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{{Short description|Transfer of privately-owned assets to the national government}}
{{see also| List of nationalizations by country}}
{{use American English |date= February 2016}}

{{economic systems sidebar | transition}}

'''Nationalization''' ('''nationalisation''' in [[British English]]) is the process of transforming privately-owned [[asset]]s into public assets by bringing them under the [[State ownership|public ownership]] of a [[Government|national government]] or [[State (polity)|state]].<ref name="Ref_">{{cite web |url= https://www.merriam-webster.com/dictionary/nationalization |title= Definition of NATIONALIZATION |website= merriam-webster.com | quote = nationalize [...] 2 : to invest control or ownership of in the national government[.]}}</ref> Nationalization contrasts with [[privatization]] and with [[demutualization]]. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone '''renationalization'''. Industries often subject to nationalization include the [[commanding heights of the economy]] – [[telecommunications company|telecommunications]], [[electrical power industry|electric power]], [[fossil fuels]], [[railway company|railways]], [[airline]]s, [[iron ore]], [[state media|media]], [[mail|postal services]], [[bank]]s, and [[Water industry|water]] – and in many jurisdictions such entities have no history of private ownership.

Nationalization may occur with or without [[financial compensation]] to the former [[owner]]s. Nationalization is distinguished from [[property redistribution]] in that the government retains control of nationalized [[property]]. Some nationalizations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car-maker [[Renault]] because its owners had [[Collaboration with Nazi Germany and Fascist Italy|collaborated]] with the 1940–1944 [[Nazi]] [[Occupation of France|occupiers of France]].<ref>{{cite news | url= https://www.theguardian.com/world/2011/dec/14/renault-descendants-demand-payout-confiscation | location = London | work = The Guardian | first = Angelique | last = Chrisafis | title = Renault descendants demand payout for state confiscation | date = December 14, 2011}}</ref> In September 2021, [[Berlin]]ers [[Deutsche Wohnen & Co. enteignen|voted to expropriate over 240,000 housing units]], many of which were being held unoccupied as investment property.<ref>{{cite news |last1=Winck |first1=Ben |title=A majority in Berlin's election just voted to strip 240,000 rentals from major landlords and fight the city's housing crisis |url=https://www.businessinsider.com/housing-market-rental-prices-berlin-referendum-landlords-public-apartments-crisis-2021-9 |work=Business Insider |date=27 September 2021}}</ref><ref>{{cite news |last1=Berry |first1=Alex |title=Germany: Berlin locals vote to expropriate real estate giants |url=https://www.dw.com/en/germany-berlin-locals-vote-to-expropriate-real-estate-giants/a-59315431 |agency=Deutsche Welle |date=26 September 2021}}</ref>

Economists distinguish between nationalization and [[Socialization (economics)|socialization]], which refers to the process of restructuring the economic framework, organizational structure, and institutions of an economy on a [[socialist]] basis. By contrast, nationalization does not necessarily imply social ownership and the restructuring of the [[economic system]]. By itself, nationalization has nothing to do with [[socialism]] – historically, states have carried out nationalizations for various different purposes under a wide variety of different [[political system]]s and [[economic system]]s.<ref>
{{cite book
| last1= Alistair |first1= Mason |last2= Pyper |first2= Hugh
| editor-last= Hastings |editor-first= Adrian
| title= The Oxford Companion to Christian Thought
| url-access= registration
| url= https://archive.org/details/oxfordcompaniont00hast/page/677
| publisher= Oxford University Press |date= 21 December 2000
| page= [https://archive.org/details/oxfordcompaniont00hast/page/677 677]
| isbn= 978-0198600244 |access-date= 8 December 2019
| quote= 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'[.]
}}
</ref>

== Political support ==
{{social democracy sidebar|ideas}}
Nationalization was one of the major mechanisms advocated by [[reformist]] socialists and [[social democrats]] 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 [[workers' self-management]] as a precursor to the establishment of a socialist economic system.<ref name="The Economics of Feasible Socialism Revisted, 1991. P.176">''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."</ref>

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. In the [[United Kingdom]] after the [[Second World War]], nationalization gained support by the [[Labour Party (UK)|Labour Party]] and some social democratic parties throughout Western Europe. In the United States, [[Publicly funded health care|nationalizing healthcare]] is often a topic of political disagreement and makes frequent appearances in debates between political candidates. A 2019 poll found that about half of residents support the measure.<ref>{{Cite web |last=Lopes |first=Lunna |date=2019-10-15 |title=KFF Health Tracking Poll – October 2019: Health Care In The Democratic Debates, Congress, And The Courts |url=https://www.kff.org/health-reform/poll-finding/kff-health-tracking-poll-october-2019/ |access-date=2022-12-01 |website=KFF |language=en-US}}</ref>

A re-nationalization occurs when state-owned assets are privatized and later nationalized again, often when a different [[political party]] or [[Political factions|faction]] 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 [[public company|publicly listed corporation]].{{citation needed|date=November 2010}}

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."<ref name=":0">{{Cite book|url=https://www.cambridge.org/core/books/power-grab/1069CD3CA50620BB1AF204156D13B2C8|title=Power grab: political survival through extractive resource nationalization|last=Mahdavi|first=Paasha|website=Cambridge University Press|year=2021|doi=10.1017/9781108781350|isbn=9781108781350|s2cid=243736481|language=en|access-date=2020-03-12}}</ref> He argues that leaders "nationalize extractive resources to extend the duration of their power" by using "this increased capital to secure political support."<ref name=":0" />

