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The Phenomenon of Privatization
By Robert Allan Williams
Saturday, December 06, 2003

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This is the story of the rhetorical campaign for free markets in Britain and America that has allowed anti-market corporations to become the largest, wealthiest, and most powerful organizations to operate on the world stage.

"Words are, of course, the most powerful drug used by mankind" - Rudyard Kipling The Dawning of the Privatization Phenomenon As the 1970s came into its midyears, America's Reason magazine August 1973 issue identified what amounted to an attack in England against the ideals of nationalism, which had been the core of Labour Party policy: "During World War I over 200 taverns, hotels, and liquor stores [in England] were nationalized, allegedly to combat drunkenness in munitions factories...Now, after 57 years, the pubs are being denationalized..."(Quoted in Reason, May 1988: 28). Six years later, in August 1979, Reason noted "Decentralization looks like the coming thing in the United Kingdom"(Quoted in Reason, ibid). Three years later, in November 1982, the magazine observed that "The British are farther along. Over the past two years, four major enterprises have been 'privatised' (as the British call denationalisation)..."(Quoted in Reason, ibid). Denationalisation or privatization was the desire to change the provision of public services in developed countries such as England and America from government bureaucracies to private enterprises ranging from sole-proprietorships and partnerships to corporations, both profit and non-profit. The desire to change the government's role in the provision of public services encompassed many ideologies, organizations and political parties. The phenonmenon acquired extraordinarily broad support, involving even socialists such as David Lange's Labour government in New Zealand. The global nature of the movement was revealed by denationalisation efforts in nearly every country of the world including France, Spain, Canada and Japan as well as in developing countries such as Argentina, Bangladesh, Brazil, Chile, Malaysia, Mexico, Pakistan, the Philippines, Singapore, and Turkey (Poole, 1989: 1-2). These efforts often involved cooperation between the state and transnational corporations. For example, in 1989, the British corporation Rothschild and Sons Limited recommended to Pakistan the privatization of banks, the airlines, oil refineries, and other state-owned enterprises after the firm had been engaged by the Pakistan government to produce a privatization plan (Nnyanzi, 1990: 5). International organizations such as the World Bank and the U.S. Agency for International Development endorsed denationalization strategies. In some cases such as Jamaica and Pakistan, privatization was a requirement as a condition for a state to receive loans from the World Bank and International Monetary Fund (IMF). Privatization began with the pubs in England, then during the 1970s, it continued with various municipalities in America and the borough of Wandsworth in England. By 1980, it had achieved national prominence in both countries. By 1989, it was a global phenomenon (Hanke 1987, Fitzgerald 1988, Walker 1988). How can we explain this sudden desire for change? What made so many people and so many societies, England and America in particular, conclude that change was necessary? What did the reformers want and what lasting impact did the reformers have on society? How did these changes affect schooling in particular? Uncertainties as Antecedents The roots of the privatization phenomenon go back at least to the New Deal during the Great Depression period in America and to its commitments to a welfare state during the Second World War in England, which led to the "Revolution" of 1945 (Havighurst, 1985: 368). Both countries had experienced the growth of large-scale business in the form of corporations and the tendency toward uncompetitive market behavior and monopoly. Both societies had looked to government to address the problem. Government, too, had created problems that were compounded by economic difficulties. The eventual identification of the state sector as inefficient and wasteful led to a growing cynicism concerning state intervention in society. Added to these uncertainties were questions of minorities and their chances to reap the benefits from probably the two most developed countries among the industrialized societies. 