Nationalisation - what is the advantage.

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ProbablyJade
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Hey,
I'm a naive economics and political bumble bee so can somebody please explain (in the simplest terms possible) what the advantage of nationalisation is, apart from allowing the public to buy shares?
~thank you
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999tigger
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(Original post by ProbablyJade)
Hey,
I'm a naive economics and political bumble bee so can somebody please explain (in the simplest terms possible) what the advantage of nationalisation is, apart from allowing the public to buy shares?
~thank you

http://www.importantindia.com/15749/nationalization/


http://www.economicsonline.co.uk/Bus...alisation.html
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Zystra
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(Original post by ProbablyJade)
Hey,
, apart from allowing the public to buy shares?
First of all, you are wrong in thinking that nationalisation allows the public to buy shares. That is privatisation. Think of nationalisation as the 'nation' owning a business, that's how I remember it.

Nationalisation was used by the labour party in the late 60s and early 70s to save 'lame ducks' which were basicially 'treasures' of britain such as Rolls Royce which would've been detrimental to the Government as it would've showed Britains weak economy to the world. So they bought out all of their shares and ran it theirselves.

Nationalisastion was in the labour parties manifesto made in the 1910's (Clause IV) which means that they had to nationalise industries and that is what they did from 1948-1951, nationalising coal industries, steel, pipelines etc. They did this because they believe that nationalisation makes the economy more 'controlled' and the government can achieve its goals easier.

So TLR - Nationalisation is done to save failing companies that are necessary to the UK such as the coal and steel industry to assist the wellbeing of the economy
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ProbablyJade
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(Original post by Zystra)
First of all, you are wrong in thinking that nationalisation allows the public to buy shares. That is privatisation. Think of nationalisation as the 'nation' owning a business, that's how I remember it.

Nationalisation was used by the labour party in the late 60s and early 70s to save 'lame ducks' which were basicially 'treasures' of britain such as Rolls Royce which would've been detrimental to the Government as it would've showed Britains weak economy to the world. So they bought out all of their shares and ran it theirselves.

Nationalisastion was in the labour parties manifesto made in the 1910's (Clause IV) which means that they had to nationalise industries and that is what they did from 1948-1951, nationalising coal industries, steel, pipelines etc. They did this because they believe that nationalisation makes the economy more 'controlled' and the government can achieve its goals easier.

So TLR - Nationalisation is done to save failing companies that are necessary to the UK such as the coal and steel industry to assist the wellbeing of the economy
So in nationalisation, the economy is more controlled (if i'm right that forms part of Keynesian economics) to prevent vital business from failing.
So it is when you privatise (and the public is allowed to buy shares), like Margaret Thatcher did that the government has less intervention in companies and it gives increase revenue to the public?
(thanks for your help, i'm really bad at this stuff)
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Zystra
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(Original post by ProbablyJade)
So in nationalisation, the economy is more controlled (if i'm right that forms part of Keynesian economics) to prevent vital business from failing.
So it is when you privatise (and the public is allowed to buy shares), like Margaret Thatcher did that the government has less intervention in companies and it gives increase revenue to the public?
(thanks for your help, i'm really bad at this stuff)
Yes that is correct. Nationalising was't very common, there was only a boom of nationalisation after WW2 but a few were nationalised throughout the period (The conservatives did it less) Thatcher privatised as a way for consumers to have a quick buck essentially, it has been argued that in the long run this wasn't good for the economy. She did it for 2 reasons - to make the UK public more capitalist which would drive voters away from labour and also to promote investment in companies which would help them compete against foreign companies.

Nationalisation is beneficial sometimes as the governments HUGE resources means that the company is ran better than a public service could ever do however the effiency of nationalised companies is criticised as they aren't usually getting money from the public, they're getting it from the government which means that their services will slack and they won't be competitive so Thatcher's privatisation meant that there would be more effiency in firms (She also set up targets for NHS and education which boosted productivity)

hope this helped
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