The Adam Smith Institute (ASI) is a UK-based

neoliberal Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...

think tank A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governme ...

and lobbying group, named after

Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...

, a Scottish moral philosopher and classical economist. The Institute advocates

free market In economics, a free market is an economic market (economics), system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of ...

and classical liberal ideas, primarily via the formation of policy options with regard to

public choice theory Public choice, or public choice theory, is "the use of economic tools to deal with traditional problems of political science." Gordon Tullock, 9872008, "public choice," '' The New Palgrave Dictionary of Economics''. . It includes the study of ...

, which political decision makers seek to develop upon. ASI President Madsen Pirie has sought to describe the activity of the organisation as " propose things which people regard as being on the edge of lunacy. The next thing you know, they're on the edge of policy". The ASI formed the primary intellectual force behind the privatisation of state-owned industries during the premiership of

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...

, and alongside the

Centre for Policy Studies The Centre for Policy Studies (CPS) is a centre-right think tanks, think tank and advocacy group in the United Kingdom. Its goal is to promote coherent and practical policies based on its founding principles of: free markets, "small state," lo ...

and Institute of Economic Affairs advanced a neoliberal approach toward public policy on privatisation, taxation, education and healthcare. A number of the policies presented by the organisation were adopted by the administrations of

John Major Sir John Major (born 29 March 1943) is a British retired politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1990 to 1997. Following his defeat to Ton ...

and

Tony Blair Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party (UK), Leader of the Labour Party from 1994 to 2007. He was Leader ...

and members of the ASI have also advised non-United Kingdom governments. Beyond policy development, the organisation advocates free market ideas through the publication and distribution of literature, the promotion of Tax Freedom Day, the hosting of speaker events for students and young people, media appearances and blogging. The ASI is rated as one of the least transparent think tanks in the United Kingdom in relation to funding and received 3% of its funding from the tobacco industry in 2011.

History

Foundation

Madsen Pirie and brothers Eamonn and Stuart Butler were students together at the

University of St Andrews The University of St Andrews (, ; abbreviated as St And in post-nominals) is a public university in St Andrews, Scotland. It is the List of oldest universities in continuous operation, oldest of the four ancient universities of Scotland and, f ...

in Scotland. Pirie left in 1974 to work for the Republican Study Committee in Washington, D.C., and then took up a professorship in Philosophy at Hillsdale College. He was joined there by Stuart Butler while Eamonn Butler went to work with Edwin Feulner, who became co-founder and director of the free-market think tank

The Heritage Foundation The Heritage Foundation (or simply Heritage) is an American Conservatism in the United States, conservative think tank based in Washington, D.C. Founded in 1973, it took a leading role in the conservative movement in the 1980s during the Presi ...

. After their experience in the United States, they returned to the United Kingdom in 1977 to found their own think tank, called the Adam Smith Institute. After a year, Stuart Butler returned to the United States as Vice President of the Heritage in charge of domestic policy while Eamonn Butler remained with Madsen Pirie as co-directors of the institute. One of their St Andrews friends, Douglas Mason, who had been active in the university's Conservative Association, did his most influential research and writing for the institute. Mason became one of its regular authors. The ASI's Omega Project (1981–1983) led by Peter Young produced a series of 19 papers shadowing each Department of State and advocated such things as the compulsory contracting-out of most local services such as refuse collection, the replacement of much of the welfare state by private insurance and further privatisation of public sector services and industries, including aspects of police services.

Thatcher's inner circle

The

era saw the think tank movement come of age and achieve influence and with the

(CPS) and the Institute of Economic Affairs (IEA) and the ASI was one of three relied upon by the Thatcher government for policy. Unlike the CPS, which had been established by Thatcher and Keith Joseph; and the IEA, which focused on more theoretical matters, the ASI was well-placed to produce bold and direct policies. Despite this role, the Institute developed an iconoclastic reputation, cynical about politicians, but enthusiastic to engage with them. The institute's relationship with Thatcher was not without troubles. Although Madsen Pirie was the architect of much of the privatisation policy, he had no emotional ties to Thatcher, nor did the ASI propose policies on a range of social issues despite its

Thatcherite Thatcherism is a form of British conservative ideology named after Conservative Party (UK), Conservative Party leader Margaret Thatcher that relates to not just her political platform and particular policies but also her personal character a ...

