I had the great pleasure last night of speaking to the Economic Research Council on the subject of Political Economy and the Crisis. I argued that:
Economics should become political economy, embracing the problem of knowledge in the social sciences, morality (think Adam Smith’s Theory of Moral Sentiments) and public choice theory, in particular.
Classical liberalism is the most robust political economy.
The Austrian School offers important insights, particularly into business cycles and capital theory.
The Austrian School predicted and intellectually survived the crisis.
That reality is, or should be, a challenge to the contemporary paradigm.
The implications for financial reform are profound.
We had a lively Q&A covering subjects from the Chinese socio-economic model to the residual role of the state. We agreed that we must not seek a rational reconstruction of society and we left outstanding the key challenge: to determine how to reform the financial system to deliver a free-market monetary regime.
My slides are available as a PDF here. For related reading, please see our primer and this article on the need for a paradigm shift in economics.
A couple of weeks ago in the offices of the Adam Smith Institute, I addressed more than twenty of China’s most senior economic thinkers while they visited London. All were members of China’s Development Research Centre (DRC) – the leading think tank of Communist Party’s Central Committee and the State Council.
At their request, I touched on the history of the UK’s free market think tanks, the importance of maintaining independence and how, in the Anglo-sphere, such organisations are often funded by a diverse array of non-governmental sources including individuals, foundations and enterprises.
I also talked about money, banking, accountancy rules, the sovereign debt crisis and I even briefly managed to touch on the issue of gold. Everyone smiled when we mused over the fact that the Chinese state represents 32 percent of GDP while the UK government is heading towards 52 percent.
However, the real fun started when we moved to the questions and answers section. Very quickly, a hand went up in the front row and through the translator a gentleman on my right asked “have you ever heard of the Austrian School of Economics?” I smiled, paused, said “yes”, explained why, and we all moved forward.
Later, the leader of the delegation said that while Adam Smith had been translated in to high Chinese at the beginning of the twentieth century, the Communist Party had had it more accessibly translated thirty years ago – in the early 1980s.
Now, reflecting on all of this after the event, I was reminded of something a friend at Liberty Fund had said to me concerning the launch of The Online Library of Liberty in the middle of the last decade. Within two days of the library going live its South East Asian server out of Australia crashed. Under investigation it turned that it had been due to the number of students in China trying to download J.S. Mill’s On Liberty.
I have no idea how many people in China are reading the classical liberal ideas of Adam Smith and J.S. Mill or are in any way familiar with the greats of the Austrian School of Economics. But this is a question to which I wish I had an answer.
When I worked in Brussels some years ago, I played a minor part in helping Dr. Cecile Philippe set up the fabulous Institut Economique Molinari
Mindful of our work at The Cobden Centre, Cecile recently emailed me details of a forthcoming event she and her Molinari colleagues are currently organising. The ‘Austrian Economics Autumn School’ will be hosted in Troyes in France between 30th September and 2nd October 2011. Critically assessing stimulus plans, debt, bank bailouts and all manner of other statist approaches, this showcase event will present a wide ranging exploration of the ideas of such notables as Ludwig von Mises, Friedrich Hayek and Murray Rothbard.
Today, the organisers extend a cordial invitation to those students who want to discover a range of arguments that coherently explain the complexity of economic realities. The event is also designed for those professionals interested in understanding the meaning and unintended consequences of contemporary economic policies.
Along with this website , the Institut Economique Molinari is also involved in encouraging a new generation of writer interested in promoting the principles of individual prosperity. Believing that gold has a key role to play within the international monetary system, both organisations have jointly proposed the following theme for their 2011 op-ed contest: “The role of gold in reforming the international monetary system”.
Details on the Autumn School and Best Op-Ed Contest can be found here.
A couple of days ago I was delighted to address 100 students and youngsters involved with the Young Britons Foundation. Led by Donal Blaney, this organisation does so much to inform and inspire young people interested in current affairs, the history of ideas and leadership.
Hosted in Committee Room 10 of the House of Commons, I spoke for 15 minutes on the recent financial crisis. Providing a critique of state-failure and the underlying institutional architecture of our so-called market economy, the audience was clearly fascinated by the view that because we have a nationalised fiat currency, a statutory central bank and a semi-Sovietised monetary policy committee at its heart of our economy, simplistic notions of market-failure to explain what has happened will not suffice.
This was a fast paced and racy event. From my question and answer session it was clear that many of those present had had their minds opened to a perspective that they will now go on to explore further of their own volition. Other speakers included Steve Baker MP, Iain Dale, Sajid Javid MP, Rt. Hon Peter Lilley MP, James Delingpole, Douglas Carswell MP, Simon Richards and Shane Frith: to name but a fraction of the full list.
TCC Director Steve Baker with Peace One Day Ambassador Jude Law
The Cobden Centre exists to promote social progress through honest money, free trade and peace. As you can see from those links, we have touched on each issue from our founding but, events being what they are, we have concentrated on honest money over the last year.
Our CEO, Dr Tim Evans, intends to deliver a step change in our activities as we move through 2011. In addition to deepening our work on money and banking, we will also develop our work on free trade and peace, making appointments to our team of Senior Fellows and our Advisory Board.
In that context, I was delighted to attend an event this week in Parliament held by Peace One Day and hosted by my colleague Nadhim Zahawi MP.
As Member of Parliament for Wycombe, I am acutely aware of the widespread consequences of armed conflict on individuals across the world. For example, many of my constituents hail from Kashmir and Pakistan and their extended families and friends continue to be directly affected by the conflicts in the region and their fallout. Many are of Sri Lankan descent and have lived through conflict there, often having lost loved ones.
