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Dr. Madsen Pirie

Dr. Madsen Pirie

Dr Madsen Pirie is President of the Adam Smith Institute, and was one of three Scots graduates working in the US who founded the Institute in 1977. Before that, Madsen worked for the House of Representatives in Washington DC, and was Distinguished Visiting Professor Philosophy at Hillsdale College in Michigan.

Articles by Dr. Madsen Pirie

Socialism – the Failed Idea That Never Dies

March 25, 2019

You might think that a book about Socialism, the failed idea, would detail the catastrophic results that attempts to build Socialist societies have achieved in practice. You would be wrong. In Kristian Niemietz’s new book these are taken as read. The horrors of Stalin’s gulags and mass murders are all assumed, as are the mass starvation and purges of Mao’s China. The utter failures of North Korea, Albania and the others, up to and including Venezuela, are treated as fact, which they are. The book concerns itself with quite another question. Why, given the overwhelming evidence of what Socialism has achieved, have Western academics sought to deny that any of these examples featured it?That they have denied every single example as "not Socialism" emerges overwhelmingly from the quotes

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The meaning of Maastricht

February 7, 2019

On February 7th 1992 the Maastricht Treaty was signed. It was more properly called the Treaty on European Union, and was signed in Maastricht by the then members of the European Economic Community. Its purpose was to further European integration. As part of that project it renamed the EEC the European Community, dropping the word ‘economic’ to emphasize its move into social, foreign, judicial and security matters. It retained that name until 2009, when it officially became the European Union. The Maastricht Treaty heralded moves to create a common European currency, the Euro. The UK and Denmark secured opt-outs from the European currency and its attendant convergence criteria. The UK also secured an opt-out from the Social Chapter, a concession rendered meaningless when the working time

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A freeport Northern Ireland

December 19, 2018

While the UK could invoke article 21 of WTO (previously GATT) rules, claiming “vital national security” to allow goods from the Republic of Ireland tariff-free access into Northern Ireland, it is uncertain if this would ultimately be upheld by the WTO. There is, however, an alternative approach.The UK could, simultaneously with the passing of the Brexit deal, also pass an Act committing it to granting Northern Ireland Freeport status at the end of the transition period if no free trade agreement with the EU had been signed. If a free trade agreement were signed, then no backstop would be needed because goods could flow freely across the border.If no free trade deal were agreed, however, the granting of Freeport status to Northern Ireland would mean that goods from outside could enter

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It’s not just how they talk about things; it’s also what they choose to talk about

December 17, 2018

I recorded a podcast interview last week with an Australia-based group that deals with critical thinking. I was asked several questions about logical fallacies, given my book on the subject, and was asked which ones were the most widespread today, and which were the hardest to detect. I chose examples that crop up in public debate, guessing that this is what would command interest.I made the point that as well as critically analyzing what people are saying, it is important to ask why they are saying it. When an historian is confronted by a document, for example, they should immediately ask how it came to be in front of them: Who wrote it and why? How did it come to survive where similar ones did not? Did this purport to be a factual account, or was it written as one-sided propaganda?

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Making “Green” mean green

December 16, 2018

A significant part of the opposition to building more houses where there is a demand for them comes from two erroneous impressions. The first is that the UK is vastly overbuilt, and we are in danger of losing huge swathes of what little countryside remains.  In fact 5.9 percent of UK land is built upon, with a further 2.5 percent designated as "urban green," such as parks and cemeteries. This means that about 92 percent of UK land is not built upon.Even the notion that "the Southeast is overcrowded" is an exaggeration, as anyone flying over the Southeast will have observed. Most of its land is not built upon.The second error is the assumption that the Green Belt is green. Some of it is indeed what people think of as "green," with meadows, woods and streams and rolling green fields.  Much

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We’ve studied poverty, now let’s study wealth

December 13, 2018

Numerous studies have examined poverty and the lot of poor people. Now Rainer Zitelman has studied the psychology of the super rich. His study, based on in depth interviews and questionnaires, looks at wealthy Germans who gained their wealth, not as employees of large corporations, but as entrepreneurs and investors. It reveals significant factors. For example, the parents of 60 percent of them were self-employed, which is ten times the average for Germany. They were not necessarily rich, but they worked for themselves. School or education did not play a key role in determining their future status as super rich, but extra-curricular activities did, notably competitive sports or entrepreneurial activity. As youngsters, they tended to be difficult, even rebellious, unwilling to subordinate

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A backdoor to the backstop?

