Rolling Back the State: Privatisation and Deregulation

Abstract

Privatisation entails the transfer of an activity from the public to the private realm – from the state to private agents. It therefore needs to be seen as part of an attempt to reverse the long-term increase in the role of the state in the economy. The proportion of public spending as a percentage of GDP among the advanced capitalist economies has risen from an average of less than 10 per cent in 1900 to around 45 per cent in the late 1990s. Britain, with public spending running at around 40 per cent of GDP, stands approximately mid-way between the EU average of around 50 per cent and the USA at 30 per cent (Economist, 20.9.97). Privatisation also raises the question of whether the transfer of assets from state to private hands involves a reduction in state power or simply a change in the way in which the state exercises power.