The people who create those organizations do so with an expectation that they will earn a lot of money in the (not at all certain) case if they succeed and continue to own them until they sell their ownership to whomever they want at a time and a price they feel is right. It's not just a thing they would like to have, that expectation is the only reason for trying to launch such a company.

If there is a credible threat of nationalization (e.g. the government has nationalized similar organizations lately or even asserted that they are considering such things), then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them. Safe and predictable legal environment - an expectation that your business won't be taken away from you - is a strong influence on the amount of investment and entrepreneurship a country gets; and more investment and entrepreneurship generally does result in more wealth for all of society even accounting for the share of the created wealth that's taken by the owners/investors.

>then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them.

Dan Wong, one the more competent China tech watchers surveying local entrepreneurs on current crackdown: "They would love to have the problems of Jack Ma" because it means they've made it really big.

China isn't a dinky market, the incentives are massive, founders will settle being 100s millionaires instead of billionaires if that's the size that keeps regulator scrutiny at bay. Also the fact that PRC is willing to break incumbents via regulatory crack down is creating opportunities not seen in markets effectively captured by huge players.

> rather do that elsewhere

Instead of "elsewhere", it's really about "do something else". PRC doesn't consider draining the best and brightest into a massive service blackhole like adtech or fintech worthwhile. It's crushing incentivization structure of soft tech to make hard tech more appealing. Beijing wants semiconductors and turbojets that can eventually be exported world wide, not a more profitable ANT pyramid scheme that will likely be a drain on domestic market.

You haven't really spelled out the issue, though. From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money?

If the business being nationalized is one that is a drain on the economy in some sense, then why wouldn't it be good for the country to nationalize it? I say "nationalize" broadly here, not necessarily in the way China implemented things. It could even be the creation quasi-public organization like Amtrak.

Obviously the key here is not to be as heavy-handed as China and to not nationalize everything, lest we be a communist state. However there are definitely things, like banks, that should have a public competitor.

> From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money?

Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build.

I’m not following. My original comment called for the nationalization of things that drain the entire economy.

This implies said companies have already “won,” and that they’ve made (a lot of) money.

Your comment would make more sense if I was calling for the transitioning to communism.

Uber, for example wouldn’t be nationalized because its product type hasn’t become so pervasive that a majority of Americans use it. Debit cards and their ilk have.

I believe a lot of times in the US, those companies become public utilities [0], which are publicly owned through stock (or privately owned)[1] but are highly regulated by the government and also I think exempt from laws prohibiting monopolies[2]. I'm not sure what's the process of a company going from a regular public company to a public utility though.

[0]: https://en.wikipedia.org/wiki/Public_utility [1]: https://marketrealist.com/p/are-utility-companies-public-or-... [2]: https://www.law.cornell.edu/wex/public_utility

> the nationalization of things that drain the entire economy.

Not sure how you would draw this line.

Do we nationalize the apple/google app stores because they are taking 30% cuts? Or Visa/Mastercard/Stripe because they take a cut on every transaction?

> Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build.

There is noting implicit that means they don't make money. The process of nationalization doesn't have to result in 0 compensation, it could be run like any other buyout. That being said being government run has its own issues.

The "buyout" is for the companies that were nationalised. But the next entrepreneurs in the field have to compete with the government.

> the next entrepreneurs in the field have to compete with the government.

So your real problem is that the government offers a service? So we should get rid of public fire departments, police, schools, and roads?

Strange that you would twist my words that way. I don't advocate for getting rid of services that the government provides, nor do I have a problem with them offering a service in general.

I do think that if you take an existing market with competition, and you nationalise one or more actors in that market, competition becomes very difficult for any remaining private actors in that market or any future entrants. The reason is pretty simple: the rule-setting body is now playing the game against you. The end result of this is that new actors are less likely to enter the market at all, which limits innovation.

Because of this (and because of the historical record of failure almost every time this kind of thing is tried) the decision to nationalise should be taken very carefully. You list several things such as fire departments and roads which are arguably best provided by the government, but I don't think it's obvious that retail financial services should be added to that list.

> I don't think it's obvious that retail financial services should be added to that list.

Neither do I especially, I was only questioning your reasoning for opposing it.

If you're an entrepreneur why would you attempt anything in any industry likely to be nationalised?

This assumes the ambitious are driven purely by explosive profit potential. Counterexamples are abound.

Why wouldn’t you? Nationalization does not imply profit is impossible.

Not to mention the purpose of the government is to serve its citizens, not just entrepreneurs.

Probably because raising money would be harder, would investors or venture firms weigh projects in industries likely to be nationalised lower? Probably.

Any industry likely to be nationalised would have an overall depressive effect on the number of risks taken on new products and services in that industry.

Yes, which is why I mentioned in my original comment that only services that are a “drain on the economy” should be nationalized.