IEA Conversations
Countering Crony Capitalism

Countering Crony Capitalism

February 9, 2019

Davos, the super-exclusive annual gathering of the world’s political and business elite displays all the features of a petri dish for the spread of “crony capitalism”.

A tiny number of extraordinarily powerful individuals meet to discuss how the affairs of all seven billion human beings should be planned and co-ordinated. It represents an environment for the growth of regulation, intervention and enhanced barriers to entry for small businesses.

All too often what we see in criticisms of capitalism are actually examples of rent-seeking and corporations trying to game the system, which amounts to crony capitalism.

But has crony capitalism like that displayed in Davos become a catch-all term?

It no longer focuses purely on cases where cronies have prospered by taking advantage of political connections. Attacks on crony capitalism too frequently devolve into attacks on capitalism itself. In reality, the real ‘cronies’ are typically not CEOs. Rather they cut a sympathetic figure.

In many cases, crony capitalist outcomes are the result of lobbying from consumer groups. Take OfGem’s Non-Discrimination Condition which banned energy companies from charging consumers less in one region and more in another. It resulted in less competition and higher margins, hitting the poorest in society, hardest.

The challenge for free markets, and for capitalism, is manifold: the message is tarnished, the frames are poor, and, fundamentally, the moral case for what they achieve is missing.

On this week's podcast, the IEA's Digital Manager Darren Grimes is joined by the IEA’s Director General Mark Littlewood and the Director of the IEA’s FREER initiative Rebecca Lowe to discuss these challenges. 

But Venezuela wasn’t REAL socialism… was it?

But Venezuela wasn’t REAL socialism… was it?

January 31, 2019

Latin America’s once-richest country, sitting atop the world’s largest proven oil reserves, is an economic basket case, a humanitarian disaster, with a dictatorship whose demise many believe cannot come soon enough. But, is it socialism that’s to blame for the widespread starvationcritical medical shortages, an explosion in crime, and a refugee crisis to rival Syria’s? You’re much more likely to read that this crisis is the product of corruption, cronyism, populism, authoritarianism, resource-dependency, U.S. sanctions and trickery OR even the residues of capitalism itself

Darren Grimes, Digital Manager at the IEA, was joined by the IEA’s Head of Political Economy Krisitian Niemietz and the Daily Telegraph’s Assistant Comment Editor, Madeline Grant to discuss was Venezuela REAL socialism? 

Immigration: Picking the low-hanging fruits

Immigration: Picking the low-hanging fruits

January 24, 2019

Opinion surveys consistently suggest that the British public is overwhelmingly hostile to immigration - a hostility which shapes our immigration policies in many ways - often negatively.

However, if we dig a little deeper into the polling data, it becomes clear that most people in Britain are not pro or anti immigration per se. Despite overall hostility to immigration, there are types of immigration that are widely accepted, or even popular with the general public.

Today we're joined by the IEA's Head of Political Economy Dr Kristian Niemietz, the author of our latest report into migration.

Kristian proposes a new post-Brexit immigration policy that would capitalise on the nuances in public opinion to push for the most liberal migration policy possible.

If you like what you hear, be sure to subscribe to our podcast channel, IEA conversations.

 

Brexit: What Happens Next?

Brexit: What Happens Next?

January 16, 2019
Earlier this week, the Prime Minister suffered a historic defeat, after the Withdrawal Agreement was voted down in Parliament by a margin of 230 votes.
 
Today we're joined by Victoria Hewson and Dr Radomir Tylecote, of the IEA’s International Trade and Competition Unit.
 
Interviewed by Madeline Grant, the pair examine what these developments mean and what renegotiation with the EU could hold, especially when it comes to securing the UK's ability to have an independent trade policy. 
 
They also discuss preparation for a 'no deal' Brexit or WTO departure, and the importance of timing and sequencing in trade negotiations.
 
Finally, they assess the continued impasse around the Irish Border question.
 
