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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

The Liberty Lectures

Written by Sally Thompson | Friday 10 December 2010

Videos of all of the speakers at the Institute’s Liberty Lectures have been uploaded to our YouTube channel for anyone who could not attend. The annual event, which took place over the Summer, brought together the country’s top thinkers on liberty to provide thought-provoking talks on the libertarian approach to economic, philosophical and political concepts for students.

Dr Tim Evans, President of the Libertarian Alliance, kicked off the afternoon’s lectures with ‘The Importance of Liberty’. He explained the underlying principles of Libertarianism: life, liberty and property and the link between liberty and capitalism. Dr Eamonn Butler, Director of the Adam Smith Institute, then talked on how markets work. He argued that the free market works in mysterious ways and caters to our wants and desires. In contrast to this government is inefficient and the services it offers give little choice and are expensive for the public.

Dr John Meadowcroft then gave a talk on the rather excitingly titled topic of ‘Sex, Drugs and Liberty’. He gave a strong criticism of prohibition and why it is morally wrong as it undermines our individual right to self-ownership. Next, Dr Mark Pennington gave a talk on public choice theory. Mark highlighted how government intervention is more damaging than an imperfect market, especially as government is controlled by special interest groups. Professor Anthony Evans, from the European Business School, showed how the Austrian school predicted the crash and explained the Austrian theory on the causes of the cycles of booms and busts. Finally, Dr Richard Wellings, from the Institute of Economic Affairs, gave a convincing talk on the role of government, arguing for a limited government whilst highlighting the dangers of big government.

It was a fascinating afternoon of top class speakers and definitely worth a watch.

Full playlist here.

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The Liberty Lectures 2012

Written by Pete Spence | Wednesday 25 July 2012

Next month the ASI hosts its annual event, The Liberty Lectures on the 23rd August from 2-6pm. An afternoon of lectures for students only [but we'll be putting everything on Youtube as well — ed.], that aim to introduce them to big ideas they might not otherwise encounter. This August, the conference will cover economics, history and politics, with lectures on four big ideas that can help how we view the world.

'Only Individuals Choose' – Dr. Anthony J. Evans

A discussion of the use of individualism as an approach to social sciences. As opposed to a conventional perception of Economics as being something akin to Newtonian Mechanics, Anthony will put the case for doing away with an overreliance on models.

'Public Choice Theory' – Dr. Mark Pennington

Going within the black box of government, Mark will put forward the Public Choice School case for considering the role of incentives in public institutions.

'History as the Story of Liberty' – Dr. Stephen Davies

Eschewing the conventional narrative of history, Steve persuasively argues for a conception of history as a struggle between ruling and ruled classes.

'Causes of the Next Financial Crisis' – Jamie Whyte

Many see us as in a post-crisis state after the turmoil of 2007. Rather than just being in a slump, Jamie will argue that we are merely in the eye of the storm. The solutions to the last crisis which politicians are now putting in place are setting us up for an even bigger fall.

If you would like to attend, or you know a student who might be interested, please RSVP to events@adamsmith.org.

We look forward to seeing you there!

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The life and works of Richard Cobden

Written by Tom Clougherty | Tuesday 20 November 2007

cobden.jpgI was at a Liberty Fund colloquium in Edinburgh over the weekend, discussing the life and works of Richard Cobden, the legendary 19th Century promoter of peace and free trade. Although I was already familiar with Cobden's ideas and achievements, I had not read any of his original writings before.

The thing that struck me most was the extent to which Cobden was an activist and campaigner, rather than merely a theorist. His speeches as leader of the Anti-Corn Law League were exceptional, displaying a rare ability to communicate liberal ideas in a way that would appeal to and motivate the audiences he was addressing. More than that, he realized the importance of using the political process to effect change – the League produced a newspaper, corresponded with voters, encouraged people to join the electoral register, stood candidates and lobbied politicians. With such commitment, it's no wonder his campaign to have the corn laws repealed was a success.

Too often today's classical liberals (or libertarians) have such disdain for government that they are not prepared to engage in politics. Could this be why liberty seems to be doing so badly at the moment? Perhaps we should all take a leaf out of Cobden's book and start fighting a little harder for our ideals.

