Adam Smith Institute

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The Adam Smith Institute (ASI) is a Westminster based "free-market" think tank which wants to dismantle the NHS, sack civil servants and council workers and slash income tax. It received Labour government funding of almost £8m in 2003.[1] It is a former member of the Stockholm Network (membership was current in the years 2006-7[2] and 2007-8[3]).

In a March 2009 presentation Tim Montgomerie and Matthew Elliott described ASI as part of the infrastructure of the conservative movement in Britain.[4]

Contents

History

ASI founders and principals, Madsen Pirie, Eamonn Butler and Stuart Butler were students together at University of St Andrews, Scotland. In 1973, they left Scotland to work with Edwin Feulner, who became co-founder of the free-market think tank the Heritage Foundation, in 1973. Edwin J. Feulner is a founder and current President of the Heritage Foundation and was a recipient of the Presidential Citizens Medal in 1989. The Heritage Foundation located in Washington, DC, is widely regarded as one of the world's most influential public policy research institutes.

After their apprenticeship in America, Eamonn Butler and Pirie returned to Scotland in 1977 to found the Adam Smith Institute, set up with the help of Antony Fisher of the Institute of Economic Affairs, one of the British think tanks associated with the Mont Pelerin Society.

Relationship with Adam Smith International

In 1992, the Institute founded a consulting company, Adam Smith International Ltd, which was "charged with overseeing the overseas work of the institute... [in] an attempt to capitalise on the growing international trend towards economic liberalization and marketization"[5]. Eamonn Butler and Madsen Pirie were, as of 1998, members of the management board of both organisations[6], but as of 2010 the management teams of Adam Smith International and the Adam Smith Institute are separate.[7][8]

In 2004, Baroness Amos described Adam Smith International as "affiliated" with the Adam Smith Institute but financially independent from it:

Adam Smith International Limited, which is the consultancy arm of the institute, is a separate organisation. It is affiliated to the institute as a self-financing commercial organisation.[9]

DfID overseas aid money

Baroness Amos's attempt at clarification of the relationship between the Adam Smith Institute and Adam Smith International came in answer to a question to the government in the House of Lords from Baroness Northover, as to:

What criteria they considered before giving the Adam Smith Institute £7.6 million in aid money last year for consultancy work? ... Is she content that the Adam Smith Institute has sufficient expertise in development issues to justify giving it such a large sum?

Baroness Amos defended the grant as follows:

the Department for International Development awarded three contracts to the Adam Smith Institute worth a total of £7.7 million in the past financial year. Each was awarded following open international competition on the basis of published evaluation criteria.[10]

Amos added:

The work that has been carried out is significant. The three contracts awarded last year included one for support services for public enterprise restructuring in South Africa; one in Afghanistan to provide support in capacity building for the Ministry of Finance and the central bank; and one in the Kyrgyz Republic for pilot training and capacity building in international waterhouse law. There is a range of projects.[11]

In 2008 Michael Foster stated that DfID "had not awarded any contracts to the Adam Smith Institute in the last five years. However, we have issued a number of contracts to Adam Smith International Ltd., which is a separate, self-financing commercial organisation".[12]

Funding

In 1993 the Guardian reported:

The Institute itself stays relatively lean. 'Not more than eight full timers' was the plan and it has been kept to. But work has been done by 300 outside contractors, a long list of professors, and one pamphlet from an unknown Michael Portillo. The funding is unsinister, a budget of £350,000, just under half coming from sales of publications and quite profitable conferences: the rest from business. However, no one gives 10% of the total. What if they got such an offer? "No one turns away money, but we'd try to have it spread over a number of years." The Institute is now approached by civil servants, and is busily thinking strategically across Eastern Europe. Its director admired the prime minister, and that matters to Major.[13]

Government ties

According to George Monbiot, writing in 2005, the British Government had been paying ASI up to £9m a year to oversee privatisation programmes in developing countries.[14] In the six years alone till 2004, ASI's consultancy arm received $34m from the UK aid budget.[15]

