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Nationalisation (an alternative spelling is nationalization) is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state. Nationalisation usually refers to private assets or assets owned by lower levels of government, such as municipalities, being transferred to the state. The opposites of nationalisation are privatisation, municipalisation and mutualization. Industries that are usually subject to nationalisation include transport, communications, energy, banking and natural resources.
Nationalisation may occur with or without compensation to the former owners. Nationalisation is distinguished from property redistribution in that the government retains control of nationalised property. Some nationalisations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.
Nationalisation is to be distinguished from "socialization", which refers to the process of restructuring the economic framework, organizational structure, and institutions of an economy on a socialist basis. By contrast, nationalisation does not necessarily imply social ownership and the restructuring of the economic system. By itself, nationalisation has nothing to do with socialism, having been historically carried out for various different purposes under a wide variety of different political systems and economic systems.
Nationalised industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate loss-making activities where it is judged that social benefits are greater than social costs — for example, rural postal and transport services. The government has recognised these social obligations and, in some cases, provides subsidies for such non-commercial operations.
Since nationalised industries are state owned, the government is responsible for meeting any debts. The nationalised industries do not normally borrow from the domestic market other than for short-term borrowing. If they are profitable, the profit is often used to finance other state services, such as social programs and government research, which can help lower the tax burden.
The traditional Western stance on compensation was expressed by United States Secretary of State Cordell Hull during the 1938 Mexican nationalization of the petroleum industry that compensation should be "prompt, effective and adequate." According to this view, the nationalising state is obligated under international law to pay the deprived party the full value of the property taken.
In 1962, the United Nations General Assembly adopted Resolution 1803, "Permanent Sovereignty over National Resources", which states that in the event of nationalisation, the owner "shall be paid appropriate compensation in accordance with international law." In doing so, the UN rejected the traditional Calvo-doctrinist view and the Communist view. The term "appropriate compensation" represents a compromise between the traditional views, taking into account the need of developing countries to pursue reform even without the ability to pay full compensation, and the Western concern for protection of private property.
In the United States, the Fifth Amendment requires just compensation if private property is taken for public use.
Nationalisation was one of the major mechanisms advocated by reformist socialists and social democrats for gradually transitioning to socialism. In this context, the goals of nationalisation were to dispossess large capitalists, redirect the profits of industry to the public purse and establish some form of workers' self-management as a precursor to the establishment of a socialist economic system.
In the United Kingdom after the Second World War, nationalisation gained support by the Labour party and some social democratic parties throughout Europe. Although sometimes undertaken as part of a strategy to build socialism, more commonly nationalisation was also undertaken and used to protect and develop industries perceived as being vital to the nation's competitiveness (such as aerospace and shipbuilding), or to protect jobs in certain industries.
A re-nationalisation occurs when state-owned assets are privatised and later nationalised again, often when a different political party or faction is in power. A re-nationalisation process may also be called "reverse privatisation". Nationalization has been used to refer to either direct state-ownership and management of an enterprise or to a government acquiring a large controlling share of a publicly listed corporation.
- Chrisafis, Angelique (December 14, 2011). "Renault descendants demand payout for state confiscation". The Guardian. London.
- Hastings, Mason and Pyper, Adrian, Alistair and Hugh (December 21, 2000). The Oxford Companion to Christian Thought. Oxford University Press. p. 677. ISBN 978-0198600244.
At the heart of its vision has been social or common ownership of the means of production. Common ownership and democratic control of these was far more central to the thought of the early socialists than state control or nationalization, which developed later...Nationalization in itself has nothing particularly to do with socialism and has existed under non-socialist and anti-socialist regimes. Kautsky in 1891 pointed out that a ‘co-operative commonwealth’ could not be the result of the ‘general nationalization of all industries’ unless there was a change in ‘the character of the state’.
- The Economics of Feasible Socialism Revisited, by Nove, Alexander. 1991. (P.176): "Nationalisation arouses no enthusiasm, in the minds of most socialists and anti-socialists. It would probably be agreed that hopes which reposed on nationalisation have been disappointed. Conservatives hold that this is due to defects inherent in nationalisation, that private enterprise based on private ownership is inherently superior. (Mrs Thatcher’s government tried to ensure that this was so by preventing essential investments and ordering the nationalised industries to sell off their more successful undertakings.)...The original notion was that nationalization would achieve three objectives. One was to dispossess the big capitalists. The second was to divert the profits from private appropriation to the public purse. Thirdly, the nationalised sector would serve the public good rather than try to make private profits...To these objectives some (but not all) would add some sort of workers' control, the accountability of management to employees."
On banks nationalization
- Dougherty, Carter, Stopping a Financial Crisis, the Swedish Way, The New York Times," September 23, 2008.
- Hilferding, Rudolf (1981) Finance Capital: A Study of the Latest Phase of Capitalist Development (London: Routledge & Kegan Paul), p. 234. ISBN 0-7100-0618-7, ISBN 978-0-7100-0618-9
- La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, Government Ownership of Banks, The Journal of Finance, vol. 57, No. 1 (February 2002), 265-301.
- La Botz, Dan (2008) The Financial Crisis: Will the U.S. Nationalize the Banks? Monthly Review 28 September 2008
- Maxfield, Sylvia, The International Political Economy of Bank Nationalization: Mexico in Comparative Perspective, Latin American Research Review, Vol. 27, No. 1 (1992), pp. 75–103.
- Myers, Margaret G., The Nationalization of Banks in France, Political Science Quarterly, Vol. 64, No. 2 (June 1949), pp. 189–210.
- Political / Nationalization risk resources directory [www.ipoliticalrisk.com]
|Look up nationalization in Wiktionary, the free dictionary.|
- The importance of public banking - article on Indian public sector banks
- Time for Permanent Nationalization by economist Fred Moseley in Dollars & Sense magazine, January/February 2009
- The Corporate Governance of Banks - a concise discussion of concepts and evidence
- Albert Emil Davies (1922). "Nationalization". Encyclopædia Britannica (12th ed.).it:Espropriazione per pubblica utilità