Nationalization

<h2 id="political-support">Political support</h2>

Nationalization was one of the major mechanisms advocated by <a href="/facts/Democratic_socialists/JGdYaWre">democratic socialists</a> and <a href="/facts/Social_democrats/Ttb0ryDT">social democrats</a> for gradually transitioning to socialism. In this context, the goals of nationalization were to dispossess large capitalists, redirect the profits of industry to the public purse, and establish some form of <a href="/facts/Workers%2527_self-management/MXwBJktg">workers' self-management</a> as a precursor to the establishment of a socialist economic system.<a class="footnote-ref" id="fnref:4" href="#fn:4">4</a>
Although sometimes undertaken as part of a strategy to build socialism, more commonly nationalization was also undertaken and used to protect and develop industries perceived as being vital to a nation's competitiveness (such as aerospace and shipbuilding), or to protect jobs in certain industries.
Nationalization has had varying levels of support throughout history. After the <a href="/facts/Second_World_War/2efV5L1U">Second World War</a>, nationalization was supported by social democratic and democratic socialist parties in Western Europe, Australia, and New Zealand. In the United States, potentially <a href="/facts/Publicly_funded_health_care/vwWns7cu">nationalizing healthcare</a> is often a topic of political disagreement and makes frequent appearances in debates between political candidates. A 2020 poll shows that a majority (63%) of Americans support a nationalized healthcare system.<a class="footnote-ref" id="fnref:5" href="#fn:5">5</a>
A re-nationalization occurs when state-owned assets are privatized and later nationalized again, often when a different <a href="/facts/Political_party/IAKw7oEK">political party</a> or <a href="/facts/Political_factions/hkjthBgz">faction</a> is in power. A re-nationalization process may also be called "reverse privatization". 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 <a href="/facts/Public_company/tnJQvSdR">publicly listed corporation</a>.
According to research by Paasha Mahdavi, leaders who consider nationalization face a dilemma: "nationalize and reap immediate gains while risking future prosperity, or maintain private operations, thereby passing on revenue windfalls but securing long-term fiscal streams."<a class="footnote-ref" id="fnref:6" href="#fn:6">6</a> He argues that leaders "nationalize extractive resources to extend the duration of their power" by using "this increased capital to secure political support."<a class="footnote-ref" id="fnref:7" href="#fn:7">7</a>

<h2 id="economic-analysis">Economic analysis</h2>
Nationalization can have positive and negative effects.<a class="footnote-ref" id="fnref:8" href="#fn:8">8</a> In 2019, research based on studies from Greenwich University found that the nationalization of key services such as water, bus, railways and broadband in the United Kingdom could save £13bn every year.<a class="footnote-ref" id="fnref:9" href="#fn:9">9</a>
Nationalization may produce other effects, such as reducing competition in the marketplace, which in turn reduces incentives to innovation and maintains high prices. In the short run, nationalization can provide a larger revenue stream for government but may cause that industry to falter depending on the motivations of the nationalizing party.<a class="footnote-ref" id="fnref:10" href="#fn:10">10</a> 
Nationalization was employed by the Panamanian Government towards the <a href="/facts/Panama_Canal/Tau1ccDe">Panama Canal</a>, which came under the <a href="/facts/Panama_Canal_Authority/XdbBTVNA">Panama Canal Authority</a> in 1999 to internationally positive effect.<a class="footnote-ref" id="fnref:11" href="#fn:11">11</a> Likewise, the Suez Canal was nationalized multiple times throughout history.<a class="footnote-ref" id="fnref:12" href="#fn:12">12</a> In Germany, the <a href="/facts/Bundesdruckerei/dNoXR8po">Federal Press</a> [Bundesdruckerei] was nationalized in 2008 with positive revenue and net income since.<a class="footnote-ref" id="fnref:13" href="#fn:13">13</a>

