Problems of Public Enterprise: Thoughts on British Experience

Problems of Public Enterprise: Thoughts on British Experience

Problems of Public Enterprise: Thoughts on British Experience

Problems of Public Enterprise: Thoughts on British Experience

Excerpt

This book does not contain an argument on whether nationalization is desirable or not. On the assumption that there is nationalization, an attempt is made to discuss certain important problems raised by it in the fields of management, pricing, resource allocation and public control. It is hoped that a discussion of this nature will contribute towards ensuring the most satisfactory results from nationalization.

In many countries nationalization will remain a permanent form of industrial organization, though its extent and the industries in- volved will vary from country to country. Public enterprise in Britain may be considered as an experiment, from which valuable con- clusions may be drawn. Four special features of Britain's experience are outstanding. Firstly, by and large, the nationalization measures have not been prompted by glaringly doctrinal considerations. On the other hand, the recent pronouncements by the Labour Party attempt to justify each nationalization on relevant and economic grounds. Secondly, the pace of nationalization has slowed down; and there has been some denationalization as well. Though this is partly due to the change in Government since 1951, one suspects that fundamentally the country is considering afresh the desirability of the kind of nationalization undertaken between 1945 and 1951.

Thirdly, the great emphasis placed in this country on economic principles in the working of the nationalized industries gives the impression that it is not the purpose of nationalization to abolish the concept of consumer's freedom, the working of the price mechanism and competitive forces in the evolution of these indus- tries. To what extent these principles have been preserved under nationalization is another question. Fourthly, from time to time changes have been introduced in the legislation governing the nationalized industries, so as to provide for their better organization. The Electricity Act of 1957, which gives effect to certain recommenda- tions of the Herbert Committee, is a good example. It may, therefore, be suggested that a careful study of recent British experience in the field of public enterprise has much to contribute towards the under- standing of problems presented by a public sector being enlarged gradually for reasons other than those of political doctrine.

It is difficult to generalize on the problems of nationalization, since nationalization has not the same form or economic content in every case. In organization, nationalized industries may vary from being of the departmental type, to being a public corporation, a joint stock . . .

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