== Economic analysis ==

Nationalization can have positive and negative effects.<ref>{{Cite web | url=https://www.britannica.com/topic/nationalization | title=Nationalization | economic policy}}</ref> 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.<ref>{{Cite web|url=https://www.mirror.co.uk/news/politics/nationalisation-public-services-could-save-20951951|title=Nationalisation of public services could save £13billion every year|last=Ellis|first=Mark|date=2019-11-24|website=mirror|access-date=2020-01-06}}</ref>

Conversely, an assessment from the Institute for Fiscal Studies found that it would add at least £150bn to the national debt and make it harder for the United Kingdom to hit its climate change targets. This analysis was based on the assumption that the UK Government would have to pay the market rate for these industries.<ref>{{Cite web|url=https://www.politicshome.com/news/uk/political-parties/labour-party/news/108375/labour-nationalisations-would-cost-tens-billions|title=Labour nationalisations 'would cost tens of billions and risk years of disruption', claims IFS|date=2019-12-03|website=PoliticsHome.com|language=en|access-date=2020-01-06}}</ref>

Nationalization can produce adverse 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 can cause the industry to falter in the longer run.<ref>{{Cite web|title=Nationalization|url=https://corporatefinanceinstitute.com/resources/knowledge/economics/nationalization/|access-date=2021-09-29|website=Corporate Finance Institute|language=en-US}}</ref> The collapse of the Venezuelan oil industry, due to government mismanagement, is a case in point.<ref>{{Cite web|last=Monaldi|first=Francisco|date=March 2018|title=The collapse of the Venezuelan Oil Indusry and its global consequences|url=https://www.atlanticcouncil.org/wp-content/uploads/2018/03/AC_VENEZUELAOIL_Interactive.pdf|website=Atlantic Council}}</ref>

== Expropriation ==
{{redirect|Expropriation|the 1974 Chilean film|The Expropriation}}
''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.<ref>{{Cite book|title=Encyclopedia of the City|last=Caves|first=R. W.|publisher=Routledge|year=2004|pages=251}}</ref> Expropriation differs from [[eminent domain]] 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.<ref>Flynn, Chris. ''Avoiding Expropriation and Managing Political Risk in Emerging Market''. Lexology. p. 1.</ref>

{{see also|Alienation (property law)}}

== Trends ==
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.<ref>{{Cite journal |last1=Chang |first1=Roberto |last2=Hevia |first2=Constantino |last3=Loayza |first3=Norman |title=Privatization and Nationalization Cycles |date=March 2018 |url=https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/abs/privatization-and-nationalization-cycles/80DFFA5293F36B73CF5CDBC1E7BE16FC |journal=Macroeconomic Dynamics |language=en |volume=22 |issue=2 |pages=331–361 |doi=10.1017/S1365100516000195 |issn=1365-1005}}</ref>

==Marxist theory==
The term appears as "expropriation of expropriators ([[ruling class]]es)" in [[Marxism|Marxist theory]], and also as the slogan "Loot the looted!" ("грабь награбленное"), which was very popular during the Russian [[October Revolution]].<ref>[[Orlando Figes]], ''A People's Tragedy: Russian Revolution'', 1996, {{ISBN|0-7126-7327-X}}.</ref> The term is also used to describe nationalization campaigns by [[communist states]], such as [[dekulakization]] and [[collectivization in the USSR]].<ref name="Pipes">[[Richard Pipes]] ''Property and Freedom'', Vintage Books, A division of Random House, Inc., New York, 1999, {{ISBN|0-375-70447-7}}, page 214.</ref>

However, nationalization is not a specifically socialist strategy, and Marxism's founders were skeptical of its value. As Engels put it:
{{Blockquote |text=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. |author=Friedrich Engels |source=''Letter from Engels to Max Oppenheim, 24 March 1891'' }}

[[Nikolai Bukharin]] also criticised the term 'nationalisation', preferring the term 'statisation' instead.<ref>''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.'</ref>

== See also ==

{{div col|colwidth=20em}}
* [[Compulsory purchase]]
* [[Constitutional economics]]
* [[Confiscation]]
* [[Eminent domain]]
* [[List of nationalizations by country]]
* [[List of privatizations by country]]
* [[Municipalization]]
* [[Planned economy]]
* [[Privatization]]
* [[Public ownership]]
* [[Railway nationalization]]
* [[Sequestration (law)|Sequestration]]
* [[State ownership]]
* [[State capitalism]]
* [[State socialism]]
* [[State sector]]
* [[Statism]]
{{div col end}}

{{clear}}

== References ==
{{Reflist|40em}}

== External links ==
{{Library resources box}}

* {{usurped|[https://web.archive.org/web/20100825184852/http://www.hinduonnet.com/fline/fl2525/stories/20081219252504800.htm The importance of public banking]}}, article on Indian public sector banks
* [http://www.dollarsandsense.org/archives/2009/0309moseley.html Time for Permanent Nationalization] by economist Fred Moseley in ''[[Dollars & Sense]]'', January/February 2009
* [https://ideas.repec.org/p/wbk/wbrwps/3404.html The Corporate Governance of Banks – a concise discussion of concepts and evidence]
* {{cite EB1922 |last=Davies|first=Albert Emil|wstitle=Nationalization|short=x}}

{{social democracy}}
{{authority control}}

[[Category:Nationalization| ]]
[[Category:Economic policy]]
[[Category:Economic systems]]
[[Category:Ownership]]
[[Category:Social democracy]]

Nationalization - Revision history

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