The nationalization bug is spreading in the Western hemisphere. What started out as a strange virus in Venezuela now threatens the shores of the United States (see Citigroup) and, just recently, leaped the Rio de la Plata into Argentina.
President Cristina Fernandez de Kirchner announced yesterday that Argentina will nationalize a military-aircraft factory owned by Lockheed Martin. (Read the full article here: http://www.laht.com/article.asp?ArticleId=329847&CategoryId=10718.) Of course, even those who see nationalization as a threat will probably find this none too troubling. Because the state is traditionally thought to have a monopoly on force, the nationalization of military-related industry doesn’t pose a major challenge to the free-market paradigm.
Personally, I don’t see nationalization as an unqualified evil (see below). I certainly don’t see it as a plague. But for those who do, this one looks pretty contagious.
-N. Fromherz
P.S. – I should probably explain my position on nationalization in more precise terms. I’ll be brief. If government wants to dabble in business, I think that’s fine. But if government nationalizes an entire industry, thereby creating a monopoly, I think that’s troublesome. Government should be able to compete, not win by default. So, too, is it problematic when government abuses its authority to give itself a leg-up on the competition. There are exceptions to these rules of thumb, but I see them as just that–rules of thumb, standards that serve as a starting point for thinking about questions of nationalization.
