Institute of Economic Affairs

Template:Short description Template:Use British English Template:Use dmy dates Template:Infobox organization The Institute of Economic Affairs (IEA) is a British right-wing free market think tank,Template:Refn which is registered as a charity.<ref name=charcom>Template:Cite report</ref> Associated with the New Right,<ref name=Den96>Template:Cite book</ref><ref name=Sto97>Template:Cite book</ref> the IEA describes itself as an "educational research institute",<ref name=IEAaboutpage>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and says that it seeks to "further the dissemination of free-market thinking" by "analysing and expounding the role of markets in solving economic and social problems".<ref name=IEAaboutpage/><ref name=IEAwedo>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The IEA subscribes to a neoliberal world view and advocates positions based on this ideology.<ref name="Cahill" /> It published climate change denial material between 1994 and 2007.<ref name="pegg" /> It has advocated for privatisation of, and abolition of complete government control of, the National Health Service (NHS), in favour of a healthcare system with market mechanisms.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="courea" /> It has received more than £70,000 from the tobacco industry,<ref name="ash" /><ref name="cigcash" /> although it does not reveal its funders,<ref>Template:Cite news</ref><ref>Template:Cite news</ref> and an IEA director was recorded offering a prospective supporter introductions to policy makers, referred to as "cash for access". The IEA is headquartered in Westminster, London.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="pegg">Template:Cite news</ref>

Founded by businessman and battery farming pioneer Antony Fisher in 1955,<ref name="founded 1955">Template:Cite news</ref> the IEA was one of the first modern think tanks,<ref name=Curtis11/> and promoted Thatcherite right-wing ideology, and free market and monetarist economic policies.<ref name="Hafer92">Template:Cite journal</ref> The IEA has been criticised for operating in a manner closer to that of a lobbying operation than as a genuine think tank.<ref name=obs11nov18>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

HistoryEdit

In 1945 Antony Fisher read an article in Reader's Digest by Friedrich Hayek that summarised Hayek's work The Road to Serfdom.<ref name="ieachronology">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name=Curtis11/> Later that year, Fisher visited Hayek at the London School of Economics. Hayek dissuaded Fisher from embarking on a political and parliamentary career to try to prevent the spread of socialism and central planning.<ref name="ieachronology"/> Instead, Hayek suggested the establishment of a body that could engage in research and reach the intellectuals with reasoned argument,<ref name="ieachronology"/> saying that a think tank would have far more "decisive influence in the great battle of ideas".<ref name="Geoghegan 2024">Template:Cite news</ref> Set up by Fisher and Oliver Smedley,<ref name="Cockett 1994">Template:Cite book Template:Page needed</ref> the IEA was thus founded after Hayek had suggested that an intellectual counterweight through think tanks was necessary to combat the prevailing post-war consensus around Keynesianism and the Butskellism of Rab Butler and Hugh Gaitskell. Fisher, Smedley, and others were successful in building the IEA and its affiliates of Atlas Network into a bastion of free-market economics and neoliberalism,<ref name="Geoghegan 2024"/> which supplanted the post-war Keynesian paradigm.<ref>Template:Cite journal</ref><ref>Template:Cite book</ref><ref>Template:Cite book</ref>

The IEA's first location was a cramped, £3-a-week room with one table and chair at Oliver Smedley's General Management Services, which housed various free-trade organisations at 4 Austin Friars, a few dozen yards from the Stock Exchange in the heart of the City of London.<ref name=":1">Template:Cite book</ref> In June 1955, The Free Convertibility of Sterling by George Winder was published, with Fisher signing the foreword as Director of the IEA.<ref name="ieachronology"/> In November 1955 the IEA's Original Trust Deed was signed by Fisher, Smedley, and John Harding. Ralph Harris (later Lord Harris) began work as part-time General Director in January 1957.<ref name="ieachronology"/> He was joined in 1958 by Arthur Seldon who was initially appointed Editorial Advisor and became the editorial director in 1959.<ref name="ieachronology"/> Smedley wrote to Fisher that it was "imperative that we should give no indication in our literature that we are working to educate the public along certain lines which might be interpreted as having a political bias. ... That is why the first draft [of the IEA's aims] is written in rather cagey terms".<ref name="Curtis11">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The Social Affairs Unit was established in December 1980 as an offshoot of the Institute of Economic Affairs to carry the IEA's economic ideas onto the battleground of sociology.<ref name=Muller/> "Within a few years the Social Affairs Unit became independent from the IEA, acquiring its own premises."<ref name=Muller>Template:Cite journal</ref> In 1986 the IEA created a Health and Welfare Unit to focus on these aspects of social policy.<ref name="ieachronology"/><ref name=Muller/> Discussing the IEA's increasing influence under the Conservative government in the 1980s in relation to the "advent of Thatcherism" and the privatisation of public services, Dieter Plehwe, a Research Fellow at the WZB Berlin Social Science Center, has written that "[t]he arguably most influential think tank in British history ... benefited from the close alignment of IEA's neoliberal agenda with corporate interests and the priorities of the Thatcher government.<ref>"Academic Identities – Academic Challenges? American and European Experience of the Transformation of Higher Education and Research", Dieter Plehwe, Cambridge Scholars Publishing, 2011, pp. 172–173</ref>

