Nationalization of the banks, President Julius Nyerere's first dramatic move toward socialism, has hurt the economy of Tanzania in the last three months but not by very much. There are dangers to the economy in Nyerere's socialism but they lie in more subtle and less dramatic areas than in the economics of banking. In the long run, for example, the program may waste scarce managerial skills and may sap initiative. Nyerere insists that his nationalization policies are less important than his other new policies - his pleas for Tanzanians to work hard and be self-reliant, his attack on elitism, his plans for rural development, and his restructuring of the educational system. He says one reason for nationalization was to get his people in the mood for the rest of his plans. But the seizure of the banks and several other firms in early February was so sudden that it has attracted more attention. Since nationalization, foreign firms and individuals have stopped or decreased investing in Tanzania...

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