As 2024 dawns, the outlook for both the United Kingdom and the world appears uncertain and gloomy. But where challenges arise so do opportunities, and IEA has a crucial role in warning about the current trajectory and articulating the alternatives.

Through the Realities of Socialism and Essential Scholars projects, we have been doing just that. Both are multinational projects led by our long-time friends at the Fraser Institute in Canada (with whom we share a co-founder in Sir Antony Fisher) in conjunction with the Institute of Public Affairs in Australia, the Foundation for Economic Education and the Fund for American Studies in the United States.

As Realities of Socialism polling has shown, socialist ideology is alarmingly popular across the English-speaking world, particularly with young people. It is therefore necessary to communicate the catastrophic consequences of those ideas. Case studies on Poland and Estonia, lay bare the brutality and deprivation of Soviet bloc communism. Mercifully, the prospect of totalitarian communism in the ilk of the Soviet empire looks remote. But the experiences of Denmark and Sweden may hit closer to home. After a century of embracing liberalism and free markets, both countries’ taxes and spending grew, as did the power of regulators and trade unions. With it came stagnant growth, wages, and productivity.

What these publications do show, however, is that there is a way out. All four countries have recovered from their experiences with interventionist economics and embraced markets. Taxes in Sweden and Denmark are high, but they are nonetheless prosperous nations with economies rooted in free markets. Since lowering taxes, opening markets, and fostering trade in the early 1990s, Poland and Estonia have become two of Europe’s developing economic powerhouses.

So many of those reforms were inspired by the work of thinkers like Milton Friedman, F.A. Hayek, and James Buchanan. Essential Scholars is a key resource in our efforts to bring their ideas back to the forefront of public debate.

The projects have reached millions of people on social media in 2023 and more podcasts, videos, and a publication on Singapore’s economic history are still to come. We look forward to continuing this vital partnership in 2024.

CEO pay does not warrant more regulation

This week the High Pay Centre announced that it took just three days for the average FTSE 100 boss to earn the average salary. In response, Editorial and Research Fellow Professor Len Shackleton highlighted the risks of trying to restrict high pay:

• Cracking down on CEO pay would undermine British competitiveness and burden all of us with higher tax bills without even benefitting workers.

• The difference between top CEOs and average pay is an obvious feature of a free society where high pay is usually, though admittedly not always, associated with greater responsibilities. A CEO can make, or break, a company and therefore it’s unsurprising they are paid generously.

• UK FTSE-100 CEOs are paid roughly in line with their counterparts in other European countries such as Germany and France, though considerably less than equivalents in the USA. In relative terms their pay has not increased significantly in recent years.

• Top earners pay stonking amounts in taxes: the top one per cent of all earners in this country pay almost 30 per cent of income tax.

• If we somehow stopped these people earning large amounts, many of them would leave the country and we would all have to pay higher taxes to compensate. If FTSE-100 CEO pay was redistributed to workers, it would mean just around £200 a year extra before tax for a company employing 20,000 people.”

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