The tragedies of violence around the world come home to my constituents day after day. For anyone serious about promoting human flourishing, peace must be a prerequisite and the initiation of violence anathema.
It was an incredible privilege to meet Peace One Day founder and Chairman Jeremy Gilley, as well as their Ambassador, Jude Law. From their website:
In 1999, preoccupied with questions about the fundamental nature of humanity and the most pressing issues of our time, filmmaker Jeremy Gilley launched Peace One Day and set out to find a starting point for peace. He had a mission: to document his efforts to establish the first ever annual day of global ceasefire and non-violence with a fixed calendar date.
Remarkably, two years on, he achieved his primary objective when the 192 member states of the United Nations unanimously adopted 21 September as an annual day of global ceasefire and non-violence on the UN International Day of Peace. We call that day Peace Day.
Astonishingly, for three consecutive years, Peace Day has been observed in Afghanistan on a national scale.
To learn more, please watch Peace One Day’s introductory film:
I was humbled to learn of the achievements of Jeremy Gilley and Peace One Day. As The Cobden Centre sets out to grow in new ways, I hope we may deliver even a fraction of that contribution made by this inspiring man and organisation towards human flourishing.
Over on my own website, I introduce the research showing the true scale of Britain’s liabilities and report:
As Chairman of the APPG on Economics, Money and Banking, I hosted a panel discussion on the documentary featuring film maker Martin Durkin, the Adam Smith Institute’s Dr Eamonn Butler, IEA Director General Mark Littlewood and CityAM’s Editor Allister Heath.
The discussion was dramatic:
Martin insisted only lower taxes would get us out of our present hole.
Allister described the growth of the state, the flaws in monetary policy and the regulator regime which caused the crisis, calling for lower public spending.
Mark said we should be “hysterical” and “apoplectic” about the state’s true liabilities before making some spectacular remarks about our democracy and the election (see from min 13 in the video below).
Eamonn felt things were even worse and was not sure our grandchildren would wish to pay the benefits we are awarding ourselves.
Here’s a video of the introductory remarks and the responses to the first question. Martin gets the last word on the likely public reaction to doing the right thing:
TCC has had a great year and, last Thursday, we held our first Cobden Centre Christmas reception in celebration at the National Liberal Club.
In 2010, we have raised our profile and we are now well on our way to being the scholarly, effective and powerful educational charity that our founder and Chairman Toby Baxendale always intended. Today, we are increasingly respected by scholars, students and opinion formers alike.
Already, TCC teachings are starting to change the parameters of debate concerning money and banking.
Organisationally, it is a slick, professional and cutting edge organisation.
At the beginning of the year, the Chief Executive, Dr. Tim Evans, started to pull together a unique Network of Voices (Senior Fellows), a high quality Academic Advisory Council, and a small number of core staff.
With a web site initially developed by yours truly and, more recently, by Mark Goodhand, the organisation’s web content and visitor numbers have grown spectacularly over the course of the year, as you can see below :
In the Spring, the organisation held a colloquium, its first annual lecture and it launched its Education Network – the latter being made possible with the appointment of its Executive Director of the Education Network, Sam Bowman.
In the summer, the Chief Executive, Dr Tim Evans, launched TCC’s bi-monthly speaker dinners.
With my election to Parliament, the autumn saw the launch of an All Party Parliamentary Group on Economics, Money and Banking, not to mention a Private Members Bill concerned with bank reform, championed by my friend Douglas Carswell MP.
Throughout 2010, TCC Directors, Fellows and Supporters have spoken at many scholarly and educational meetings including Warwick University, Cambridge University, Oxford University, London University, a Conservative Party Conference Fringe Meeting and countless others.
Today, the organisation has a database with many, many hundreds of people on it.
It uses Facebook, Twitter and other social media platforms to multiply its impact.
And through use of videos and the recent launch of Cobden Centre Radio – ably overseen by Andy Duncan and Brian Micklethwait – the TCC is also becoming a past master at on-line outreach and communications.
Finally, in recent times all of this has started to bear fruit in terms of the organisation’s broader media successes.
Having been recently promoted in newspapers such as the Daily Telegraph, the Wall Street Journal and across a host of blogs and other web sites, we end this year not only established with a good reputation and visibility, but with a firm foundation upon which to prioritise a step change in our fundraising during 2011.
The Cobden Centre is now an active presence in the world of ideas and practical action and we look forward to the years ahead.
Today, Cobden Centre comrades and I are off to inject some Austrianism into the Positive Money conference. As you can tell from the Cobden Centre’s literature page, we are not afraid to work with other schools of thought — there are significant areas of overlap.
Does the fundamental design of the banking system automatically lead to an unstable, unproductive, unfair and unsustainable economy and society? If the answer is yes, then should we take the opportunity to truly fix the problem now, or simply make superficial changes and start saving up for the next bailout?
This is, of course, very much where I am coming from. However, there is a hint of anti-capitalism about the conference page, something which I hope to contribute to overturning.
The fundamental problem is, after all, the state: state monopoly, state planning, legal privilege, the socialisation of risk and the privatisation of profit. What is wrong is that we have the appearance of capitalism without the correct institutional architecture.
Yesterday, I gave a talk at the Libertarian Alliance Conference 2010 entitled Honest Money and the Future of Banking. Please click the image below for the slides.
Video footage of my presentation will be available shortly.