During the 1990s the IEA began to focus its research on the effects of regulation,<ref name="Den96" /> and began a student outreach programme.<ref name="Den96" /> Free-market publications continued to be the core activity of the IEA.<ref name="Den96" /> Oliver Letwin said of the organisation in 1994: "without the IEA and its clones, no Thatcher and quite possibly no Reagan; without Reagan, no Star Wars; without Star Wars, no economic collapse of the Soviet Union. Quite a chain of consequences for a chicken farmer!"<ref>Template:Citation</ref><ref>Template:Cite news</ref> In 2007 British journalist Andrew Marr called the IEA "undoubtedly the most influential think tank in modern British history".<ref>Template:Cite episode</ref> Damien Cahill, a professor of Political Economy at the University of Sydney, has characterised the IEA as, "Britain's oldest and leading neoliberal think tank".<ref name="Cahill">Template:Cite book</ref> In October 2009 the IEA appointed Mark Littlewood as its Director General, with effect from 1 December 2009.<ref name="cherwell">Template:Cite news</ref> In September 2022 an associated think tank, the Free Market Forum, was founded.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In December 2023 Mark Littlewood stood down as the IEA's Director General and was replaced by Tom Clougherty under the title of Executive Director.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Purpose and aimsEdit

In 2018 the IEA's then-director Mark Littlewood said "We want to totally reframe the debate about the proper role of the state and civil society in our country ... Our true mission is to change the climate of opinion."<ref name=Monbiot18Dark>Template:Cite news</ref> While there is no corporate view, and while the IEA has a tradition of welcoming discussion, debate, and papers from those on the left, the IEA promotes the market and has two prominent themes in its publications: first, a belief in limited government and, second, "the technical (and moral) superiority of markets and competitive pricing in the allocation of scarce resources."<ref name=Den96/>

The IEA is described as a "university without students"Template:According to whom because its primary target is not politicians but "the gatekeepers of ideas", namely the intellectuals, academics, and journalists.<ref name=":2">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The IEA believe that a change in the intellectual climate is a pre-condition for any ideological shift within political parties or government institutions.<ref>Template:Cite journal</ref>

The IEA has written policy papers arguing against government funding for pressure groups and charities involved in political campaigning.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The IEA does not receive government funding.<ref>Template:Cite news</ref>Template:Primary source inline

The IEA supports privatising the National Health Service (NHS) with repeated calls to replace the NHS with an insurance-based health system in the UK;<ref>https://www.cityam.com/calls-to-scrap-nhs-and-replace-with-social-health-insurance-system/</ref><ref>https://lowdownnhs.info/analysis/iea-a-well-connected-right-wing-think-tank-paid-to-reject-the-nhs-model/</ref> campaigns against controls on junk food;<ref>https://iea.org.uk/media/banning-fast-food-outlets-is-not-the-answer-to-tackling-obesity/</ref> attacks trades unions;<ref>https://iea.org.uk/wp-content/uploads/2022/07/SUMMERTIME-BLUES-TRADE-UNIONS.pdf</ref> and defends zero-hour contracts,<ref>https://iea.org.uk/why-zero-hours-contracts-are-a-good-thing/</ref> unpaid internships and tax havens.<ref>https://iea.org.uk/in-the-media/press-release/britain-should-embrace-tax-havens-new-research-shows</ref> IEA staff are frequently invited by the BBC and other news media to appear on broadcasts.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref><ref>Template:Cite news</ref> The IEA also published, between 1994 and 2007, "at least four books, as well as multiple articles and papers, ... suggesting manmade climate change may be uncertain or exaggerated [and that] climate change is either not significantly driven by human activity or will be positive", according to an October 2019 Guardian article.<ref name="pegg" /> Specifically, in 2003, the IEA published the book Climate Alarmism Reconsidered which concluded that government intervention in the name of sustainability is the major threat to energy sustainability and the provision of affordable, reliable energy to growing economies worldwide.<ref name="Bradley 2003 144">Template:Cite book</ref> It further advocated that free-market structures and the wealth generated by markets help communities to best adapt to climate change.<ref name="Bradley 2003 144" />

