IEA Blog

For perhaps only the second time in its history the IEA will feature in a comic book.

The first instance was over a decade ago when Antony Fisher, IEA founder, appeared in such a publication along with Milton Friedman. Friedman was well known and was always face on; Fisher was not well known and all one saw was the back of his head with chickens on his hat and shoulders - as he was of course the entrepreneur behind the factory farming of such birds. Very subtle stuff.

In July, Bluewater Productions, a comic book company on the west coast of the USA will launch Female Force – Margaret Thatcher, written by the IEA’s Distinguished Senior Fellow John Blundell.

This 20-page full-colour comic documents Lady Thatcher’s rise and many achievements. John comments: “I am pleased at how much scope this new medium for me has allowed for the discussion of free market economics.”

In Female Force – Margaret Thatcher, the story of the IEA’s Arthur Seldon writing to Geoffrey Howe at the end of the 1960s and asking “may we hope for better things from Margaret?” is retold. Howe’s response is also there: “I am not at all sure about Margaret. Many of her economic prejudices are sound. But she is inclined to be rather too dogmatic … there is much scope for her to be influenced between triumph and disaster.”

To purchase a copy of Female Force – Margaret Thatcher go to your local comic book store and pre-order your copy. If you are not sure where to find a comic book store then type “comic shop locator“ into a search engine.

James Tooley’s recent book The Beautiful Tree is the best single book on public policy to be published since Charles Murray’s Losing Ground twenty-five years ago. It richly deserves to win the 2010 Sir Antony Fisher Memorial Award from the Atlas Economic Research Foundation for the best policy book of the past two years. The prize of $10,000 goes to the think tank that published the book - namely Washington DC’s Cato Institute - but I heard from that think tank’s great leader Ed Crane that Cato will split the prize money with Professor Tooley.

The book is all about how many poor people in less developed countries are educating their children privately. Huh? Yes that is no typo. It is about rickshaw drivers and washerwomen and peasant farmers who scrape together enough to get inexpensive private education for their kids in many of the world’s worst slums. Private education does not have to be expensive is one of many lessons Tooley teaches us.

It is counterintuitive but it is there, it exists and large numbers of children are getting a far better education than they would at the hands of the state. It is (as one reviewer put it) as if Indiana Jones did education policy as Tooley bravely goes into really quite disgusting and very dangerous neighbourhoods tracking down his private schools.

But this book is not just about education. It is a big,big book with a breathtaking scope and an ability to change the way you view the world, particulary the less developed bits. If every priest in the world were asked to read Tooley then we would hear a lot less twaddle on Sundays.

But hats off too to the IEA because The Beautiful Tree is a direct descendant of Tooley’s earlier monograph The Global Education Industry, which I was very pleased to publish back then. And hats off also to Penguin for publishing the Indian edition of The Beautiful Tree which at Christmas was the number one non-fiction ranked book by The Hindi Times.

I worked closely with the Founder of Atlas namely Sir Antony Fisher and in 1987, a year before he died, he entrusted Atlas to me. He passed on the following summer and his widow Dorian and I created the  Fisher Prize to keep his memory alive. Of all the books that have won that prize over the past two decades The Beautiful Tree has to be way up near (or even at) the top of the best of the very best, such is the power of its message, the depth of its research and the elegance of the writing.

Click here to listen to Professor Tooley’s 2009 IEA Hayek Memorial Lecture and here to read Education Without the State.

Six weeks before he died in late April 1946, Keynes was visited by Hayek, who told me the conversation went something like this:

HAYEK: What if you are wrong?

KEYNES: Don’t worry. If I’m wrong I’ll persuade everyone that you are right.

What arrogance! But this historical vignette sums up Thomas Sowell’s brilliant book Intellectuals and Society perfectly.

Like Hayek in the similarly titled The Intellectuals and Socialism (1949), Sowell is concerned with the role of those whose output is simply ideas, the intellectuals, and how they shape opinion in society.

