power under communism and the danger of excessive private economic power under capitalism.
The common standard should be human welfare, freedom, opportunity, accountability and the ability of ordinary people to influence their economic future.
By Jugo Ikeji Uju
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