The Backbencher’s Daniel Pryor caught up with Mark Littlewood, who is the Director General of the IEA: the UK’s original free-market think-tank.
1. First of all, thank you for agreeing to be interviewed by The Backbencher! You’ve previously been involved in many groups such as Progressive Vision and NO2ID, but what first inspired you to enter the world of politics? Could you point to any specific people or a certain event?
As a kid, I was interested in politics almost as a sort of game or sport. I remember following the Foot versus Healey Labour leadership contest avidly in 1980 at the age of eight. I wasn’t so much interested in what either candidate stood for (although my father was pretty clear that he considered Foot a dangerous extremist), I was more interested in what a candidate had to do to win. I treated the 139 to 129 win for Foot a bit like my friends would treat a football or cricket result.
I only really became fascinated in political ideas when I went to university in 1990. In so far as I had any philosophical ideas before arriving at Oxford, I was a “purist democrat.” I wasn’t so much interested in what the right policy outcome was to tackle any particular problem, I was more interested in what legitimised deciding on a policy outcome. So, I was keen on widespread use of referendums and was a staunch opponent of the first-past-the-post electoral system (which seemed to allow 40% of voters to rule over the other 60%).
In my second year, I read Robert Nozick’s “Anarchy, State and Utopia”. The scales fell from my eyes. I converted from being a rather soggy, sludgy social democrat into being a passionate libertarian almost overnight. It seemed to me that free markets were the unalloyed proportional representation I’d always yearned for. If 56.3% of people wanted to buy their socks from M&S and the other 43.7% wanted to buy them from Next, you didn’t need a referendum on sock provision, you just let individuals choose their own sock supplier. A similar logic should apply to health, education and pensions.
I remain fascinated by philosophical debates about the limits of markets, but I’m steadfast in my view that we need an enormously smaller state and a colossal transfer of power away from politicians and bureaucrats and towards individual men and women. That core belief has guided virtually all my work over the last two decades.
2. As Director General of the IEA, please give a basic outline of what the group exists to accomplish, and describe your day-to-day role within the institute.
We’re in the business of educating people. Free markets have proven to be an incredibly effective means of enriching humanity, yet many people remain seduced by the dead hand of centralised state planning. Often, free market truths are felt to be counter-intuitive. For example, many people still instinctively believe that a free trade between two individuals is a zero sum game. If one party gains from the transaction, the other must have lost out by the same amount. In fact, trade almost always benefits both parties.
The IEA seeks to explain free market ideas through a wide range of activities. We have an extensive publishing programme, producing high quality, peer-reviewed research on a huge range of topics from banking reform to tobacco regulation, from poverty relief to transport policy. We complement this work with dozens of debates, panel discussions and lectures every year, usually hosted at our offices in Westminster. This is underpinned by an outreach programme to explain free market ideas to students, teachers, politicians, journalists and civil society as a whole. IEA spokespeople appear hundreds of times a year in the national media, applying free market thinking to day-to-day political and economic events.
As the Institute’s chief executive, I’m the main mouth and face of the organisation. On some very rare occasions, I’m the brains too! I need to raise the money each year to keep the show on the road, I put the free market case externally at events, public meetings and on the media and I have to motivate, direct and manage the IEA’s staff. The last of these tasks is by far the easiest as the Institute has assembled a truly impressive professional team covering research, communications, events, outreach and all of a think tank’s operational needs.
3. If everyone in Britain were to read one publication from the IEA, which would it be and why?
There are so many to choose from that it’s difficult to pick a single “one size fits all” publication for the entire British public.
If you want to understand the philosophical underpinnings of much of the Institute’s work, try our condensed version of Hayek’s seminal work “The Road to Serfdom” (link). If you’re interested to know how Britain might look today if the IEA’s principles were being put into practice, pick up “Sharper Axes, Lower Taxes: Big Steps to a Smaller State” (link)
4. What score would you give this Coalition government out of ten, and what realistic policies could they adopt in the next two years to improve that score?
4/10 and slowly dropping. They have at least identified government overspending as a major problem. Sadly, they have shown very limited guile and guts in actually tackling it. On the present trajectory, it will take several centuries to eliminate the budget deficit, not the single five-year Parliament the coalition had initially planned. That rate of progress is beneath feeble and beyond lamentable. On deficit reduction, the government has “talked dry, acted wet”, they should have “talked wet, acted dry”.
Very little has been done to encourage entrepreneurship and private sector growth. There have been a few baby steps in the right sort of direction – for example, cuts in the rate of corporation tax – but these do not amount to the full blown supply side revolution the country needs. We were promised a bonfire of red tape. In fact, at best, there has been a very gentle smouldering.
By the end of this Parliament, George Osborne will hold the record for being the most Keynesian Chancellor Britain has ever seen. He will have added about £600bn to the national debt. His unintended legacy may be to prove, once again, that Keynesian deficit-financed fiscal stimulus does not bring about economic growth.
The coalition are always keen to point out that they inherited a grim economic legacy. And they are right. In effect, they have had to play the role of a doctor being on the scene of a car accident. But having half-heartedly applied a couple of tourniquets, it’s increasingly clear they have no real plan for rehabilitating the patient to full and rude health.
Governments rarely achieve much in their last two years in office. But the coalition should look again at public spending and this time actually get it under some semblance of control rather than just pretending to.
5. Ruth Porter (the IEA’s Communications Director) recently participated in a New Statesman debate, opposing the following motion: ‘This house believes the left won the 20th century’. How optimistic are you that free-marketers can win the 21st century, and why?
In Britain, I’m very pessimistic over a five year time horizon, but optimistic over the course of the next twenty years. The present crop of mainstream politicians are, by and large, only willing to engage in a few minor tweaks and twiddles. They probably won’t quite manage to bankrupt the nation, but neither are they going to rocket launch it to new heights.
Over the medium term, I’m of a much sunnier disposition. The public are growing wearier and more cynical about politicians of all stripes. This provides an opportunity for those promoting a vision based not on merely changing the managerial team who run our bloated state, but on radically reducing the size of the state altogether. If you think politicians are the answer to our problems, you’re asking the wrong question.
I think it’s also beginning to seep into public consciousness that a state sector that accounts for about half of our national income is morbidly obese. The historical record and contemporary evidence show that if you want a prosperous, growing economy, you’re wise to limit the state to controlling only about 25% of the economy. If we can shift public culture away from insisting that politicians always need to “do something” and instead start demanding that they back off from fiddling in and directing so many aspects of our lives, then the prospects for a free market approach to our affairs are good.
6. What are your predictions for the results of this Thursday’s local elections?
I’m getting a better return on my football bets than on my political bets at present, so I’m loathe to make a prediction. The joker in the pack is UKIP, of course. If they are able to secure more than 10% of the national vote, then there is a good case for believing that we really are moving to a four party system (or perhaps a “2+2 party system”). If the Tories perform particularly badly in the North, there’s likely to be another round of Conservative panic over whether they can ever win a majority at Westminster.
Whatever the final outcome on Thursday, I think the battle of ideas in Britain will engage people more and more, whilst traditional party politics will engage them less and less. That bodes well for the IEA and for the think tank sector in general.
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