1) Economic Insecurity At the end of the Second World War, avoidance of unemployment was the primary goal of most anxious Anglos and Americans who feared a return to the nightmare of pre-war unemployment, poverty and tragedy experienced by many during the decade of the Great Depression. That decade marked the greatest economic depression ever experienced by England and America, and was sandwiched by two world wars. According to Kenneth Morgan "Amidst the very euphoria of victory in 1945, the nation offered not a triumph of will but a suspicion of change and paralysis of doubt" (Morgan, 1990: 28). Though Morgan was referring to the British, Americans were just as terrified at the prospect of a post-war depression. "Job security - in the 1950s - was the most important priority, because the people who entered the work force then were the inheritors of the Great Depression", noted Adam Smith (1986: 197). James Bere, former chairman and chief executive officer (CEO) of Borg-Warner, a Chicago-based multi-national corporation echoed this anxiety: "...[After the 'Big War'] newspapers were all saying, 'How can we have an economy with no war to keep the manufacturing going?' So when we got out of the service, our whole mission was to get a job. Any job. We were so afraid of the insecurity of being unemployed" (Quoted in Greene, 1986: 213). Governments in both countries, which had shown success in planning and implementing the defeat of Nazi Germany, were deferred to by nearly everyone to plan and implement post-war employment for "twenty million defense workers and ten million servicemen" in America and for many in Britain (Eakins, 1969: 147). From "the whole spectrum of responsible economic opinion" (Eakins, 1969: 149), both governments decided to take an approach to the problem derived from the ideas on pump priming and demand management of an English economist, John Maynard Keynes, contained mostly in his 'The General Theory of Employment, Interest and Money ([1936] 1997). In the Keynesian approach, "Government was about applying the hand to the tiller to correct minor deviations, so it was possible to envisage an economy of full employment, low steady inflation, and modest rises in growth" (Ashford, 1999: 33). It provided a framework of belief for the continued visible hand of government in coordinating business and labor based on the needs of large corporations, without whom, it was believed "the free world might have lost the First World War and most certainly would have lost the Second" (Nevins, 1953: 436). Professionals and experts were perceived as having the ability to make decisions concerning the application of "the hand to the tiller", thus the strong deference for government was transferred "towards the expert: the doctor, the teacher, the social worker, and the administrator" (Ashford, 1999: 33). In July 1944, representatives of the Allies met at Bretton Woods, New Hampshire to plan Keynesian future development. "What Bretton Woods bequeathed to the world was a lethal totalitarian blueprint for the carve up of world markets", commented Clairmont (1990: 12). It also gave us a world of inflationary paper money. From that meeting, the U.S. produced the World Bank and the International Monetary Fund. "And institutions like the IMF and World Bank only benefit governments and banking interests at the expense of the American taxpayer and the poor in other countries"(Rockwell Jr, 1988: 141). The realization of the Keynesian approach differed in each country. For Britain, it became "the welfare state" - a "whole range of what are considered essential services, provided by the state, funded by taxpayers, and designed to assist individual welfare" (Ashford, 1999: 32). Iron, steel, coal and gas industries were nationalized with the blessing of Conservatives and Labour; as were rail and lorry transport (iron, steel and lorry transport were later denationalized). In addition, the state provided a national health service, public housing and construction of schools and universities (Goodlad, 1998: 6-8). By 1950, "nationalization and private enterprise seemed to exist fairly happily side by side and the British people wished it that; ..."(Havighurst, [1962] 1985: 430). In America, the Keynesian approach did not go as far as in Britain in regards to "a high degree of outright public ownership and management by government planners of industry, agriculture, and public utilities,..."(Higgs, 1987: 240). The American mixed economy, instead developed into a corporatist political economy of armies of corporate soldiers, representing an alliance of government with "the giant corporation" that "has become the characteristic vehicle of monopoly..."