<h2 id="expropriation">Expropriation</h2>
"Expropriation" redirects here. For the 1974 Chilean film, see <a href="/facts/The_Expropriation/EgQteNog">The Expropriation</a>.
See also: <a href="/facts/Alienation_(property_law)/uFLErENX">Alienation (property law)</a>
Expropriation is the seizure of private property by a public agency for a purpose deemed to be in the public interest. It may also be used as a penalty for criminal proceedings.<a class="footnote-ref" id="fnref:14" href="#fn:14">14</a> Expropriation differs from <a href="/facts/Eminent_domain/M9skdn5A">eminent domain</a> in that the property owner is not compensated for the seized property. Unlike eminent domain, expropriation may also refer to the taking of private property by a private entity authorized by a government to take property in certain situations. 
Due to political risks that are involved when countries engage in international business, it is important to understand the expropriation risks and laws within each of the countries in which business is conducted in order to understand the risks as an investor in that country.<a class="footnote-ref" id="fnref:15" href="#fn:15">15</a>

<h2 id="trends">Trends</h2>
Studies have found that nationalization follows a cyclical trend. Nationalization rose in the 1960s and 1970s, followed by an increase in privatization in the 80s and 90s, followed again by an increase in nationalization in the 2000s and 2010s.<a class="footnote-ref" id="fnref:16" href="#fn:16">16</a>

<h2 id="marxist-theory">Marxist theory</h2>
The term appears as "expropriation of expropriators (<a href="/facts/Ruling_class/6brqEKFD">ruling classes</a>)" in <a href="/facts/Marxism/sgnnLfax">Marxist theory</a>, and also as the slogan "Loot the looters!" ("грабь награбленное"), which was very popular during the <a href="/facts/Russian_Revolution/kk1z6pnH">Russian Revolution</a>.<a class="footnote-ref" id="fnref:17" href="#fn:17">17</a> The term is also used to describe nationalization campaigns by <a href="/facts/Communist_states/oYaCr1Av">communist states</a>, such as <a href="/facts/Dekulakization/3yv6w7cU">dekulakization</a> and <a href="/facts/Collectivization_in_the_USSR/h845mlpB">collectivization in the USSR</a>.<a class="footnote-ref" id="fnref:18" href="#fn:18">18</a>
However, nationalization is not a specifically socialist strategy, and Marxism's founders were skeptical of its value. As Engels put it:

<blockquote>Therein precisely lies the rub; for, so long as the propertied classes remain at the helm, nationalisation never abolishes exploitation but merely changes its form — in the French, American or Swiss republics no less than in monarchist Central, and despotic Eastern, Europe.— Friedrich Engels, Letter from Engels to Max Oppenheim, 24 March 1891</blockquote>
<a href="/facts/Nikolai_Bukharin/w2nceA7e">Nikolai Bukharin</a> also criticised the term nationalisation, preferring the term statisation instead.<a class="footnote-ref" id="fnref:19" href="#fn:19">19</a>

<h2 id="see-also">See also</h2>

<ul><li><a href="/facts/Compulsory_purchase/M9skdn5A">Compulsory purchase</a></li>
<li><a href="/facts/Constitutional_economics/9Keffeys">Constitutional economics</a></li>
<li><a href="/facts/Confiscation/NXccRNdG">Confiscation</a></li>
<li><a href="/facts/Eminent_domain/M9skdn5A">Eminent domain</a></li>
<li><a href="/facts/List_of_nationalizations_by_country/p83dwINq">List of nationalizations by country</a></li>
<li><a href="/facts/List_of_privatizations_by_country/51NyNbDs">List of privatizations by country</a></li>
<li><a href="/facts/Municipalization/tgebdcyy">Municipalization</a></li>
<li><a href="/facts/Nationalization_of_oil_supplies/31TBkkoS">Nationalization of oil supplies</a></li>
<li><a href="/facts/Planned_economy/TCMJrC5M">Planned economy</a></li>
<li><a href="/facts/Privatization/TAtreKqK">Privatization</a></li>
<li><a href="/facts/Public_ownership/Jr4dPDo3">Public ownership</a></li>
<li><a href="/facts/Railway_nationalization/UTKQSM0R">Railway nationalization</a></li>
<li><a href="/facts/Sequestration_(law)/hM09PVPs">Sequestration</a></li>
<li><a href="/facts/State_ownership/Jr4dPDo3">State ownership</a></li>
<li><a href="/facts/State_capitalism/7UDnqIWs">State capitalism</a></li>
<li><a href="/facts/State_socialism/V3eKpDeV">State socialism</a></li>
<li><a href="/facts/State_sector/bV8gdzPu">State sector</a></li>
<li><a href="/facts/Statism/6n5RGyC4">Statism</a></li></ul>

<h2 id="external-links">External links</h2>

Look up nationalization in Wiktionary, the free dictionary.

