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# U.S.

2026-08-12·x-repost-20260812-164545

U.S. Stocks 1983: The Global Privatization Wave of the 1980s ## Inflation Had to Be Brought Down Before Reform Could Begin Paul Volcker was appointed by President Carter, but his most aggressive rate hikes actually took place during President Reagan’s term.

This shows that the Federal Reserve had already grown intolerant of historically high inflation before the American public could no longer bear it.

Although Paul Volcker had already raised interest rates to a high of 17.6% during Carter’s final term, the most painful phase of the economic downturn caused by the sharp rate hikes occurred largely during Reagan’s presidency.

Despite serious divisions within the government over the economic pain caused by the rate hikes, President Reagan, guided by conservatism, firmly supported Paul Volcker’s extreme tightening measures to combat inflation. Bringing inflation down gave Reagan room to begin cutting taxes and reducing regulation.

Otherwise, implementing these policies during a period of high inflation would have made inflation even more difficult to control. ## Acting Quickly: Large-Scale Tax Cuts In August 1981, Reagan signed the Economic Recovery Tax Act of 1981, launching large-scale direct tax cuts and reducing the top marginal individual income-tax rate from 70% to 50%.

In 1986, Reagan signed the Tax Reform Act of 1986, further lowering the top individual income-tax rate from 50% to 28% and the top corporate income-tax rate from 46% to 34%. ## Privatization and Deregulation From January 1981 through the end of 1983, the Reagan administration established a task force on regulatory relief headed by Vice President Bush.

It reviewed, revised, or eliminated 76 of the 116 economic regulations in place at the time, substantially reducing government intervention in the economy. In 1981, the Reagan administration privatized the railroads, with 85% of the federal rail freight company—the United Railways Corporation—being privatized.

In 1982, it proposed selling 5% of federally owned land within five years. In 1983, it abolished the system requiring approval of airline fares. In 1985, it abolished the Civil Aeronautics Board, opening the aviation industry to free competition. It eliminated most regulations governing cable television, radio broadcasting, and telecommunications services.

With inflation under control, it lifted price controls on crude oil while also easing regulatory intervention in natural gas, trucking, railroads, and other industries. Even more startling was the push to outsource public services through contracts, franchises, vouchers, and other arrangements that shifted responsibilities to the private sector.

These efforts covered more than 200 projects, including prison management, airport operations, drug-treatment centers, and flood-control programs.

In September 1987, during the latter half of his presidency, Reagan appointed 30 scholars to form the President’s Commission on Privatization, formally promoting the ideas of privatization and private-sector management.

## The Global Privatization Wave of the Same Period In reality, the global privatization wave of the 1980s did not originate in the United States. It began with Margaret Thatcher’s privatization reforms in Britain in 1979.

Under Thatcher, Britain sold nearly 50 state-owned enterprises, including British Petroleum, British Telecom, British Gas, British Airways, steel companies, water utilities, and public housing. By the early 1990s, roughly 80% of the state-owned sector had been transferred to private ownership.

The Treasury raised more than £50 billion, while Thatcher also substantially deregulated the financial sector. In 1987, at the peak of the privatization wave of the 1980s, the Japanese government split Japanese National Railways into six companies for sale and restructuring in an effort to address its enormous losses and debt.

During the same period, Western European countries such as France, Italy, and West Germany also privatized stakes in some state-owned banks and industrial companies. ## Why Was Privatization Necessary? The privatization wave of the 1980s did not emerge out of nowhere.

It was a historical correction shaped by three decades of “learning from the Soviet Union and competing with it.” The competition from Soviet socialism led capitalist countries to place greater emphasis on social fairness and public services.

As social democratic and Labour parties gradually came to power in the West, they put these ideas into practice by nationalizing and bringing certain basic industries into public ownership. But if we trace this trend further back, we can see that it also grew out of an even earlier movement toward big government: the Great Depression of the 1930s.

Keynesianism began gaining favor around the world. It argued that governments should intervene more extensively in economic activity through fiscal and monetary policy to compensate for periodic market failures under private enterprise and to maximize employment for the population.

The outbreak of World War II in the 1940s, followed by postwar reconstruction in the 1950s, made it even more necessary for governments to play a central role in coordinating social and economic activity.

So without the widespread nationalization and public ownership of the preceding decades, there would have been no global wave of privatization and the transfer of enterprises into private hands in the 1980s.

## The Short-Term Effects of Privatization When private capital is unable to organize sufficiently efficient production, and when it encounters periodic market failures, public ownership coordinated through effective planning will inevitably emerge.

When Keynesianism began to fail, the wave of capitalist privatization in the 1980s was likewise bound to occur. How to balance individual incentives against the positive effects of collective action has always been a central question in economics. Perhaps this is the problem that socialism with Chinese characteristics is seeking to address and resolve.

In the short term, Reagan’s privatization policies clarified property rights, introduced market competition, and relaxed administrative controls. They did rapidly reverse economic inefficiency, and many state-owned enterprises that had suffered long-term losses and depended on government funding quickly became profitable.

