How much to nationalise ?

[spasmodicus]

The main reason for wanting to nationalise things is that the previous nationalisation and subsequent de-nationalisation was messed up so dismally.
Railways? Gas supply? Electricity? Privatised industries aren't allowed to operate properly because of ham fisted regulation. The same regulators oversee nationalised industries too. Many areas, although nominally private are so heavily regulated (Nuclear power, railways for example) that they might as well be nationalised. Similarly, the NHS, although "National", contains privatised elements like PPPs and consultants who operate privately, so it is neither one thing, nor the other. We seem to end up with all the disadvantages of both systems.

It's depressing.
S

[Gilgongo]

OTOH the privatisation of university education has led to vast numbers of people studying the wrong subjects, at vastly increased overall cost. But since it is private cost not public cost, why should the govt care? At least until they all start officially defaulting on their loan repayments.

I can't find it now, but I saw some research that estimated student loans were on track to cost the tax payer more than the grants system was (and increasingly so). This due mainly to non-collection of money and increasing amounts having to be written off. Pretty tricky calculation though as it has to allow for things like increased student numbers and things.

If so, then this pattern of turning private costs into public ones would be part of a general theme, seen also in the recent debate about bailouts and loans to energy companies I think. But I'm pretty sanguine about national debt

[XFool]

Nationalise? I was a kitchen boy on the restaurant cars in the 1950's. At the end of one trip with a cook of left wing leanings, I asked him what shall I do with the remaining quarter of a roast rib of beef. "Dump it, plenty of money on the railways". That was one example. Admitedly, most other cooks might have told me to put it in the fridge, for a casserole tomorrow, but you get the drift. It's not my money, I don't care.

I don't follow that.

If your cook had thought he would have realised it was his (our) money precisely because the industry was nationalised. Presumably, on the more 'profitable' privatised railway, he could have said exactly the same thing, if he had felt like it?

[servodude]

Nationalise? I was a kitchen boy on the restaurant cars in the 1950's. At the end of one trip with a cook of left wing leanings, I asked him what shall I do with the remaining quarter of a roast rib of beef. "Dump it, plenty of money on the railways". That was one example. Admitedly, most other cooks might have told me to put it in the fridge, for a casserole tomorrow, but you get the drift. It's not my money, I don't care.

I don't follow that.

If your cook had thought he would have realised it was his (our) money precisely because the industry was nationalised. Presumably, on the more 'profitable' privatised railway, he could have said exactly the same thing, if he had felt like it?

Indeed.
There's huge pile of steaming conflation in this stank heap.
I can't understand how privatisation of public services in the UK leading to UK bods paying their money to nationalized companies in France helps anyone but the French people whose govt has restricted how much they can be fleeced in a season.
I'm sure someone will have an argument for why that's great and benefits everyone but practically it seems like shooting yourself in the face in the name of something or other; dulce et decorum est pro ideology mori

[Gilgongo]

The whole nationalise/privatise debate is just another ideological fight about taxation.

I don't see any reason why a public service can't been managed to the same standard of efficiency and quality as a private one. And it's not as if the history of privatised services has shown they always raise those metrics anyway. I'm old enough to remember British Rail and the GPO. Sure, they were bad, but they weren't that bad considering how they were so underfunded. Privatisation was certainly one solution to their problems. But it turned out to be the worst solution eventually.

Personally, I see taxation as good. It's what money was invented for, and it's the engine of advanced human society that keeps things sweet against inflation and many other things that benefit the economy and all of the people in it. Governments should use their money to provide utilities that benefit everyone equally, and on which free enterprise, innovation and competition can then stand tall.

Transport, energy, healthcare, education. How much to nationalise? All of those (maybe some others - land, arguably; defence, possibly).

Those with Laffer curves tattooed on their biceps can then get on with their sovereign citizen arguments about the rest.

[Gerry557]

The whole nationalise/privatise debate is just another ideological fight about taxation.

I don't see any reason why a public service can't been managed to the same standard of efficiency and quality as a private one. And it's not as if the history of privatised services has shown they always raise those metrics anyway. I'm old enough to remember British Rail and the GPO. Sure, they were bad, but they weren't that bad considering how they were so underfunded. Privatisation was certainly one solution to their problems. But it turned out to be the worst solution eventually.

Personally, I see taxation as good. It's what money was invented for, and it's the engine of advanced human society that keeps things sweet against inflation and many other things that benefit the economy and all of the people in it. Governments should use their money to provide utilities that benefit everyone equally, and on which free enterprise, innovation and competition can then stand tall.

Transport, energy, healthcare, education. How much to nationalise? All of those (maybe some others - land, arguably; defence, possibly).

Those with Laffer curves tattooed on their biceps can then get on with their sovereign citizen arguments about the rest.

I thought defense was nationalised or do you mean the bits that they buy. "Today you were bombed by the Royal Air Force in conjunction with Coca-Cola!

" but they weren't that bad considering how they were so underfunded" I thought that summed up the main argument against nationalisation. Everyone taking out of the pot rather than paying in.

[Mike88]

Surely re nationalising gas and electric companies will not have much affect. It's the energy producers that are of greater significance. Good luck with trying to nationalise the gas and electric elements of Shell and BP which operate globally. As for the water companies the rationale was that so much money was required to modernise the infrastructure the best bet was to privatise. When the purse strings were held by the government any expenditure became low on the list of government priorities. Had they privatised any expenditure on infrastructure would have scored against the PSBR so the government's decision to privatise was understandable from their viewpoint. Sadly water companies especially were not up to the task even though billions have been spent on improvements with bills rocketing as a consequence. Re- nationalising these companies simply won't happen.