According to a previous article by George Monbiot in The Guardian, in 2004, Britain's Department for International Development (DFID) gave ASI £6.3 million for "public sector reform" in South Africa. The Institute has also been given "its own budget - £5m of British aid money - to disburse as it pleases". This lets DFID generate "the support it likes for privatization and public-private partnerships, while avoiding direct responsibility for the decisions the institute makes". In this, Monbiot says, DFID is clearly breaking the law since the International Development Act forbids it from spending money for any purpose other than the elimination of poverty, not to mention the rules forbidding it to "link aid money to deals for specific British businesses".[16]

The "implementation secretariat" for the Indian State of Andhra Pradesh's privatization program, funded by DFID and overseeing the privatization of the state's power sector, was also being run by ASI at the British Government's insistence with the money, once again, coming out of Britain's foreign aid budget.

Key proposals

  • ASI is a key proponent of privatization both at home and abroad.
  • ASI was in the vanguard of replacing central planning and state controls by "incentives, market opportunities and an entrepreneurial culture".
  • ASI advocacy has led to cuts in the top rates of taxation to "create a business-friendly climate"
  • ASI has oft likened government regulation of business and enterprise with totalitarianism while arguing that less regulation means lowers costs and opens opportunities for the development of innovative ideas.
  • ASI is also at the forefront of a campaign to private educational institutions

Healthcare reform

ASI is a fierce critic of the NHS, which it describes as "centralized tax-funded monopoly". Instead it argues that the UK should "shift the balance of healthcare spending away from tax and more to the individual." At the same time, it says "we need to transform today’s state monopoly providers into independent, competitive ones" - ie private for-profit healthcare providers.[17]

Healthcare articles and publications

  • A scalpel is needed on health costs we can no longer afford, by Tom Clougherty, June 2010. In this article, Clougherty writes: "When it comes to health, the key question we need to ask is this: can we still afford to provide everyone with comprehensive healthcare, free at the point of use? Or should we focus scarce resources on those most in need, using government as a safety net and guarantor of minimum standards, rather than a provider of universal services?" He advocates gradually introducing user charges throughout the NHS."[18]
  • Road Map to Reform: Health, by Dr Michael Goldsmith & Dr David Gladstone, 2005. This report proposes "to unleash the power of enterprise and innovation in how healthcare is actually provided. This requires breaking through the ideological barricades - a public-private mixture is really the only way forward."[19]
  • NHS reform: towards consensus?, written by Anthony Browne and Matthew Young, 2002. It was part of ASI's Partnership for Better Health project – a programme of work to develop early, practicable reform of the NHS, which was led by Dr Eamonn Butler (Director-General) and Matthew Young (Projects Director).[20] This report, which calls for an end to today's centralised health service and the adoption of competing European style social insurance has been endorsed by prominent health experts. The main thrust is that the government should neither provide nor finance health. It should merely regulate.

UK government funding

The British government has funded ASI's affiliated company Adam Smith International with millions of pounds for various "consulting" activities around the world, and it certainly is curious that a Labour government would pass many such contracts to an avowedly right-wing/neoliberal institution. House of Commons hearings in January 2004 revealed substantial funding for its international operations.