Concerns about political independenceEdit

As a registered charity, the IEA must abide by the regulations of the Charity Commission for England and Wales, and so cannot "promote, or be seen to promote, a political party or candidate".<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In July 2018, the Charity Commission opened a regulatory compliance case into the IEA due to concerns about its political independence after the then-director of the IEA was secretly recorded offering potential US donors access to government ministers and civil servants, telling an undercover reporter that his organisation was in "the Brexit influencing game". While seeking funding, Littlewood said that the IEA allowed donors to shape "substantial content" in reports.<ref name=obs29jul18>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The IEA denied that it breached charity law.<ref name=graun30jl18>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Alison White, the then-registrar of consultant lobbyists, also said she would examine whether the think tank should be registered as a lobbyist after the undercover investigation, but in 2019 the registrar concluded that the IEA did not meet "statutory criteria for consultant lobbying in this case".<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Also in July 2018, it emerged that casino owners had donated £8,000 to the IEA after the IEA published a report calling for fewer restrictions on casino openings,<ref name="graun30jl18" /> and that an IEA report arguing that tax havens (such as Jersey) benefited the wider economy had been partially funded by a group representing financial interests in Jersey. The IEA stated that the funding they received never influenced the conclusions of reports, and that their output was independent and free from conflict of interest.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In November 2018, the IEA removed a report on Brexit from its website after the Charity Commission said that it was "not sufficiently balanced and neutral".<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name=cowburnbaynes /> In February 2019, the Commission issued an official warning to the IEA and instructed trustees to provide written assurances that the IEA would not engage in campaigning or political activity contravening legal or regulatory requirements.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> IEA trustees were also required to implement a process to ensure that research reports and launch plans were signed off by trustees. Following the IEA's compliance, the Charity Commission withdrew the official warning in June 2019.<ref name="civil">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In October 2024, the Charity Commission agreed to review concerns raised about IEA. It had initially, in March 2024, declined to investigate. A joint complaint by the Good Law Project, four cross-party politicians and a former member of the Charity Commission board had suggested the IEA had breached charity law.<ref>https://www.civilsociety.co.uk/news/commission-to-review-concerns-against-institute-of-economic-affairs-after-u-turn.html</ref>

Freer launchEdit

In March 2018<ref name="Steerpike1">Template:Cite news</ref> the IEA offshoot Freer was founded to promote a positive message of liberal, supply-side Conservative renewal.<ref>Template:Cite news</ref><ref name="Bennett1">Template:Cite news</ref>Template:Failed verification Freer held two meetings at the 2018 Conservative conference (with none in any other political parties' conferences),<ref name="Eye1490">Template:Cite news</ref> and remains entirely within the IEA's structural and organisational control.<ref name="Hughes1">Template:Cite news</ref> Cabinet ministers and MPs (including Michael Gove and Liz Truss) spoke at the organisation's launch. Truss called for a neoliberal "Tory revolution" spearheaded by "Uber-riding, Airbnb-ing, Deliveroo-eating freedom-fighters",<ref name="Bennett1" /> comments which were criticised by the Morning Star for failing to take into consideration the quality of employment within the companies mentioned.<ref name="Hughes1" /> Conservative blogger Paul Staines said that the launch "piqued the interest of senior ministers including Michael Gove, Dom Raab and Brexit brain Shanker Singham".<ref name="Hughes1" /> As of early 2019, the organisation had 24 parliamentary supporters, including prominent figures such as Truss, Chris Skidmore, Priti Patel, Ben Bradley, and Kemi Badenoch, all of whom are Conservative MPs. Freer also holds events and publishes pamphlets for Conservative MPs, and has been referred to the Charity Commission by Private Eye for political bias.<ref name="Eye1490" />

FundingEdit

The IEA is a registered educational and research charity.<ref name=roccc>Template:EW charity</ref> The organisation states that it is funded by "voluntary donations from individuals, companies and foundations who want to support its work, plus income from book sales and conferences",<ref name="IEA-about">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and says that it is "independent of any political party or group".<ref name=IEA-about /> The Charity Commission listed total income of £2.34 million and expenditure of £2.33 million for the financial year ending 31 March 2021.<ref name=roccc />

