Nationalization as Privatization in Reverse: Understanding the Nature of the Commons to Identify a Possible Point of Optimal Nationalization, Part 3

editors | 20 July, 2010 20:49

By Lucio Munoz*

* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada Email: munoz@interchange.ubc.ca

[continued]

Notice that when there are no assets in public use(g) and in private use(p) at the same time, then there is no commons(c), which can be stated as follows:

c = gp

The nature and characteristics of the different types of commons

From the model presented above( C = G + P ), it can be seen that there can be three different types of commons:

a) The commons under full public use(C1)

One possibility is that the commons is under full public use(G), no private use exists(p), which can be represented as:

C1 = Gp

This would be the case of a fully totalitarian state or full nationalization(FN) where no private uses exists(p). As it can be seen in Figure 5 below, there is a point of full public use at point “a”.

b) The commons under full private use(C2)

Another possibility is that the commons is under full private use(P), no public use exists(g), which can be presented as follows:

C2 = gP

This would be the case of a fully capitalistic state or full privatization(FP) where no public uses exists(g). As it can be seen in Figure 5 below, there is a point of full capitalistic use at point “b”.

c) The commons under compromised use(C3)

The third possibility is that the commons is under compromised used(M), one where the commons is under both public(G) and private(P) use at the same time:

C3 = GP = M

This would be the case of a mixed state, where both public(G) uses and private uses(P) coexist or exist at the same time. As it can be seen in Figure 5 below, there is public use-dominated mixed state at point “c” and there is a public use-dominated mixed state at point “d”.

Note that the arrow on the top of the inversegram indicates that levels of public use(G) of the commons move from left to the right; and that the arrow below the inversegram shows that levels of private use(P) of the commons move from the right to the left.

Possible levels of privatization

To facilitate the presentation of ideas, it is assumed that there are four possible levels of privatization: zero privatization, weak privatization, strong privatization, and full privatization. Figure 6 below captures these ideas in detail.

Figure 6 above shows the different levels of privatization of the commons as we move from right to left at the base of the figure: At point (a) we have zero privatization; at point (b) we have weak privatization; at point (c) there is strong privatization; and Full privatization is found at point (d). Notice that as the level of privatization increases, the level of public use decreases, showing that nationalization is privatization in reverse.

Also see that the move from point (a) to point (b) in Figure 6 above can be seen as the pre-globalization period when we moved from no privatization at all slowly to some privatization; and that the move from point (b) to point (c) can be taken as the globalization period, the move from weak quickly to strong privatization.

Possible levels of nationalization

Since nationalization can be seen as the opposite of the privatization process or as privatization in reverse, then there can be also different levels of nationalization, which can be appreciated in Figure 7 below:

Figure 7 above points out the different levels of nationalization possible as we move from left to right at the top of the figure: at point (e) we have zero nationalization; at point (f) we have weak nationalization; at point (g) there is strong nationalization; and full nationalization is found at point (h). Notice that as level of nationalization increases, the level of private use decreases. Hence, privatization is nationalization in reverse, which is consistent with the principle of inverse action.

Also see that the move from point (e) to point (f) in Figure 7 can be seen as the period of nationalizing all assets that are not yet in private hands and are still in public hands. And the move from point (f) to point (g) can be taken as the period of strong nationalization of private assets.