Renationalization

Categories: Financial Theory

Argentina, creator of Argentine Tango. That’s one place they’re smooth. One place they weren’t smooth? Renationalization. Don't cry for them.

Argentina had many nationalized industries, meaning they were run by the state (“state,” as in government). In the 1990s, all those crazy colors, haircuts, and dance moves got Argentina thinking, "hmm, maybe we should privatize some of this." So they did. Transportation (roads and rails), communications (phones, TV, ratio), manufacturing (steel and electricity), finance (lending, mortgages), and more were privatized. Like baby birds leaving the nest for the first time. A lot of them.

And a lot of them were pretty bad at flying. Mom didn’t really show them how. In the early 2000s, Argentina renationalized many of these industries. Back to the nest you go, little birds.

So yeah...renationalization is when a country does take-backsies on privatizing industry. That means that the industry was controlled by the state, then privatized, then controlled by the state again.

Shareholders of renationalized Argentinian industries were not happy. They invested money into these newly privatized industries, only to have shares reclaimed by the state later with renationalization.

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