Basic Explanation of Nationalization

[Kamil]

Could someone please give a basic explanation of what nationalization is in economics? How does the day to day order of operations run differently in a nationalized industry? What differences and similarities are there between state owned businesses in capitalist country and state owned companies in a planned economy. How is the style and structure of nationalization more "democratic" or "egalitarian"? Why is it that previous so-called communist regimes have used this method? What basis in the text of Das Kapital do the style and structure of state owned businesses in planned economies have?

[RichardAWilson]

Nationalization: State-Ownership of the means of production and distribution. The nationalization of industrial sectors can be accomplished via expropriation and the compensation of the bourgeoisie and shareholders.

Socialization: Worker-Ownership of the means of production and distribution. The difference between nationalization and socialization is that, with socialization, the working classes own and manage the business.

The idea of state owned enterprises (I.e. nationalized businesses) originated with Socialism. However, it has been used by mixed-economies (I.e. Western-Europe). Nationalized industries have been used for complimenting private industries. (I.e. Britain’s National Coal Board was used to provide cheap energy and steel.)

These businesses (state-owned and managed) can be operated with financial losses if the benefits are perceived to outweigh the short-term expenses. (I.e. the National Coal Board ran huge losses while supporting a strong manufacturing sector.)

In the so-called Communist Countries, nationalized industries were used for wider industrialization programs. These countries were often underdeveloped and didn’t have established, structured and influential capitalists and financiers. In a sense, national companies supported a nation’s industrialization.

However, for obvious reasons, it can not be said that nationalization conforms with socialism. Socialization is much different from nationalization. That doesn't mean that a federal democratic-socialist state that's accountable to the working classes can't manage state-owned businesses in a manner that's comparable to socialization.

[Tim Cornelis]

Socialisation does not mean worker ownership, it means common ownership and control by whomever is using it--use rights (thus, the workers control the means of production, the peasants control land they utilize, however the means of production is not owned by the workers who use it but by all in common).

The difference between private and state ownership is merely ownership, the social relations remain almost identical. Surplus value goes to the capitalist and state respectively.

State owned corporations are not more democratic or egalitarian (unless it's a cooperative owned by the state, but a private capitalist might also introduce participatory management).

As far as I know Marx never mentioned central planning.

"Why is it that previous so-called communist regimes have used this method?"

I think they intended to increase the productive capacity though centralisation, for socialism to work the productive forces of society had to be increased--was their outlook--as Russia was not yet industrialised. The intention was not to introduce socialism, it was more of a transitional phase between capitalism and socialism ('state-capitalism').