Because of this, it has been necessary in most cases to establish a regulatory authority (Ofgas and Oftel respectively for gas and telecommunications), backed up by the possibility of a reference to the COMPETITION COMMISSION, to control the industry. The main problem with privatization is the extent to which competition can in fact be introduced into sectors hitherto confined to state monopolies, either by breaking up an existing state corporation into a number of separate private companies (as for electricity) or by encouraging new entry (as in gas and telecommunications). By contrast, the removal from the public sector of those individual firms (as distinct from whole industries) that were nationalized because they were making losses and needing reorganizing (for example, Ferranti, Inter nation-al Computers, Rolls-Royce, Jaguar, British Leyland, British Shipbuilders) can be more easily justified. However, because these activities are capital-intensive and, like natural monopolies, are characterized by significant economies of scale, the most that can be hoped for is the creation of a high seller concentration OLIGOPOLY. In the latter category come industries, such as iron and steel, gas and electricity generation, shipbuilding and car manufacture, where, because production usually takes place on a multiplant basis, the scope exists for placing each plant under a different ownership interest, thereby creating a more competitive supply situation. The alternative of a private-enterprise MONOPOLY is not appealing either, critics argue, because of the dangers of monopolistic abuse. There could be a serious loss of efficiency through unnecessary duplication of resources if these activities were to be fragmented. In the former category come those industries, such as gas and electricity distribution, railway and telephone services, where ECONOMIES OF SCALE are so great that only a monopoly supplier is in a position to fully maximize supply efficiency. In this regard, it is pertinent to distinguish between industries that can be considered NATURAL MONOPOLIES and those where, in theory, a more fragmented industrial structure could be recreated. Specifically they argue that firms that are left to fend for themselves in a competitive market environment are likely to allocate resources more efficiently and to meet changing consumers’ demands more effectively than a bureaucratic state monopolist (see PRICE SYSTEM). Thus, in the UK, the wide-ranging programme of privatization embarked upon by the Conservative government in the 1980s can be interpreted partly as a political preference for the private-enterprise system.Īdvocates of privatization, however, also espouse the economic virtues of free enterprise over state control. The extent of state ownership of industry depends very much on political ideology, with CENTRALLY PLANNED ECONOMY proponents seeking more NATIONALIZATION, and PRIVATE-ENTERPRISE ECONOMY advocates favouring little or no nationalization. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson privatization the denationalization of an industry, transferring it from public to private ownership. ![]() Send us feedback.Collins Dictionary of Business, 3rd ed. ![]() These example sentences are selected automatically from various online news sources to reflect current usage of the word 'profiteering.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. 2022 And in doing so, her worldview rooted in precision, fidelity, and destiny for the betterment of society was confronted with arbitrary practices, bad luck, and chaotic profiteering. 2022 The latest TransDigm audit and hearing followed a 2019 Pentagon report that alleged similar profiteering by TransDigm. 2022 Everyone knew that what Ukrainian politicians were really receiving was a blind eye turned toward their profiteering. 2022 Congressional Democrats have held hearings on supply bottlenecks and corporate profiteering related to inflation.ĭaniel Strauss, The New Republic, 16 Mar. 2022 Price gouging and corporate profiteering are always elements of the American economy that should be studied and scrutinized. Sheri Linden, The Hollywood Reporter, 28 Mar. 2022 The intended impact of some of those ideas - involving militarism, class, profiteering and Big Pharma - grows muddled, though, as the film shifts into a second half driven by action set pieces. ![]() Sheldon Whitehouse, will go after corporate profiteering and give an inflation rebate to Americans to help with gas bills. A Missouri statute authorizes the private use of deadly force when 'necessary to effect the arrest of a person who at that time and in his presence committed or attempted to commit a class A felony or murder.' Mo. Rainer Michael Preiss, Forbes, 8 June 2022 My windfall-profit tax, proposed with Sen. Recent Examples on the Web Three months later the government introduced measures to control food prices and prevent profiteering during Ramadan and Hari Raya festival celebrations.
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