Press Release: Semantic shifts were key factor in decline of classical liberalism, argues new study

Key concepts central to the Western tradition of classical liberalism have shifted dramatically in meaning since the late 19th Century, according to a new scholarly website, Lost Language, Lost Liberalism (4L), released today (Tuesday) by Professor Daniel Klein in partnership with the Adam Smith Institute. 4L shows that the English-language discourse of Western Civilization underwent a watershed change during the period 1880-1940. 4L focuses on changes in the meaning of words, and suggests that these changes played an important role in the decline of classical liberalism in the politics of the English-speaking world.

Ten central words are treated: liberal(ism), liberty, freedom, justice, property, contract, equality, equity, law, and rights.

Up to about 1880, people understood these terms particularly for certain salient classical liberal meanings. But then, from 1880, the culture changed and meanings became upset or confused. 4L provides vast compendia of quotations in which the central words are used. The changes were a move toward collectivization, a favor for greater governmentalization of social affairs.

For each of the ten words, the website provides quotations showing how collectivists innovated, often assaulting the classical liberal meanings and flaunting innovation. The website also provides many rejoinders by authors who objected to the assaults. The site shows the debate over the meaning of each word.

The website presents tables capturing the classical liberal meanings of the words, and the changes.

The site also provides many ngram diagrams, verifying that a profound shift occurred from 1880.

The site also provides a vast collection of quotations testifying that the shift came by new generations, which talked one way, displacing older generation, which had talked another way.

4L shows that Western Civilization not only changed direction after 1880, it altered the meanings of its most important words.

Klein claims that today we are still stuck in the ruts of those changes; his message is that we need to recover the meaning and culture of the original liberalism. 4L is part of Klein’s broader ambition to advance understanding of the original arc of liberalism, its ascent, its decline, and its bearing on today.

Daniel Klein is professor of economics at George Mason University, where he leads a program on Adam Smith. He is also JIN Chair at the Mercatus Center at GMU and Associate Fellow of the Ratio Institute, Stockholm. He is the editor of Econ Journal Watch, and the author of Knowledge and Coordination: A Liberal Interpretation (Oxford University Press, 2012). The Adam Smith Institute recently interviewed Klein about another project called Liberalism Unrelinquished.

4L is authored by Klein, but the collecting of quotations was chiefly the work of Ryan Daza, an independent research and collaborator (and former student) of Klein’s.

For further comment or to arrange an interview with Daniel Klein, please email dklein@gmu.edu. His home page is http://econfaculty.gmu.edu/klein/index.html.

Forthcoming ASI research on education quality is featured in City AM

A forthcoming report on the link between education quantity and economic growth - written by ASI Fellow Gabriel Heller Sahlgren - was featured in City AM. Read the article here.

In a forthcoming report for the Adam Smith Institute (ASI), Gabriel Heller Sahlgren has shown that “the relationship between education quantity and economic growth is shaky at best”. Indeed, “there is currently no robust support for the idea that education quantity increases countries’ economic well-being (at least in developed countries).”

In contrast, Sahlgren’s own econometric research and global literature review in the ASI report shows that education quality – as measured by international test scores, for example – has a very powerful impact on economic growth. In fact, the results are stunning.

Ben Southwood comments on Mark Carney's role in the UK's economic recovery in City AM

The Adam Smith Institute's Head of Policy, Ben Southwood, was quoted in City AM discussing Mark Carney's role in the UK's economic recovery.

Carney's appointment was announced on 26 November 2012 by chancellor George Osborne. The Canadian had previously ruled himself out of the running, so the news was a surprise. If investors were overwhelmingly positive, we'd expect to see stocks appreciate as a result.

So what happened? Ben Southwood, head of policy at the Adam Smith Institute, says that the FTSE 350 barely rose that day, nor when he came into office last year, or even when Carney introduced forward guidance in August.

And since Carney's arrival was announced the pound has strengthened against the dollar, while inflation has declined. Taken together these three facts imply that Bank policy "has been a relatively small factor in the nascent recovery," says Southwood, "just as inflation spikes were out of the Bank's hands in 2011, real GDP improvements are also likely coming from supply-side improvements now".

Southwood highlights Japan as a comparison. There Bank of Japan governor Haruhiko Kuroda and Prime Minister Shinzo Abe "really have made the difference" through monetary policy. Stocks are way up, the yen is way down, and inflation has risen.

 

Director of The Entrepreneurs Network writes for City AM

Director of The Entrepreneurs Network, Philip Salter, writes for City AM - "The workspace, the incubator, and the accelerator: What you need to know" Read the article here.

"It's a truism of entrepreneurship that the road to riches is full of at least as many lows as highs. That’s why many entrepreneurs don’t take the leap until they meet the right partner to jump into business with. This isn’t just about co-founders having complementary skills; the support of a business partner can be invaluable. For better or worse, it is often the difference between giving up and persevering."