The other thing that surprised me is how relevant Cobden remains today, whether on foreign policy (where he believed in peaceful non-intervention), labour laws (which he opposed) or a whole host of other issues. He criticized stealth taxes, for instance, arguing that a tax should be as visible and closely linked with the service for which it is required as possible, in order to increase accountability. He also realized, long before Laffer drew his curve, that lowering taxes could boost enterprise and raise revenue. Gordon Brown take note.

You can read more about Cobden on the Globalisation Institute's website – where it is also possible to download The Life of Richard Cobden by Viscount John Morley.

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The Lifeboat Test

Written by Tim Worstall | Monday 03 December 2007

I'd like to propose a little test that we can use to judge the merit of any proposal for the spending of taxes, something I'm calling "The Lifeboat Test". As we all know there are some things that have to be done both collectively and with the powers of compulsion (at least in paying for them) that the State has available. There's also another set of things which do indeed need to be done collectively, but there is no real reason why we need the compulsion of taxation to pay for them. For as PJ O'Rourke pointed out, taxation is in the end extracted by the business end of a gun (don't pay it and they send you to jail: escape and they'll try to shoot you).

I'm using lifeboats as my test for they are indeed something that must be collectively provided but as is also apparent (this might puzzle some non-Brits: The Royal National Lifeboat Institution runs all lifeboats in the UK and it is entirely a private charitable institution. Other than the usual charitable tax concessions it receives no subsidy from taxes at all) that they can be provided both excellently and voluntarily. What I propose is that if something is more important than the lifeboats, we can consider whether tax money (that extracted by the gun, remember) might be used to pay for it. If it's less important then we can reject the idea of funding from taxation out of hand.

Gordon Brown is apparently considering the funding of political parties from taxation (that which is extracted at the barrel of that gun, remember):  

Mr Brown also sent a clear signal that he was prepared to consider a big increase in state funding for political parties.

So let us now apply our new test. The suggestion is that, by force, money should be removed from our pockets to pay for politicians to apply for their own jobs. Is paying for politicians to posture and preen in front of us more important than the lifeboats? No? I think not as well.

Good, State funding of political parties fails the lifeboat test and can therefore safely be rejected out of hand.

To enliven a Monday morning, what State spending (paid for by the taxes the government already forcibly removes from us at gunpoint) also fails the lifeboat test? 

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The lights aren't on...

Written by Junksmith | Saturday 29 August 2009

.... so everyone's home.

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The list

Written by Carly Zubrzycki | Sunday 20 July 2008

It will surprise no one that I’m not a fan of the 130 demands that unions handed to Gordon Brown last week.  Most, if not all of them will hurt far more people than they help. Requiring the adult minimum wage for apprenticeships and 18 year olds, for example, will certainly not encourage companies to hire young folks (which probably explains why they also want some companies to be required to guarantee apprenticeships.  Hooray for solving the bad results of one policy with another bad policy!). The fact that anyone seriously thinks that running train companies as not-for-profits will be better for customers is also mind-boggling. 

The funniest item on the list, however, is definitely the call for tax deductions for union membership.  That’s right- they basically handed the prime minister a list of expensive demands, and then said “oh, and our members want to pay less taxes, let someone else do it."  Not that this is unusual for labour, but this just seems like a particularly flagrant declaration of that philosophy and demand for pork.  Though Brown has rejected many of the propositions, it is likely that at least some will pass.  As Auberon Herbert once asked, “how should it happen that the individual should be without rights, but the combination of individuals should possess unlimited rights?" Good question… how indeed?
 

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The London Lootings need real solutions

Written by Anton Howes | Tuesday 09 August 2011

Let's be clear. The riots engulfing London over the past few days are not politically motivated, and nor are they even protests. What may have started out as a reaction to the shooting of Mark Duggan has evolved into a mindless, thuggish reaction to the noticeable absence of law and order. A police state that spread itself so thinly in order to control every one of us has failed in its core duty of protecting the peaceful majority's lives and property from the shocking rapacity of a violent minority.

So who are the culprits? The vast majority of the looters appear to be very young, revelling in the havoc and destruction they cause rather than expressing anger and frustration. Some blame poverty and inequality, citing youth unemployment and cuts to the Education Maintenance Allowance. This is of course an insult to every respectable poor person; those with the strength of character to get by and to better themselves without resorting to violence. If this is about poverty, it is poverty of spirit amongst a young few, rather than any widespread material poverty.

