Nationalization and privatization Nationalization –the acquisition of private companies by the public sector Privatization –the return of state enterprises to private ownership and control Nationalization Another possibility is to nationalize the industry and provide a subsidy to cover the loss –as was popular in Europe in 1945-80 If nationalized industries make losses, this does not prove they are failing to minimize costs or produce at the socially efficient output –but incentives may be a problem.