ABSTRACT
The understanding of what private property is and what it is not—is clouded in both capitalist and socialist societies by a “Fundamental Myth” accepted by both sides in the capitalism/socialism debate. The myth can be crudely stated as the belief that “being the firm” is a structural part of the bundle of property rights referred to as “ownership of the means of production.” It is the myth that the residual claimant’s role is part of the property rights owned in the capital-owner’s role, i.e. part of the “ownership of the means of production.” The great debate over the public or private ownership of the residual claimant’s role is quite beside the point since there is no “ownership” of that role in the first place. The ownership of the capital assets is quite relevant to the question of bargaining power; it gives the legal party with the capital-owner’s role substantial bargaining power to also acquire the contractual role of residual claimancy.
