What is the difference between nationalisation and privatisation

When the coal industry was nationalised after World War Two, for example, it involved the transfer of ownership and control of 1, pits owned by companies who employed , workers. Tens of millions of pounds was paid in compensation to the previous owners for their assets - the mines, colliery plants and all the equipment.

The government can also buy individual companies outright, although this is fairly unusual. It typically refers to the ownership of property, a business, or an industry being transferred from a government to an individual, or another private company. Under Prime Minister Margaret Thatcher, at least 22 big privatisations took place. They included companies like BT and British Airways, as well as more complex ones like the rail industry.

Among them, water and sewerage services were privatised in England and Wales in They are now run by private companies, although there is a national regulator of the regional water companies called Ofwat. It can set caps on how much water companies charge customers. The privatisation of Royal Mail took place in A bailout is usually when a government rescues a failing private company by giving it money or loans, or buys shares in it.

It is a form of nationalisation, and can be a temporary measure. It has been used to save banks that were in trouble. In the last decade, it has had to cut , jobs and shut up or sell operations in 41 countries. In the Budget, it said it was planning to sell all of its remaining shares in the company by Some people think that it makes sense for the government to be in charge of industries where a natural monopoly exists.

That means where a single firm supplies everyone with a particular product or service. The state getting involved should mean theoretically that consumers pay the best prices available, and are not exploited. Questions could be raised over a government's actions and their impact on other investors in a partly-nationalised company. For example, some shareholders in a nationalised energy company might lose money if a government decided to reduce energy bills.

Privatization allows solving the problems of stagnation and inflation in state-owned economies, however the business profitability criterion can lead to policies that maximize the profits of private capital, leaving out the social interest as a premise for the functioning of the economy. This criterion applied to basic services can exclude important sectors of the population from accessing resources for their development, as well as the marginalization of services necessary for modern life.

At present there are multiple forms of mixed economy, for example companies where the State shares shareholdings with private capital, or where the private economy is subject to regulations with the criterion of maintaining mechanisms of social responsibility thereof. Fiscal policies can also have a redistributive role that allows maintaining a social security system, at the same time as a private economy.

The problem behind all economic policy begins with the conflict between the requirements for the valuation of capital state or private and the satisfaction of the needs of society, such as the valuation of work. The capitalist economy works on this axis and statist or private public policies are the result of the tension that is generated in this regard. There are also forms of alternative economy that work on the premise of cooperation or mutual support, which can be distinguished as a social economy.

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