Essay, Research Paper: Nationalization

NATIONALIZATION, in broad economic terms, the governmental appropriation of
property other than land, transferring it from the domain of private property to national
control. More specifically, the term designates the assumption by a nation of the
ownership of privately owned industry, distributive enterprises, or other businesses or
services. When applied as part of socialist or Communist programs for abolition of
private property, nationalization is sometimes known as socialization. Following a severe
change in government, such as a revolution, nationalization may be effected by
expropriation without compensation to the owners of the property, as in Soviet Russia in
1917-18 and in Cuba in 1959. In more gradual governmental evolution, property
appropriation may be effected by some form of payment to the owners, as in Great
Britain after the installation of the Labour party government in 1945. Denationalization
also occurs, as in the case of Britain's steel industry.
Historical Background.
Although some degree of government ownership of national resources, industry,
transportation, communications, or services essential to social welfare has been a feature
of every form of organized society, the subject of nationalization, prior to the latter part
of the 19th century, remained the concern primarily of social reformers. The 17th-century
English reformer Peter Chamberlen, for example, held that poverty could be eliminated
by the nationalization of royal and church estates, the commons or parks, forests, mines,
and other assets of land and sea; he advocated the confiscation of what he characterized
as unearned increments in manufacturing, trade, and agriculture. During the French
Revolution, the French socialist leader François Noël Babeuf advocated the immediate
nationalization of all corporations and of the property of individuals following their
deaths.
Periodically, reform movements in the U.S. have advocated specific nationalization. In
the late 19th century, the People's party proposed to break the monopolistic control of
freight rates by the railroads through "national ownership of . . . transportation."
The first government to initiate a complete nationalization of industry was that of the
Soviet Union under Lenin. With respect to other governments, nationalization was used
by formerly colonial and semicolonial countries to secure their natural resources against
exploitation by foreign capitalist interests; a typical example was the nationalization by
the Mexican government in the 1920s and '30s of the country's various mines and, to
safeguard Mexico's vast oil deposits, of the subsoil.
More recent examples of nationalization can be found in the Middle East and in Latin
America. One was the expropriation of the Suez Canal by Egypt in 1956. During the
early 1970s many of the foreign-owned oil interests in the Middle East were either partly
or totally nationalized in a concerted move by the Arab states to gain control over their
leading, and sometimes only, international commodity. In Latin America utilities and oil
and mining operations have been nationalized in Bolivia, Chile, Mexico, and Peru. When
nationalization does not work out favorably, some countries may follow Chile's example
and denationalize certain properties. C.J.F.
nationalization
acquisition and operation by a country of businesses owned and operated by private
individuals or corporations. It is usually done in the name of social and economic
equality, often as part of Communist or socialist doctrine. Nationalization of foreign-
owned property, e.g., the Suez Canal by Egypt (1958) and the copper-mining industry by
Chile (1971), typically attempts to end foreign control of an industry or the economy and
poses complex problems for INTERNATIONAL LAW. After World War II, Communist
Eastern Europe nationalized all industry and most agriculture, and Western European
nations nationalized some key industries, such as transportation. By the 1990s the trend
in many former and current Communist countries and Western nations was toward
PRIVATIZATION, mainly because political pressures have usually led governments to
operate businesses very inefficiently.



Bibliography


Richards Ralph, Nationalization, Random House, 1988


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