I’m doing some research into share ownership. I remember that Margaret Thatcher was an enthusiastic advocate of the idea that it was a good thing for “the masses” to own shares. She wanted to sell off a collection of nationalised industries. So there were several major advertising campaigns as each industry was sold off. Millions of people across the country became shareholders for the very first time. And presumably having gone through the process of buying shares once, many will have “got the bug” and gone on to buy other shares and may be buying and selling shares to this day.
My question now is, did the same phenomena happen in the states at around the same time? Was there a similar wave of new shareholders? If so can you tell me a little about it.
I have just found out that when Thatcher came to power in 1979 the fraction of the population that owned shares was 7%, by 1990 it was 25%. Does anyone have any corresponding figures for Reagan’s term?
I have also heard that there was a massive growth in share/bond ownership in the US in the build up to the 1929 crash. But I don’t have the precise figures… does anyone here have them?
Starting with Eastern-European experience with “mass stock ownership” I’d strongly advise to check Thatcher’s numbers a few years after her last term. Such artificial “mass ownership programs” tend to fade in time. You just cannot force mass ownership on people.
Well sure… you may be right. And I would indeed love to “check Thatcher’s numbers”… I just don’t know where to look. I would love to check Reagan’s numbers too. There have got to be some graphs somewhere…
I can’t say I do not understand them. Getting rid of proof of a great failure is the first thing any political want to do. Numbers might indeed be hard to find.
“[Mass privatization] was launched in 1991 there was concern that it would lead to diffuse ownership and poor oversight of management. In fact, it turned out that, while many funds were created, a few bank-sponsored funds were able to acquire some 70 percent of the vouchers. Accordingly, far from diffuse ownership, this resulted in a relatively concentrated ownership of firms which, in principle, would lead to better corporate governance.” Massive privatizations flop from the very beginning.
This too appears to be good. has had by far the most decisively bad experience with mass privatization, due to size.
Of course, Rothbard’s “how not to desocialize” is a must-read, although not always very realistic; take that form the point of view of a guy who was alive during the transition form a socialist to market economy.
Now, the general story runs as follows. The idea was to provide ‘the people’ with ownerships of state assets (not unlike Rothbard’s ideas) and that they’d all die to own a piece of those assets. Details vary form country to country.
In organized crime stepped in and was able to largely prevent the massive sale outright. You’ll see that this is ofet held to be a failure of the Russian political calls. I strongly disagree: those shares would have ended up in the hands of the most productive individuals anyways, and the Mafia action just discounted that in time. It was an unintentional efficiency-boosting measure in a country which needed efficiency badly and could afford to loose no time.
In the scheme was implemented but ownership quickly concentrated on foreign hands as efficiency would have it. It was a flop.
Finally, in my own , before anyone had a chance to think of such nonsense as mass privatization, whatever was good in state-run enterprises was stolen and sold aboard fro hard cash. The fastest liquidation of malinvestments in history.
I’m sorry I couldn’t provide more articles (those I have are paperback). But keeping these general lines in mind, you can easily scout Google form specific cases. There are tons of articles out there.
I don’t know quite how “free” they are - buy certainly they are all now private companies. None of the profits go to the government as far as I am aware.
I can only venture a guess that lowering the top tax bracket from 70-something to 20-something encouraged share ownership, as well as lowering corporate tax rates significantly.