The government also received one-time fiscal revenue from selling these assets and freed itself from the burden of providing long-term subsidies. From a social perspective, the short-term restructuring and breakup of enterprises did invigorate market competition. Consumers had more choices, prices fell, and innovation accelerated.

Overall, these changes helped lay the foundation for the economic takeoff of the 1980s. ## The Problems That Emerged After Long-Term Privatization But it is now 2026, and this wave has already lasted for forty years.

The social costs of comprehensive privatization—and its prioritization of capital efficiency—have clearly and seriously eroded social equity and stability. The concentration of wealth has become even more extreme. The logic is simple: when public assets were broken up and sold, their inefficiency kept their sale prices low.

Once the buyers improved those assets and restored them to normal levels of capital efficiency, a vast valuation gap naturally emerged. The most extreme examples were Russia and Eastern Europe after the collapse of the Soviet Union, where shock therapy produced large numbers of industrial and financial oligarchs.

The simplistic pursuit of higher capital efficiency also created structural imbalances in employment and triggered social problems. It encouraged private capital to invest in highly productive regions while chronically underinvesting in less productive ones, intensifying extreme disparities across industries and regions.

At the national level, many essential industries were pushed out of the market—and effectively out of the country—by their low rates of return. By the time governments realized what had happened, it was already too late. The nation’s integrated industrial structure had been severely hollowed out, with little ability to recover.

## The United States Is Now Suffering the Consequences On October 26, 2025, two carrier-based aircraft aboard the U.S. Navy’s steam-catapult aircraft carrier USS *Nimitz* crashed into the sea within half an hour of each other. Trump angrily called the incidents “ridiculous” and demanded that U.S.

aircraft carriers continue using steam catapults after they are repaired. But an investigation reportedly found that only two Chinese state-owned enterprises still possess complete, high-performance steam-catapult production lines anywhere in the world.

The American company Babcock & Wilcox, which had originally possessed this technology, was a private enterprise.

Under domestic environmental pressures and market competition, it had long since gone bankrupt and was eliminated by “the American version of a market economy.” Today, the United States has lost the personnel and industrial capacity needed to rebuild the supply chain for this technology.

Earlier this month, NASA launched Artemis II, a crewed mission to orbit the Moon. Media outlets across the country described it as the first time in 54 years that the United States had sent astronauts to the Moon. But shortly after launch, the spacecraft’s “general waste management system” experienced problems.

Put simply, it was a toilet issue; put more seriously, it was a problem involving the survival of humans in space. In addition, after the spacecraft’s previous uncrewed flight returned to Earth, its heat shield showed “severe wear far beyond design expectations.” Finding one cockroach in the kitchen suggests that there are probably many more.

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# U.S.

