A nationalization (or nationalization) is a transfer of the private property to the State. This practice is of use since the Antiquité and gives rise to for example the Public domain in the ancient Rome. The modern term is rather associated with the Social-démocratie, or with the Nationalisme, he knows his golden age in Europe between 1945 and 1973, when the political consensus which follows the Second world war is favorable to the nationalization of the strategic sectors of the services and industry.

Typology of the nationalizations

  • Confiscation with the profit to be able it. It is historically the oldest practice, and also most frequent, with innumerable examples. She is exerted in particular during or after wars, with regard to overcome or their accomplices. She is generally presented as a sanction either legal (business of the Templiers, business Ioukos very recently), or extra legal (nationalization of Renault whereas the death of Louis Renault several months before extinguished the legal actions against him for collaboration with the occupant).

  • economic Support . In the interest of the owners and their employees. Example: creation in France of the SNCF by nationalization of the railroad companies virtually in bankruptcy or support for heavy industry after the war in France and for the United Kingdom.

  • National interest . An activity having an strategic importance for a nation: oil, mining resources, armament, nuclear energy, etc

  • New market . The emergence of a new market pushes sometimes the States to declare sole owner of it. The arrival of the radio or television thus gave rise to a strong public sector then a progressive opening to deprived, under control of the State almost everywhere in the world. British BBC is thus founded since 1922 and has a monopoly as regards Télévision until in 1955; 1973 for the radio.

  • natural Monopoly . Virtual economic concept, the natural Monopole is however sometimes evoked to explain certain nationalizations.

  • ideological Nationalizations . The national property, is considered by much preferable with the private property, either by principle, or simply to apply more easily certain policies (for example of tariff equalization as regards electricity or postal service). The Leninist modes practiced the nationalizations in the form of confiscation, without financial counterpart. Other countries on the contrary carry out compensated expropriations

Chronological reference marks

Confiscations with the nationalizations

The absence of body politic freely made up obliges to introduce a fundamental distinction between the nationalization, tool for political economy corresponding to a given moment of the European history and the confiscation, Government action sovereign for his own interest.

Antiquity usually practiced the confiscation of private properties (condemned, overcome countries, hostages…) and in many cases, these confiscations were done with the profit of the State. The Res Publica leaves place under the Roman Empire with the imperial field ( dominium principis ).

One of the most spectacular confiscations of the Middle Ages was that operated by the king of France Philippe IV Beautiful the on the goods of the Templiers (October 13rd 1307). This confiscation with the profit of the State was operated by sanction, without financial equalization.

The French revolution nationalizes the goods of Church as of the October 10th 1789. The country priests who lived until there rather chichement are delighted, because this nationalization is accompanied by a compensation in the form of annual rent for 1  200 pounds. The clergy and the public assistance (hospital and old people's homes) are officialized. Good reaction also in the catholic peasants who think of being able to increase their exploitation by repurchasing these grounds. The Concordat of 1801 does not call into question this nationalization.

The French revolution issues the March 30th 1792 the confiscation of the goods of the noble hostile to the Republic, emigrants abroad since July 1st 1789. This confiscation with the profit of the State decided the day before the war was operated by sanction, without financial equalization. But with the restoration, a debate will take place on the questioning of these confiscations, the adopted solution being (like often in this kind of situation) a compensation (the “billion the emigrants”).

The nationalizations Bolsheviks

Russia Bolshevik issues the abolition of the land and buildings without compensation as of the November 8th 1917 (October 26th with the orthodoxe calendar). The Bank S (December 27th 1917), the foreign trade (May 2nd 1918), oil industry (June 20th 1918) then all big industry (June 28th 1918) were then nationalized. These nationalizations cause a total disordered state of the economy leading in 1921 to the installation of the new economic policy (NEP). The nationalizations begin again as of 1928, in particular in the agricultural domain. Associated with planning, they will temporarily allow a development accelerated of the economy of the the USSR, and particularly of heavy industry thanks to the heavy tribute, human and financial, taken on the farming populations. After the crisis of 1929, the Soviet development model will inspire several democracies.

Wanting to avoid the nuisances known in the USSR at its beginnings, the Popular republic of China does not practice massive nationalizations between 1949 and 1953. The nationalization of Chinese industry is then operated between 1953 and 1957.

One can also evoke the examples Cuba ins, vietnam iens or Algérie NS, in particular. In the case of Algeria, the ideology appears less present. The frontage is Socialiste, but the engine of the movement of nationalizations is rather of national order.

The recent nationalizations bolivariennes of South America

The current practices of Hugo Chavez and Evo Morales join again with these methods (without nationalizing in a complete way, but while negotiating with the foreign private companies). They support that the nationalizations of the natural resources will be a source of social budgets, and will allow a help to the adjoining countries. They take as a starting point the movement Bolivariste. Because of a competence of the local personnel limited, mainly in Bolivia, the nationalizations generally return to a simple raising of prices and the redirection of the oil revenue towards the cases of the State. The exploitation remains reserved for the oil companies.