(Phillips, 1969, 186). According to Eakins, "it meant a corporatist cooperation among government, business, farmers and labor"(Eakins, 1969: 144). The giant corporations had demonstrated the ability to ride out the pre-war depression. After 1945, they increased their domination of manufacturing output, "making oligopoly - domination of a given industry by a few firms - a dominant feature" of the American economic landscape (Nash, 1986: 891). Consequently, most Americans, grasped by anxiety and fear of a post-war depression, elected to pursue economic security in the prized employ of a corporation. 2) Bureaucratization of Business and Society Max Weber identified bureaucracy as the archetypical manifestation of the "rationaliztion" process. Bureaucracy was characterized by a hierarchical authority structure, clearly delineated division of labor maintained by written rules and regulations, and an impersonal technical concern for efficiency (Weber, 1947: 9). A transformation of the economy occurred from problems of production into problems of distribution and consumption. Weaver explained: "In the phrase of its leading historian, Alfred D. Chandler, the corporation is a creature of the visible hand. Wherever the corporation appears, it sets in motion a process of vertical and horizontal integration that leads traditional market relationships to break down and bureaucratic relationships to proliferate...to leave nothing to chance in the search for growth, efficiency and profits - and to place its trust in administrative controls...in managing markets rather than freeing them; in shaping the rules of the game to its advantage,"(Weaver, 1988: 19). "Theoretically a corporation is a creature of the state" noted David Lawrence in 'Beyond the New Deal'(1934). The U-form corporation, "a stately, bureaucratic, inertia-ridden creature of the visible hand" (Weaver, 1988: 141), had a profound effect on social relations. According to Weaver: "People who had previously faced one another as independent buyers and sellers in the marketplace were now dealing with one another as fellow members of a corporate bureaucracy. The corporation curtailed market relationships and caused bureaucratic and political relationships to flourish" (1988: 113). In the late 1940s and early 1950s, fear of Communism and atomic war, coupled with faith in big business to provide economic growth, left an eerie sense of conformity in American society. According to Nash: "As the economy grew, an increasing sense of sameness pervaded middle-class society. This was the great age of conformity, when Americans of all social groups learned to emulate those around them rather than strike out on their own" (1986: 894). William H. Whyte, author of 'The Organization Man'(1956) called it "belongingness" (Quoted in Nash, 1986: 892). He explained: "The harsh fact is that big business didn't really want the best people, if by best we mean the most creative, the most innovative, the most intelligent. They didn't want a creative person who would rock the boat. The administrators would say, 'His loyalty isn't to the company, it's to his profession'. I think it's in the nature of bureaucracies to bear down on the individuals" (Quoted in Smith, 1986: 198). C. Wright Mills noted "When white-collar people get jobs, they sell not only their time and energy but their personalities as well" (Quoted in Nash, 1986: 892). 3) Irritation and Protest The first industry to feel the brunt of post-war protest against conformity was the hat makers. After years of forced hat, cap, and helmet wearing "inside a military machine whose lack of democracy was very clear"(Zinn, 1980: 409), the ex-soldiers' 1946 Hat Rebellion captured their anger against military conformity and devastated a fashion industry. In addition, people began to wear T-shirts, strictly a military-issue underwear, as outerwear in an impudent sign of protest. "No one recorded the bitterness of enlisted men against the special privileges of officers in the army of a country known as a democracy"(Zinn, 1980: 409). In the stage production of Tennessee Williams's 'A Street Car Named Desire'(1946), Marlon Brando made his Broadway debut as Stanley Kowalski while his T-shirt made its debut as outerwear. Gradually, the ranks of grateful corporate soldiers began to see problems with their unquestioning obedience to authority, their conformity, and their lack of creativity. American popular literature illustrated this. David Reisman, et al, drew attention to the loss of "inner direction" through publication of 'In the Lonely Crowd: a study of the changing American character'([1950] 1969). J.D. Salinger similarly showed the pressures of conformity for a group of boarding school students in his novel 'Catcher in the Rye'(1951). After the U.S. Senate condemned Joseph McCarthy in 1954 for instigating communist subversive hysteria, dissent from conformity increased. Whyte's 'The Organization Man'(1956) and Sloane Wilson's 'The Man in the Gray Flannel Suit'(1955) "came to represent all that was perceived to be wrong with American business - the conformity, the stodginess, the lack of creativity, the unquestioning obedience to executive authority"(Greene, 1986: 200). 