Starting with a case study of safety in production, I attempt, in this article, to use the framework of modern ownership theory, and not the traditional method, to analyze the internalities and externalities of ownership on the one hand and, on the other, the root of government control thereof. According to the ownership theory, because transaction cost is positive, ownership cannot be completely and clearly defined, and a part must be positioned in the public domain, making traders with advantages in information grab public wealth as their own, thus incurring to the counter party losses not stipulated on terms and conditions of the contract. That is what is called internalities. The purpose of government control, therefore, lies inreduction of the cost of completely defined ownership, and raise in efficiency of resource allocation. On this basis, this paper will finally integrate the internalities the externalities into one in the same framework of ownership theory, causing the two factors and government control to have a unified theoretic foundation.
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