The IEA policy is to allow donors to choose whether or not to disclose their funding.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Some publish their grants to the IEA;<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> others do not. It has been criticised for receiving minor funding (less than 5% of revenue) from major tobacco companies whilst campaigning on tobacco industry issues.<ref name=Monbiot18Dark/><ref>Template:Cite news</ref> British American Tobacco (BAT) confirmed it had donated £40,000 to the IEA in 2013,<ref name=ash>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> £20,000 in 2012 and £10,000 in 2011, and Philip Morris International and Japan Tobacco International also confirmed they provide financial support to the IEA.<ref name="cigcash">Template:Cite news</ref> In 2002, a leaked letter revealed that a prominent IEA member, the right-wing writer Roger Scruton, had authored an IEA pamphlet attacking the World Health Organisation's campaign on tobacco, whilst failing to disclose that he was receiving £54,000 a year from Japan Tobacco International.<ref>Template:Cite news</ref><ref name="bmj">Template:Cite journal</ref> In response, the IEA said it would introduce an author declaration policy.<ref name="bmj"/> The IEA also says that it "accepts no tied funding".<ref name="peer review">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

An organisation called American Friends of the IEA had received US$215,000 as of 2010 from the U.S.-based Donors Trust and Donors Capital Fund, donor-advised funds which support right-wing causes.<ref name="guardian.co.uk">Template:Cite news</ref> The think tank Transparify, which is funded by the Open Society Foundations, in 2015 ranked the IEA as one of the top three least transparent think tanks in the UK in relation to funding.<ref name="sarahneville" /><ref name="t2015" /> The IEA responded by saying "It is a matter for individual donors whether they wish their donation to be public or private – we leave that entirely to their discretion", and that it has not "earmarked money for commissioned research work from any company".<ref name="sarahneville">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Funding to the IEA from the alcohol industry, food industry, and sugar industry has also been documented.<ref name=":0">Template:Cite book</ref> IEA Research Fellow Christopher Snowdon disclosed alcohol industry funding in a response to a British Medical Journal article in 2014.<ref name=":0" /> In October 2018, an investigation by Greenpeace found that the IEA was also receiving funding from the oil giant BP, which was "[using] this access to press ministers on issues ranging from environmental and safety standards to British tax rates."<ref>Template:Cite news</ref> In May 2019, the British Medical Journal revealed that British American Tobacco was continuing to fund the IEA.<ref>Template:Cite journal</ref><ref>Template:Cite news</ref> In November 2022, the funding transparency website Who Funds You? rated the institute as E, the lowest transparency rating (rating goes from A to E). This was updated to a D rating in December 2023.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

ReceptionEdit

In early 2019, on national radio station LBC, James O'Brien called the IEA a politically motivated lobbying organisation funded by "dark money" of "questionable provenance, with dubious ideas and validity", staffed by people who are not proper experts on their topic. The IEA complained to the UK media regulator Ofcom that those remarks were inaccurate and unfair. In August 2021, Ofcom rejected the complaint.<ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

PublicationsEdit

Template:Multiple issues Arthur Seldon proposed a series of Papers for economists to explore the neoliberal approach to the issues of the day.<ref name="ieachronology"/> Eventually, these emerged as the Hobart Papers; 154 had been published by August 2006. In addition, 32 Hobart Paperbacks had been released along with 139 Occasional Papers, 61 Readings and 61 Research Monographs.<ref name="ieachronology"/> They published The Denationalization of Money by Hayek in 1977.

ResearchEdit

According to the IEA, although not an academic body, the institute's research activities are aided by an international Academic Advisory Council and a panel of Honorary Fellows. The IEA's work is generally more theoretical than political, and has a refereeing process for all its publications.<ref name=":2" /> They note that their papers are subjected to the same refereeing process used by academic journals,<ref name="peer review" /> and that the views expressed in IEA papers are those of the authors and not of the IEA, its trustees, directors, or advisors. The IEA has also published research in areas including business ethics, economic development, education, pensions, regulation, taxation, and transport.

Notable peopleEdit

Honorary FellowsEdit

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Personnel and FellowsEdit

As of 2024, the IEA had full and part-time 26 employees, 9 trustees (unpaid volunteers), and 3 former chairmen who serve as life vice presidents;<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> additionally, the IEA has an Academic Advisory Council with dozens of professors and other academics.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>