Diane Abbott, the MP for the affected Hackney North is probably much closer to the truth when she points out how these youths are destroying their own communities. Rather than venting frustration at figures of authority, they are actively destroying the livelihoods of their own neighbours. The poverty of spirit here is about alienation from the rest of society rather than purely the loss of respect for authority. After all, peacefully challenging authority is the healthy sign of a free and vibrant society, whereas relished violence towards your own neighbours is nothing more than sheer barbarism.

The knee-jerk reaction from many to use authoritarian measures has therefore also been disturbing. Calls to bring in the army, use water cannons and restore respect for authority do not address the problem. These young people are alienated by an impersonal, centralised welfare system that allows them to receive and take without any appeal or bond to the societies and communities immediately around them; so instilling a grudging respect for authority will only be temporary, and potentially perpetuate the problem when a deep-felt respect for all others is required instead.

Instead, the lasting solution must come from communities. Already, there are reports of groups of residents chasing away looters, and of Turkish communities in North London clashing with the thugs. Residents and shopkeepers have little choice but to rely on themselves and each other. Citizens therefore need to be made well aware of their rights in defending themselves and their property. The myth of neighbourhood policing has been shown up for the skin-deep and top-down sham it often is - but the answer is not to replace it with a more oppressive regime; it is to allow society to confidently step in so that law-abiding communities can themselves reclaim the city from fear. 

Anton Howes is Director of the Liberty League.

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The lottery and the Olympics

Written by Dr Madsen Pirie | Thursday 09 August 2012

Some oppose the cost to public funds of the Olympics, and some criticize the inconveniences to which Londoners have been subjected.  There can be few, however, who deny credit for the superb performances of our athletes.  They have shown a dedication and commitment that has rallied most of the nation behind them in their efforts, and given them generous praise for their achievements.

That so small a nation can do so well is remarkable, and many commentators, including Lords Coe and Moynihan, have praised the role of the National Lottery in this.  The Adam Smith Institute is proud of the role it played.  In 1990 we invited the orchestra conductor, Denis Vaughan, who had suggested the idea, to write a paper for us setting out the case.  Within two years of that publication, the National Lottery bill had cleared Parliament, with credit to Sir John  Major and Virginia Bottomley for the role they played.

The lottery is voluntary. No-one has to buy a ticket, and those who do can dream of the chances of winning millions. Funds are raised that taxpayers might not be prepared to give.

The distribution of lottery receipts has been remarkable.  Of every £1 spent on tickets, 50p has gone into the prize fund.  Of the remaining 50p, 28p is assigned to good causes, 12p in government duty, 5p to retailers as commission, and 4.5p in operating costs to Camelot, and 0.5p as their profit.  It returns to good causes a higher proportion of each £1 than any other official lottery.  It is reckoned to have increased funding for the arts and sport sevenfold. 

Perhaps too much lottery money has gone to support institutions such as the Royal Opera House, where more might have been given to local arts ventures, repertory companies and youth orchestras, but large numbers of people on modest  incomes have benefitted from the support it has given to sports activities.  Lottery funding has enabled athletes to undertake full-time training in preparation, to attract top-ranking international coaches, and to train in the world-class facilities that it funded.

The pay-off achieved by our athletes at the Beijing Olympics and even more in London is the reward for a bold idea well executed.  The arts, medical and other charities have been aided by the National Lottery as well, but the Olympics highlights the difference it has made to sport.  And every penny is raises is freely given.

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The machines are going to steal all our jobs!

Written by Tim Worstall | Wednesday 22 January 2014

The Economist has another of those breathless pieces worrying about what's going to happen when the robots come for all our jobs. There's one basic error in the piece and one slightly more technical.

The basic error is that they fail to note that when the robots have taken all our jobs then we'll all be incredibly rich. One of the comparisons they make is to the first industrial revolution and that's appropriate. So, let us think about what happened when the mechanisation of cotton production killed off the hand weaving (and linen although more slowly) industries. Yes, certainly, some people lost their jobs: but the entire population now became rich enough to be able to wear cotton underwear simply because the production costs of cotton fell so far. And only those who have suffered through the woollen kind will know how rich that makes us all.

