Privatising the nationalised industries, de-mutualising the building societies and the launch of PEPs created large numbers of individual shareholders; there are 12.5 million of them now, nearly double the number in the Seventies. But most of these people are inactive, buying and selling shares only rarely. Many do not trade at all. So while the Thatcher revolution did make a radical change to individual share ownership, the revolution was incomplete. It did not create a culture in which buying and selling shares was a normal part of middle-class everyday life, as it used to be a century ago.
Now, suddenly, three things have happened that seem likely to complete the revolution. All are associated with the Internet. Most obviously, the Net provides the technology that makes share-trading simple and swift. But secondly, it also provides a mass of information, mostly raw and undigested, about companies and their shares. And thirdly, the whole high-technology revolution has created an exciting bunch of new investments to trade. Since none of the professional investors knows how to value these stocks, the techno-savvy amateur is able to challenge the techno- illiterate professional.
The simplicity of online trading is clearly an enormous draw. It is not just that you can buy and sell shares with a credit-card number and a few clicks of the mouse. It is also the classlessness of it. Instead of the palaver of finding a stockbroker and risking being humiliated by the fact that you have "only" a few thousand to invest, or don't know any of the language of the City, buying shares is anonymous and private.
Some 40 per cent of UK private investors are already connected to the Internet, so they will already have found their way around the system. There is no evidence that the Net is a yet creating new investors. What seems to be happening is that existing ones are starting to buy and sell more actively. The Net is in many ways the ideal technology for share- dealing. It provides up-to-the-minute information on prices and company performance; it is cheap; and the product is "delivered", so-to-speak, electronically. Just remember, says ProShare, the organisation that seeks to promote private share ownership, not to double-click the mouse at the wrong moment. If you do, you end up buying twice the number of shares that you wanted.
The information now available on the Net about companies is astonishing. The official websites are uneven; while more than 80 per cent of the top 100 companies have websites for investors, some of them are pretty dreadful. But there are also online information services, newspaper archives, consumer groups, tip-sheets, chat-rooms - the whole swirling, chaotic, global clamour of the Net. Every bit of information you could want is there somewhere; trouble is, it may well be wrong.
There is one particular ingredient in this bouillabaisse of information that can be poisonous: deliberate ramping of shares. Because the Net is so anonymous and uncontrolled, anyone wanting to puff a share can do so without the usual interface of the press or professional brokers. Bang out a tip on some whizzo new hi-tech company, and there is a chance that enough people will buy the shares to up the price. You had, of course, bought the shares yourself first. There is nothing new here, but the technology makes it vastly easier.
At its best, the Net brings a democratisation of investment information. The individual at home with a PC may not have the elegantly argued brokers' missives on his or her desk that the big City investment institutions would have. Those of us who are concerned about the shift of power that has taken place as a result of concentrating investment funds among a handful of giant institutions must welcome the way the Net is creating a potential counterbalance.
So there is a new way of trading shares and a new way of spreading information about them. There are also new types of shares.
One of the really astounding aspects of the last year has been the way in which once-tiny companies have surged to enormous size, and corporate giants of yesteryear have withered away. Just this week little Nokia, a Finnish company that hardly anyone had heard of six years ago, became the most valuable company in Europe, worth pounds 120bn. The current value of Marks & Spencer, our largest retailer? Just pounds 7bn.
Now, Nokia is a long-established company that used to make wood products before it hit on the wacky idea of trying to make mobile phones. But many of the new corporate giants did not even exist 15 years ago. Somewhere out there are tiny companies that will become the next generation of giants. Find just one, buy a few shares, and the prospect of boundless wealth beckons.
That's as maybe. You don't need to believe the hype surrounding the high- technology boom to accept that it is exciting. Investment in recent months has been qualitatively different from investment in previous post-war share booms, for there is a new technology that changes the rules of competition. Being at the forefront of this new economy (as Nokia is) seems to hold the prospect of relentless, astonishing growth. Being part of the old economy (as Marks & Spencer is) holds the prospect of commercial misery.
Put these elements together, and you have the stuff of revolution. That it is an economic revolution is self-evident. It is also - less evidently - a social revolution. People who can handle computers and find their way about the Net have power that they never had before. We have power as consumers, able to pick the cheapest holiday or airline seat. But it also gives the technically adept power as investors. Of course, shares go down as well as up, and the one thing that I can predict with utter confidence is that there will be a crash in Internet-related share prices. The only trouble is, I can't tell you when.
When it comes, good people will be hurt. But share-trading on the Net will surely survive. For good or ill, the technology is breaking down the barriers to the second phase of the Thatcher revolution, the creation of a nation in which a sizeable proportion of families are individual shareholders. Just remember not to double-click the mouse.Reuse content