# U.S. Stocks 1983: The Global Privatization Wave of the 1980s ## Inflation Had to Be Brought Down Before Reform Could Begin Paul Volcker was appointed by President Carter, but his most aggressive rate hikes actually took place during President Reagan’s term. This shows that the Federal Reserve had already grown intolerant of historically high inflation before the American public could no longer bear it. Although Paul Volcker had already raised interest rates to a high of 17.6% during Carter’s final term, the most painful phase of the economic downturn caused by the sharp rate hikes occurred largely during Reagan’s presidency. Despite serious divisions within the government over the economic pain caused by the rate hikes, President Reagan, guided by conservatism, firmly supported Paul Volcker’s extreme tightening measures to combat inflation. Bringing inflation down gave Reagan room to begin cutting taxes and reducing regulation. Otherwise, implementing these policies during a period of high inflation would have made inflation even more difficult to control. ## Acting Quickly: Large-Scale Tax Cuts In August 1981, Reagan signed the Economic Recovery Tax Act of 1981, launching large-scale direct tax cuts and reducing the top marginal individual income-tax rate from 70% to 50%. In 1986, Reagan signed the Tax Reform Act of 1986, further lowering the top individual income-tax rate from 50% to 28% and the top corporate income-tax rate from 46% to 34%. ## Privatization and Deregulation From January 1981 through the end of 1983, the Reagan administration established a task force on regulatory relief headed by Vice President Bush. It reviewed, revised, or eliminated 76 of the 116 economic regulations in place at the time, substantially reducing government intervention in the economy. In 1981, the Reagan administration privatized the railroads, with 85% of the federal rail freight company—the United Railways Corporation—being privatized. In 1982, it proposed selling 5% of federally owned land within five years. In 1983, it abolished the system requiring approval of airline fares. In 1985, it abolished the Civil Aeronautics Board, opening the aviation industry to free competition. It eliminated most regulations governing cable television, radio broadcasting, and telecommunications services. With inflation under control, it lifted price controls on crude oil while also easing regulatory intervention in natural gas, trucking, railroads, and other industries. Even more startling was the push to outsource public services through contracts, franchises, vouchers, and other arrangements that shifted responsibilities to the private sector. These efforts covered more than 200 projects, including prison management, airport operations, drug-treatment centers, and flood-control programs. In September 1987, during the latter half of his presidency, Reagan appointed 30 scholars to form the President’s Commission on Privatization, formally promoting the ideas of privatization and private-sector management. ## The Global Privatization Wave of the Same Period In reality, the global privatization wave of the 1980s did not originate in the United States. It began with Margaret Thatcher’s privatization reforms in Britain in 1979. Under Thatcher, Britain sold nearly 50 state-owned enterprises, including British Petroleum, British Telecom, British Gas, British Airways, steel companies, water utilities, and public housing. By the early 1990s, roughly 80% of the state-owned sector had been transferred to private ownership. The Treasury raised more than £50 billion, while Thatcher also substantially deregulated the financial sector. In 1987, at the peak of the privatization wave of the 1980s, the Japanese government split Japanese National Railways into six companies for sale and restructuring in an effort to address its enormous losses and debt. During the same period, Western European countries such as France, Italy, and West Germany also privatized stakes in some state-owned banks and industrial companies. ## Why Was Privatization Necessary? The privatization wave of the 1980s did not emerge out of nowhere. It was a historical correction shaped by three decades of “learning from the Soviet Union and competing with it.” The competition from Soviet socialism led capitalist countries to place greater emphasis on social fairness and public services. As social democratic and Labour parties gradually came to power in the West, they put these ideas into practice by nationalizing and bringing certain basic industries into public ownership. But if we trace this trend further back, we can see that it also grew out of an even earlier movement toward big government: the Great Depression of the 1930s. Keynesianism began gaining favor around the world. It argued that governments should intervene more extensively in economic activity through fiscal and monetary policy to compensate for periodic market failures under private enterprise and to maximize employment for the population. The outbreak of World War II in the 1940s, followed by postwar reconstruction in the 1950s, made it even more necessary for governments to play a central role in coordinating social and economic activity. So without the widespread nationalization and public ownership of the preceding decades, there would have been no global wave of privatization and the transfer of enterprises into private hands in the 1980s. ## The Short-Term Effects of Privatization When private capital is unable to organize sufficiently efficient production, and when it encounters periodic market failures, public ownership coordinated through effective planning will inevitably emerge. When Keynesianism began to fail, the wave of capitalist privatization in the 1980s was likewise bound to occur. How to balance individual incentives against the positive effects of collective action has always been a central question in economics. Perhaps this is the problem that socialism with Chinese characteristics is seeking to address and resolve. In the short term, Reagan’s privatization policies clarified property rights, introduced market competition, and relaxed administrative controls. They did rapidly reverse economic inefficiency, and many state-owned enterprises that had suffered long-term losses and depended on government funding quickly became profitable. The government also received one-time fiscal revenue from selling these assets and freed itself from the burden of providing long-term subsidies. From a social perspective, the short-term restructuring and breakup of enterprises did invigorate market competition. Consumers had more choices, prices fell, and innovation accelerated. Overall, these changes helped lay the foundation for the economic takeoff of the 1980s. ## The Problems That Emerged After Long-Term Privatization But it is now 2026, and this wave has already lasted for forty years. The social costs of comprehensive privatization—and its prioritization of capital efficiency—have clearly and seriously eroded social equity and stability. The concentration of wealth has become even more extreme. The logic is simple: when public assets were broken up and sold, their inefficiency kept their sale prices low. Once the buyers improved those assets and restored them to normal levels of capital efficiency, a vast valuation gap naturally emerged. The most extreme examples were Russia and Eastern Europe after the collapse of the Soviet Union, where shock therapy produced large numbers of industrial and financial oligarchs. The simplistic pursuit of higher capital efficiency also created structural imbalances in employment and triggered social problems. It encouraged private capital to invest in highly productive regions while chronically underinvesting in less productive ones, intensifying extreme disparities across industries and regions. At the national level, many essential industries were pushed out of the market—and effectively out of the country—by their low rates of return. By the time governments realized what had happened, it was already too late. The nation’s integrated industrial structure had been severely hollowed out, with little ability to recover. ## The United States Is Now Suffering the Consequences On October 26, 2025, two carrier-based aircraft aboard the U.S. Navy’s steam-catapult aircraft carrier USS *Nimitz* crashed into the sea within half an hour of each other. Trump angrily called the incidents “ridiculous” and demanded that U.S. aircraft carriers continue using steam catapults after they are repaired. But an investigation reportedly found that only two Chinese state-owned enterprises still possess complete, high-performance steam-catapult production lines anywhere in the world. The American company Babcock & Wilcox, which had originally possessed this technology, was a private enterprise. Under domestic environmental pressures and market competition, it had long since gone bankrupt and was eliminated by “the American version of a market economy.” Today, the United States has lost the personnel and industrial capacity needed to rebuild the supply chain for this technology. Earlier this month, NASA launched Artemis II, a crewed mission to orbit the Moon. Media outlets across the country described it as the first time in 54 years that the United States had sent astronauts to the Moon. But shortly after launch, the spacecraft’s “general waste management system” experienced problems. Put simply, it was a toilet issue; put more seriously, it was a problem involving the survival of humans in space. In addition, after the spacecraft’s previous uncrewed flight returned to Earth, its heat shield showed “severe wear far beyond design expectations.” Finding one cockroach in the kitchen suggests that there are probably many more.

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