NATIONALISATION AND REGULATION

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					NATIONALISATION AND REGULATION

PURPOSE OF LECTURE TO ANALYSE THE EXPERIENCE OF PUBLIC OWERSHIP IN THE CONTEXT OF DIFFERING STATE TRADITIONS IN RESPONSE TO:1. 2. 3. POLITICAL AND ECONOMIC IDEOLOGIES THE IMPACT OF WAR AND ECONOMIC RECESSION PRACTICAL CONSIDERATIONS eg. TECHNOLOGY, MARKET SIZE

DEFINING PUBLIC OWNERSHIP 1. 2. 3. PUBLIC CORPORATIONS eg NCB, BRITISH RAILWAYS STATE SHAREHOLDERS IN CORPORATE SECTOR INTERPENETRATION: MILITARY-INDUSTRY COMPLEXES

MOTIVES FOR PUBLIC OWNERSHIP A. (1) (2) (3) (4) (5) (6) (7) ECONOMIC ARGUEMENTS EXTERNALITIES PUBLIC GOOD CONSIDERATIONS NATURAL MONOPOLY ‘WASTEFUL’ COMPETITION SECURITY OF SUPPLY NATIONAL, STANDARDISED SERVICE ECONOMIC MANAGEMENT

BRITAIN PHASE 1: 1945-51

BANK OF ENGLAND, COAL, GAS, ELECTRICITY, RAILWAYS, ROAD TRANSPORT*, IRON AND STEEL* * DE-NATIONALISED AFTER 1951

MOTIVES 1. 2. 3. 4. CLAUSE IV OF 1918 CONSTITUTION NATIONAL MONOPOLIES PLANNING PHSICAL RECONSTRUCTION

PHASE 2: 1970s ROLLS ROYCE, BLMC, BRITISH AEROSPACE, BRITISH SHIPBUILDERS, BNOC.

MOTIVES 1. 2. 3. 4. LOCALISED UNEMPLOYMENT STRATEGIC SUPPLY RESTRUCTURING INTERPENETRATION

FORM OF ORGANISATION IN PHASE 1 THE SEMI-INDEPENDENT PUBLIC CORPORATION i.e. PUBLIC CONTROL + MANAGERIAL INITIATIVE AND ‘FREEDOM’ FROM MINISTERIAL INTERVENTION. THE PRACTISE 1. 2. 3. 4. 5. 6. RULES ON PRICING AND INVESTMENT MINISTERIAL INSTRUCTIONS BORROWING LIMITS PRICES & INCOMES POLICIES H of C INVESTIGATIONS M.C. INVESTIGATIONS

RESULTS 1. 2. MANAGERIAL DEMORALISATION POOR ECONOMIC PERFORMANCE

SOLUTION: MARKET INCENTIVES VIA PRIVATISATION

USA PUBLIC CORPORATIONS: 2 CATEGORIES 1. ADMINISTRATIVE ORGANISATIONS FOR DELIVERING SOME ASPECT OF PUBLIC POLICY ‘TRADITIONAL’ PUBLIC UTILITIES

2.

1.a. WARTIME CREATIONS b. NEW DEAL c. ‘MISCELLAANEOUS’ a. + b. + c. = AD HOG STRUCTURES

2.

PUBLIC UTILITIES GAS, WATER, ELECTRICITY AT FEDERAL & STATE LEVELS POWER PROVISION IN 1970:ONLY 10% DRAWN FROM STATE AND FEDERAL CORPORATIONS

NB.

REGULATION MILITARY-INDUSTRIAL COMPLEX

REGULATION NEW DEAL: REGULATORY FRAMEWORKS FOR TELECOMMUNICATIONS, SURFACE & AIR TRANSPORT, GAS, ELECTRICITY, PETROLEUM. AIMS 1. 2. TO PROMOTE BUSINESS STABILITY TO ENSURE CONFORMITY TO GOVERNMENT’S SOCIAL AND ECONOMIC OBJECTIVES.

AIRLINES: CIVIL AERONAUTICS ACT (1938)

1. 2. 3. 4. LED TO:

NO NEW ENTRANTS TO MARKET ‘FAIR’ MIXTURE OF ROUGES COORDINATED FARES STRUCTURE NON-PRICE COMPETITION ALLOWED 1. HIGH COSTS 2. CROSS SUBSIDIES 3. INEFFICIENT ROUTE STRUCTURE 4. EXCESS CAPACITY

HENCE: DEREGULATION IN 1978

MILITARY-INDUSTRIAL COMPLEX RESULT OF 1. 2. COLD WAR SPACE RACE/NATIONAL PRESTIGE

1979: 70% OF US R&D EFFORT IN AVIATION FUNDED BY FEDERAL AUTHORITIES N.B. REPLICATED IN UK

GERMANY STATE SHARE HOLDINGS e.g. VEBA (40%) VW(36%)

INTERESTS ALSO IN COAL, IRON AND STEEL, SHIPBUILDING, LUFTHANSA. MOTIVES FOR SHAREHOLDINGS 1. 2. POSTWAR RECONSTRUCTION LEVERAGE eg LOCATION DECISIONS, ENERGY POLICY

ONLY 2 UK-STYLE PUBLICY-OWNED CORPORATIONS: BUNDESBAHN : BUNDESPOST

JAPAN PUBLIC CORPORATIONS CREATED IN 1940s

1. 2. 3. 4.

JAPAN NATIONAL RAILWAYS CORPORATION  NIPPON TELEGRAPH & TELEPHONE CORPORATION JAPAN MOMOPOLY CORPORATION  JAPAN ATOMIC ENERGY CORPORATION 

KOSHA

OTHER PUBLIC CORPORATIONS KODAN KOKO KINKO GINKO TOKUSH GAISA : : : : : SOCIAL OVERHEAD CAPITAL HOUSING FINANCE MIXED PUBLIC/PRIVATE ENTERPRISES e.g. ELECTRIC POWER DEVELOPMENT CO.; JAPAN AIRLINES

KODAN DOMINANT MOTIVES 1. 2. 3. POSTWAR RECONSTRUCTION AD HOC RESPONSES TO WIDENING GOVT. FUNCTIONS JOB CREATION FOR RETIRED OFFICIALS

CONCLUSIONS 1. UK ALONE ENGAGED IN A ‘PURPOSEFUL’ PROGRAMME OF NATIONALISATION 2. UK ALONE USED NATIONALISATION FOR (a) RESCUING BANKRUPT FIRMS & (b) FOR INDUSTRIAL RESTRUCTING 3. UK ALONE HAS EXPERIENCED POLITICALISED DEBATE 4. ‘AD HOCERY’ ELSEWHERE 5. ‘INTERPENETRATION’ IN US/UK 6. NOTE USE OF UK PUBLIC CORPORATIONS IN MACROECONOMIC MANAGEMENT.


				
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