60. Nationalisation

In this blog I will be talking about Nationalisation, and provide you with some links on the subject.

I will be starting off by indicating my moral objection to the principle, then I will be looking at what the proponents say (together with some initial objections) then I will go on by looking at the key arguments against nationalisation before looking at some historical perspectives before arriving at a conclusion to the argument.

So, let me start by making the point that I think from a moral point of view - it is wrong for a Government to use force to attain social objectives. Apartheid was a good example of this concept - it just isn't right to use force - even if it may be to the benefit of some - even the majority. It was wrong for Nazi Germany to expect that a group of people wear a yellow star, even if the majority agreed with it.

The ANCYL in their "Basic Document" gave seven reasons for Nationalisation:

 Firstly they say that the Freedom Charter" requires it.

Secondly they say it will increase the Fiscal Capacity of the state (I am sorry - theft increses the fiscal capacity of the thief - it is no argument).

They feel that it will lead to better working conditions for the employees. Fourthly they see it as a tool for industrialisation and job creation.

In the fifth place it supports the idea of National sovereignty (SAA - the national flag carrier also does this at a massive cost to the taxpayer - I believe that the money should rather be used for other social services than subsidising the relatively wealthy to travel by air to their favourite holiday destinations).

Then they talk about transformation of the "accumulation path" .

And in the seventh and last spot they refer to the transformation of unequal spatial development patterns.




The arguments against Nationalisation are as follows: 1. Governments are not in the business of operating commercial enterprises. The correct incentives are not in place for Governments to execute the kinds of controls that drive private organisations to create wealth. Even if they hire the best persons to do the job, the very fact that the government is the main or sole shareholder removes the strict discipline of "produce or perish" that exist for privately owned organisations.

2. Governments should also not want to get involved in the running of enterprises - why assume the the risk of losses when by merely taxing a profitable enterprise without assuming the risk could provide an income without any effort?

3. Governments often assume the role of service provider to be able to deliver the service to the vulnerable sectors of society - this is a less effective way of achieving the objective. They should rather directly assist those groupings through subsidies and vouchers rather than to try and run the delivery organisation too. Often the assistance goes to the organisation and never gets to the intended recipients of the service. (I will include more arguments and points of view in the future)

LINKS: http://www.economicsonline.co.uk/Business_economics/Nationalisation.html