What would happen if coal was in the public sector?

Question

What would happen if coal was in the public sector? what advanatgs would it have to the goverment and would there excess demand?

thanks

Answer 1

Depends on how it was managed. If the government ran the mines, inefficiency would probable be the result, but if it simply kept ownership collecting royalties but had competitive companies do the mining, not much would change except the government would get more revenues and the companies less profit. In either case any effect would be on supply not demand.

Answer 2

Look at England, the coal industry was nationalised to protect it as a strategic industry in event of war,
Coal production stagnated, prices increased and there was significant labour unrest. privatisation is generally better as it encourages the more efficient operators to maximise profit and the less efficient to maximise efficiency.