While there is no blueprint for transforming a largely
government-controlled economy into a free one, the
experience of the United Kingdom since 1979 clearly
shows one approach that works: privatization, in which
(5) state-owned industries are sold to private companies. By
1979, the total borrowings and losses of state-owned
industries were running at about t3 billion a year. By
selling many of these industries, the government has
decreased these borrowings and losses, gained over t34
(10) billion from the sales, and now receives tax revenues from
the newly privatized companies. Along with a dramatically
improved overall economy, the government has been able
to repay 12.5 percent of the net national debt over a
two-year period.
(15) In fact, privatization has not only rescued individual
industries and a whole economy headed for disaster, but
has also raised the level of performance in every area. At
British Airways and British Gas, for example, productivity
per employee has risen by 20 percent. At associated
(20) British Ports, labor disruptions common in the 1970’s and
early 1980’s have now virtually disappeared. At British
Telecom, there is no longer a waiting list—as there always
was before privatization—to have a telephone installed.
Part of this improved productivity has come about
(25) because the employees of privatized industries were given
the opportunity to buy shares in their own companies. They
responded enthusiastically to the offer of shares; at British
Aerospace, 89 percent of the eligible work force bought
shares; at Associated British Ports, 90 percent; and at
(30) British Telecom, 92 percent. When people have a personal
stake in something, they think about it, care about it, work
to make it prosper. At the National Freight Consortium,
the new employee-owners grew so concerned about their
company’s profits that during wage negotiations they
(35) actually pressed their union to lower its wage demands.
Some economists have suggested that giving away free
shares would provide a needed acceleration of the privati-
zation process. Yet they miss Thomas Paine’s point that
“what we obtain too cheap we esteem too lightly.” In
(40) order for the far-ranging benefits of individual ownership
to be achieved by owners, companies, and countries,
employees and other individuals must make their own
decisions to buy, and they must commit some of their own
resources to the choice.
208. It can be inferred from the passage that the author considers labor disruptions to be
(C) a predictor of employee reactions to a company’s offer to sell shares to them
(D) a phenomenon found more often in state-owned industries than in private companies (E)