This is not to claim that the work of engineers and doctors and even, say, some lawyers and accountants is not intellectual. But at the end of the day there is a working automobile, a well patient, a court case won or a set of accounts filed. There is verifiability and accountability.

The output of the intellectual classes is not so concrete but may well become so as the idea of the policy wonk is taken up by a politician and implemented by a bureaucrat. After all, as Sowell notes, “Adam Smith never ran a business and Karl Marx never administered a Gulag”.

But, even when the decades pass and the predictions of say a Paul Erlich or a Ralph Nader are shown to be manifestly false, intellectuals do seem immune from bearing the costs of being wrong in a way that no others in society are so protected. Indeed as Sowell notes, false prophets seem likely to end up “with just as much honour as if they had been truly prophetic”. It is as if by taking up issues such as climate change, famine or safety on behalf of your fellow man you don the mantle of a “secular saint” and while you might be wrong, dreadfully wrong, you are still on the side of the angels. You are wrong, we believe you meant well and therefore you deserve our thanks.

Like Hayek, six decades ago, Sowell notes two other phenomena: the propensity of intellectuals in one field to speculate with great conviction on matters outside their expertise; and our tendency to give weight to the views of those experts who likewise stray. On the former, Sowell quotes Keynes’s biographer Harrod who wrote that his subject “held forth on a great range of topics”; on some he was “thoroughly expert” while on others he had glanced at a few pages of a book – the problem was “the air of authority was the same in both cases”. What a nightmare! How to filter?

On the latter he highlights the century or more of hysteria on the impending exhaustion of natural resources by relevant experts who “did not know enough economics to understand how prices allocate resources over time” and “among other alternative users at a given time”.

Two bits of data made me sit up and blink, both attributed to Richard Posner’s Public Intellectuals. Apparently among the 100 intellectuals most quoted in the media only 18 “are also among the 100 intellectuals mentioned most often in the scholarly literature”. Division of labour or what? The relevant footnote takes one to a fascinating direct comparison: Lester Thurow beats Gary Becker 2:1 in the media while Becker totally spanks Thurow 8:1 in scholarly journals. I’m glad I’m on Becker’s team!

Intellectuals do a lot to shape public opinion. They decide what and when we hear, from whom we hear it and with what spin. They are massively important and anybody involved in social change must study them. From Hayek through Posner to Sowell we thank our scholars for focusing on them. However on the day I read Sowell I was more than amused to read a newspaper headline that reported over half of Brits have serious doubts about man-made global warming. It restores one’s faith in mankind. Two plus decades of tsunami upon tsunami of experts, scholars and intellectuals nearly all singing one tune and over half a country is not convinced!

Hayek’s little essay was clearly instrumental in creating the Thatcher/Reagan era of the 1980s as it inspired the founders of the Foundation for Economic Education and the Institute for Humane Studies in the US, and the Institute of Economic Affairs in the UK. Their respective founders (Leonard Read, Baldy Harper and Antony Fisher) read Hayek, eschewed politics and focused on the intellectuals and the scholarly case for free markets and private property under the rule of law.

It took 30 years but Hayek’s fingerprints are all over that decade – though ten years were not sufficient to irrevocably roll back collectivism. I sense that future intellectual historians may well laud the achievements of Sowell as his book is crammed full of insights that will inspire a new generation of freedom oriented venture philanthropists and intellectual entrepreneurs.

I approached SuperFreakonomics with great hope but also mild trepidation. The great hope was that Levitt and Dubner had pulled it off again after the incredible (and well-deserved) success of Freakonomics – 4m copies in 35 languages!

The mild trepidation was caused by an unsolicited letter sent to me by Levitt when my review of Freakonomics appeared four years ago on the IEA website (see also Ed Smith’s review in Economic Affairs)

Levitt wrote words to the effect that my review was pretty much the most ingenious and best written of all he’d read. Wow!

Fan letters from winners of the biennial John Bates Clark Medal are to be treasured.

Note to self: file with Friedman, Hayek, Buchanan and Coase.

So do they pull it off again? The answer is a resounding shout it from the rooftops “yes”, yes in spades doubled and redoubled. Save this for a long flight because you will not want to stop.

