Econ #2.docx - Econ#2 Nationalization vs Privatization How...

Econ #2
Nationalization vs Privatization
 How does a government make money?
o Taxes
 Income tax, sales tax
o Control resources/businesses
 Make money doing that business
 Nationalize an industry/resource
 Privatize it if the government does not do a good job of controlling it
 Nationalization
o When the government of a state physically and literally takes over a resource and
an industry from a private sector and makes it a state product
o Hugo Chavez—President of Venezuela
 Nationalized oil industry
 “It’s our oil, why are we paying more for it, we are going to buy you out”
 Capitalists hate nationalization
 U.S. hates Hugo Chavez because Chavez tried to take over U.S. oil
industry, Exxon
 U.S. froze all Venezuelan assets in the United States and are now suing
Venezuela
 Privatization
o When a government sells off or leases out an industry or rights/resources to a
private industry
o Japan sold its post office
 Liberal Left on Privatization
o If government is going to give off industries to private sector, they better protect
the workers and taxes should be raised on these industries to give back to the
people
 Conservative Right on Privatization
o