The Adam Smith Institute
The Adam Smith Institute is the UK's leading innovator of free-market policies. Named after the great Scottish economist and author of The Wealth of Nations, its guiding principles are free markets and a free society. It researches practical ways to inject choice and competition into public services, extend personal freedom, reduce taxes, prune back regulation, and cut government waste.

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Missing the point on vouchers
By Tim Worstall

Journalists were quick to note David Cameron’s retreat from the voucher system for schools. Vouchers increase parental involvement by increasing their choices, and it is important that those with a say in education reform should not overlook their political impact and importance.

The policy proposed, and from which David Cameron seems to be retreating, is essentially a clone of the Swedish system, as detailed in this paper by the Research Institute of Industrial Economics in Stockholm.

It is simple to set up a private school. They can be community run, for profit, or charitably. They can, as long as they obey certain basics of the curriculum, teach what they like. They cannot charge top up fees and the municipality must fund it in direct proportion to the number of pupils it attracts. This is what was being proposed, and while allowing top up fees would be even better, Cameron really does seem to have missed the point.

A large part of the political left in the UK, perhaps most of the Labour and Liberal Democrat parties, use things Scandinavian as a template, a design for what would make a better society. Scandinavian is equated with ‘good.’ The Conservatives showed political astuteness by proposing Scandinavian-style vouchers in education.

The principle can be extended to other policy areas. To those who praise the French health system above our own it can be pointed out that it includes private providers and private top up insurance. These things are worth doing for their own sake, of course, because they offer solutions to intractable public sector problems. But it is also useful in politics to confuse and confound one’s enemies, and this seems to be the point which David Cameron might have missed.

(Tim Worstall writes here)



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Adam Smith (1723-1790)
Adam Smith was the great Scottish philosopher and economist best known for "The Wealth of Nations", his pioneering book on free trade and market economics.

A wide selection of material about Adam Smith is now available on the Adam Smith website. This includes the full text of his two major works, The Theory of Moral Sentiments and The Wealth of Nations.