Nationalization: An Old and Failed Tradition

There seems to have been a bit of a row in France. Arnaud Montebourg, the socialist Minister for Industrial Recovery, told a foreign factory to leave the country, due to their closing a large factory.  Later, “[t]he French government announced on Thursday that it could nationalize the factory in question, with backing from an unnamed businessman.” This is not the end of the insanity. Montebourg also justified his actions by saying that Obama does the same thing (in regards to nationalizing industries).

It appears, then, that the old European delusions are not dead. The rioting and rise of fascist movements, along with the parasitic supporters of socialism demanding more government robbery and coercion to keep the EU alive, has not brought everyone back to reality. But it is Montebourg’s latter point—his justification—that is also disturbing. He is not merely justifying this supposed power of nationalizing by a statist philosophy, but because one of the United States’ worst presidents has also done the same. Barack Obama, Francois Hollande, Arnaud Montebourg, and all of the other socialists and collectivists of the world still fail to realize that nationalizing anything is wrong both in the philosophical and practical sense. Like all other collectivist ideas, nationalization is not new—it has been tried many times before and failed.

Before we consider the historical and practical matters of nationalization, we must consider the philosophical and moral implications. Nationalization violates one of man’s most sacred rights—the right to property. What right does the government have to nationalize anything in the first place? It does not have this right. If the government may steal one man’s property, then there is no difference between that and the individual doing something similar. Even subsidies may be seen in a similar light—as they come from tax dollars. The government is a thief and pirate. But, what else could be expected from collectivists who champion “public” ownership, arguing that “everyone” owns it—which is a monstrous myth.

Historically, socialism and nationalization (the two are closely related) are old ideas. Ancient Greece, oddly admired by so many today, had a socialist tradition. Sparta, though a war-machine, did practice a form of collectivism. The modern-day, oft-hailed Scandinavian socialist governments have a legacy of collectivist Norse culture from the Middle Ages. (That is not to say, though, that this collectivist legacy is solely responsible for Scandinavia’s love of socialism.) But even these ideas might be too old for some, and we must look forward in history.

Perhaps one of the most potent examples against this idea of public ownership is the example of the Pilgrims living the Massachusetts Bay Colony. As we all know, the Pilgrims were mostly a group of persecuted protestants who fled England and came to America, though some came for purely economic reasons. After landing in the New World, the Pilgrims did not declare that they may go, work their own plots of land, and own them, but that they would have “common property.” In other words, they all owned these common properties. In a sense, the land was nationalized. The results nearly led them to starvation.

Another example of public ownership failing is the Collins Line steamship company. The American government, upset at the domination of the steamship industry by the British, thought that they could dominate this industry by subsidies. The Collins Line slowly began to fall apart. Eventually, their competitor’s line, owned by Cornelius Vanderbilt, overtook them. The subsidy for the Collins Line ended. Another try at nationalization failed.

Yet those in the United States had not learned their lesson. Only a short time after the demise of the Collins Line, the Federal government decided to try nationalizing a railroad. These railroad companies, the Union Pacific and Central Pacific, became famous in American history. It was when these railroads met at Promontory Point, Utah, that the trans-continental railroad was completed. That is what most know and have seen, but the truth is one of bumbling incompetence, waste, and corruption. As with the Collins Line, there was a competitor to the subsidized railroads: James J. Hill. Hill ensured that his railroad “the best-quality materials, even if they were more expensive.” Hill also, because he did not have a subsidy, was focused on finding the “shortest route for his railroad,” while the government-subsidized railroads did not—there was no need and it was less profitable for them. And, adding to it all, “the executives of the CP and UP [the subsidized railroads] stole funds from their own companies in order to profit personally.” Obviously, the Hill line triumphed, until the government further intervened in the railroad industry to protect the subsidized companies.

A final instance of nationalization is one from World War I. Although war does not suspend our natural, inalienable rights, Woodrow Wilson and the Progressives did not believe this. Previous to the war’s onset, the Federal government empowered itself to order private companies to obey it, but things only continued once the United States entered the war. Finally, when the war ended, the government was in control of or entered innumerable industries, including communications, “ocean-shipping,” “shipbuilding,” “wheat trading,” and transportation of “raw materials” and other goods. Shortly after the war ended, in 1920, a recession happened, partly due to the government’s tyrannical nationalization and mishandling of private industries during the war.

The past failures of nationalization are plentiful and may be examined for a great deal of time. If it is any indication from the examples shown, nationalization in this “modern” era is akin to Einstein’s quip about insanity. All attempts at nationalization are doomed to fail.

Beyond the practical matter, though, nationalization has greater, philosophical implications. Apart from theft, nationalization also gives a kind of legitimacy to government ownership. It creates a precedent that may lead to even further collectivist measures. If government taking a factory is acceptable, then what is wrong in kidnapping a person and forcing him to work for the government or serve in the military? One abuse of liberty will lead to more.

Christian Lopac | Wabash College | @CLopac

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