Ben Southwood is quoted in City AM on the Bank of England's inflation policy

The Adam Smith Institue's Head of Policy, Ben Southwood, was quoted in City AM this morning on the Bank of England's inflation policy. Read the article here.

"Ben Southwood, head of policy at the Adam Smith Institute, argues the opposite. "Under half of the population can tell you who sets the base interest rate", says Southwood, implying that policy simply isn't well understood. As for working well throughout the business cycle, he says that a regime of inflation targeting has seen spending growth "anemic" since the financial crisis. NGDP growth still remains below its long-term trend."

Ben Southwood writes on NGDP targeting for Conservative Home

The Adam Smith Institute's Head of Policy, Ben Southwood, wrote a comment piece for Conservative Home about the importance of nominal GDP targeting.

His article follows the annual Adam Smith Lecture, at which Prof Scott Sumner delivered an address on the same topic.

Read the article here.

"Monetary policy may seem dry, but it has the power to put economies on life support, or if done correctly, bring them back to life."

Dr Eamonn Butler is quoted in the Telegraph

Dr Eamonn Butler, Director of the Adam Smith Institute, was mentioned in Sue Cameron's article on the disconnect between Whitehall and policy makers.

Read the article here.

"Margaret Thatcher was an Oxford graduate but she used to boast that “I never let it hold me back”. When she was PM, the university spitefully refused to give her an honorary degree. Now, though, attitudes there are changing. Earlier this year the Oxford Union held a debate on the motion: “This House believes that Margaret Thatcher saved Britain.” I was one of the speakers supporting the motion in a team led by Tom King and ably supported by the Tory MP Conor Burns and Eamonn Butler, director of the Adam Smith Institute.

"All of us struggled to make the students understand what life had been like in the Seventies, with endless strikes and nationalised industries that had no concept of competition or consumer choice. The clincher came from Butler, who said: “It was like North Korea – but without the hope.” The motion was carried by 176 to 103."

Press Release: Central banks can revive the global economy, says economist who inspired QE3

Professor Scott Sumner will be hosted by the Adam Smith Institute from 17th June - 21st June. To arrange an interview with Prof. Sumner, contact Kate Andrews, Communications Manager: kate@adamsmith.org / 07584 778 207

Central banks can revive the global economy by targeting spending levels instead of inflation, Prof. Scott Sumner said this evening (TUESDAY 17TH JUNE) at the 2014 Adam Smith Lecture held by the free market Adam Smith Institute in Westminster.

Prof Sumner said that:

  • Cuts and hikes to government spending are economically irrelevant when the central bank is trying to hit a target
  • Central bank policy is highly effective even when interest rates hit zero
  • Central banks should abandon inflation targeting and instead guarantee the stability of the total amount of spending in the economy

Prof Sumner added that nearly all top monetary economists agreed how to deal with recessions in 2008, but they appear to have forgotten what they knew then, despite events since the crisis highlighting the power of monetary policy and the irrelevance of fiscal policy.

Prof Sumner argued that, done right, monetary policy can totally offset the macroeconomic cost of government spending cuts. The Nobel Prize-winning economist Paul Krugman said that the US economy's performance in 2013 was a 'test' of this – Sumner argued that the US's economic revival that year following QE3 was evidence that central banks have enormous power to stabilise the economy, far more than most politicians realise.

The best monetary policy, said Sumner, was for central banks to target nominal GDP instead of inflation. This would mean that after a shock, like an oil crisis, central banks would pledge to keep the level of spending constant along its growth path. Even though the real spending power would fall, it would avoid the 'musical chairs' problem created where spending levels fall and, combined with wages that take time to fall in nominal terms, leads to widespread unemployment.

Sumner, who is a professor of economics at Bentley University in the US, was called 'the blogger who saved the US economy' by The Atlantic (his blogging at themoneyillusion.com was a major factor behind QE3), and in 2012 Foreign Policy ranked him 15th in their Global Thinker index – joint placed with then-Chairman of the US Federal Reserve Ben Bernanke. He is considered the father of the 'Market Monetarist' school of macroeconomics, which argues that economic stability can be safeguarded if central banks target the level of nominal GDP instead of inflation.

Sam Bowman, Research Director of the Adam Smith Institute, said: "If anyone doubts the importance of monetary policy, they should compare the plight of the Eurozone with that of Japan. The Eurozone was driven into a second recession after the ECB raised interest rate hikes, while Japan is booming after Shinzo Abe's government began to pursue a policy of easy money through low rates and quantitative easing.

"Scott Sumner is one of the most brilliant economists of his generation, and his speech last night should be listened to carefully by policymakers around the world."

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.