OPINION

Capitalism and nationalization

Last Monday the prime minister of the world’s second-biggest (after the US) cradle of capitalism made a groundbreaking announcement. British Prime Minister Gordon Brown announced the nationalization of a privately owned ailing mortgage lender, Northern Rock. When the news reached Brussels it triggered a number of bitter comments from European Union ministers. French Prime Minister Francois Fillon asked why, therefore, was France being attacked for trying to protect its state-run companies, while other ministers sniggered that British politicians had for decades asserted that the government must limit itself to a nightwatchman’s role, and now it had been forced to become a lifesaver. Northern Rock’s nationalization is not unique. German Chancellor Angela Merkel decided last week to bail out Deutsche Industriebank AG to the tune of 1 billion euros. What do these examples prove? That the free market economy is all well and good but ultimately, the anchor of every economy, the fortress around every society and community, is the state. Even its most vocal opponents and enemies will run to it when disaster strikes. However, because it is unacceptable to privatize profits and nationalize losses, governments must begin introducing stiff fines for managers of private companies who have mismanaged funds in order to increase their bonuses. Yes, it is right for a government to occasionally nationalize a bank or two to protect people’s savings, but, at the same time, the managers of these banks should be made to answer for their actions and should be brought to justice. The capitalist ethic cannot have double standards.