|
|
|
| Current Issue |
|
|
| Resources |
|
|
|
Privatization in Great Britain: Motives, Methods, and Lessons
| Article
# : |
18702 |
|
|
Section : |
MODERN THOUGHT
|
| Issue
Date : |
8 / 1991 |
3,495 Words |
| Author
: |
David Bernstein
David Bernstein, a recent graduate of Yale Law School, has
written for various publications on law, economics, and public
policy. |
According to Madsen Pirie of the Adam Smith Institute, "The privatization programme in Britain probably marked the largest transfer of power and property since the dissolution of the monasteries under Henry VIII." Because privatization (defined here as sales of government assets to the private sector) in England has resulted in such a massive transfer of wealth from the public to the private sector, it is worth exploring the motives behind privatization in England, the political methods that have been used to accomplish it, and what lessons it holds for privatization advocates in the United States.
At first, most commentators on British privatization assumed that it was a result of the intellectual influence exerted upon the Conservative government by a small group of free-market thinkers known as the "New Right." Those (mostly left-wing) commentators believed that Margaret Thatcher was sacrificing practical political considerations for ideological goals. Yet, as the Financial Times says, "Far from denting the government's popularity, wholesale privatization became one of the strongest sources of its political appeal."
A few analysts have recognized and examined this politically practical side to privatization under Thatcher. Their attitude is summed up by Pirie: "Privatization was not the end result of an ideological victory in the world of ideas; it was something which was so successful in practice that the government did more of it." Pirie's claim is backed up by the fact that the word privatization did not appear in the 1979 Conservative Party manifesto (the equivalent of the American political platform, but far more influential). The manifesto referred only to the sale of the ship-building and aerospace industries and the National Freight Corporation. According to Cento Veljanovsky, of the Institute for Economic Affairs, Thatcher feared that privatization would be unpopular with the voters, and therefore she didn't plan to pursue it.
Indeed, little was accomplished on the privatization front until 1981. At that time, Conservative Party fortunes were at their lowest ebb, and unemployment rose to set new post war records. Conservative backbenchers were on the verge of revolt, and Thatcher needed an issue that could unite the party behind her leadership. Hostility to the public sector was widespread among all Conservative factions, so she seized on privatization as a political life preserver.
Privatization also helped Thatcher politically because she could have been otherwise unable to restrain total government spending as
...
Read Full Article
Look for this article in Ask.com
|
|
