September 14, 2016 Econ #2 2.2 Natonalization versus Privatization - The state has to have some money to run the government and provide services o Military o Healthcare o Post offices o Roads and bridges - If the government doesn’t do even the bare minimum, why would it even exist? It wouldn’t - Even the die hard libertarians still think that we need a basic government - The government doesn’t make anything of economic value that they then sell - Q: how does a government make money? o A: two ways! 1. Taxes income taxes sales tax 2. Control resources / businesses they would make money doing that business to do this, they might have to nationalize an industry or resource or they may have to privatize nationalization: when a state (the government of a state) physically and literally takes over a resource or industry and then makes it state property and then the state runs it and makes the money from it o Venezuela: Hugo Chavez: He has nationalized everything He looked at the situation and saw that BP and Exxon and other oil companies were taking all of their oil for only a few dollars So then he went to BP and Exxon and took the oil platforms back; he wrote a check to Exxon to buy the oil platforms If they don’t take the offer, then the state can just come in and kind of seize it
September 14, 2016 o die hard capitalization and rich western countries HATE nationalization o any time a business gets its shit nationalized they go home and complain to their government o when Huge Chavez and Venezuela did this to Exxon the US froze all of Venezuela’s assets and is now suing them in international court; says they stole US property etc. Privatization: the opposite; when a national government sells off an industry or leases out or gives away the rights of the resources to private industry o Japan sold its post office They realized that a private cooperation will do it better o In the future, will people privatize their militaries? How do yall feel about privatization? o Left: If the government gives away the resources they better regulate it well and raise taxes to raise money for the people o Right: This is great!!!! Get the rules out of the way and let us make the money doing the business Nationalization? o Left: We should nationalize!! All the resources and industry are property of all of us in the state! Let them run it then they’ll have the money to provide for people in the state o Right: Slippery slope towards communism There are pros and cons for letting state or alternatively
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- Spring '08
- Communism, Saudi Arabia, People's Republic of China, Privatization, Nationalization