An awful lot is up for grabs in 2017. Brexit is going to be such a big change in British politics that we'll have to reconsider nearly everything we do. Big multinationals are thinking about moving to Dublin or Frankfurt? OK, let’s think about cutting taxes so they have a reason to stay. London rents are too expensive to attract talented Indian software engineers? OK, what can we do about planning?
Donald Trump’s election victory is going to embolden economic nationalists around the world, especially if it takes some time for the real cost of his policies to become clear. I’m less pessimistic about Trump than some people, but when the President of the United States says things like “China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade”, it’s not good news for Smithian liberals.
The world is in a process of extreme flux. Whether that flux ends well or badly is up for grabs. We at the Adam Smith Institute tend to think of times like this as opportunities to change things for the better. When the big debates are about trade versus autarky, individualism versus collectivism, and bottom-up versus top-down ways of solving social problems, we think the real world is on our side, and if we do things right we can win.
Over the next two weeks, we’ll be writing about the areas where we’re going to be focusing our efforts in 2017, outlining what we've got planned. Among these focuses are:
- Free market urbanism. The UK needs free market planning and transport policies that allow lots more houses to be built where the demand actually is, of the kind that people actually want to live in and around, supported by infrastructure of the sort that people actually want and are willing to pay for. We believe in dense, beautiful, booming cities surrounded by green, open communities for families who prefer suburban life – all within the reach of people on normal incomes. In 2017 we’ll show how the market and bottom-up planning laws can get us these things, and try to promote policies that overcome the political obstacles to them.
- Pro-growth tax reform. Not all taxes are created equal. Some can be much more harmful than others because of the effect they have on economic activity. Those worst taxes are ones on capital, like corporation tax, capital gains tax and taxes on saved income, and taxes on transactions, like stamp duty. Growth matters a lot, and boosting it even by little amounts really can add up – by some measures, fixing our tax system could raise GDP by 7% or more. To put that in perspective, Nobel economist Robert Lucas reckons that scrapping all taxes on capital could make us even better off than eliminating the business cycle and all market monopolies. Our vision is a tax code that does as little harm to economic growth as possible, and in 2017 we’ll be outlining how to fix Britain’s tax system so that we stop taxing growth.
- Robust capitalism. We can pretend that nobody has any complaints about global capitalism, or we can be realistic and try to change the fact that they do. The global liberal order took a beating in 2016, and defending it will mean tackling the biggest obstacles to people’s satisfaction with their lives in places ‘left behind’. That means promoting a capitalism that works for people across the country and across society: devolving powers over spending and regulation to city regions so less prosperous parts of the country can gain a competitive advantage; replacing the welfare system with a simple, pro-work Negative Income Tax so that people have the flexibility to reskill as technology changes the job market; and designing an immigration system that brings us the best and brightest talent from around the world without creating native resentment.
- Liberal solutions to everyday problems. What does a free market think tank have to say to people who rarely think about politics, but who are affected by it all the same? This year we will be making a conscious, concerted effort to break out of the Westminster bubble – break out of the politics bubble, really – and talk about how to solve some of the problems that affect people across the country. The biggest among these is how to make childcare less expensive, so women have more freedom to return to work after having children and parents have an easier time raising their families. We’re going to be pushing ahead to get the rules banning safe standing football stadiums lifted, so ticket prices can fall, and we’ll be making the case for a liberal approach to the nighttime economy so that people can have an better and cheaper time when they go out in the evenings.
- Entrepreneurship policy that works. Way too much of the government’s policy to support entrepreneurs ends up being a boondoggle for “grantrepreneurs” rather than the real innovators. Our work on entrepreneurship, through our sister think tank the Entrepreneurs’ Network, is about cutting through the PR guff and letting entrepreneurs speak for themselves to government, and focusing on the policies that really promote business innovation: simpler regulations, lower taxes, and openness to the rest of the world.
- A united, global Brexit. Brexit is going to dominate British politics and it’s crucial that there are voices in favour of free trade with the EU and the rest of the world, and a liberal approach to migration that nonetheless maintains control over Britain’s borders. We’ll be working with other groups, left and right, Leave and Remain, to promote a liberal Brexit that the whole country can support, and gets Britain her sovereignty and the freedom to trade with the world while preserving deep economic ties with our neighbours in Europe.
- Techno-optimism and harm reduction. We’re nothing if not optimistic at the ASI, and a lot of that comes from our confidence in the ability of technology to solve many of our problems. We seem to be on the cusp of enormous steps forward in technology – from driverless cars and drones to the blockchain, 3D printing and machine learning – that promise to change our lives for the better, if we let them. And in the field of harm reduction, our Sinnovation paper made the case that e-cigarettes, already saving millions of people from the diseases caused by smoking, are just the beginning of technology’s answer to the costs of having fun – hangover-free booze and other reduced risk tobacco products are on the way too, but only if we let them. It’s our job to make sure we do.
On top of all this, we’ll be continuing our work on financial stability and monetary reform, led by work by our senior fellows Prof Kevin Dowd and Prof Anthony J Evans, and on public service reform that brings choice and competition to the NHS and education sectors.
We’re about giving people control over their own lives. We want an open, prosperous Britain, where solutions to people’s problems come from markets, not the state. We make our case on the basis of the facts, not dogma, because we want to persuade others and not just preach to the choir. These are radical ideas, for sure – but there’s never been a better time to think big.