Nationalisation

• State-owned industry


  owned and operated by the government
• What goods do state-owned industries provide?

  goods of strategic importance or that are in public or social interest
• Examples of state-owned industries?

  network rail

  channel 4

  NHS
• Arguments for Nationalisation 


  public interest

  social equality

  service equality

  job security
• social equality


  benefits from goods are more evenly distributed

  can include price control and increase allocative efficiency
• Job security


  privatisation will prioritise profits leading to potential lay-offs and wage cuts
• Arguments against nationalisation


  inefficiency and bureaucracy

  lack of innovation

  risk aversion

  misallocation of resources
• Risk aversion


  refers to a tendency to avoid situations that involve uncertainty or the potential for a negative outcome

  due to a lack of competition
• Misallocation of resources


  lack discipline of market forces so overstaffing or underutilisation could occur