The woman who launched privatization big time

During the 20th century, governments everywhere became more powerful, undermining both liberty and prosperity. Yet because of entrenched interest groups which gained special favors from government, it seemed politically impossible to do anything about this.

Then Margaret Thatcher became Britain's Prime Minister on May 3, 1979. This grocer's daughter broke the monopoly power of labor union bosses and began selling off costly, inefficient government enterprises. She privatized 350,000 residential units in government housing. The first public offering of shares in a government enterprise: British Petroleum (a 5% stake), in November 1979.

The 1984 British Telecom offering put privatization on the map. Daniel Yergin and Joseph Stanislaw, in their book The Commanding Heights (1998), noted that "Relatively few people actually paid attention to the oil and gas privatizations; almost everybody knew that something dramatic was going to happen to the phones. The telephone system, part of the post office until separated...embodied many of the worst traits of state-owned companies. Bureaucratic state control repressed innovation. The customer did not count. It took months to get a new telephone. There were only two choices – the design offered or nothing. The only way to get a phone fixed in any reasonable time was to pay a repairman, who freelanced after hours, under the table."

Thatcher wanted as many people as possible to become shareholders. Shares were offered through post offices. Purchases were tied to phone bills. People could pay on the installment plan. There were applications for four times more stock than was available. More than 2 million people bought stock, half of whom were investors for the first time. The offering raised L3.9 billion, the biggest equity offering of any kind, for 51% of the enterprise. This was seven times more than was raised by the next-biggest privatization. Yet it was later topped by the privatization offers for British Gas (1986) and British Petroleum (1987).

Following Thatcher's lead, more than a hundred countries have sold more than $500 billion of government enterprises. This cut government losses and gave private individuals incentives to improve the enterprises. Most of them expanded, served customers better and created millions of productive jobs. Large numbers of people became shareholders, which would make it politically unpopular for a government to again try nationalizing the enterprises.

The first woman to be Britain’s Prime Minister, she served longer than any other 20th century British Prime Minister, 11 and a half years, and she won three consecutive terms which nobody else had done before.

While Thatcher wasn’t the first to privatize government enterprises, she made privatization a battle cry. She wanted as many people as possible to become stockholders and thereby have a greater stake in defending a free society.

Thatcher explained that her aim was "to change Britain from a dependent to a self-reliant society; from a give-it-to-me to a do-it-yourself nation; a get-up-and-go instead of a sit-back-and-wait Britain…A man’s right to work as he will, to spend what he earns, to own property, to have the state as servant and not as master; these are the British inheritance…What I am desperately trying to do is create one nation with everyone being a man of property or having opportunity to be a man of property…That is what capitalism is: a system that brings wealth to the many, not just to the few."

Thatcher turned privatization into a big, sophisticated program. Her people pioneered a wide range of privatization methods. Thatcher’s experience proved that obstacles could be overcome, and privatization would help millions.

Privatizations have become so widely accepted that it’s hard to imagine now what a radical idea they were. Sell off the state? It seemed like an unthinkable, impractical, preposterous pipedream.

"If any economic policy could lay claim to popularity, it would certainly be privatization," observed Harvey B. Feigenbaum and Jeffrey R. Henig in the Journal of International Affairs.


Peter Jenkins, Mrs. Thatcher's Revolution: The Ending of the Socialist Era (Cambridge: Harvard University Press, 1988).

"Privatization" in Jim Powell, The Triumph of Liberty
(New York: Free Press, 2000).


Eleanor Griffith, In Her Own Right: The Life of Elizabeth Cady Stanton (New York: Oxford University Press, 1984).

"Steadfast Devotion" in Jim Powell, The Triumph of Liberty (New York: Free Press, 2000).

Similar Topics to this:

- Launching the struggle for women's rights
- A breakthrough strategy for promoting liberty and prosperity

Additional articles:

Wall Street Journal calls The Triumph of Liberty -
"a literary achievement"

Voices for liberty in the ancient world
The first yearnings to be free were expressed in Greek epics, tragedies and comedies

The man who helped finance the American Revolution
During desperate years, merchant Robert Morris came through with money and munitions so that George Washington could win

Ancient Roman contributions to private property rights
The Romans replaced tribal property with private property and worked out the details about how ownership should be proven and transferred.

How toleration developed in modern Europe and America
Courageous individuals defied the terrors of the Inquisition and denounced religious wars.

The story of Magna Carta
King John's wars and taxes stirred England's barons to protect their interests by rebelling against him, and they set an enormously important precedent for liberty which benefited everyone.

The best of H.L. Mencken, witty American defender of liberty
This prolific newspaperman and literary critic still entertains and enlightens us today.

How private enterprise created modern Japan
The government's railroads, shipping, silk-reeling and other ventures all lost money. Private entrepreneurs achieved wonders.

Runaway slaves!
Far from being contented and docile, American slaves dreamed of liberty, and thousands rebelled or ran away. Inspiring resistance to oppression.

The strange battle for the U.S. Bill of Rights
Those who initially wanted it ended up voting against it, and those who never wanted it made it happen

Why has liberty thrived in the West?
This is where enough people stuck out their necks for liberty.

"Honor is a harder master than the law"
At 58 and in ailing health, Sam Clemens (Mark Twain) was plunged $94,000 in debt by business failures. True to his word, he repaid everybody.

Liberty as a woman
Throughout history, liberty has been depicted as a woman on coins, in engravings, paintings, statues and more. Here are illustrations from ancient Rome, France and America.

Private initiative spurred vital discoveries throughout history
Language, geography, science and other essentials of civilization were diffused around the globe by private initiative.Political liberty impossible without economic liberty
The life and times of F.A. Hayek. The New Yorker called the twentieth century "the Hayek century."

Political liberty impossible without economic liberty
The life and times of F.A. Hayek. The New Yorker called the twentieth century "the Hayek century."

Thomas Jefferson in perspective
How can friends of liberty still defend him after the relentless attacks of historians and biographers during the last quarter century?

How markets nurtured our civilization
Many people seem to imagine that markets and commerce are only about money, yet they made civilization possible. They brought people into contact with new ideas and things. Civilization has flourished where commerce has flourished.

Most dramatic orator in the American antislavery movement
Although Wendell Phillips isn't as well known today as William Lloyd Garrison, the pioneering journalist for abolishing slavery, or Frederick Douglass who provided the most compelling testimony, Phillips was more effective than anyone else stirring crowds against slavery.

Socialism's greatest enemy
How this great Austrian economist recognized the fatal flaws of a government-run economy 7 decades before the collapse of the Soviet Union made it obvious to all that he was right.

They created the first modern agenda for liberty
Dubbed the "Levellers" by their adversaries, these mid-17th century English rebels championed private property, religious toleration, freedom of speech, freedom of the press, free trade, a rule of law, a separation of powers, a written constitution, and they opposed military conscription.

William S. Gilbert's wicked wit for liberty
Most quotable lines by the dramatist whose comic operas, created with composer Arthur Sullivan, are still going strong after more than a century (reportedly performed more than the work of any other songwriting team except the Beatles). Mark Twain and H.L. Mencken enjoyed Gilbert's barbs at bureaucrats and politicians.

Further Links:

Great Thinkers
Dynamic Connections
Epic Debates
Things to See
Best from Web
About Jim Powell
Q&A with Jim Powell
Powell at Cato video
Discussion Board

Other Links and Categories:

Coming soon.
© Copyright All Rights Reserved.