December 12, 2018

If the EU will not modify the proposed Brexit agreement to allow the UK to end a backstop when it chooses to do so, it seems unlikely that it could command a Parliamentary majority to implement it. In which case the UK would leave on March 29th under WTO rules. David Singh Grewal, a professor of law at Yale University, and Richard Tuck a professor of government at Harvard University, have written an intriguing piece in the Irish Times suggesting a possible course of action the UK might then undertake, much to its advantage, and providing a solution to the apparent impasse. They point out that WTO rules allow for a “national security exception.” It is in article 21 of the general agreement on tariffs and trade (Gatt). “Nothing in this agreement shall be construed . . . to prevent any

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Not replacing Politics by Economics, but inserting the real world into it

December 7, 2018

Paul Mason has written a challenging piece in ExecReview. He does so from a Left-wing activist background as a Corbyn supporter who says that Labour “should welcome Momentum,” and as a one-time Channel 4 News Economics Editor. He quotes Goldsmiths University academic, Will Davies, who describes “the disenchantment of politics by economics”. Mason writes that:“Another way of phrasing Davies’s definition, then, could be the evisceration of politics by economics, or more simply the surgical removal of emotional reasoning from political decision-making.”It was neoliberalism that did this, of course. He is right in the sense that neoliberalism did change politics, but wrong in supposing that it used economics to remove emotional reasoning from it. Inspired by David Hume, neoliberals know that

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More common errors of the Left

December 6, 2018

Many of the errors they perpetrate have already been tried and tested and found wanting. Some of them have been found disastrous, as has been seen in Venezuela. Yet they persist as if in some hypothetical world that bears no relation to what goes on in the world around us.6. State ownership is efficient because it does not need profitsThis has been shown countless times to be untrue. It is the pursuit of profits that leads private corporations to seek to be lean and efficient. They try to cut costs and to keep prices competitive to attract customers. The state has no such incentives to drive it to be efficient. In practice, state industries are subject to producer capture, and are usually directed to serve political rather than economic ends. They tend to be over-manned and costly,

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Common errors of the Left

December 5, 2018

It can be depressing to have to revisit arguments won long ago, but some politicians continue to cling to errors that have been exposed, simply because they wish the world were other than it is.1. Taxes do not change behaviourIn the real world taxes usually change behaviour. Tax increases put up prices, and people usually respond by buying less of something. Increased taxes on cigarettes might lead people to smoke less, but they also lead people to obtain cigarettes from lower tax jurisdictions, or from bootleggers. The result is that less tax is raised than was anticipated. The same is true for taxes on income. They make work and effort less attractive, and they encourage people to use legal means to shelter income from tax. People talk of increasing income tax "to raise more money," but

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Future Inventions

November 21, 2018

In “The Poverty of Historicism” Popper makes the point that the future state of society will be influenced by the knowledge available to it. Since we cannot predict the future growth of our knowledge by rational or scientific methods, we cannot predict the future course of human history. This is fine, and it rules out all claims about history moving towards an inevitable outcome, whether it be the triumph of any particular class, race or nation.That said, in my doctoral thesis, published as “Trial and Error and the Idea of Progress,” I attribute more to human motivation than Popper does. Not only does it influence which theories we retain or discard, depending on how much they help us, but it also influences the future course of knowledge. Put bluntly, we try to achieve the things we want,

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East & West, North & South — Real world test labs

November 20, 2018

Some want us to compare the practical experience of capitalism, warts and all, with some abstract theory of what socialism might be like “if it were done properly.” It is difficult to compare the two, given that experiments with each have been done at different times, in different places, in different countries, in different cultures. We cannot usually do a “ceteris paribus” because other things are not usually equal, and therefore different outcomes can be attributed to outside variables.There are, however, two obvious cases where we can see countries of similar background, history and assets over enough time, to give us an approximate laboratory comparison of the outcomes achieved by each system. They are postwar Germany, divided between East and West; and postwar Korea, divided between

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July 24, 2018

Commentators seem so locked into the aftermath of the Financial Crisis of 2007/8 that they are in danger of overlooking a series of developments that have the potential to change everything. Historically, economic growth has been fuelled by advances in productivity. As workers became more productive, they could earn higher wages. New technology, now emerging in several areas will spur increases in productivity as well as transform people’s lives:Autonomous electric transportSelf-driving transport powered by electricity will transform most people’s lives. The interiors of cars need not look they have done for decades, with people in forward-facing seats.  People might face each other, or have the interiors kitted out as offices or small living rooms, as people choose to do other things than driving. Road crash fatalities and injuries will fall dramatically. Commuting times will fall, and the hassle of commuting will be much diminished.Commercially the cost of freight transport by road and sea will fall as autonomously driven vehicles become the norm, raising productivity and enabling higher living standards. The same will probably be true of air transport, both freight and passenger, as autonomy and electric power take over. Electricity, powered by fracked gas and solar, will be very cheap.

