No blueprint exists for transforming an economy from one with a great deal of government control to one based almost solely on free market principles. Yet the experience of the United Kingdom since 1979 clearly shows one approach that works: privatization, in which under-performing state-owned are sold to private companies.
By 1979, the total amount of debt, liabilities, and losses for state-controlled enterprises in the UK topped 3 billion annually. By selling off many of these companies, particularly those in the depressed industrial sector, the government decreased its debt burden and ceased pumping public funds into money losing enterprises. According to government spokesperson Alistair McBride, "Far from past practice of throwing good money after bad, the Queen’s government this year expects to take in 34 billion from the proceeds of the sale." That, say some analysts, may only be the beginning. Privatization has not only been credited with rescuing whole industries but the nation’s economy to boot.
Due to increased tax revenues from the newly privatized companies along with a rebound in the overall economy, economic forecasters predict that Britain will be able to repay nearly 12.5% of the net national debt within two years. That is good news indeed for the economy as a whole at a time when many sectors are desperate for any ray of sunshine. British Airways this week announced a 20% jump in overall ticket sales and profits over this quarter a year ago. British Gas announced its first profitable quarter in nine years. At Associated British Ports, a new labor contract was finalized, the first union contract signed at the port without a work stoppage in twelve years. Closer to home for most Britons, the nation’s phone service, British Telecom, no longer puts new subscribers on a waiting list. Prior to privatization, new customers would sometimes have to wait months before phone service could be installed in their home. Now, according to a company press release, British Telecom is promising 24-hour turnaround for all new customers.
Part of this improved productivity has to do with new efforts to allow employees to hold a stake in the company’s future. Companies now give their employees stock options that allow employees to share in the company’s success (and profits). The response has been enthusiastic to say the least. At British Aerospace; 89% of those eligible to buy company shares did so. At British Telecom nearly 92% of eligible employees took part. Finally, at Associated British Ports, long synonymous with union disagreements, walkouts, and labor strife, almost 90% of employees now can call themselves owners of the company.
"When people have a personal stake in something," said Henry Dundee of Associated British Ports, "they think about it, they care about, they work to make it prosper." At the National Freight Consortium, itself no stranger to labor problems, the new employee-owners actually voted down an employee pay-increase and, pressured union representatives to relax demands for increased wages and expanded benefits. "Privatization was only the start," says one market analyst, "what we may have here is a new industrial revolution.\
UK’s experience in 1979 demonstrates that（）
A. government control can be based on free market principles
B. privatization is the only way out for UK’s economic development
C. state-owned enterprises can benefit a lot from privatization
D. a major transformation in economic system is feasible
