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NATIONALIZATION AS AN ECONOMIC PROCESS FOR THE STATE Naumenko Volodymyr National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute

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Meaning of Nationalization Nationalization (or nationalisation) is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state. 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. Antonym for nationalization - privatization

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Difference between Nationalization and privatization

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Advantages Safeguards the interests of Laborers: Nationalization also came to be regarded as holding the key to better relations between labor and management. Under private capitalism the managers are agents acting for a host of owners. They have therefore to oppose the demands of labor in every case to safeguard the owners’ interests and to keep their own position absolutely safe and clear. This would not be so under a system of nationalized industries, because the interests of the laborers would not be opposed to those of the managers. Both would act on behalf of the nation and get such rewards for their services as the nation is willing to pay. Technical efficiency and lower cost of production: The managers, freed from their tutelage to the industrial overlords, would devote themselves entirely to improving technical efficiency and lowering the cost of production. Cooperation and prosperity for all: The industrial world, under private capitalism, is torn as under by strife and discords. There are frequent stoppages of production or, at least, the quantity and quality of work have to suffer as a result of this bitterness. Nationalization would do away with industrial unrest and usher in a period of cooperation and prosperity for all.

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Increased earnings of the State: Nationalization of some important industries would enable the State to earn large revenue easily and without any extra cost. Control over prices of war supplies: During war, nationalization would help because the government could not be forced to pay exorbitant prices for war supplies by a handful of war profiteers. Employment opportunities: In periods of unemployment, people could be given employment expanding the activities of the nationalized industries. Economic and political growth: In short, nationalization would help the State to order the political and economic life of the nation more conveniently both in peace and in war. Without mastery over certain industries, at least, the government would be solely at the mercy of the economic lords. With nationalization the tables are turned and the State can dictate its own terms to those industrial magnates as are allowed to remain.

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Disadvantages Lack of individual initiative: The men who shout these slogans do not always stop to consider if there can be any progress if individual initiative is stopped. Social philosophers have often pointed out that in a regime of nationalized industries, the spur of individual advancement will never be as powerful as it is today. Men will have a tendency to work in accordance with a dull routine rather than strike out a new path. Lack of freedom: It is only when men can think and act freely as individuals that they can produce new ideas and make new inventions.

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Lack of Spirit of competition: Then we must not forget that although modem industry is often dominated by monopolies, there is some rivalry among them and the spirit of competition is not entirely dead. Rigid system: State ownership of industries may mean rigid routine and a dead uniformity. Less intervention of public in economic affairs: Moreover, there is a danger in making the government the sole master of economic affairs. In private Capitalism the government can act as the balance-wheel; if any thing goes wrong, we can look to the government for redress.

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PROCEDURE OF NATIONALIZATION IN UKRAINE The objects of the right of private property, which are not subject to compulsory alienation in favor of the state on the grounds of social necessity, include: Personal movable property of citizens; 2) Private dwellings (houses, apartments); 3) objects of historical and cultural heritage and architectural monuments which are kept in good condition or are in the process of restoration at the expense of the private owner; 4) objects of intellectual property rights;

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5) Land and property shares of citizens of Ukraine, obtained as a result of the dispersal of the lands of former collective farms and state farms; 6) property of trade union organizations; 7) Mass media; 8) property of public organizations;

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1 Analysis of the grounds for nationalization 2 Notice of the owner of the intention to nationalize the enterprise 3 Preparation of a special draft law on nationalization 4 Creation of a special commission that verifies the existence of grounds established by this Law for the nationalization of a particular property 5 According to the results of the analysis of the said plan, the Cabinet of Ministers of Ukraine has the right to postpone for a period not exceeding 30 days, a decision to support or not support a bill on the nationalization of specific property. 6 Estimation of the value of property and losses incurred by the owner as a result of nationalization 7 Payment of compensation to the owner of property subject to nationalization 8 The transfer of property subject to nationalization takes place after the entry into force of the Law of Ukraine on the nationalization of a particular property. 9 From the day the owner receives a copy of the decision of the Cabinet of Ministers of Ukraine on the nationalization of a particular property, the owner of such property shall ensure its preservation.

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