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Freedom’s Fighters 2 – Daniel Hannan MEP

July 6, 2018

The second in the ASI’s monthly series honouring “Freedoms Fighters” featured Dan Hannan MEP for Southeast England since 1999. He answered questions from Dr Madsen Pirie as to what motivates him, and how he survived in the European Parliament without going native.Before an invited audience of 24, he held forth about his love of Shakespeare and his views on the food of his native Peru, as well as on the shenanigans of the European Union. You can watch it below ?

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Freedom’s Fighters 1 – Mark Littlewood

July 5, 2018

The ASI has pioneered a new event format.In a monthly series honouring “Freedom’s Fighters,” the ASI hosts interviews with some of those who have campaigned for free enterprise, free trade and individual liberty.The format features a 20-minute interview before an invited audience of 24, as Dr Madsen Pirie asks questions that try to bring out some of the personality of the subject, as well as their beliefs and values. There are no questions from the floor, just drinks afterwards and the chance to question the subject in person.First off was Mark Littlewood, defending freedom, free enterprise, and Southampton Football Club…

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The kidnapping of Adam Smith

July 3, 2018

Adam Smith was kidnapped by gypsies at the age of 4, and was rescued by his uncle, who, according to some accounts, led a horseback posse into the woods to achieve this. It might have been the most exciting thing that happened to Smith in his lifetime. He lived most of his life with his mother, never married, and led the life of a scholar in research and writing.He has, however, been kidnapped many times since his death as assorted scholars and others have sought to explain that he didn’t mean what he wrote, and was really on their side. Every few years some new study comes out to reinterpret Smith’s work, and after the initial reaction, quietly disappears. Even Gordon Brown had a go. Smith has been claimed as a kind of proto-socialist, and even as a precursor of Karl Marx. To be fair, Marx did indeed adopt one of the very few things Smith was wrong about, namely the labour theory of value.The Adam Smith Institute is usually derided in such reinterpretations for abusing the great man’s name and propagating a cardboard cut-out simplification of his ideas. The straw man is a simplistic, capitalist, laissez-faire apologist for the abuses of big business. This is not what the ASI does. Our emphasis starts with Smith’s “Theory of Moral Sentiments,” the book that first established his reputation.

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Neoliberalism: No regrets

June 20, 2018

Two years ago, in 2016, Prof Colin Talbot, Professor of Government at the University of Manchester, claimed that the term “Neoliberalism” was devoid of meaning. He was attacked by a ‘progressive’ student who demanded that he be disciplined by the university authorities. Talbot claimed that no-one admitted to being a neoliberal, and that it was now simply an all-purpose insult.Cambridge took a lead with its debate in mid-June of 2018 on the motion, “This House Regrets Neoliberalism.” The Cambridge Union took the line that the term does in fact have meaning, and that it is something one can be for or against. The Adam Smith Institute is for it. Asked to speak at the end of a 2015 term-long seminar at Brighton University, I chose the title, “Looking at the World Through Neoliberal Eyes,” and

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Stealth Taxes

June 20, 2018

In this week’s Madsen Moment, Dr Pirie looks at the issue of Stealth Taxes. Government should be honest about the taxes it expects people to pick the bill up for.

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The document that changed the world

June 15, 2018

Forty years ago, in 1978, 18 farmers from the village of Xiaogang in China, met at night in secret. They had seen subsistence and famine. Exhausted and emaciated, they lacked the energy to work the collective fields as Party discipline required. A few years earlier they had seen 67 of their 120 population starve to death in the "Great Leap Forward" Now they took matters into their own hands. By flickering lights (none had seen electricity), they came forward in turn to sign a document dividing up the collective farm into individual family plots, whose owners could keep most of the proceeds of their labours.They knew the dangers, and added a clause to the contract pledging that if any were betrayed and executed, the others would raise their children until aged 18. Following that historic

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How the Left and Right see each other

June 11, 2018

There is an old, instructive, Chinese proverb that tells us:"Never criticize a man until you have walked a mile in his shoes. That way you are a mile away when you voice your criticism. And you have his shoes!"Its message is that it can be quite revealing to look through an opponent’s eyes. How does the Left perceive neoliberals and free marketeers?To over-simplify to a perhaps unforgiveable degree, the Left sees the rich comfortably off while the poor find it hard to manage. Those on the Left want to take some of that surplus from the rich and give it to the poor. This would make the poor better off and create a more equal society. This is why they advocate tax increases on the rich, and greater benefits to those less well off.They see their opponents as being on the side of the rich,

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Madsen Moment – Immigration

June 6, 2018

Once we take back control of all of our migration policy we can set rules and follow them. Importantly we can make immigration work for migrants, for communities and meet business needs. Let’s not ignore the concerns or pressures of communities but meet their needs and at the same time let business greet employees they need. Brexit presents an opportunity, and one we should all relish. Watch the latest #MadsenMoment now!

