Date: Tuesday 15 June 2010
Time: 06:30pm - 06:30pm
The Free Society and the Adam Smith Institute present:
CAN A BIG SOCIETY BE A FREE SOCIETY?
Power or persuasion: what’s the big idea?
Chaired by Claire Fox (Institute of Ideas), speakers include Dr Eamonn Butler (director, Adam Smith Institute), Tim Evans (chairman, Libertarian Alliance), Martin Kettle (associate editor, Guardian), Shane Greer (executive editor, Total Politics), Simon Hills (associate editor, The Times Magazine), and Heather Brooke (freedom of information campaigner).
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.