'Howl' ([1955] 1972), a poem written by Allen Ginsburg, was a "scathing critique of the modern, mechanized culture and its effects"(Nash, 1986: 898). Ginsburg's poem marked the beginning of the Beat movement in which "beatniks" revealed through their poetry a disdain for a sterile and conformist society. By the early 1960s, beatniks appeared regularly on popular television. Maynard, a beatnik character played by the actor Bob Denver in the television programme Doby Gillis, was for many ordinary Americans their first encounter with Beat ideas. John Keats, a sociologist, wrote 'The Crack in the Picture Window'(1956) portraying suburbia as stifling to the mind and spirit. John Kerouac wrote 'On the Road'(1957), a best-selling novel written on an 80-meter roll of paper. His characters never stayed in any one place for long. The 1955 "Chevy" and newer '57 Chevrolet with AM radios that blasted songs like Elvis Presley's number one hit 'Heartbreak Hotel', were instrumental in fueling America's love for the road. Americans were becoming increasingly restless with the suburbs and the cult of the "American consensus"(Higham, 1959: 93). In 1963 Pete Seeger recorded Malvina Reynold's song 'Little Boxes' that criticized the growing conformity and bureaucratization of American society: "Little boxes on the hillside, little boxes made of ticky tacky Little boxes on the hillside, little boxes all the same... And the boys go into business and marry and raise a family In boxes made of ticky tacky and they all look just the same." (Quoted in Ravitch, 1990: 339) In Britain, despite government's overt role in the Keynesian approach to a slow but steady growth economy, to near absence of unemployment, and to rebuilding of housing, youth were similarly uncomfortable and dispirited with the austere effects for English society. As early as 1953, a survey of English youth revealed: "They would grieve that so much of English beauty is being defaced and destroyed by the ugliness of sprawling cities, the blight of factories, the utter wantonness of those who grab and invade our heritage of beauty when often they might spare it - these Borough councils and governmental tyrants who do not care a jot for any loveliness of our countryside"(Gibbs, 1953: 18). New novelists, poets, and dramatists emerged in England during the 1950s seeming to challenge the society's culture of deference, well before the Angry Young Men in 1956. The urban working class was beginning to experience involuntary and voluntary mobility. Irritation and protest in England grew between 1956 and 1962. A new mood of individualism and personal liberation emerged. By the 1960s, the movement was identified as counter-culture. In 1963, President John F. Kennedy was covertly assassinated by government agents in Dallas, Texas. The publication of Betty Friedan's 'The Feminine Mystique' hit the bookstores. In 1964, a new Labour government in Britain brought no socialism, just more Keynesianism and support for the U.S. intervention in Vietnam. In 1967, the British government was forced to devalue sterling. In 1968 there was an international monetary crisis. These events in the 1960s were framed by a wave of mergers in American industry. Said Joseph Heller, author of 'Catch-22'(1955), about the 1960s - "There was a general feeling that the platitudes of Americanism were horseshit"(Quoted in Nash, 1986: 940). Whyte echoed this sentiment - "We have a mythology of individualism in this country, but basically we are a nation of large organizations...the individual is always going to be secondary to the organization"(Quoted in Smith, 1986: 198). Robert Higgs, author of 'Crisis and Leviathan'(1987) explained: "Many - especially among the students - came to believe that a ruling politico-corporate establishment, which they mistakenly identified with capitalism or the free-market system, was responsible for the unjust racial relations and the savage, pointless war" (Higgs, 1987: 250). The Vision Makers "Ideas have consequences" - Richard Weaver This section will talk about the role of the think tanks. Beginning with ideological sparks from Austria that kindled in Britain with Friedrich von Hayek and in America with Ludwig von Mises, a wide range of institutions from libertarian to conservative achieved voice in free enterprise. Without the vision makers at the think tanks, privatization would likely have never achieved prominence starting in the mid-1970s when Hayek was awarded the Nobel Prize in economics. By providing facts about ineffecient state