<ul><li><a href="https://web.archive.org/web/20100825184852/http://www.hinduonnet.com/fline/fl2525/stories/20081219252504800.htm">The importance of public banking</a>[usurped], article on Indian <a href="/facts/Public_sector/bV8gdzPu">public sector</a> banks</li>
<li><a href="http://www.dollarsandsense.org/archives/2009/0309moseley.html">Time for Permanent Nationalization</a> by economist <a href="/facts/Fred_Moseley_(economist)/0ovWg394">Fred Moseley</a> in <a href="/facts/Dollars_%2526_Sense/VGId95RS">Dollars & Sense</a>, January/February 2009</li>
<li><a href="https://ideas.repec.org/p/wbk/wbrwps/3404.html">The Corporate Governance of Banks – a concise discussion of concepts and evidence</a></li>
<li>Davies, Albert Emil (1922). <a href="https://en.wikisource.org/wiki/1922_Encyclop%C3%A6dia_Britannica/Nationalization">"Nationalization" </a>. <a href="/facts/Encyclop%25C3%25A6dia_Britannica/CEyVsjlN">Encyclopædia Britannica</a> (12th ed.).</li></ul>

<h2 id="references">References</h2>

<ol>
<li id="fn:1">"Definition of NATIONALIZATION". Merriam-Webster. 13 September 2024. nationalize [...] 2 : to invest control or ownership of in the national government[.] <a href="https://www.merriam-webster.com/dictionary/nationalization" target="_blank">https://www.merriam-webster.com/dictionary/nationalization</a> <a href="#fnref:1" class="footnote-back-ref">↩</a></li>
<li id="fn:2">Chrisafis, Angelique (December 14, 2011). "Renault descendants demand payout for state confiscation". The Guardian. London. <a href="https://www.theguardian.com/world/2011/dec/14/renault-descendants-demand-payout-confiscation" target="_blank">https://www.theguardian.com/world/2011/dec/14/renault-descendants-demand-payout-confiscation</a> <a href="#fnref:2" class="footnote-back-ref">↩</a></li>
<li id="fn:3">Alistair, Mason; Pyper, Hugh (21 December 2000). Hastings, Adrian (ed.). The Oxford Companion to Christian Thought. Oxford University Press. p. 677. ISBN 978-0198600244. Retrieved 8 December 2019. 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'[.] <a href="978-0198600244" target="_blank">978-0198600244</a> <a href="#fnref:3" class="footnote-back-ref">↩</a></li>
<li id="fn:4">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 nationalized 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 nationalized 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." <a href="#fnref:4" class="footnote-back-ref">↩</a></li>
<li id="fn:5">Jones, Bradley (2020-09-29). "Increasing share of Americans favor a single government program to provide health care coverage". Pew Research Center. Retrieved 2024-09-15. <a href="https://www.pewresearch.org/short-reads/2020/09/29/increasing-share-of-americans-favor-a-single-government-program-to-provide-health-care-coverage/" target="_blank">https://www.pewresearch.org/short-reads/2020/09/29/increasing-share-of-americans-favor-a-single-government-program-to-provide-health-care-coverage/</a> <a href="#fnref:5" class="footnote-back-ref">↩</a></li>
<li id="fn:6">Mahdavi, Paasha (2021). Power grab: political survival through extractive resource nationalization. Cambridge University Press. doi:10.1017/9781108781350. ISBN 9781108781350. S2CID 243736481. Retrieved 2020-03-12. <a href="9781108781350" target="_blank">9781108781350</a> <a href="#fnref:6" class="footnote-back-ref">↩</a></li>
<li id="fn:7">Mahdavi, Paasha (2021). Power grab: political survival through extractive resource nationalization. Cambridge University Press. doi:10.1017/9781108781350. ISBN 9781108781350. S2CID 243736481. Retrieved 2020-03-12. <a href="9781108781350" target="_blank">9781108781350</a> <a href="#fnref:7" class="footnote-back-ref">↩</a></li>
<li id="fn:8">"Nationalization | economic policy". <a href="https://www.britannica.com/topic/nationalization" target="_blank">https://www.britannica.com/topic/nationalization</a> <a href="#fnref:8" class="footnote-back-ref">↩</a></li>
