Richard North, 07/03/2005  

An article by John Blundell, Director-General of the Institute of Economic Affairs, in today’s Daily Telegraph, reminds us that his institution is fifty years old this year. The birthday is being celebrated with the publication of a new collection of articles, entitled Towards a Liberal Utopia. They are also having meetings including one that I hope will be a trenchant discussion on climate change and Kyoto.

Whenever I hear people telling me that it is preposterous to suppose that Britain will ever function outside the EU or that it is unthinkable that Europe could ever go any other way I think of the Soviet Union and the certainty so many people had that it would always be there and would be so powerful that the only way to escape thralldom would be to continue providing watered down versions of its economic and social system.

And whenever people wonder why any of us should waste our time painfully working out alternative ideas to the victorious europhile tendency I think of the IEA. For a couple of decades its denizens did just that: worked out, sometimes painfully, sometimes less so at convivial lunches, ideas that seemed completely mad.

What, privatization of the “commanding heights of the economy”? Preposterous. (We hear the same about health and education now. Letting people make choices? Preposterous.)

Breaking the power of the union bosses? Ridiculous. Turning council homes into private property, thus increasing the market? Oh, come on!

Yet, these things have come to pass and Britain is a better place for that. It is the sectors that are still in the state’s hands that malfunction to an extraordinary degree.

But there are two things the IEA did not foresee: one is the malign influence of the European Union and the other is the tenaciousness of those who want to go on running our lives for our own good, naturally. If they cannot own the means of production, they will regulate them.

It is with the remnants of the old order and the new tyranny that the anniversary volume deals with and Mr Blundell gives a quick summary in his article.

Like many utopias, there are aspects that one wonders about. Are the great sages of the IEA still underestimating the tenaciousness of those in charge, for whom the simple theory that he expresses means nothing:

“So what will my successors be battling against? There is never a shortage of human folly. Yet I think we are learning collective lessons. We've learned that free trade and open markets benefit everyone, especially the poorest. We've learned that the state is inept at active roles but can be creative as a regulator or adjudicator.

We've learned that duties we took to be those of local authorities are better done by others – especially schooling. The NHS is something of a British cargo cult now. In a generation we will have learned that medicine is much like any other expertise and needs neither mystification nor monopoly.”
Much these people care that others can do their work better. They need their highly paid jobs and, in any case, would these others make the “right” decisions.

Now I sound like all those who laughed in the fifties and sixties. After all, many of the reforms advocated at the time have gone through. But the acceptance of the need for freedom and personal care and responsibility has not yet taken a very deep hold on this country. It will happen.

Among other things the volume predicts that by 2055, the next big anniversary
“The UK will have seceded from both the Common Fisheries Policy and the Common Agricultural Policy, those vivid and corrupt failures. The grand project to regulate every aspect of life will have crumbled and the ghost of the EU will be a loose free-trade area. Once the penny had dropped that the billions living in Third World misery could become wealthy if we stopped suppressing them with "aid" and let them trade, their economies took off.”
Well, let us hope so, indeed. And let us also remember, as Mr Blundell, reminds us:
“The IEA was sparked into being by the sage FA Hayek observing that political activity was futile without the weaponry of good ideas. It is ideas that eventually rule the world. The future belongs to capitalism; socialism will soon be a matter for archaeologists.”
While I must reluctantly disagree with that last comment, I can only cheer the first one. It is, indeed, ideas that rule. Politics without ideas goes nowhere. European integration was a biggish idea and can be defeated only by other big ideas. One day even our politicians will learn that.

Meanwhile, happy fiftieth birthday to the IEA.

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