I’m new here, so I shall ignore what seems to be the convention of describing an adventure fighting the good fight during the last week, and make a case for a way of looking at one of the things we are arguing about.
I usually like to think of the key idea at the heart of good economics not as being ‘the free market’, but rather ‘the price mechanism’. The reason is that today, there is almost no one who really wants to argue that there is never a legitimate basis for pursuing social objectives through collective action. That makes the ‘free market’ position either untenable or too precarious to be held. So, its would-be advocates are forced into too many compromises.
On the other hand, there is a real battle to be fought over the means by which those social objectives are pursued. On one side is what seems to be the politician’s (or the bureaucrat’s) go-to solution of banning or requiring something. But very often there is a better way by utilising market forces in the guise of the price mechanism.
The great example that differentiates the two is the ‘education vouchers’ plan. Parents are given a voucher for each child. It is sufficient to pay for an adequate education, and parents can cash it in at the school of their choice. Schools (organised as for profit, or not for profit entities) compete for pupils and are permitted to charges fees in excess of the voucher. So there is choice for parents, the possibility of middle-income parents spending a little extra on their children’s education, and centrally – competition between schools. It is the price mechanism that is at the heart of it, since the schools set their own fees, but there is no way to describe that as a ‘free market’.
That doesn’t mean any price-based policy is a good one, since there are still plenty of situations where government should mind its own business. But where we need policy-intervention, the price-based way is usually the way to go. Examples abound, and environmental policy serves up many, but check this one out as a prize example of an absurd alternative to a Congestion Charge - here.
James Forder Academic and Research Director, Institute of Economic Affairs
IEA IN TRANSLATION
The IEA's sister organisation in Greece, The Centre for Liberal Studies – Markos Dragoumis (KEFiM), has translated thirteen IEA classics in the last two years, reaching a wide audience in a country that is in great need of liberalising ideas.
President of KEFiM Alexander Skouras said that "thanks to the generous support of the IEA and its donors, thousands of Greek readers were able for the first time to read in their native language the works of giants like James Buchanan, Ralph Harris, and John Blundell.
"They also got the chance to read and learn from leading contemporary thinkers like the tireless Eamonn Butler, Chris Snowdon, Nima Sanandaji, and Philip Booth. As one Greek politician put it "since KEFiM partnered with the IEA, we've seen more classical liberal books being published than in the previous 199 years of modern Greek history".
IEA books are translated and distributed widely across the globe thanks to the tireless work of our partners. If you wish to translate further IEA materials, please don’t hesitate to contact [email protected] to receive translation permissions for any of our publications free of charge.
iN THE MEDIA
Building back better... With the Johnson administration having faced two crises in quick succession – first Brexit, then Covid-19 – it has so far been unclear whether the government has anything approaching a meaningful agenda for economic reform.
In his column for The Times, IEA Director General Mark Littlewood argues that the early signs are not wholly encouraging – "levelling up" and "building back better" may sound promising, but discerning what these mean in concrete policy terms is far from easy.
If the prime minister is a man with a catchphrase searching for a policy, Mark writes, he could do a lot worse than to peruse the winning entries in this year's Richard Koch Breakthrough Prize, which sought to find pro-market, pro-enterprise solutions to boosting living standards in so-called left-behind Britain.
The people's rebate... This year's winner, Timothy Foxley, wrote for Conservative Home about his idea to raise living standards in areas like his hometown Stoke-on-Trent. You can find out more about the Richard Koch Prize and this year's entries here.
WHO's got it wrong... This week the World Health Organisation and Public Health England issued conflicting advice over vaping. The WHO called for more regulation on e-cigarettes, branding them "harmful", while PHE highlighted vaping as one of the most effective ways to quit smoking.
IEA Head of Lifestyle Economics Christopher Snowdon appeared on GB News to discuss the WHO's campaign to further regulate the vaping industry. Christopher argued that it is irresponsible and counterproductive to try to dissuade the public from using far less harmful alternatives to smoking. You can watch a clip here.
Big state Britain... After the Public Accounts Committee revealed Britain’s Covid bill has soared to £372bn, IEA Director of Communications Annabel Denham argued that the pandemic has been a "poor advertisement for an activist state".
In her column for The Spectator, Annabel notes that there has been an absence of transparency and accountability, with ministers repeatedly failing to predict the predictable, from the surge in cases following Eat Out to Help Out to the ongoing 'pingdemic'.
Annabel also wrote for CapX on mandatory vaccine passports, arguing that they are an affront to individual liberties and pose significant ethical and moral dilemmas. You can read her article here.
Tory tax hikes... Over the past year or so, the government has sought to bring in various tax rises, ranging from a hike in corporation tax, to a freeze on the tax-free income tax allowance.