reputation. The ASI took the view that the market was "more genuinely democratic than the public sector, involving the decisions of far more individuals and at much more frequent intervals". The Institute published Douglas Mason's recommendation that local government rates (the local government tax) should be replaced by a per-capita charge. A version of this was later implemented by the

Conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...

government introducing the Community Charge in Scotland in 1989 and in England and Wales in 1990. Other policy recommendations which Douglas Mason published with the ASI included the privatisation of the

Royal Mail Royal Mail Group Limited, trading as Royal Mail, is a British postal service and courier company. It is owned by International Distribution Services. It operates the brands Royal Mail (letters and parcels) and Parcelforce Worldwide (parcels) ...

(''The Last Post'' − 1991); the introduction of charges in British public libraries (''Ex Libris'' – 1986); the privatisation of the Forestry Commission; the complete removal of arts subsidies (''Expounding The Arts'' – 1987); and the abolition of restrictions on drinking (''Time To Call Time'' – 1986).

After Thatcher

In November 1994, the Institute began a review of welfare reform called Operation Underclass, aimed at methods of creating jobs for the long-term unemployed. Some elements of the programme were adopted by the government within months. The ejection of the Conservative government in 1997 did not have as dramatic an effect on the ASI as some had anticipated. The Institute praised the Blair government's welfare-to-work programmes, describing it as "the most successful policy initiative of this century". The ASI publicly welcomed the news that Labour had implemented the long-held ASI aim of an independent Bank of England, Madsen Pirie gave it a nine out of ten for performance. Eamonn Butler has ascribed this flexibility to who is in power to their role not being "to be political or shout slogans", but to be "policy engineers". The ASI then collaborated with the MORI organisation on a series of opinion polls to measure such things as the goals of young people and students, and public attitudes to state services. The ASI's libertarian label was officially changed to neoliberal on 10 October 2016. In February 2022, the ASI wrote a paper arguing that the

Moon The Moon is Earth's only natural satellite. It Orbit of the Moon, orbits around Earth at Lunar distance, an average distance of (; about 30 times Earth diameter, Earth's diameter). The Moon rotation, rotates, with a rotation period (lunar ...

should be privatized to eliminate poverty on Earth. The paper argued that the Moon's land should be divided and given to different countries that would then be rented to companies in order to increase economic growth through

space tourism Space tourism is human space travel for recreational purposes. There are several different types of space tourism, including orbital, suborbital and lunar space tourism. Tourists are motivated by the possibility of viewing Earth from space, ...

and exploration. The

Outer Space Treaty The Outer Space Treaty, formally the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, is a Multilateralism, multilateral treaty that forms the bas ...

of 1967 prohibits individuals and countries from owning property in space. According to ''

The Guardian ''The Guardian'' is a British daily newspaper. It was founded in Manchester in 1821 as ''The Manchester Guardian'' and changed its name in 1959, followed by a move to London. Along with its sister paper, ''The Guardian Weekly'', ''The Guardi ...

'', the report received an "outraged online reaction".

International work

In 1992, the Institute founded a consulting company, Adam Smith International Ltd, which was "charged with overseeing the overseas work of the institute nan attempt to capitalise on the growing international trend towards

economic liberalization Economic liberalization, or economic liberalisation, is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liber ...

and marketization".Denham and Garnett (1998), p. 153 While Eamonn Butler and Madsen Pirie were as of 1998 members of the management board of both organisations, the management teams of Adam Smith International and the Institute are now separate.

Funding

Think tank Transparify ranked the Institute as one of the four least transparent think tanks in the United Kingdom in relation to funding. Transparify's report ''How Transparent are Think Tanks about Who Funds Them 2016?'' rated them as "highly opaque", one of "a handful of think tanks that refuse to reveal even the identities of their donors". In 2022, the website Who Funds You? rated the Institute as E, the lowest transparency rating (rating goes from A to E). TobaccoTactics, the website of the Tobacco Control Research Group at the

University of Bath The University of Bath is a public research university in Bath, England. Bath received its royal charter in 1966 as Bath University of Technology, along with a number of other institutions following the Robbins Report. Like the University ...

, details the institute's funding by the tobacco industry. ''

'' reported that the Institute received three percent of its funding from the tobacco industry in 2011.