Year Project title Current value (£) (original contract value plus cost of any increases or extensions) Country
1999 PR Unit Support for Parastatal Sector Reform Commission (PSRC) 430,625 Tanzania
1999 Privatisation Project Phase 3 and 4 Managing Consultant 1,718,736 Guyana
1999 Privatisation Agency Support Project Consultancy 560,752 Zimbabwe
1999 Technical Assistance for Public Enterprise Reform in Orissa 3,667,571 India
1999 Assistance to the Palestinian Negotiations Affairs Department 9,131,555 West Bank and Gaza
1999 Additional Support to the Privatisation Board 106,241 Bangladesh
1999 UK-Ireland Privatisation and Regulation Study Tour 11,145 Tanzania
1999 Medium Term Programme of Capacity Building for PURC 1,559,960 Ghana
1999 Initital Support to the Budgetary Processes of the Government of Macedonia 44,315 Macedonia
2000 Rehabilitation of Cyclone Damaged Lift Irrigation Points in Orissa 1,296,327 India
2000 Seminar on Export Credits and Developing Countries 102,594 United Kingdom
2000 Lead Adviser to Parastatal Sector Reform Commission (PSCR) 229,966 Tanzania
2000 Russia Trade Policy Project 1,199,986 Russia
2001 Conference on Disinvestment 70,000 India
2001 Support for Public Sector Undertaking Reforms & Social Safety Net in Madhya Pradesh 80,000 India
2001 PSCR: Water Privatisation and Regulation Study Tour 54,924 Tanzania
2001 Communications Film for Department of Disinvestment 89,500 India
2001 Consultants for Standards, Technical Regulatory Barriers Programme 92,870 Global (non project specific)
2002 Trade Training for DFID Staff 20,075 United Kingdom
2002 Pilot Training and Capacity Building in International Watercourse Law 151,008 Kyrgyz Republic
2002 Trade Training for DFID Staff-Bangkok 32,328 United Kingdom
2002 Support for Capacity-building in the Ministry of Finance and Central Bank 3,277,815 Afghanistan
2003 Support Services for Public Enterprise Restructuring in South Africa 6,363,435 South Africa, Republic of
2003 Support to Water Sector Regulation by PURC-Ghana 1,079,100 Ghana
2003 Andhra Pradesh Economic Restructuring Programme-Public Enterprise Reforms, Phase II 416,435 India
2003 Economic Support within 1st Military Division HQ Basra. 55,510 Iraq
2003 Economic Development within 1st Military Division HQ Basra. 119,848 Iraq
2003 Support to the Office of the Prime Minister and to the Cabinet Office. 100,400 West Bank and Gaza
2003 ITD-DFID Staff Training 288,685 Global (non project specific)
2003 Asia Trade Consultancy 44,200 United Kingdom
2003 International Lawyer within 1st Military Division HQ Basra. 131,868 Iraq
2003 Economic Support to Coalition Provisional Authority South (CPAS) 111,255 Iraq
2003 Secondment of Negotiations Support Staff to the Office of Prime Minister. 75,800 West Bank and Gaza
2003 Legal Adviser within Coalition Provisional Authority South (CPAS) 72,925 Iraq
Source[21]

Publications

The ASI published a report recently called 'Privatisation Reviving the Momentum'[22]. In it they argue for a return to the vigorous pursuit of privatisation. Targets include Scottish Water, Northern Irish Water Glas Cymru, Royal Mail, Channel 4 and BBC Worldwide. The author, Nigel Hawkins is a senior fellow at the Adam Smith Institute, he is also an investment banker in the City of London.

Media Friends

In his 2012 book Think Tank: The Story of the Adam Smith Institute, Madsen Pirie describes how 'it helped very much in our early days to have people in the media who broadly shared our agenda'[23]. The ASI's media friends are listed as being John O'Sullivan of The Telegraph and The Times, Derrick Hill, Peter Hennessey, and Edward Pearce. Sir James Goldsmith's Now magazine is also described by Pirie as being 'invaluable'[24].

Adam Smith Institute articles were offered to the press and the Daily Mail printed them enthusiastically, the paper's editor David English and features editor Mac Keene would help the ASI develop their papers. The Daily Mail and Now magazine both paid the ASI 'particularly well' for producing articles for them.[25] Pirie also worked part time as a relief leader writer for the Daily Mail.[26].

Activities

Targeting youth

ASI specifically targets youth through its "seminar on the Open Society" where school students are indoctrinated in "free-market" ideas. The Next Generation meeting is another forum to get 18 to 33-year-olds together.

Weblogs

ASI's blog gets over 3,000 hits a day and according to the Daily Telegraph, their "most refreshing commentary on policy" is read by all political parties. They also issue a regular email bulletin to subscibers detailing their current preoccupations. These tend to be informal in tone at the level of "all politicians are useless" (as the issue of 1/8/2007 concludes - which could be seen as slightly ungrateful considering the level of funding noted above).

