Nationalization

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Nationalization NATIONALIZATION, in broad economic terms, the governmental appropriation of property other than land, transferring it from the domain of private property to national control. More specifically, the term designates the assumption by a nation of the ownership of privately owned industry, distributive enterprises, or other businesses or services. When applied as part of socialist or Communist programs for abolition of private property, nationalization is sometimes known as socialization. Following a severe change in government, such as a revolution, nationalization may be effected by expropriation without compensation to the owners of the property, as in Soviet Russia in 1917-18 and in Cuba in 1959. In more gradual governmental evolution, property appropriation may be effected by some form of payment to the owners, as in Great Britain after the installation of the Labour party government in 1945. Denationalization also occurs, as in the case of Britain's steel industry. Historical Background. Although some degree of government ownership of national resources, industry, transportation, communications, or services essential to social welfare has been a feature of every form of organized society, the subject of nationalization, prior to the latter part of the 19th century, remained the concern primarily of social reformers. The 17th-century English reformer Peter Chamberlen, for example, held that poverty could be eliminated by the nationalization of royal and church estates, the commons or parks, forests, mines, and other assets of land and sea; he advocated the confiscation of what he characterized as unearned increments in manufacturing, trade, and agriculture. During the French Revolution, the French socialist leader François Noël Babeuf advocated the immediate nationalization of all corporations and of the property of individuals following their deaths. Periodically, reform movements in the U.S. have advocated specific nationalization. In the late 19th century, the People's party proposed to break the monopolistic control of freight rates by the railroads through "national ownership of . . . transportation." The first government to initiate a complete nationalization of industry was that of the Soviet Union under Lenin. With respect to other governments, nationalization was used by formerly colonial and semicolonial countries to secure their natural resources against exploitation by foreign capitalist interests; a typical example was the nationalization by the Mexican government in the 1920s and '30s of the country's various mines and, to safeguard Mexico's vast oil deposits, of the subsoil. More recent examples of nationalization can be found in the Middle East and in Latin America. One was the expropriation of the Suez Canal by Egypt in 1956. During the early 1970s many of the foreign-owned oil interests in the Middle East were either partly or totally nationalized in a concerted move by the Arab states to gain control over their
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