monopolies, neglecting facts about ineffecient corporate monopolies, and ignoring the Rothbardian maxim that monopoly cannot arise from other than the interventionist force of government, the vision makers helped politicians and electorates to embrace the idea of privatization as the shifting of production and services from government to the private sector. The Austrian School began with Carl Menger's 'Principles of Economics'([1871] 1981). The school's usefulness in sociology was noted in Menger's 'Problems of Economics and Sociology ([1883] 1985). Eugen von Boehm-Bawerk was a student of Menger who published an article in 1891 titled 'The Austrian Economists'. Boehm-Bawerk eventually became Austria's Minister of Finance at the dawning of the twentieth century. After the First World War, Ludwig von Mises emerged as an authority of the Austria School. Mises incorporated Max Weber's concept of "meaningful" behavior as purposeful or intentional conduct from which a framework emerged within which economizing then occurred (Mises, [1949] 1963). During the late 1930s, the National Chamber of Commerce wanted to implement a prgram smacking of socialism that involved the electric companies. Leonard Read was general manager of the Los Angles Chamber of Commerce and pitched the program to the California Edison Group President, William Mullendore. After a one-hour conversation between the two, Leonard Read's mind was changed concerning the supposed merits of socialism. He became a life-long proponent of free enterprise until his death in 1983. In 1943, a group of corporation owners founded the American Enterprise Institute. Its philosophy was of a Republican Party type - "free enterprise but keep those subsidies coming". Their goal was effectively to direct or redirect government spending toward the corporate sector. They also proved effectiv in blurring the distinction between free market enterprises and corporations. In 1944, the Austrian economist Friedrich von Hayek published 'The Road to Serfdom'. Noted a conservative historian "Not only did it sell well initially but it also reached a large audience by way of condensation and publication in Reader's Digest"(Carson, [1986] 1987: 267). Henry Hazlitt's 'Economics in One Lesson' followed in 1946. Eventually published in eight different languages, millions encountered his Austrian free market ideas. He ideas were derived from the writings of Carl Menger, Eugen von Boehm-Bawerk, and Ludwig von Mises. During his lifetime, Hazlitt published 24 more books and hundreds of articles and newspaper columns. As a newspaper journalist for the New York Times, he was instrumental in bringing Ludwing von Mises to America as a visiting professor at New York University. In 1946, Leonard Read, "a non-political educational champion of private property, the free market, and limited government", established The Foundation for Economic Education (FEE)"(The Freeman, June 1992: 210). He produced a journal "called Ideas on Liberty at first, then under the title, The Freeman, when he bought out that older publication"(Carson, 1987: 277). Foundation staff began to produce monographs such as Dean Russell's translation of Frederic Bastiat's 'The Law'([1850] 1950). Of his mission, Read later stated: "What, then, about the few who have a grasp of free market truths and, at the same time, are lacking in prestige, fame? Hardly a big name among us! Wherein lies our hope? Have we no chance? My answer: We can make our chances!"(Read, 1975: 58). The following year in 1947, Hayek helped found The Mont Pelerin Society, an international group of pro-market economists and friends named for the place of their first meeting held in Switzerland. Leonard Read said "I was present when it was born: April 1947, at the first meeting of The Mont Pelerin Society. The initiator was Professor Ludwig von Mises"(Read, 1975: 154). Mises had earlier made his mark through his contribution to Germany's economic comeback after the First World War: "Observe on what a slender thread the recovery of West Germany ws strung: Mises, saying what's right - right now; Roepke coming to share the great man's understanding; and Erhard courageously putting it all into effect"(Read, 1975: 155). Erhard had laid a political path utilizing Austrian economic rhetoric. He later said: "Apart from such considerations the United States, Great Britain, Canada and the other Commonwealth countries are closely concerned with the Federal Republic's return to world markets and with the scope, methods adn objectives of this comeback"(Erhard, [1954] 1976: 5). In 1947 an influential publication appeared in Britain - Quentin Hogg's 'The Case for Conservatism'. The following year appeared Richard Weaver's 'Ideas Have Consequences'. In 