Disadvantages Of Nationalization: Pros And Cons Of Nationalization

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The pros and cons for nationalization of public transport
1.Definition:
Nationalization is a process conducted by a government to take control of a company or a whole industry for a variety of reasons. When a Government takes under its control as owner any privately run business, then this act is known as the act of nationalization. The former owners would or would not be compensated for their loss of net worth or potential future income.
Nationalization of public transport means government is responsible for running the public transport, including bus, trains, underground etc. Government invests to manufacture and maintain the infrastructure and gets the revenue. The main purpose is to provide social welfare for the public instead of making profit.
Pros:
The most important advantage for nationalizing public transport is the contribution it brings to the social welfare. If run efficiently, public transport can bring great convenience with every person in the society can enjoy a convenient and pleasant journey with an affordable price, which is mostly important to people who cannot buy a car. Equality is provided to people of different status by the same access acquired by same price.
Prices can be set below market that private runners would never entertain. Because government has no purpose for profiteering while it will also give subsidies to support the smooth functioning of the whole system, the price can always be set at a relatively low level compared to that run by private institutions. In this case, travelers can enjoy the cheap journey, where part of the benefit is from the tax they have paid.
Public transport can achieve economies of scale by concentrate all the management to government’s hand. Consumers can benefit from ...

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At last, to use the case of British nationalization in railway system as a silent manifestation for the default of nationalization. Britain enacted the Transport Act in 1947, providing the legitimacy of British government’s running almost all of the transportation from January 1, 1948. However, The actual results of the last eighteen months of nationalized operation of British railways indicate that the customary pattern is evolving. The British railways, despite rate in-creases, operated in the red in 1948, and the British Transport Com-mission frankly stated in its voluminous first annual report that the future outlook for adequate earning power is not good. At the same time British railways have suffered a wave of slow-down strikes and protests of railway workers expressed politically and in industrial discontent and bickering with the Railway Executive.

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