Investigated for breaches of charities rules

In December 2018, the institute, which consists of at least three different legal entities (a British company, a British charity and an American non-profit foundation), was reported to be under investigation by the

Charity Commission The Charity Commission for England and Wales is a non-ministerial department of His Majesty's Government that regulates registered charities in England and Wales and maintains the Central Register of Charities. Its counterparts in Scotland and ...

for improper use of funds. Charities in England and Wales are required to be genuinely independent from other entities, and cannot perform political campaigning. Contributors giving £1,000 a year were offered "opportunities to attend power lunches and patrons dinners with influential figures, including politicians, ministers, journalists and academics."

Activities

Tax Freedom Day

The institute publishes the British version of Tax Freedom Day, the day in the year when the average person has earned enough to pay his or her annual tax bill. The Institute calculates the figure by expressing the government's take of the economy as a percentage of the year, including all forms of taxation, direct and indirect, national and local.

The Next Generation

The Liberty League was a United Kingdom student organisation in the early 2010s, was founded by members of the Next Generation Committee (James Lawson, William Hamilton and Anton Howes). It aimed to support classical liberalism. Its annual Freedom Forum conference was transferred to the institute.

Influence

In January 2009, ''

Foreign Policy Foreign policy, also known as external policy, is the set of strategies and actions a State (polity), state employs in its interactions with other states, unions, and international entities. It encompasses a wide range of objectives, includ ...

'' and the

University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...

named the Institute among the top 10 think-tanks in the world outside of the United States. The institute is highly influential in United Kingdom public policy and was "a pioneer of privatisation" in the United Kingdom and elsewhere. Early Institute papers proposed the outsourcing of local government services (1980), the fundamentals of the

poll tax A poll tax, also known as head tax or capitation, is a tax levied as a fixed sum on every liable individual (typically every adult), without reference to income or resources. ''Poll'' is an archaic term for "head" or "top of the head". The sen ...

(1981–1985) and the

deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

and

privatisation Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...

of transportation (1980). Other influences include the United Kingdom's cutting of the highest rate of

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

from 83% to 40% in the late 1980s and its liberalisation of alcohol licensing laws. The institute has released a series of Roadmap to Reform papers, calling for shifts in public policy in Health, Deregulation and Europe. In 2006, the Institute released a paper calling for a rethink of Britain's countryside policy. According to the ''2014 Global Go To

Think Tank A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governme ...

Index Report'' ( Think Tanks and Civil Societies Program,

), the ASI is ranked number 69 (of 150) of the "Top Think Tanks Worldwide". Other "Top Think Tank" rankings include No. 3 (of 80) in Domestic Economic Policy, No. 5 (of 50) in International Economic Policy, No. 17 (of 60) for Best Use of Social Networks, No. 40 (of 60) of Think Tanks with the Best External Relations/Public Engagement Program, No. 24 (of 70) for the Most Significant Impact on Public Policy, and No. 12 (of 60) for Outstanding Policy-Oriented Public Programs.

Tax reform

A 2005 paper by the Institute proposed a flat-rate income tax of 22% for United Kingdom taxpayers, with the above-referenced tax-free personal allowance of £12,000. '' City A.M.'' editor Allister Heath said of this report that "rarely has a think-tank publication been this influential so quickly. Its arguments have been dissected by the UK Treasury, are well known among the Shadow Treasury Team, have had an influence on some parts of the Liberal Democrats and were even adopted by several minor political parties". The ASI continues to campaign for a

flat tax A flat tax (short for flat-rate tax) is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base. It is not necessarily a fully proportional tax. Implementations are often progressi ...

Public sector reform

Education

The

Education Reform Act 1988 The Education Reform Act 1988 (c. 40) is legislation that introduced multiple changes to the education system in England and Wales, including the introduction of Key Stages and the National Curriculum. It replaced many rules and structures that h ...

reflected many policy changes proposed by the institute, including increasing representation of parents on state school governing boards, shifting control of state schools from the local authority to the board and head teachers and abolishing fixed school catchment areas.

Rail privatisation

With its author Kenneth Irvine, the ASI says it pioneered the

privatisation of British Rail The privatisation of British Rail was the process by which ownership and operation of the Rail transport in Great Britain, railways of Great Britain passed from government control into private hands. Begun in 1994, the process was largely compl ...

with private companies competing for franchises on a separately owned national network (The Right Lines – 1987). This policy was enacted by

's government.