They did not rush to capitalise on their first success but rather waited four years (or however long it took) until they had the material to justify a second book. Well done them for deciding to build the brand. And they have not only created their own brand (pushing micro-economics into the unlikeliest places) but also created a mini tsunami of excellent books on economics that are accessible, well-written and free of maths. The founders of the IEA must be smiling down on us.

SuperFreakonomics is insightful and superbly well written. The Notes (p 221 – p 256) are a treasure trove, a must read in themselves.

To me they drove home the richness of micro, my first and only love. Nobody could ever write a book like this about the arid desert of macro.

That possibly leads me to a warning. If your bright 16 to 18 year-old reads this book and announces “I’m going to study economics at university!” then a caution might be in order. This is not what most (all?) economics degrees look like. I hate to write this but you might get closer to this kind of intellectual inquiry by taking a degree in sociology (shudder) with strong statistical, micro economics and history components. Another route for a budding Freakonomist would be one of those build your own degrees in interdisciplinary studies type programmes. That’s the way to avoid the macro and get into real issues.

When Freakonomics appeared its most notorious claim (and I simplify hugely) was that Roe versus Wade (legalisation of abortion) was responsible for declining crime in big American cities rather than the new breed of cop typified by Bill Bratton of Boston, New York and most recently Los Angeles. The chiefs went ballistic so I challenged America’s top cops to take on Levitt in the pages of the IEA journal – not one accepted.

Levitt and his journalist pal Dubner really do deserve our thanks and our admiration. They are driving the re-energisation of economics. It’s a real joy to read and observe and learn.

Four years from now I look forward to reviewing Super Duper Freakonomics.

John Blundell is Senior Distinguished Fellow at the Institute of Economic Affairs.

All of us who knew Milton Friedman can attest to the importance of Rose in so many ways it is hard to list. From an IEA perspective I recall the Friedmans living in 1750 Taylor Street, San Francisco, the very same building as IEA founder the late Sir Antony Fisher and his second wife Dorian.

The Fishers back then in the 1980s had a magnificent apartment overlooking the Bay from say the 18th floor or thereabouts. Milton often borrowed it for media filming and it was there that many of the young scholars and intellectuals visiting Antony to get his advice on how to start an IEA would have met Rose and Milton – and what a buzz that gave them.

I also recall standing down in the lobby of that same building talking with the doorman. Across the courtyard I could see a very big American car with a number plate MV PT, the classic monetary equation. I turned to the doorman and said “That must be Professor Friedman’s car!” “How on earth did you guess?” he replied.

Read about the life and achievements of Rose Friedman here.

If you had told me that an absolute page-turner of a novel with a strong pro-market message had been published in 2005; that its theme could not be more topical today as Americans struggle with proposals to nationalise their health care industry; that this novel was heavily endorsed four years ago by Milton Friedman, Walter Williams and Steve Forbes; then (given that I had never heard of it) I would have instantly assumed you were playing some kind of joke on me.

I follow the literature of liberty closely and I include novels, so it was a wonderful surprise and a great joy to discover Noble Vision by Gen LaGreca thanks to John Cerasuolo, an entrepreneur from Tennessee I met when I was speaking recently at the Atlas Experience, a programme of the Atlas Economic Research Foundation. Thanks John.  

If you ever read The Fountainhead by Ayn Rand then you will get this book immediately when I tell you it is as if Howard Roark was a surgeon and not an architect. Milton writes that “the defects of government-controlled medicine are dramatized effectively in this page-turning story” and Milton to the day he passed on insisted on reading from cover to cover all books for which he agreed to provide a blurb, so we know he read it. To Steve Forbes it is a “salutary tale” about big government getting even bigger and to Walter Williams it is an intriguing book about unintended consequences of actions by people who might mean well but have a devastating impact down the line. Walter clearly did not enjoy the novel totally as he reports that it “comes too close to describing today’s reality.” Well if it was close in 2005 on publication then it is miles closer today with the looming threat of Obama-Care.  

