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USINESS

Privatization fought ‘the British disease’ _

Dr. Madsen Pirie. president of
Britain's Adam Smith Insiitute,
was the source of sonte oi the
Most innoevative privatizaiion
polictes of farmer Prime Minister
Margaret Thatcher and now serves
as 8 senior adviser to her suc-
cessor, John Major. in his
speeches during his Adantic
Canada tour, he recalled the Bri-
tain of the 1970s, haw Mrs. That-
cher became an arden privatizer
and describes the continuing
Privatization revolution in the
U.K. — including the privatiza-
tion of the civil service.

The fotiowing was first publish-
ed in the Nationa! Citizens’ Coali-
tion’s July Overview,

1 WANT to take you for a
stroll down memory lane, to
an. unfamiliar country,
which is Britain tn 1979 ...
The government was the
dominant producer, it was
the biggest insurer, the
largest employer.

Everything about the economy
had government at its focus. Gov-
ecnment ran many of the impor-
tant industries. Jike the telephone
service, ail of the energy utilities.

it ran the steel mills and ihe
coal mines. It ran ship building
and plane building; it ran the con-
struction of automobiles, trucks
and buses; it ran ferry boat ser-
vices. It even ran hotels.

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tound the government: running
was the deck chairs at the seaside
resort of Margate. [They were ac-
tualiy owned and run by the gov.
ermment.

Winter of Discontent

in Britain, we called (1979) the
winter of our discontent because
virtually every single public service
went on strike, one after another.

Huge and crippling public sec-
tor strikes. Garbage was piled
high in the streets cf London.

And of course high taxanon —
who else paid for all this? The
taxpayers.

Taxation was so high, the top
rate in Britain was S&8%,, That was
in fact an income tax rate of 83%
plus a surcharge of 15% on in-
vestment income.

If you were stupid enough to
invest in creating wealth and jobs
in Britain, you were punished with

AND WE’LL WRAP

another 15% surcharge on your
regular tan,

The 98% taxation took awiy bo
We vovernment che money chat
would otherwise have been avait
able for the purchase of sods
and services, for investment i

private industry, to peneniie cco-

nomic vrowth, Sa there wasn't
any economic growth.

This was called othe British
disease.

Shere was ua general feeling that
she whole country was jiving on
its past: that the wealth that had
been built up by previous genera-
tions was being tun down very
rapidly by the current generation.

Britain was piling up huge
debts, bigger every year. : ;
i do apologize for this trip

down memory fane. Totally un-
familiar territory this -—- huge
pubiic sector, powerful unions,
huge high taxes. and the feeling
that thev were living on their past.

=a)

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Then along came Mrs. That-
cher. Phe world began in 1979.

Iowas sand of Mrs, Chatcher that
cae comdd not pass any grear Brit-
ish anstituion without hemg an-
pelied to hit wid fer handbag.
We had a ternfic ride fos Pb:
years, We went alongside whiie
wah that handbag she clouted
everybody ie sight: umions, public
sector UKIUSEFICS,..

Leuding from the Front

Take privatization, which is the
one thing, more than anything
else, that she is noted for. Nota
single piece of privanization was
ever popular before she did it.

Every one had a huge majority
opinion pol) against it.

She would always say that the
people would come around to
support it when it was done. And
they always did.

When we privatized each in-

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dustry the fuss died down and
within months it had an opinion
peil in favor of it. But never in
aGvance.

She always did every one from
the front. lve never met a single
pohtical leader anywhere in the
‘wortd, not even in Eastern Europe
-- brave enough ta take every
singie issue, in the iceth of public
opposition, and just assume that
success would bring them around.
Ana she did.

OF course, Mis. Thatcher tried
ali the conventional things first.

She said we could improve the
public sector; we could make it
more efficient by bringing in-
private sector advisers — whiz
kids from the City of London —
and they'll make the public sector
as efficient as the private sector.

So the whiz kids were brought
in and guess what happened?

See Civil pave &7

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