Nationalization
Nationalization (or nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to private assets or to assets owned by lower levels of government (such as municipalities) being transferred to the state. Nationalization contrasts with privatization and with demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone renationalization. Industries often subject to nationalization include the commanding heights of the economy - telecommunications, electric power, fossil  fuels, railways, airlines, iron ore, media, postal services, banks, and water - though, in many jurisdictions, many such entities have no history of private ownership. During the United States Civil War troops raised by individual states in the North were Federalized into national service as components of the Union Army. Most served a three year term before they were released by the U.S. Army to return to their home states. Nationalization may occur with or without compensation to the former owners. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property. Some nationalizations take place when  a government seizes property acquired illegally. For example, in 1945 the French government seized the car-maker Renault because its owners had collaborated with the 1940–1944 Nazi occupiers of France. In September 2021, Berliners voted to expropriate over 240,000 housing units, many of which were being held unoccupied as investment property. Economists can distinguish between nationalization and socialization, which refers to the process of restructuring the economic framework, organizational structure, and institutions of an economy on a socialist basis. By contrast, nationalization does not necessarily imply social ownership and the restructuring of the economic system. By itself, nationalization has nothing  to do with socialism - historically, states have carried out nationalizations for various different purposes under a wide variety of different political systems and economic systems. Compensation. Since nationalized industries are state owned, the government is responsible for meeting any debts. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. If they are profitable, the profit is often used to finance other state services, such as social programs and government research, which can help lower the tax burden. The traditional Western stance on compensation was expressed by United States Secretary of State Cordell  Hull during the Mexican nationalization of the petroleum industry in 1938, saying that compensation should be "prompt, effective and adequate". According to this view, the nationalizing state is obligated under international law to pay the deprived party the full value of the property taken. The opposing position has been taken mainly by developing countries, claiming that the question of compensation should be left entirely up to the sovereign state, in line with the Calvo Doctrine. Socialist states have held that no compensation is due, based on the view that private ownership over socialized assets is illegitimate, exploitative, or a hindrance  to further economic development. In 1962, the United Nations General Assembly adopted Resolution 1803, "Permanent Sovereignty over National Resources", which states that in the event of nationalization, the owner "shall be paid appropriate compensation in accordance with international law". In doing so, the UN rejected the traditional Calvo-doctrinal view and the Communist view. The term "appropriate compensation" represents a compromise between the traditional views, taking into account the need of developing countries to pursue reform, even without the ability to pay full compensation, and the Western concern for the protection of private property. In the United States, the Fifth  Amendment requires just compensation if private property is taken for public use. Political support. Nationalization was one of the major mechanisms advocated by reformist socialists and social democrats for gradually transitioning to socialism. In this context, the goals of nationalization were to dispossess large capitalists, redirect the profits of industry to the public purse, and establish some form of workers' self-management as a precursor to the establishment of a socialist economic system. In the United Kingdom after the Second World War, nationalization gained support by the Labour party and some social democratic parties throughout Western Europe. Although sometimes undertaken  as part of a strategy to build socialism, more commonly nationalization was also undertaken and used to protect and develop industries perceived as being vital to the nation's competitiveness (such as aerospace and shipbuilding), or to protect jobs in certain industries. A re-nationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power. A re-nationalization process may also be called "reverse privatization". Nationalization has been used to refer to either direct state-ownership and management of an enterprise or to a government acquiring a large  controlling share of a publicly listed corporation. According to research by Paasha Mahdavi, leaders who consider nationalization face a dilemma: "nationalize and reap immediate gains while risking future prosperity, or maintain private operations, thereby passing on revenue windfalls but securing long-term fiscal streams." He argues that leaders "nationalize extractive resources to extend the duration of their power" by using "this increased capital to secure political support." Economic analysis. Nationalization can have positive and negative effects. In 2019 research based on studies from Greenwich University found that the nationalization of key services such as water, bus, railways and broadband in  the United Kingdom could save £13bn every year. Conversely, an assessment from the Institute for Fiscal Studies found that it would add at least £150bn to the national debt and make it harder for the United Kingdom to hit its climate change targets. This analysis was based on the assumption that the UK Government would have to pay the market rate for these industries. Nationalization can produce adverse effects, such as reducing competition in the marketplace, which in turn reduces incentives to innovation and maintains high prices. In the short run, nationalization can provide a larger revenue stream  for government, but can cause the industry to falter in the longer run. The collapse of the Venezuelan oil industry, due to government management, is a case in point. Expropriation. "Expropriation" is the seizure of private property by a public agency for a purpose deemed to be in the public interest. It may also be used as a penalty for criminal proceedings. Unlike eminent domain, expropriation may also refer to the taking of private property by a "private" entity authorized by a government to take property in certain situations. Due to political risks that are involved when countries engage in  international business it is important to understand the expropriation risks and laws within each of the countries in which business is conducted in order to understand the risks as an investor in that country. Marxist theory. The term appears as "expropriation of expropriators (ruling classes)" in Marxist theory, and also as the slogan "Loot the looters!" ("грабь награбленное"), which was very popular during the Russian October Revolution. The term is also used to describe nationalization campaigns by communist states, such as dekulakization and collectivization in the USSR. However, nationalisation is not a specifically socialist strategy, and Marxism's founders were  sceptical of its value. As Engels put it: Nikolai Bukharin also criticised the term 'nationalisation', preferring the term 'statisation' instead.