Do pick up a copy and discover how the pioneering surgeon gets trapped by the state bureaucrats now running nationalised health in its maze of rules as he struggles to save the eyesight of a young, highly talented ballerina. As the jacket reads: If he obeys the law, she is doomed; if he defies it, he is. 

The news that the Metropolitan Police is to order officers to stop walking the beat in pairs and to go solo is a huge step forward.

For over a decade the IEA has been highlighting what works and what does not work in policing with:

●  Visits by top US officers who have seen crime tumble;

●  A special issue in December 2007 of its journal Economic Affairs on Policing A Liberal Society; and

●  As recently as December 2008 an article in Economic Affairs by retired officer Roy Bailey entitled “The importance of solo patrol in policing a liberal society”.

In the lead article in “Policing a Liberal Society” I wrote:

Ed Davis achieved a 70% drop in crime in the late 1990s as head of the Lowell, Massachusetts, Police Department thanks to three major initiatives. Firstly, he decentralised his police force, opening small and highly visible police shops on city main streets, rather than having one massive and imposing police building. Secondly, he gave his officers control over their own “turf “: officers were regularly assigned to the same areas and were expected to take responsibility for them…[Davis] took officers out of their cars and put them on the streets on foot and on cycles – solo. He reports that the amount of low-grade but vital intelligence coming into his department exploded. Finally, he committed his officers to being preventive rather than reactive. Lowell’s officers were taught not only to see crime but also the conditions that allow it to flourish.

Later I added:

A US study has proved that solo car patrols are no more dangerous than working in pairs, possibly because police are more inclined to take risks when partnered. Police departments that have adopted this measure have improved their response time to officers who need assistance. In many areas in the UK, however, dangers to police are negligible, even if there is anti-social and low-grade criminal behaviour. Foot and bike officers can be sent on solo patrols too. The immediate benefit is that these officers, without the temptation of a fellow officer to talk to, now talk to the public…Solo patrols establish communication and trust, and the public not only feels more comfortable with a consistent and visible police presence, but also is more inclined to share information and tips that can lead to crime prevention and arrests.

Retired Officer Roy Bailey responded:

Blundell, in developing this theme, argues that foot and bike officers should also be deployed on solo patrols…This contrasts with the current position, where officers predominantly patrol in pairs, talking and interacting with each other and failing to engage meaningfully with the community. Not only does this practice lead to alienation from the public, it is also wasteful of scarce resources, effectively halving police presence. Solo patrols, conversely, would enable officers to establish communication and trust, leading to a greater degree of public confidence in the police. Such a visible and consistent police presence would also encourage the public to pass on vital information and intelligence, resulting in higher detection rates.

An update to An economic Christmas-present puzzle: buying books on Amazon:

After my three letters to Amazon (going back two months now) were ignored, the IEA blog seems to have done the trick as a very lengthy response suddenly appeared in my email inbox. I am now Case Number 1,461,552 which makes me ponder. Is it good or bad that the number is so high?  

So, what did the email tell me? Apparently sellers can set any price they wish, which is 100% fine with me. However sellers “are required to have the item in their possession at the time they list it for sale”, so the dealer who simply sends an order from his amazon.co.uk site to amazon.com for fulfillment is way out of line. It is a “community rules violation” and it has been so reported. I am glad to be vindicated on that front. This was not pure arbitrage at all in my book. 

On the bigger question of listings in general there is also good news. Amazon recognises my book as my personal intellectual property and on filing of a Notice of Infringement I can ask that only Amazon be allowed to sell my book at its site. So that will hopefully quickly see off these characters asking for two to three times the cover price. Puzzle solved?

I recently wrote a book explaining Thatcherism to America. It is available in paperback, published in New York City in October 2008 by Algora as Margaret Thatcher: A Portrait of the Iron Lady. It can be bought from Amazon.com for $24.95 and that seems to include shipping. So far so good. But an economic mystery arose immediately on publication.