[Gilgongo]

I thought defense was nationalised or do you mean the bits that they buy. "Today you were bombed by the Royal Air Force in conjunction with Coca-Cola!

" but they weren't that bad considering how they were so underfunded" I thought that summed up the main argument against nationalisation. Everyone taking out of the pot rather than paying in.

I've seen arguments to take more control over defence, but like I say, "possibly" - depending on what that control means. So if you nationalised BAe in the same way as the French have with EDF for energy. Not convinced myself.

As to everyone taking out of the pot rather than paying in - what's the problem with that? Governments can make money to fund as much (or as little) as they want. The holy war about taxation distracts us from the fact that paying off "government debt" is an illusion.

[Alaric]

So if you nationalised BAe in the same way as the French have with EDF for energy..

It had already been nationalised in the 1970s by the Wilson or Callaghan governments. It was privatised alongside everything else in the 1980s.

[Gerry557]

If you nationalised BAe, the likely hood is that over time. Funding would be cut and the best people would move to pastures new. Mainly for better pay and to work with the best technologies.

The state run thing will slowly wind down into averageness. Governments will then force themselves into buying from them, in the national interests, of course.

The armed forces will be stocked with poor equipment that doesn't really work whilst others buy from the best.

One only has to look at current events to see the effects of this.

[Gerry557]

As for government debt, what you say is great until it isn't.

I have some monopoly money, can I use it to buy your house. I'll pay double market rate. Obviously that will work if you value my monopoly money or you will laugh in my face if you don't.

Didn't Zimbabwe go down that road. Invest in wheelbarrows to move your cash.

[dealtn]

is an illusion.

Wow. The very first sentence of the reply is enough to scare me that people think like this and the debt (and its growth) has no consequences.

[NotSure]

is an illusion.

Wow. The very first sentence of the reply is enough to scare me that people think like this and the debt (and its growth) has no consequences.

from the comments below the linked article:

Neil Harding says:
June 12 2020 at 1:21 pm

The key, is the amount of interest payments. These are payments that disproportionately go to the richer half of the population.

As you suggest, while interest rates are low, especially if below an already low inflation rate, then the rich are not gaining, so it is ok.

The problem comes if interest rates are increased in a belief it will control inflation. Could a higher national debt limit public spending by making the levying of taxes more difficult & inflation rates & therefore interest rates more sensitive to any increased public spending?

Richard Murphy [the article's author] says:
June 12 2020 at 2:42 pm

And when is that going to happen?

The 500 year trend is downward interest rates

And inflation is not anticipated by anyone

Shall we worry about the real world?

[Alaric]

Looking down the list of FTSE 100 components, I tried to recall which had previously been wholly or partly in public ownership.

https://www.ii.co.uk/indices/ftse-100-index

Have I missed any?

BAE Systems (LSE:BA.)

BP (LSE:BP.)

BT Group (LSE:BT.A)

Centrica (LSE:CNA)

International Consolidated Airlines Group SA (LSE:IAG)

National Grid (LSE:NG.)

NatWest Group (LSE:NWG)

Rolls-Royce Holdings (LSE:RR.)

Severn Trent (LSE:SVT)

SSE (LSE:SSE)

United Utilities Group (LSE:UU.)

Apart from NatWest, I think they were all part of government assets when Maggie came to power in 1979.

[Gilgongo]

Wow. The very first sentence of the reply is enough to scare me that people think like this and the debt (and its growth) has no consequences.

I agree it's not the best explainer (it was just the first thing I could find in Google that seemed reasonably succinct). But the key thing is that "national debt" is not one thing, as the explainer explains. It is made up of separate but related things that act differently in the economy:

- The National Cash
- National Savings and Investments
- National Bonds, when structured as gilts
- And National Capital, maybe, for that debt which the government owns through the QE process

We're probably forking this discussion too much now... but to grerry557's point about Zimbabwe-like inflation, aspects of the above are used to control inflation, not create it.

[dealtn]

Have I missed any?

3i - Originally part of the Bank of England
Associated British Foods - owning British Sugar originally nationalised in 1936
Astra Zeneca - parts of ICI, which in turn resulted from various mergers including nationalised explosive, chemicals and nationailsed enterprises such as British Dyestuffs

and that's before you've got past the first letter of the alphabet.

[Gilgongo]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

The dogmatic belief that either tax is bad in principle, or tax is good in principle, is a great way of gaining votes from one or other members of that religion. The latter is largely (if somewhat complexly) a myth that is used to justify either shrinking the state, cutting services and privatisation. But tax and government debt are not what they seem. Here's another explainer.

So to answer the question "How much to nationalise?", I say nationalise everything that enables free enterprise to flourish. Principly health, education, transport and energy.

[dealtn]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

[pje16]

I say nationalise everything that enables free enterprise to flourish.

That is a pure contradiction

[Leothebear]

I'm in favour of renationalizing former monopolies. Water and power being the priorities. What reasons can there be for a nationalized industry to be less efficient that a privatised one? The former has the huge advantage of not being beholden to shareholders as their number one priority.

I know the reputation NIs have compared to the private sector but I cannot believe it is impossible to turn that around.