Immigration

The institute is one of the strongest defenders of

immigration Immigration is the international movement of people to a destination country of which they are not usual residents or where they do not possess nationality in order to settle as Permanent residency, permanent residents. Commuting, Commuter ...

Current viewpoints

Green belt

The ASI has written extensively about the effect the

green belt A green belt or greenbelt is a policy, and land-use zone designation used in land-use planning to retain areas of largely undeveloped, wilderness, wild, or agricultural landscape, land surrounding or neighboring urban areas. Similar concepts ...

has had on house prices by restricting where houses can be built. In its paper ''The Green Noose'', the Institute wrote that "simply removing restrictions on land 10 minutes’ walk of a railway station would allow the development of 1 million more homes within the Green Belt surrounding London alone". The ASI believes that instead of simply putting a blanket ban on building in the areas surrounding cities, planning permission should be granted based on the environmental, historic and scientific value of the land.

Rail policy

Amid ongoing debate about the railways, the ASI has been an advocate of the privatised system, writing that much of the rise in passenger numbers since privatisation cannot be attributed to other factors. It has called for increased competition through the use of open access operators or having two operators sharing a franchise and competing with each other.

Publications

; Books * ''Economy and Local Government'', Eamonn Butler & Madsen Pirie, 1981 * ''Aid by Enterprise'', Eamonn Butler & Madsen Pirie, 1984 * ''Hayek'', Eamonn Butler, 1985 * ''Milton Friedman: A Guide to His Economic Thought'', Eamonn Butler, 1985 * ''Micropolitics: Creation of a Successful Policy'', Madsen Pirie, 1988 * ''Wayward Elite: A Critique of British Teacher-Education'', Dennis O'Keeffe, 1990 * ''Adam Smith's Legacy'', Norman Barry et al., 1990 * ''A country at ease with itself'', Michael Forsyth, 1991 * ''Taming the Trade Unions'', Eamonn Butler, 1991 * ''Blueprint for a Revolution'', Madsen Pirie, 1993 * ''Vision: Targets for Britain'', Madsen Pirie, 1994 * ''Shephard's Warning: Setting Schools Back on Course'',

Antony Flew Antony Garrard Newton Flew (; 11 February 1923 – 8 April 2010) was an English philosopher. Belonging to the analytic and evidentialist schools of thought, Flew worked on the philosophy of religion. During the course of his career he taught ...

, 1994 * ''The End of the Welfare State'', Eamonn Butler & Madsen Pirie, 1994 * ''Readings in Liberalism'' (ed. Detmar Doering), 1995 * ''Hayek: A Commemorative Album'' (ed. John Raybould), 1998 * ''City in the Mist'', Douglas Mason, 1998 * ''Simply No Mistake: How the Stakeholder Pension Must Work'', Eamonn Butler, 1998 * ''The Future of the NHS'', Eamonn Butler (ed. Dr. Michelle Tempest), 2008 * ''Adam Smith – A Primer'', Eamonn Butler, 2007 * ''The Best Book on the Market'', Eamonn Butler, 2008 * ''Freedom 101'', Madsen Pirie, 2008 * ''The Rotten State of Britain'', Eamonn Butler, 2009 * ''Ludwig Von Mises: Fountainhead of the Modern Microeconomics Revolution'', Eamonn Butler & Jeff Riggenbach, 2010 (Audiobook) * ''Hayek: His Contribution to the Political and Economic Thought of Our Time'', Eamonn Butler & Jeff Riggenbach, 2010 (Audiobook) * ''The Alternative Manifesto'', Eamonn Butler, 2010 * ''Economics Made Simple'', Madsen Pirie 2012 * ''Think Tank'', Madsen Pirie 2012

Footnotes

References

External links

* {{Authority control Political and economic think tanks based in the United Kingdom Think tanks established in 1977 1977 establishments in the United Kingdom Organisations based in the City of Westminster Neoliberal organizations CANZUK

Institute An institute is an organizational body created for a certain purpose. They are often research organisations (research institutes) created to do research on specific topics, or can also be a professional body. In some countries, institutes ca ...