Before I even had my first author copy in my hands Amazon.co.uk started to carry adverts for it from British book dealers claiming it was published in June 2007 and that they had used and new copies. It wasn’t even written in June 2007 let alone published! Even more worrying was the price, which with shipping was well over two to as much as three times the US dollar price. 

As I write on December 18th 2008 there are five copies at Amazon.co.uk as follows, with the price plus shipping rounded: used like new $59; new $65; used very good $66; used like new $66; and new $75. So the cheapest (which is not even new) is $34 more than a new copy from the USA and the most expensive (which is new) is a whopping $50 more. 

What is going on? Well it is to me a complete mystery and my three letters to Amazon’s US headquarters (starting say six weeks ago now) remain unanswered. Not even an acknowledgement of receipt has been received. I stress the books are not offered by Amazon but by dealers whose wares appear at its UK site.  

But the story gets worse, very naughty in one particular regard. My book is offered by three different sellers we will call A, B and C. The first two have one advert each and the third has three - hence the five prices quoted above. This last dealer advertises that it has the book in stock in Florida whereas the first two claim to have it in stock in the UK.

As an experiment I ordered a copy from one of them for a mere $60 or so. As soon as the order was placed I was warned it would take 7 to 9 days to reach me and that was accurate as – well you have probably guessed by now – it came direct from Amazon in the USA! It wasn’t even repackaged – no pretence at all that it came from UK stock.

Digging deeper I note that A, B and C currently earn 97%, 98% and 94% positive ratings and that they have in round terms 50,000, 3,000 and 32,000 such lifetime ratings, which adds up to a lot of books sold. Looking at their ratings for just this past year one sees they have garnered 18,000, 3,000 and 8,000 respectively, which leads me to guess that A and C have been around for say 3 to 5 years - maybe a little longer - whereas B is probably just a year old.

So where are these dealers? Where are their bookshops? For one I found a description of “internet book superstore based in England” and at its site it did have my book advertised at £31.94, which is currently roughly $48, along with the boast that its prices are “slightly higher”. This is the same dealer that is offering “used like new” for $59 at Amazon! The other two are much harder to find, although the one that says it has UK stock but then ships from Amazon in the US seems to be operating out of a north London private residential address. Explanations of what is happening here would be much appreciated.

This is the best non-partisan short book on “Thatcherism” and the 1979-1990 era to have appeared to date. It is wide ranging, all encompassing, massively referenced with a great Bibliography and very fair. It digs out a lot of facts, gives useful insights and accords credit where credit is due as in (surprisingly to some) to Peter Walker and Michael Heseltine for the right to buy local authority housing granted to sitting tenants early in the first Thatcher term.

I particularly enjoyed the many quotations provided by Alan Clark, Nicholas Ridley and Jock Bruce-Gardyne - all sadly gone now. And I was struck at how often Nigel Lawson appeared, second only to Mrs Thatcher herself by my count.

The author (the blurb claims he “broadly predicted the Thatcher Revolution” but is neither pro- nor anti- just “dispassionate”) is Emeritus Professor of British Government and Administration at the University of Leeds and his scholarship and presentation skills do much to restore at least some faith in “political studies” as a discipline following the dreadful treatment of Lady Thatcher in a recent issue of Political Studies Review.

 
Indeed the contrast at all levels and on all fronts could not be clearer as Fry is a sober, scholarly, balanced and painstakingly accurate Professor who deserves our respect and wins our thanks.

 
If I have one quibble – other than the “artistic” interpretation of the cover’s Union Jack – it is with the smallish typeface and the Germanic paragraphs which combine to make for some hard going. I just do not like paragraphs that run for three whole pages! Phew! And I think Geoffrey Howe suspended exchange controls and that Nigel Lawson abolished them in the 1987 Finance Act.

 
But this will not stop me from looking out for the first two parts of this trilogy, namely The Politics of Crisis which covers 1931 to 1945 and The Politics of Decline which takes the story from that volume to this one.

The Politics of the Thatcher Revolution: An Interpretation of British Politics, 1979-1990, by Geoffrey K. Fry, Palgrave MacMillan.