1949, Orwell's '1984' was published. In 1948, E. William Dykes was a member of the Homebuilders' Association, which featured Leonard Read as a speaker for its annual convention. Dykes said "Leonard changed my life". He explained "I bought fifty copies of Hazlitt's 'Economics in One Lesson' (Williams, Dec 1991: 2). Dykes's involvement with the libertarian movement led to his Chairmanship of FEE for three years in addition to serving many years on its Board. He also spent 36 years on the Board for the Institute for Humane Studies. During the 1950s influential works appeared such as Mises's 'Human Action' (1949) and Ayn Rand's fictional 'Atlas Shrugged' (1957). With Mises, a revival of the Austrian school emerged in America from his seminars at New York University during the 1950s and '60s. Murray N. Rothbard, a graduate student at Columbia University, was a student of Mises at his seminars. Sometime during this period, a man of wealth name William Volker established an endowment fund known as The Volker Fund, which "originally asked for [book] reviews to keep tabs on who was doing worthy scholarship within the broad classical liberal tradition"(Richman, 1988: 353). The reviewers worked for the National Book Foundation (NBF) and the Volker Fund commissioned the reviews. The NBF reviewers were not spies. They just reviewed books. Their remit was quite unlike that of CIA analysts as depicted in the American film 'Three Days of the Condor'(1975). Unlike the film's CIA covert research office, they did not have a computer into which they fed plots, dirty tricks, or codes so that the computer could check against actual CIA plans and operations. The reviewers did not analyze the books for leaks. Richman explains that the "task of the NBF reviewers was to advise whether a book was suitable for distribution". NBF was "established initially to place books sympathetic to individual liberty into libraries around the country...Later, NBF focused on professors, enabling them to get 10 copies of a book without charge"(Richman, 1988: 353). The Volker Fund gave Murray N. Rothbard his start in vision-making. Rothbard wrote a review on June 26, 1952 of William A. Paton's 'Shirtsleeve Economics: A Commonsense Survey (1952), "the first of a few hundred book reviews commissioned of him by the Volker Fund between 1952 and about 1962"(Richman, 1988: 352). Rothbard reviewd more books than all the other reviewers, including prolific reviewers such as Rose Wilder Lane and Frank S. Meyer. A Volker grant subsidized Rothbard's writing of 'Man, Economy, and State (1962). Remarked Rothbard's biographer David Gordon "Few groups have done so much as that foundation did in a few short years to advance the cause of classical liberalism"(Gordon, 1986: 9). They helped identify and sometimes nurtured authors who could help carry the message of liberty and challenge socialist ideas. Today, the Institute for Humane Studies (IHS) is the custodian of the Volker file, which contains the reviews that were commissioned by NBF. IHS, originally located in California, is now at George Mason University in Fairfax, Virginia. Socialists raised the alarm of a growing 'Radical Right' - a label that grouped together free marketeers and libertarians with ultra-conservatives such as The John Birch Society. The socio-economic mainstream took heed. In 1960, the Hoover Institution on War, Revolution and Peace added an economic program to its cold war agenda. Conservative groups representing corporate interests maintained an influential presence in vision making. In 1967, the International Chamber of Commerce listened to an address by the director of Lehman Brothers, a large investment-banking firm, by the name of George Ball: "In these twenty postwar years, we have come to recognize in action, though not always in words, that the political boundaries of nation-states are too narrow and constricted to define the scope and activities of modern business"(Quoted in Zinn, 1980: 549). Paul H. Weaver said "Since the end of the 1950s, a quiet revolution has transformed the U.S. political system"(Weaver, 1988: 204). He added "The new...politics is more ideological and conflict-ridden than the old"(Weaver, 1988: 205). Most of the ideological movements during the 1970s and '80s were grounded in market economics. Weaver explained: "The publication in 1970 of 'The Economics of Regulation' by Alfred E. Kahn, the distinguished Cornell University regulatory economist and political liberal, marked the emergence of the new promarket consensus among economists - and the triumph of the Chicago school, which began to merge with the mainstream"(Weaver, ibid). The corporate mainstream effectively made a request for a public relations campaign in which