Over the past many months, some peculiar news items have attracted this column’s attention. Here are some of them:
A large section of French lawmakers has put its considerable weight behind legislation to nationalize ArcelorMittal over allegations that the steel manufacturer is cutting jobs, shutting down plants, dithering on decarbonization and engaging in tax avoidance.
Thames Water, which provides water and wastewater services to roughly 16 million UK customers, is inching towards nationalization after differences emerged between lenders and the government.
The UK started nationalizing train services about a year ago, one railway service at a time.
The US has provided federal support—through equity stakes, mandatory price floors and subsidies—to rare earth mineral companies, MP Materials and USA Rare Earth. Though not outright nationalization, this is overt state support to secure a critical supply chain.
In June 2025, the US government extracted a ‘golden share’ in US Steel in exchange for greenlighting Nippon Steel’s acquisition of the Pittsburgh based steelmaker. This special class of equity vests the government with wide-ranging governance oversight.
There is now an inexorable pattern unfolding. Instances of nationalization in Europe and the US, a bastion of free market ideology, have been increasing, as is public support for some of these moves. These episodes seem to be challenging settled ideas about separation of state and industry.
It might be tempting to attribute the proximate reasons for these extraordinary measures to extraneous events: first the pandemic and then geopolitical conflicts.
For example, the German government’s acquisition of a 40% stake in defence manufacturer KNDS, maker of Leopard tanks, might be viewed as a consequence of the Russia-Ukraine conflict. But Western governments have been intervening even before that: a good example is the US government’s acquisition of a stake in Citigroup and General Motors in the aftermath of the 2008 US financial crisis.
Somewhere amid these contending views lies the truth: private delivery of public services seems to have failed and there is now a groundswell of public opinion that wants government to take back control of these services.
A recent article in F&D Magazine, published by the International Monetary Fund, estimates that assets valued at $239-544 billion were nationalized over the past 10 years, with final valuations depending on the valuer. The article also claims that the current pace of nationalization has been the fastest in 50 years.
This then is a major shift in the realm of ideas. But here is the thing about ideas: they change with time, occasionally even performing 180° turns. Economic philosophies and ideologies are probably valid for limited periods (usually a few decades), and then, when the ground shifts, they have to cede space to fresh thinking. This trend is not yet a wave but merits a close watch because it may have some relevance for India.
One valid argument often used against nationalization is the bitter experience of the past. This is true especially of India. Public sector units turned into bloated entities, exemplars of inefficiency, corruption, trade union adventurism and customer apathy, among other things. They also unwittingly became tools in the hands of venal politicians.
This raises a vital question: are past mistakes a valid reason to not re-explore this business model? After all, numerous stock market scams have not stopped the Indian capital market from functioning; neither have repeated incidents of industrialists siphoning off bank money choked credit flow to industry. The endeavour has been to constantly improve institutional functioning, upgrade the regulatory landscape, tighten rules and enhance vigilance.
It can, thus, be argued that the same courtesy should be extended to government investment in industry. There are definitely multiple lessons to be learnt from past disappointments. However, a key ingredient in all this will be the political will to erect an appropriate governance framework, and that remains a major source of scepticism. But a compelling reason for nationalization lies in saving jobs and reducing unemployment.
Many nationalization episodes overseas have been prompted by the private sector’s marked failure to deliver quality services, despite charging high user fees and slashing costs through job cuts.
Many UK railway operators, for example, shed train drivers to streamline costs, which has led to delays and forced potential passengers to opt for alternative transport modes, leading to further revenue leakage.
In addition, there are many cases where governments are stepping in to ensure that the economy is not destabilized by aggressive manpower rationalization and rising unemployment.
The South African government is in talks to acquire Arcelor Mittal South Africa to save about 100,000 direct and indirect jobs. The UK government too is nationalizing British Steel to stop its Chinese owner from shutting down the plant and rendering 3,000 people jobless.
It is now indisputable that geopolitical uncertainty, geo-economic fragmentation and technological instability have combined to invalidate established economic thinking. And as nation-first strategies take hold, nationalization is likely to emerge as a key tool in economic policymaking.
The author is a senior journalist and author of ‘Slip, Stitch and Stumble: The Untold Story of India’s Financial Sector Reforms’ @rajrishisinghal