With reports we may face an increase to national insurance contributions, writing for The Sunday Telegraph, IEA Head of Public Affairs Emma Revell asked: where is the party of lower taxes?
Bottoms up... Wine is set to become 13p cheaper, according to industry experts, as the UK scraps VI-1 forms, an EU regulation which tests the acidity of the wine, something which is not done for beer or spirits.
Commenting on the news in The Telegraph, IEA Head of Regulatory Affairs Victoria Hewson welcomed the news but argued that we should take care that these useful steps are not outweighed by the torrent of new interventions that the Government seems to have in mind.
IEA Chief Operating Officer Andy Mayer made his debut on GB News to discuss the hidden bailout of defence contractors in the nationalisation of Sheffield Forgemasters.
Andy questioned why the government is using taxpayer's money to bail out companies that are not obviously in any trouble. You can watch a clip here.
Back to work... A survey found this week that 8 in 10 people expect employers to offer hybrid working going forward.
IEA Editorial and Research Fellow Professor Len Shackleton also appeared on GB News to discuss the findings. He argued that the government should refrain from legislating for flexible working and that employers should be free to adopt hybrid working as they see fit. You can watch a clip of his interview here.
Corbynism is back... This week the Labour Party unveiled proposals to overhaul the labour market, including a French-style 'right to disconnect’ and a ‘real living wage’ of at least £10 an hour for all ages.
Writing for CapX, Len argued that the plans would makeit less attractive for businesses to take workers on, could lead to increased union militancy, and would certainly increase bureaucracy and public spending.
WE'RE HIRING!
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We're looking to recruit a Head of Foundations and Trusts to join our highly motivated fundraising team, responsible for building relations with private individuals, corporations, foundations and trusts.
We're also on the hunt for a new Donor Relations Officer, who will support the development team, researching individuals and companies, supporting publications and events, and maintaining our systems.
For more information on both roles, and to apply, click here. The final deadline is Sunday 22nd November.
Applications are also open for the Autumn 2021 IEA Internship programme (27th September to 24th December 2021).
If you would like to apply, please send your CV and covering letter to Bart Popowicz, IEA Operations Officer, at [email protected], explaining why you would like to intern at the IEA and how you would benefit the team.
Despite Boris Johnson’s triumph in the 2019 election, many Conservative voters sense that a larger cultural battle has been lost. Some accuse the left of mounting a secret, slow-motion takeover, inspired by the ideas of the Italian communist Antonio Gramsci – the ‘long march through the institutions’.
In this episode of Parallax Views, the IEA's new YouTube series, IEA Head of Cultural Affairs Marc Glendening speaks to Marc Sidwell, author of "The Long March Through The Institutions: How the Left Won the Culture War & What To Do About It". The book can be downloaded free of charge from The New Culture Forum website here.
On the podcast this week, IEA Communications and Marketing Assistant Kieran Neild-Ali is joined by Economics Fellow Julian Jessop to discuss the ins and outs of inflation.
The two discuss what inflation is, how is it caused, whether it is dangerous and what policies can be used to control it. Julian also explains quantitative easing and its implications on monetary policy and the wider UK economy. You can listen here.
IEA PATREON
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To visit the page and find out more about the IEA’s Patreon, follow the link here or watch our trailer here.
YOU'RE INVITED
Tomorrow, Monday, 2nd August from 6-7pm, the IEA will host the Rt Hon Penny Mordaunt MP, Conservative Member of Parliament for Portsmouth North, for the latest in our In Conversation series with senior figures in public life. The event will be chaired by IEA Director General Mark Littlewood.
Penny Mordaunt is currently part of the Treasury team as Paymaster General. She has previously served as Secretary of State for Defence, Secretary of State for International Development, and Minister for Women and Equalities, and is a Royal Naval Reservist.
She is also the author of a new book Greater: Britain after the storm which she will be discussing during the event. It is available to purchase here.
The discussion will be live streamed on the IEA YouTube Channel here.
The IEA is working with the Vinson Centre for the Public Understanding of Economics and Entrepreneurship at the University of Buckingham on the delivery of an MA in Political Economy by Research.
The programme can be completed by distance learning and is aimed at graduates with a strong interest in the history of economic ideas and the application of economics to questions of public policy.
Online seminars will cover topics on Adam Smith; David Ricardo; John Stuart Mill; Alfred Marshall; the marginalists and neoclassical economics; Karl Marx; Friedrich Hayek and the Austrians; J.M. Keynes; James Buchanan, Gordon Tullock and public choice theory; the Frankfurt School; and behavioural economics.
For further information, please follow the link here.
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