In the UK the Labour Party is (or at least was) big on nationalisation of industry. It seem to me that this was one of their many downfalls in the midlands.
Is there any proven benefits to nationalisation of industry?
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Nationalization (or regulatory variants thereof) is a response to one of two problems.
The first is for the purposes of control. In many developing nations, there are natural resources the local populace lacks the expertise to properly exploit. Rather than turn over major parts of their national economy to foreigners, they nationalize the resource extraction industries and then hire those foreigners to do the work. Likewise, it’s common to nationalize defense industries since they’re only producing for a single client (the national government) anyway.
The second is natural monopolies. Certain industries tend to have features which discourage competitive markets. Consider roads. For a true competitive market to exist, you’d need multiple companies building redundant roads from place to place. Not only is this tremendously wasteful of land resources, but competition rarely results. Why build a road to compete with an existing road when you could build a road that runs between two previously unconnected destinations? So while you may have competition, it ends up being localized monopolies that have no incentive to improve or offer better service.
So it really depends on what you’re nationalizing and why. In general, if you can construct a competitive market, you’re better off for doing so because the market will create efficiency over time.
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