<li id="fn:9">Ellis, Mark (2019-11-24). "Nationalisation of public services could save £13billion every year". mirror. Retrieved 2020-01-06. <a href="https://www.mirror.co.uk/news/politics/nationalisation-public-services-could-save-20951951" target="_blank">https://www.mirror.co.uk/news/politics/nationalisation-public-services-could-save-20951951</a> <a href="#fnref:9" class="footnote-back-ref">↩</a></li>
<li id="fn:10">"Nationalization". Corporate Finance Institute. Retrieved 2021-09-29. <a href="https://corporatefinanceinstitute.com/resources/knowledge/economics/nationalization/" target="_blank">https://corporatefinanceinstitute.com/resources/knowledge/economics/nationalization/</a> <a href="#fnref:10" class="footnote-back-ref">↩</a></li>
<li id="fn:11">"My opinion Andrés Oppenheimer : Panama delivers a lesson to isolationists". www.azstarnet.com. 2006-10-29. Archived from the original on 2006-11-06. Retrieved 2024-09-15. <a href="https://web.archive.org/web/20061106000852/http://www.azstarnet.com/allheadlines/153038" target="_blank">https://web.archive.org/web/20061106000852/http://www.azstarnet.com/allheadlines/153038</a> <a href="#fnref:11" class="footnote-back-ref">↩</a></li>
<li id="fn:12">"Britannica Money". www.britannica.com. Retrieved 2024-09-15. <a href="https://www.britannica.com/money/nationalization" target="_blank">https://www.britannica.com/money/nationalization</a> <a href="#fnref:12" class="footnote-back-ref">↩</a></li>
<li id="fn:13">"Lagebericht und Jahresabschluss 2021" (PDF). Bundesdruckerei Gruppe GMBH. 2023-02-27. <a href="https://www.bundesdruckerei.de/files/dokumente/pdf/bundesdruckerei_lagebericht_jahresabschluss_2021.pdf" target="_blank">https://www.bundesdruckerei.de/files/dokumente/pdf/bundesdruckerei_lagebericht_jahresabschluss_2021.pdf</a> <a href="#fnref:13" class="footnote-back-ref">↩</a></li>
<li id="fn:14">Caves, R. W. (2004). Encyclopedia of the City. Routledge. p. 251. <a href="#fnref:14" class="footnote-back-ref">↩</a></li>
<li id="fn:15">Flynn, Chris. Avoiding Expropriation and Managing Political Risk in Emerging Market. Lexology. p. 1. <a href="#fnref:15" class="footnote-back-ref">↩</a></li>
<li id="fn:16">Chang, Roberto; Hevia, Constantino; Loayza, Norman (March 2018). "Privatization and Nationalization Cycles". Macroeconomic Dynamics. 22 (2): 331–361. doi:10.1017/S1365100516000195. hdl:10986/4227. ISSN 1365-1005. <a href="https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/abs/privatization-and-nationalization-cycles/80DFFA5293F36B73CF5CDBC1E7BE16FC" target="_blank">https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/abs/privatization-and-nationalization-cycles/80DFFA5293F36B73CF5CDBC1E7BE16FC</a> <a href="#fnref:16" class="footnote-back-ref">↩</a></li>
<li id="fn:17">Orlando Figes, A People's Tragedy: Russian Revolution, 1996, ISBN 0-7126-7327-X. <a href="/wiki/Orlando_Figes" target="_blank">/wiki/Orlando_Figes</a> <a href="#fnref:17" class="footnote-back-ref">↩</a></li>
<li id="fn:18">Richard Pipes Property and Freedom, Vintage Books, A division of Random House, Inc., New York, 1999, ISBN 0-375-70447-7, page 214. <a href="/wiki/Richard_Pipes" target="_blank">/wiki/Richard_Pipes</a> <a href="#fnref:18" class="footnote-back-ref">↩</a></li>
<li id="fn:19">Economy of transition period, Chapter Seven 'The latter term, indeed, certainly is not perfect. First, it mixes "nation" ("whole") with the state, i.e. the ruling class. Second, it has shade of national states epoch. We keep it because it is absolutely rooted, though there are no logical grounds for its existence.' <a href="#fnref:19" class="footnote-back-ref">↩</a></li>
</ol>

Nationalization open-in-new

Nationalization