Nationalist nationalizations

Mexico with the the Middle East, while passing by the Africa, many companies were nationalized in order to escape a foreign influence. The oil resources are particularly aimed by these nationalizations, but all the branches of industry are touched.

The nationalization of the Suez Canal in 1956 caused very a Franco-British strong reaction, but this binomial had to admit the Egyptian decision under the pressure of the Americans and the Soviets.

Western nationalizations

After the economic crisis of the Years 1930, all the Western countries obtain a public sector. The Second world war amplifies the phenomenon.

The United Kingdom

With the the United Kingdom, the Bank of England is nationalized in October 1945, coal mining in January 1947, air transports in February 1947, the railroads in January 1948. The Sidérurgie was nationalized between 1951 and 1953, then nationalized again in 1967. In 1976, automotive and naval engineerings are nationalized. Margaret Thatcher undertakes a vast program of Privatization S starting from 1979. These privatizations bring back 24 billion francs of the time between 1979 and 1983, and more than 120 between 1983 and 1993. In 1991, privatization of the gas and electric sectors; certain companies born of this privatization are repurchased by the French state enterprise EDF-GDF starting from 1998. Since 1997, and the victory of the Ploughing, Tony Blair does not modify this orientation, continuing even the program of privatizations. This new approach is one of the bases of “New Labor”.

France

In France, the first nationalization in economic matter takes place in 1907. The State flies to the help of the “railway Company of the West”, in financial problems. In 1919, the State takes the control of the mines of potash of Alsace. These first nationalizations are exceptional, even accidental. Put aside a mean fraction of the political and trade-union left, the nationalization is not a major claim before the Années 1930.

The Popular front nationalizes some arms factories (August 11th 1936) and the Railroads by creating the SNCF (August 31st 1937). The sector of air construction also partially is nationalized and decentralized with Toulouse (1937). Á to note that the programme of nationalizations of the Popular front was much more important than that indeed carried out. The Banque de France is not nationalized. The brakes with these nationalizations are of three types. Initially, employers' resistance. Put aside the very overdrawn companies like those of the railroads, the owners are very hostile with these nationalizations. If the Socialists of SFIO appear favorable to the nationalizations, it is less true for the radical and the communist . The radicals are wary of the interventionism of the State, while the Communists reject a solution reformist reinforcing the capitalist system. Last brake, finally, events. The monetary reforms and the reforms of structure monopolize the governments of the Popular front between 1936 and 1938. This period has the merit to begin the debate concerning the nationalizations: who, why and how. Before 1936, this type of debates concerned only some initiates; it is from now on on the public place.

During the German Occupation, the Vichy government nationalizes the News agency Havas which becomes the AFP with the Libération. The program of the National council of Resistance (CNR) claims as of 1944 the “return to the nation of all the great ways of monopolized productions, fruits of common work, the energy sources, the richnesses of the basement, the insurance companies and the large banks”. Four imperative reasons explain this choice. The sanction for collaboration, the installation of a “economic and social democracy”, rationalization of the economy and urgency of the rebuilding.

The Release, three waves of nationalization follow one another:

The nationalization of the banks was carried out in a fast way, in order to avoid speculative movements . The bill was filed in Friday November 30th at the evening, after the closing of the purse, to be voted the December 2nd and published with the Official journal as of the following day.

; After the period of the Release

Years 1950 with 1981, the nationalized sector changes little. On the other hand, the State increases its minority interests in a big number of companies during this period. In April 1967, the Rapport Nora denounces the economic centralization of the State. He recommends a more commercial orientation and less policy of the nationalized companies. Television is exemplary. Considered to be strategic, television is then under the direct and heavy cut of the ministry for information. This yoke is loosened gradually: 1968, introduction of publicity; 1969, suppression of the ministry for information then decree liberalizing the staff regulations; 1975, bursting of ORTF in seven companies (TF1, Antenna 2, FR3, Radio France, INA, SFP, TDF); 1984, creation of Canal+, first private channel.

The election of the president of the Republic François Mitterrand is accompanied by a new wave of nationalizations compensated with height for 39 billion francs. This plan of nationalization appears in the “common program of government” signed the June 27th 1972 between the Socialist party, the Communist party and the Radical lefts and taken again among the “110 proposals” of the Mitterrand candidate in 1980 - 81. The law of nationalization becomes effective the February 13rd 1982 and touches many sectors: industry (Thomson, Saint-Gobain-Bridge-with-Monsoon, Rhône-Poulenc, Pechiney-Ugine-Kihlmann, Sacilor, Usinor) or finances (Paribas, Suez, CIC, Crédit du Nord, Commercial Credit of France, Banks Rotschild, Banque Worms, Banque Hénin…) particularly. In 1983, an employee on four works in the public sector.

