Why nationalisation

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These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. What Is Nationalization? Key Takeaways Nationalization is the process of taking privately-controlled companies, industries, or assets and putting them under the control of the government.

Nationalization often happens in developing countries and can reflect a nation's desire to control assets or to assert its dominance over foreign-owned industries. The government can come in and take over the ownership and management of such companies.

To provide uninterrupted services: When essential services like electricity, water supply etc, are owned by private individuals in a nation, the government can also nationalize those services to make sure that citizens get the best out of those services. Also see: Advantages and disadvantages of division of labour. It helps to check exploitation: Just like I have discussed before, Nationalisation of helps to stop exploitation by foreign and private businesses in the nation.

When the government take control of the business, citizens will enjoy because the government might provide that same service for free or fore a lesser amount. Thus, nationalization is a way of through which can ensure efficiency in the supply of some goods or services.

Also see: Factors that affect efficiency of Labour. Encourages efficient use of resources: It encourages more efficient use of economic resources. Protection of strategic industries : The government can also nationalize a business due to the fact they the business is so important that it should not be allowed to be in the hands of a private individual or foreign investor.

Ensures equitable distribution of resources : Since the sole aim of the government is to provide for the needs of the whole nation, nationalization of businesses tends to benefit every part of the country more than when those businesses were owned by private individuals. It ensures equitable distribution of resources as well as correct any imbalance in the means of production.

Elimination of Monopoly : This is also one of the major advantages of nationalization. Source: National Archives. It was re-nationalised in when over 90 of steel capacity was put under the control of the British Steel Corporation BSC. Steel was returned to the private sector once more in By the late s it became increasingly apparent that many of the industries nationalised between and were running into difficulties.

The major problems that the industries faced were:. The intention was that, back in the free market, these industries would become more efficient and would be able to modernise by having greater access to the capital markets, and by employing more modern and dynamic management. Quiz of The Week: 6 - 12 November.

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