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
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- Spring '08