These companies which play the chart of the mixed economy by in particular introducing subsidiary companies on the market deprived as of 1983, are privatized following the return to the business of the right-hand side after their success with the legislative elections (March 16th 1986). It is the first time in France which a practical government of the “denationalizations”. The Krach of 1987 puts a term at this policy of privatization. The re-election of president Mitterrand in 1988 gives rise to the policy of “nor-nor”: neither nationalization, nor privatization. The victory of the right-hand side to the legislative elections of 1993 changes gives it and a new wave of privatizations starting from the July 19th 1993 returns to the private sector more than one million employment. To surprised of much, this program is also followed by the government of the “Plural left” directed by Lionel Jospin between 1997 and 2002. One can see there, already, the impact of the increasing problems posed by the national Debt of France. With the return of the right-hand side to the businesses in May 2002, the movement of privatizations is slowed down because of the economic crisis marking the end of the “Bulle Internet” and of strong resistances of the employees of public sector (EDF-GDF, for example). Privatizations take again the following years: sale of the majority of the capital of France Telecom, reduction with 15% of the shares in Renault, opening of the capital of Gaz de France, SNECMA, procedures of opening for Électricité de France, privatization of the companies of highway…

Germany

In Germany, the Weimar Republic carries out nationalizations in 1920 in particular (railroads) then in 1932: Metallurgical Dresdner Bank and irons and steel industry and. The Third Reich did not practice the nationalization, not more than privatization: it is by other means that it kept nevertheless a direct control on the economy.

Italy

In Italy, the fascistic mode sets up the Institute for the industrial rebuilding (IRI) which takes the control of several companies in the name of the State. The IRI remains in place after the fall of the mode mussolinien, accentuating even its weight on the Italian economy after 1945. Apart from the IRI, let us note the constitution of the ENI (Graft Nazionale Idrocarburi) founded by the law of the February 10th 1953. With the beginning of the Years 1970, one considers the sector nationalized Italian at 30% of the industrial investments for 10% of the sales turnover.

Spain

In Spain, the pro-Franco mode sets up in 1941 a Instituto nacional of industrias (INI), which plays an important role in the industrial development of the country. Out the INI, the railroads are also nationalized in 1941 but the remainder of the economy although subjected to important control of the state remains under private property.

Critical of the concept

On the principle

The “nationalization” is anything else only one transfer of economic capacity held by some people towards the collective detention of this capacity by some other people belonging to the apparatus of the State, in order to serve as the supposed objectives of general interest. That is accompanied by differences in behaviors (the objectives of a public service are not always the same ones as those of the private sector, short-term profitability does not have any direction for a public service, which rather aims the satisfaction of the needs for the population on the long run). The result is in general very different even if in certain sectors that will be first of all less visible. Moreover, the property by the State - which becomes judge and left - does not support inevitably more Transparence of information, that depends on the way in which these services are organized, but the service dependant on the community and either on private interests, the obligations of information will be in the majority of the more important countries, in certain countries not very democratic it will be the reverse.

In certain countries, it happens that the national companies and the public services are useful more than in others the interests of the capacity, in particular in the not or not very democratic countries. Used for objectives primarily of being able, they cannot provide their normal function fully, the equality of the citizens is not respected any more.

On the implementation

In practice the experiments have a result which is rather different according to the countries and the sectors concerned:

  • the nationalization-sanction seems a spoliation extra-legal, retroactive, in short in violation of the general principles;

  • the nationalization-rescue, which puts the taxpayer at the service of the failing capitalist, is politically delicate. A provisional support, in the form of loan for example, is often easier to make accept;
  • the nationalization is a lever useful for corruption and the clientelism;
  • the attempts at economic revival by the apparatus of State are not always convincing successes (cf the French experiment of 1981-1984), that depends on the adopted strategies;
  • the national companies do not show systematic advantages on the private companies, it does not have there a rule. Less sensitive to the commercial aspects, they can be more sensitive to the technical sides, which can lead them to make investments (including as regards Recherche) more important but of which profitability is more doubtful. Their great weakness is that, by construction, they are more violently criticized for their failures, since everyone is concerned. Their great force, a support without fault of the capacity, makes them sometimes too trustful what leads to too risky operations and particularly memorable scandals (Crédit Lyonnais in France). Moreover, they can obtain to conditions of exercise too laxists on certain points, whereas the State would control more scrupulously of the private companies (but, conversely, the civils servant of the national companies can more easily reveal or denounce of the abuses and the violations of general rules, that private employees). Lastly, they can serve as “laboratory” with political ideas, with the expenses of the taxpayer: in the middle of the years 1980, before the privatization of Renault, the group Peugeot affirmed that for its public period the public group would have cost at the French State a sum comparable with that which would have reported to him the private group.

  • it is however possible for the management of the monopolies natural to resort to other methods that the nationalization (the setting under supervision of a specialized authority, regulations very precise which is a control in fact, etc)

  • the official property systematically does not show advantages on the private property, all depends in the way of which it is managed and the objectives which are given to him.

See too

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