COVID-19 pandemic: a wave of nationalization may cover Western capitalists


After COVID-19, the world will not be the same. A coronavirus pandemic not only kills thousands of lives, but also breaks down established stereotypes about international economics. Some couple of months of the crisis caused by the rapid spread of the disease, clearly showed that the "braces" of the liberal capitalist economy stopped working.


Private enterprise, which is supposedly always more efficient than the state, the “invisible hand of the market”, small business - all this was instantly covered with a copper basin. But will the right conclusions be drawn from this?

The pandemic has shown all the weaknesses of a globalized economy when everyone is totally dependent on each other. In China, due to quarantine for months, industrial enterprises were closed, the supply of which is expected abroad. The consumption of raw materials and energy carriers decreased, which hit their exporters, including Russia. Ford Motor, General Motors and Fiat Chrysler have closed their plants in the United States, Canada and Mexico, sending home one and a half hundred thousand workers. Toyota, Honda and Nissan followed suit.

Logically stopping assembly lines will hit thousands of enterprises manufacturing components for them. If a pandemic drags on over time, this can lead to the bankruptcy of many companies and the collapse of production chains. A huge number of specialists involved in the high-tech automotive industry risk losing their jobs.

And this is just one example. COVID-19 brought down the tourism and hotel business worldwide, questioned the existence of many transport companies engaged in passenger and freight transportation. A business focused on serving a large number of visitors, for example, cinemas, restaurants, cafes, shopping centers, is on the verge of ruin. So, on the eve of Germany recognized that 99% of small and medium enterprises of the European Union, that is, about 25 million business entities, suffered from the epidemic.

It is also significant that no one is going to save these “effective owners”. Judging by the statements of Berlin and Paris, only large corporations will receive financial support. German Minister of Economics Peter Altmayer a few days ago said:

We will not allow the bankruptcy of economically strong companies.


At the same time, the word "nationalization" was spoken for the first time, albeit with the proviso that it was "temporary." Soon, his French counterpart Bruno Le Mayor spoke in a similar way.

Let's face it, it even touches. Nationalization is the transfer of property from private to state through confiscation or requisition. All past decades, we have been taught from the West, and home-grown liberals assented them that the state is an inefficient owner, so we need to privatize everything as soon as possible so that everything flies.

And everything flies, while everything is fine. But at the first serious crisis, for some reason everything immediately streams in, and all “effective businessmen” run for salvation under the wing of the state. Moreover, only large companies will become supportive, in relation to which the “invisible hand of the market” will temporarily cease to act, and any “trifle” will have to be saved on its own.

What amounts are we talking about? In the United States, authorities plan to channel $ 850 billion into the fight against coronavirus, which will help businesses and the public. The European Union has increased financial assistance to 37 billion euros. Paris will allocate 45 billion euros to support the French economy, Finland - 15 billion. Poland at all 52 billion. As other countries say, Italy's worst-hit epidemic in Europe has already begun nationalization, starting with Alitalia and its healthcare sector. By the way, the nationalization of Lufthansa and SAS airlines are now discussed, respectively, in Germany and Sweden.

So it turns out that liberalism in the economy works, only so far so good, and when it gets bad, the state should bear the burden of costs of “effective owners” for the transitional period. Well, until things get better.

It is interesting to see which of the domestic oligarchs will be the first to come to the government for help and launch their hands in the NWF. In a good way, if the "business captains" can’t cope with it themselves, it would be nice to nationalize the assets that they once privatized as part of a free confiscation. But, knowing how everything is arranged with us, one can be sure that “nationalization” will mean the sale of assets that have become “toxic” to the state at a reasonable price.
Photos used: Kiefer / flickr.com
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  1. Bakht Offline
    Bakht (Bakhtiyar) 22 March 2020 12: 56
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    All according to the laws of the market. So there is no contradiction. Profit for oneself, losses for the state.

    On the other hand, nationalization in Russia is vital for solving completely different problems. And even very late.
    1. Bitter Offline
      Bitter (Gleb) 22 March 2020 15: 52
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      Nationalization, as a way to write off your insolvency and debts at the expense of the state, then again denationalize your favorite feeder and effective managers at the same time "shuffle".
      1. Bakht Offline
        Bakht (Bakhtiyar) 22 March 2020 15: 57
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        In Russia, the meaning of nationalization is different. If we are to carry out nationalization, then we will have to cancel the privatization of the 90s. None of the Russian leadership will do this.

