Date: Thursday 3 June 2010
Time: 06:30pm - 08:30pm
Location: Queenborough Room, St Stephen’s Club, 34 Queen Anne's Gate, London, SW1H 9AB
"Adam Smith’s teachings on modern economic policy"
ASI and friends gathered yesterday to commemorate the birthday of Adam Smith, our favourite classical economist. The reception was held at St. Steven’s Club, followed by a lecture by Irwin Stelzer, business economist, columnist for the Guardian and the Sunday Times (among others) and the co-founder of The National Economic Research Associates. The topic of the speech was the relevance of Adam Smith’s teachings on modern economic policy.
Mr. Stelzer took an unorthodox approach in his lecture: assuming everyone on the audience was a free marketeer, he argued in favour of some government intervention, and attempted to define the proper role of government within the economy. He highlighted six key areas in which some intervention would be desirable:
Mr. Stelzer labelled his approach “neo-orthodoxy”: a free economy with minimal, but well thought-out regulation to counterbalance market imperfections. Referencing Smith, he asserted that if the incentives are chosen well enough, “much good will follow”.
Well, maybe. But I wasn't wholly convinced. As the ASI's Dr. Eamonn Butler pointed out during the question and answer session, many – if not all – of the market failures Mr Stelzer drew attention to have their roots in previous government failure or intervention. He argued that if we got the first point right, and ensured that markets were genuinely free and competitive, government wouldn't really need to concern itself with the five that followed.
Date: Wednesday 2 June 2010
Time: 12:45pm - 02:15pm
Title: Why regulate a competitive market?
Colette Bowe, Chairman of the phone and broadcasting regulator Ofcom, was our guest at a Power Lunch in Westminster this week. Her topic was Why regulate a competitive market? – which is a pretty good question. Back in the early 1980s, of course, when the ('Completely impractical, minister') idea of privatizing the telephone end of the Post Office was mooted, the market was of course very different. The monopoly incumbent – British Telecom, as it became known after privatization – then controlled 100% of the UK's telephone system, wires, handsets and all. It now controls less than 50% of the fixed-line sector, one of the lowest incumbent shares in Europe.
Plainly, regulation was needed at the outset to contain BT's monopoly power. Like most privatization, this one cut with the grain of the existing structures, and breaking up BT into little, competing segments would have been even more difficult than keeping it whole, which was hard enough (privatization was then a completely new and unknown thing). So is it still needed, now that BT faces such competition?
Competition, as the first telecoms regulator Sir Bryan Carsberg used to say, is the best regulator. And all regulators say that competition is what they want to encourage. The question is, how do they know when they have achieved that happy state, and can retire. They need to have some premonition of their own sunsets. That is not so easy for people who are deeply involved in the minutiae of regulatory questions, experts who often think they can 'improve' on markets. It is obviously a decision for the boards of the regulatory agencies. But again, are they detached enough?
I am not quite sure why we have so many sectoral regulators any more. What we need, I would say, is tough pro-competition policy – and that applies as much in the gas or water industry as it does in rail or telephones. We should promote competition as a matter of principle, not meddle in particular sectors in detail.
Date: Monday 10 May 2010
Time: 12:45pm - 02:15pm
Title: Regulation after the Crisis
Hector Sants was appointed FSA Chief Executive in July 2007. He joined the FSA in May 2004 as Managing Director, Wholesale and Institutional Markets at the Financial Services Authority. Hector had responsibility for all regulated markets, the related infrastructure such as clearing and settlement, the operation of the UK Listing rules and regulation of firms or groups which conduct primarily wholesale or institutional market business between professionals.
Hector joined the FSA from Credit Suisse First Boston where he was Chief Executive Officer of Europe, Middle East and Africa and has extensive experience of the wholesale markets both in the UK and internationally. He joined CSFB in 2000 when the firm merged with Donaldson, Lufkin & Jenrette and was a member of CSFB's Executive Board. He was a member of the Financial Services Practitioner Panel and was previously a Board member of, among other bodies, the SFA and the London Stock Exchange.
All power lunches take place from 12.45-2.15pm in our offices at 23 Great Smith Street, Westminster. These events are by invitation only, but if you are interested in attending please contact Philip at firstname.lastname@example.org or on 020 7222 4995.
Date: Tuesday 4 May 2010
Time: 06:00pm - 08:00pm
Title: How to be right about everything
Location: The Phoenix, 14 Palace Street, Victoria
The Spectator and Telegraph columnist James Delingpole gave a solid defence of classical liberalism at the ASI's The Next Generation event on Tuesday 4th May. He explained why it was so difficult to be a classical liberal - its firm roots in empiricism and the realities of human nature do not often arouse great enthusiasm. Its policies and positions must constantly be explained and justified, relying on the audience's commitment to reason and logic. A big ask.
To be on the left on the other hand is simple. Not only have they won the culture wars as Gramsci had hoped and advocated, but to take on an air of moral superiority is both thoughtless and effortless - it is the easiest thing in the world to be committed to reducing global warming, poverty and inequality. Actually acting on those commitments is something entirely different, and could be done to the detriment of all in a spurt of destructive moralising zeal.
Despite the numerous advantages of the left, classical liberalism is fundamentally 'sound' due to its basis in reality rather than wishful thinking. It will prevail so long as we keep on justifying our positions sensibly and with the use of reason. Delingpole's speech ended in a call to arms - it was for us to continue a fight with the odds stacked against us - whilst being a classical liberal may be difficult, we gain all the more from the tools of empiricism and realism at our disposal. In short: classical liberals are always right, and should remember it.