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The balance of old and young

May 29, 2018

There is much current comment about an alleged imbalance between addressing the problems faced by young people today and attending to those bearing more upon older people. Some analysts claim that too much emphasis has been placed on meeting the problems of the elderly, and not enough on those of the young. Older people have a triple-lock pension, rising with inflation or wages, or at 2.5%, whichever is the largest. They have free travel passes, a Christmas bonus, and a winter fuel allowance. Those over 75 have free TV licences, plus free or reduced admission to many attractions and services. Many are home-owners, free of mortgages, with private pensions to supplement the state’s provision.Young people, by contrast, find it difficult to become home-owners with an inadequate housing stock,

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May 15, 2018

What does MaxFac mean? What might it mean for Brexit? In this week’s #MadsenMoment, Dr Pirie explores the option on the table to solve the Irish border question after we leave the EU.

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Reforming their Lordships and Ladyships

May 9, 2018

Many commentators think it inevitable that the House of Lords will be reformed. The present mix–part hereditary and elected by their peers, and part appointed and chosen by the government–is difficult to justify in principle, and has failings that are all too evident in practice.Some of the activities and powers of the Lords have been restrained by convention rather than by law. The famous Salisbury Convention, by which the Lords will not impede laws that were in the manifesto on which the government was elected, is not legally binding; it is only a convention. Recent years have shown that convention is a poor restraint on political expediency.Convention decreed that the Parliament Act that could shorten the delaying power of the Upper House to one year rather than three, was limited to

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Happy Birthday DNA!

April 25, 2018

65 years ago two Cambridge scientists looked at their watches and realized they could just make it to the Eagle pub in Cambridge before closing time. They had just cracked one of science’s great problems, and for their friends they drew in beer on the pub table the double helix shape they had understood to depict the structure of the DNA molecule. On 25th April, 1953, 65 years ago today, their paper appeared in Nature magazine, and the world changed.Their discovery has formed the basis of much medical and biological science since that time, and illustrates yet again Popper’s insight that the future is inherently unpredictable because we cannot predict what discoveries will be made, or what their significance will be. Those who tell us that history is unfolding toward its inevitable destiny

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Wanted: A Gerald Nabarro to kill import tariffs

April 5, 2018

Sir Gerald Nabarro was a splendid figure. An immaculate dresser with a huge handlebar moustache, his three Rolls Royces were numbered NAB 1, NAB2 and NAB3. He appeared at every budget day, when such things mattered, in morning suit with top hat.He killed the Purchase Tax by a series of relentless questions over the years: “Why was a budgie mirror with a bell taxed at a lower rate than one without a bell? Why was a 10-foot ladder taxed at a lower rate than a 12-foot one?"My grandmother’s mantelpiece had two identical flower vases. The one marked “celery” on the base was 25% cheaper (essential) than the one that did not (luxury). Sir Gerald made the lives of successive chancellors such a misery that they eventually gave up and abolished it. We need someone to do the same for the Trump

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Cheap energy, plentiful water

March 13, 2018

In my 2015 book, “Britain and the World in 2050,” I made several startling predictions, startling because they went against many assumptions popular among the chatterati. While the dinosaurs and dodos gained massive coverage because the media couldn’t resist them – some even did drawings – there were two significant predictions that offer more far-reaching consequences.The first is that we will not run out of energy. Despite alarmist cries of “peak oil,” I take the view that we’ll be leaving most of it in the ground by 2050, or maybe using it for its complex chemistry. We won’t be burning much of it. My reasoning is that fracked gas is plentiful and cheap, and mostly not controlled by politically unstable countries. It is less polluting, and will have replaced coal and most of oil for

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Measuring quality by outcomes

March 9, 2018

I think when I do a third edition of my"How to Win Every Argument" I will add a new fallacy to the 94 fallacies I identified and described there. This could be called "Measuring quality by inputs."I wrote here earlier about "Regulation by result" making the case that if we state what result is to be achieved and leave it to creative brains to find ways of achieving it, we do better than if we stipulate the processes which people are required to follow.This is different, but related. It seems extraordinary that people should measure quality by the effort put in rather than by the result achieved, but many people do precisely that. Gordon Brown’s government measured the quality of education by the amount spent on it, by the pay of teachers, by the size of classes, and so on. Most thinking

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Regulation by result

March 7, 2018

Too many regulators are obsessed by process, telling businesses and individuals precisely what they must do. The concern should be with the results, not the process. It is process regulation to require that all motor vehicles be fitted with a particular type of catalytic converter. It is result regulation to specify the maximum output of various pollutants that will be permitted.The former approach limits the technology to that which is known and approved, whereas the latter leaves space for ingenuity and creativity to devise different ways of achieving the stipulated result.The UK’s forthcoming departure from the European Union gives us an opportunity to move away from the process regulation which has largely been favoured by the EU, and into result regulation to achieve equivalent

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