Home > Uncategorized > Public saving: The new nationalisation

Public saving: The new nationalisation

There has always been debate within the Labour Party, and other left-wing parties, about the common ownership of industry. This has invariably led to traditional forms of nationalisation, being the public operation of industry, or co-operatives.

Whilst co-operatives are a great idea, there are limitations in that investment is usually directed towards stakeholders rather than enterprises. Public saving differs from co-operative ownership and public operation in that it relies on public saving too finance public investment, advanced through taxes.

Assume for one moment that the sole-purpose of the Labour Party is the redistribution of wealth, then public saving produces the desired outcome in an efficient manner, utilising the mechanisms of the market.

Public saving is using budget surpluses to finance capital projects, but it does not have to be confined to the financing of public investment, as it can go further and raise a surplus of savings which can be lent to the private sector. Thus exists private enterprise operating with publicly owned capital. If the primary aim is to prevent the growth of private riches then there is no reason why the public ownership of capital should not take the form of owning shares, while leaving managers relatively free.

Nationalisation would exist through the increased public ownership of the nation’s wealth, coupled to considerable freedom of enterprise. If the state financial institutions were numerous and sufficiently enterprising, it would not be unreasonable to suggest that there might be more private enterprise than there is in a purely capitalist system as there is a propensity for public capital to take greater risks with the knowledge of public guarantees.

This is not to say that Northern Rock, RBS and Lloyd’s HBOS are the model to upheld for they were purchased on privately borrowed capital and are by no means enterprising.

Categories: Uncategorized
  1. Niall
    April 21, 2011 at 10:46

    So we pay less for Gas, Telephone, Electricity and Rail tickets now do we?

  2. Ust Oldfield
    January 23, 2012 at 10:20

    Reblogged this on The Guerrilla Economist.

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