the distinctions between corporatism and capitalism; between corporations and free market businesses would remain blurred in the thinking of businessmen: "In the year 1976, with a presidential election [and bicentennial celebration] approaching...William Simon, Secretary of the Treasury, under both Nixon and Ford (before then an investment banker earning over $2 million a year), spoke in the fall of 1976 to a Business Council meeting in Hot Springs, Virginia...His speech could well be taken to represent the thinking of the American corporate elite: '[Americans] have been taught to distrust the very word profit and the profit motive that makes our prosperity possible, to somehow feel this system, that has done more to alleviate human suffering and privation than any other, is somehow cynical, selfish, and amoral'. We must, Simon said, 'get across the human side of capitalism'"(Zinn, 1980: 546. During the '70s, there was a "proliferation of conservative think tanks and political action groups funded by business"(Weaver, 1988: 174). The "liberal Brookings Institution, founded by a Missouri businessman in the 1970s"; the conservative Heritage Foundation; the libertarian Cato Institute, funded by Charles Koch and David Koch, principals of Koch Industries in silver mining; were some of the major players to emerge in the struggle of ideas (Weaver, 1988: 216). The Reason Foundation was established in California during this time. On the east coast, William Casey, who later became director of the Central Intelligence Agency, established the Manhattan Institute for Policy Research in 1978 with financial backing from British businessman Antony Fisher (Cockett, 1994). The big three of business lobbyists were the U.S. Chamber of Commerce, National Association of Manufacturers, and Business Roundtable. In late 1980, the American Business Conference (ABC) was founded by American Stock Exchange chairman Arthur Levitt, Jr and the big three became "the big four" (Weaver, 1988: 219). Weaver explained "The following year, Albertine [ABC's leader] emerged as the leader of the business coalition backing the Reagan Administration's Tax Equalization and Fiscal Reform Act (TEFRA), which rescinded most of the 1981 tax cut"(Weaver, 1988: 218). He added "There was an extraordinarily close-fit between the ABC's interests and the Reagan Administration's needs in wake of the 1981 tax cut"(Weaver, 1988: 220). Albertine recalled: "We fit the philosophical predilections of the Administration ever so neatly...We told everyone, if you believe in markets, growth, and efficiency, you've got to eliminate the bias in the tax code against fast-growing, non-capital-intensive business. But what sold our position on the Hill was the unfairness argument - the point that some companies pay no taxes while high-growth companies pay very high rates. We also pointed out that there are lots of high-effective-tax-rate companies, that cutting rates is good politics because there are a lot of companies out there you'll be helping. It was easy to persuade people. We were offering them a way to increase tax revenues - which they had to do to reduce the deficit - while increasing the tax code's neutrality" (Quoted in Weaver, 1988: 222-223). There developed a "vast array of small promarket public-interest lobby and litigation group", such as the Competitive Enterprise Institute, established by former Environmental Protection Agency (EPA) staff member Fred Smith, or Richie Fink's Citizens for a Sound Economy (Weaver, 1988: 217). These smaller groups often were at loggerheads with entitlement-seeking business lobbyists. Subsequently, their corporate backing was limited. [THIS SECTION CONTINUES FOR SIX MORE PARAGRAPHS] The Politicians "Watch what they do, not what they say" - Gorbachev This section will examine the role of the politicians in propagating the rhetoric of privatization. We will examine the camouflaged economic motives, as well as the monetary and political events that led to the rise of privatization. Two politicians stand out for their role in propagating market rhetoric, which played a pominent role in the fruition of the privatization phenonmenon - Ronald Reagan in America; Mrs Margaret Thatcher in Britain. [THIS SECTION CONTINUES FOR 26 PARAGRAPHS] Triumph of the Privatization Phenomenon "There are no nations...The world is a college of corporations" - board chairman Arthur Jensen in 'Network'(1976). This section talks about the 80s and 90s and the new mythology of free enterprise, which was made even more effective by the efforts of those involved who genuinely believed they were working to achieve that vision. [THERE ARE ABOUT 30 PARAGRAPHS IN THIS SECTION].  

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