The Heritage Foundation's ever excellent Insider Online has featured an extremely good article from the City Journal. It sets out to deter American policymakers from considering industrial nationalisation by setting out the cautionary precedent of Britain's economy in the 1970s and the nationalisation of British Leyland,
Claire Berlinski writes that post-war British politicians
nationalized the commanding heights of the economy and inaugurated the cradle-to-grave welfare state. By the 1970s, the UK faced an economic crisis unrivaled since the Great Depression. Shabby and hopeless, Britain had become, in Henry Kissinger’s words, a “tragedy” of a nation, reduced to “begging, borrowing, stealing.”
British Leyland, Britain’s largest automaker, faced bankruptcy in 1975. Fearing that its collapse would leave a million workers unemployed, the Labour government nationalized it. The company remained a ward of the state for 13 years. During that time, the British taxpayers invested 11 billion pounds—the inflation-adjusted equivalent of $22 billion today—in a company whose only sign of life was a willingness to spend that money. Though the British economy recovered, British Leyland did not.
She is writing in an effort to deter Congress from replicating such errors. She concludes:
British Leyland, to judge from the news, has disappeared down the world’s memory hole. We’re nonetheless repeating an experiment that has been conducted already, and its results are known to anyone who cares to consult them. The experiment was a failure—and there is no good reason to think that it will succeed the second time around.
From both an economic and a big brother perspective, it's an example that we should not forget ourselves.