        Although, of course, for the "effective managers" this is a good solution at the moment. To carry out a temporary, of course, rudeness on the part of the bankrupt "menagers".
        1. Bitter Offline
          Bitter (Gleb) 22 March 2020 16: 20
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          ... abolish the privatization of the 90s. None of the Russian leadership will do this.

          Logically, stolen in the nineties, this is holier than all the shrines.

          ... this, of course, is rudeness ...

          It is rather a "non-standard" approach to solving problems or "nothing personal, just business," and you are immediately rudeness.
          However, it’s time to be rude as a national Russian sport, at all levels, from amateur to professional.
          1. Bakht Offline
            Bakht (Bakhtiyar) 22 March 2020 16: 41
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            Temporary privatization (both in Russia and in Germany) is rudeness, regardless of the country. So there’s nothing national. Rather, class.

            If a gentleman cannot win by the rules, he changes them.
  2. Arkharov Online
    Arkharov (Grigory Arkharov) 22 March 2020 13: 46
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    Can it be eastern? However, nationalization has nowhere led to anything good.
    1. Bakht Offline
      Bakht (Bakhtiyar) 22 March 2020 14: 17
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      Then why now is the question of nationalization? Both in the States and in Europe. Do they really want to make it worse?
      1. Arkharov Online
        Arkharov (Grigory Arkharov) 22 March 2020 15: 23
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        Who is on whom and where is it? They’re going to go right this way, there are government decisions, or on our “Internet”, as you always don’t understand, what and where have you read?
        1. Bakht Offline
          Bakht (Bakhtiyar) 22 March 2020 15: 48
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          In your favorite RBC, it is written that the German Minister of Economics is considering the temporary nationalization of large enterprises. In exact accordance with what I wrote. For the time of losses - everything is to the state, and how the situation will be corrected and profit will appear - return everything to the private owner.
          In the States, Trump spoke of the buyback of large companies. Mnuchin (Minister of Finance) says the same thing in a slightly different form. It is about $ 1 trillion to private companies. This is not a direct help. This is a transfer of a controlling stake under state control.

          When asked if there is enough stimulus of a trillion dollars, Trump said: “We will find out later. Let's see what happens. Depends on how long, so much depends on what is happening in this room, from a medical point of view. We can stop it in its path, the virus, it is enough. If we cannot, we will have to go back and talk. ”

          President Donald Trump on Thursday opened the door to a radical change in US government relations with private industry, as an outbreak of coronavirus undermines the country's economy, stating that it will support the government that has decided to nationalize some companies.
          -----
          “We will help the aviation industry. We will help the cruise ship industry. We are likely to help the hotel industry, ”said the frantic Donald for the seed.
    2. Bitter Offline
      Bitter (Gleb) 22 March 2020 16: 08
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      But the privatization of national giants often led to mass layoffs (because otherwise it didn’t), lower quality and higher prices for manufactured products.
      And then (after a couple of years) again to beg to the state, like, there were not enough funds and more injections from the budget are needed, otherwise the kirdyk is close. Effective management of effective managers. laughing
      It is necessary to introduce to the golden parachutes, in addition, an effective shooting with rubber bullets, depending on the "effectiveness" of individuals, from once a month, per quarter, or according to the results of the project.
  3. Bakht Offline
    Bakht (Bakhtiyar) 23 March 2020 11: 13
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    The coronavirus pandemic is pushing the Italian government to do something that hasn't been seen in decades in Europe: Nationalizing an airline.

    An emergency decree published on Sunday, introducing billions of euros in measures to help the Italian economy crippled by the pandemic, contains a provision for the state to buy Alitalia. The airline, which hasn't made a profit since 2002 and has been in bankruptcy for almost three years, would be nationalized in response to the crisis. Alitalia is formally for sale, but with the travel industry in tumoil it's highly unlikely that anybody will express an interest in buying it before the deadline to present offers on Wednesday. That might leave the government as the only alternative to shutting down.

    A pandemic of the virus forces the Italian government to take a step that has not been in Europe for decades. Government buys Alitalia.
    An airline that has not made a profit since 2002 and has been bankrupt for almost three years will be nationalized in response to the crisis.