It's a very, very, basic observation: if the machines are making everything then everything becomes extraordinarily cheap. This is the same statement as the one that the machines taking all our jobs makes us all very rich indeed.

The more detailed mistake is here:

But though growth in areas of the economy that are not easily automated provides jobs, it does not necessarily help real wages. Mr Summers points out that prices of things-made-of-widgets have fallen remarkably in past decades; America’s Bureau of Labour Statistics reckons that today you could get the equivalent of an early 1980s television for a twentieth of its then price, were it not that no televisions that poor are still made. However, prices of things not made of widgets, most notably college education and health care, have shot up. If people lived on widgets alone— goods whose costs have fallen because of both globalisation and technology—there would have been no pause in the increase of real wages. It is the increase in the prices of stuff that isn’t mechanised (whose supply is often under the control of the state and perhaps subject to fundamental scarcity) that means a pay packet goes no further than it used to.

So technological progress squeezes some incomes in the short term before making everyone richer in the long term, and can drive up the costs of some things even more than it eventually increases earnings. As innovation continues, automation may bring down costs in some of those stubborn areas as well, though those dominated by scarcity—such as houses in desirable places—are likely to resist the trend, as may those where the state keeps market forces at bay. But if innovation does make health care or higher education cheaper, it will probably be at the cost of more jobs, and give rise to yet more concentration of income.

This is Baumol's Cost Disease of course. Those things where it is more difficult to increase the productivity of labour in their production will rise in price in comparison to those things where raising that productivity is easier. Exactly those services like college education and health care complained about.

But...but...if we're now stating that we're worried about automation attacking the jobs in those areas we're in fact making exactly the same statement as that they're about to become 20 times cheaper. Just as happened with the widgets. You can't both complain about the price reductions that come from the robots stealing our jobs and also about increasing inequality. For if everything falls, over only 30 years, to one twentieth of the starting price then what the hell is there left to have any consequential inequality about?

Positional goods? Sure, the Louvre will still have the world's only Mona Lisa, there will still only be a handful of houses in Eaton Square but beyond that, seriously who cares? The end state, if the robots to start doing all the work, is that we get all the food, healthcare, clothing, housing (but perhaps not exactly where we might want it), education and all the rest that our greedy little hearts could desire.

And this is something that people think governments have to start having policies about?

Heavens preserve us. 

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The madness of crushing uninsured cars

Written by Dr Eamonn Butler | Monday 10 January 2011

crushBack in 2005, the UK's Labour administration announced that it would be seizing and crushing the cars of people who drove without being insured. This week, ministers in the new Coalition government are to go further even than this, saying that anyone who merely keeps an uninsured vehicle faces having it seized and crushed.

Such proposals show how tentative a grip our politicians have on commonsense, and on justice. Commonsense first: where do I start? Well, (1) problem of uninsured vehicles is the problem of people driving them and being involved in accidents, and then having no insurance with which to compensate any victims. Collectors and other people may well own cars which they have no intention of ever taking on the road, and so do not bother to insure. It is simply absurd that they should face the cost of insuring a vehicle that never moves out of the garage. (2) When people or property are injured in an accident caused by an uninsured driver, seizing and crushing the driver's car does nothing to help. Sure, the threat of it might dissuade people from driving without insurance, but other, more traditional penalties might be equally effective on that front. In any case, (3) selling the car in order to compensate the driver's accident victims might do more for them. (4) Even on the simple grounds of economy, is it not better to preserve a perfectly good car than send it to the crusher, just so lawmakers can show how 'tough' they are?

But there is a justice question too. The present and proposed law have no regard to the value of the car. The loss to the uninsured driver could vary considerably depending on whether it was a Fiat or a Mercedes. And the point about justice is that the penalty should be the same for everyone. It's time our politicians stepped outside their dreamworld and got a bit of common sense. And it's time that they stopped trying to think up a headline-grabbing arbitrary 'solution' to every problem and learnt something about the principles of justice.

Edit: In the comments, HJ777 makes a point about SORNs (Statutory Off-Road Notifications) which are designed to avoid the situation outlined above. I'd overlooked this, but the point remains because many people will lack the time and knowledge to get out one until it's too late. Thanks to HJ777 for the pointer.

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