Key Personnel

Staff

Former staff

Consultants

Affiliations

References, Resources and Contact

Contact

Address: 23 Great Smith Street
London SW1P 3BL
Telephone: 020 7222 4995
Fax: 020 7222 7544
Email: info@adamsmith.org
Website: www.adamsmith.org

Related Articles

  • George Monbiot, "Exploitation on tap", The Guardian, 19 October 2004.
  • George Monbiot, "This is what we paid for", The Guardian, 18 May 2004.
  • "Tanked Up", The Evening Standard (London), 29 April 2005.
  • "Campaign features web of intrigue INTERNET", The Daily Telegraph, 6 April 2005.

References

  1. David Walker, Privatisers' prime thinktank is flush with public money, Guardian, 2 January 2004. (Accessed: 7 December 2007)
  2. 10 Years of the Stockholm Network, The Stockholm Network Annual Report 2006/2007, The Stockholm Network, p. 13
  3. The Stockholm Network Annual Report 2007/2008, The Stockholm Network
  4. Tim Montgomerie, The growth of Britain's conservative movement, ConservativeHome, 14 March 2009.
  5. Denham, A. & Garnett, M., 1998. British Think Tanks and the Climate of Opinion. UCL Press Ltd, London, p. 153
  6. Denham, A. & Garnett, M., 1998. British Think Tanks and the Climate of Opinion. UCL Press Ltd, London, p. 153
  7. Management team, Adam Smith International website, acc 23 May 2010
  8. Key people, Adam Smith Institute website, acc 23 May 2010
  9. Baroness Amos, Adam Smith Institute: DfID Contracts, Lords Debates - 13 January 2004, acc 23 May 2010
  10. Baroness Amos, Adam Smith Institute: DfID Contracts, Lords Debates - 13 January 2004, acc 23 May 2010
  11. Baroness Amos, Adam Smith Institute: DfID Contracts, Lords Debates - 13 January 2004, acc 23 May 2010
  12. Michael Foster, Adam Smith Institute: DfID Contracts [http://yourdemocracy.newstatesman.com/parliament/adam-smith-institute/HAN100063355 Adam Smith Institute], House of Commons Written Answers, 14 October 2008, acc 23 February 2011
  13. Ed Pearce 'The prophet of private profit' Dr Madsen Pirie is a head of the Adam Smith Institute, and a passionate advocate of a free market in practically everything. Yet Guardian readers might still like the man, Guardian Unlimited, 19 April 1993.
  14. George Monbiot, A game of double bluff, Guardian, 31 May 2005 (Accessed: 7 December 2007)
  15. Duncan Campbell, UK accused of using aid to promote privatisation, Guardian, 27 September 2006. (Accessed: 7 December 2007)
  16. George Monbiot, Exploitation on Tap, The Guardian, 19 Oct 2004, acc on monbiot.com 23 May 2010
  17. ASI website, Health, accessed Nov 2010
  18. ASI, A scalpel is needed on health costs we can no longer afford, June 2010
  19. ASI, Road Map to Reform: Health, 2006
  20. ASI report, NHS reform: towards consensus? (PDF), 2002
  21. International Development: Adam Smith Institute, UK Parliamentary Transcript, 26 Jan 2004.
  22. ASI [1] Privatisation Reviving the Momentum
  23. Madsen Pirie, (2012), Think Tank: The Story of the Adam Smith Institute, Biteback Publishing, P.50
  24. Madsen Pirie, (2012), Think Tank: The Story of the Adam Smith Institute, Biteback Publishing, P.50
  25. Madsen Pirie, (2012), Think Tank: The Story of the Adam Smith Institute, Biteback Publishing, P.52
  26. Madsen Pirie, (2012), Think Tank: The Story of the Adam Smith Institute, Biteback Publishing, P.53
  27. Adam Smith Institute, Key People, accessed 24 February 2011
  28. 10 Years of the Stockholm Network, The Stockholm Network Annual Report 2006/2007, The Stockholm Network, p. 13
  29. The Stockholm Network Annual Report 2007/2008, The Stockholm Network
  30. Who We Are, Liberty Club (Accessed: 21 September 2007)
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