If you like what you hear, be sure to subscribe to our podcast channel, IEA Conversations

Further Reading: 

The A List

The A List

January 10, 2019

In any society there are ‘elite’ positions that command a high income and, more importantly, high status. Unsurprisingly, there is intense competition for these positions. But what happens when a society turns out more people qualified for these roles than the number of roles actually on offer? 

On this week’s podcast, the IEA’s Head of Education Dr Steve Davies discusses what he calls the ‘over-production of elites’ in society. The problem, he explains, is that elitism, unlike many things, is a zero-sum game – to be in the elite means you are not like 90 per cent or more of the population as a whole.

As a result, the ever-increasing number of UK university graduates or American PHDs students leads to bitter resentment towards those with similar qualifications, who have managed to secure elite jobs.

Steve talks about how elitism affects our views of a fair society, what it means for the concept of meritocracy, and how societies go about addressing perceived issues of unfairness.

If you like what you hear, subscribe to our iTunes channel, IEA conversations.

The Foundational Economy

The Foundational Economy

January 4, 2019

In this episode of the IEA podcast, the IEA’s Head of Education Dr Steve Davies walks the IEA’s Associate Director, Kate Andrews, through a relatively new theory called ‘The Foundational Economy’. 

This theory puts economic emphasis on material infrastructure in society - things like the water and sewer industries – and argues that these systems of provision have been undermined in the age of privatisation and outsourcing. 

Steve discusses the theory of the foundational economy, notes areas of support and criticisms, and highlights questions that arise from the theory: Is the British economy too London-centric? Have our politicians overlooked foundations of economic life and their importance? Should these services be delivered by the state?

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IEA Christmas Special 2018: A Year in Review

IEA Christmas Special 2018: A Year in Review

December 20, 2018

Welcome to our Christmas special - 2018: A Year in Review.

Joining our Associate Director Kate Andrews today is IEA Director General Mark Littlewood, Research Director Dr Jamie Whyte and Director of the IEA’s FREER initiative Rebecca Lowe.

The four talk through the biggest stories of the year, ranging from the ongoing Brexit negotiations, to the state of British political parties and ideologies, to other important happenings around the world.

You’ll also get to hear who Mark, Jamie, and Rebecca have chosen as their person of the year, event of the year, and best of all, their top prediction for 2019.

If you like what you hear, subscribe to our iTunes channel – IEA Conversations.

What does Brexit tell us about the regulatory state?

What does Brexit tell us about the regulatory state?

December 13, 2018

One underexplored aspect of the global economy in recent decades has been an explosion in the creation, issuing and enforcement of regulations. 

But is this emerging regulatory state necessary in the modern age, both to protect consumers and adapt to the changing needs of contemporary trade - or is this weight of regulation excessive and harmful to competition? Some even argue that such rules - often issued by unelected officials and removed from the electorate - represent a threat to democracy itself?

Britain’s withdrawal from the EU has revived interest in these issues, since the UK may soon be extricating itself from a weight of historic regulatory rules dating back to the Maastricht Treaty. Yet increasing regulation is actually part of a global trend, with the US, China, and to a lesser extent, Japan also defining the trade landscape through their different regimes. Today, the IEA's Head of Education Dr Steve Davies makes the case that the regulatory state, and its push for harmonisation, is damaging competition. Back in 1970s Europe, he argues, you could determine good regulations from the bad by monitoring each country’s individual rules and regulations and learning from best practice. 

On our podcast today, Steve and the IEA’s Associate Director Kate Andrews discuss these topics and more. If you like what you hear, be sure to subscribe to our podcast channel, IEA Conversations. 

Socialism - Good idea, badly done?

Socialism - Good idea, badly done?

December 6, 2018

In this week's podcast, we were joined by the IEA's Head of Political Economy, Kristian Niemietz, the author of a recent paper which ventures into the realm of fiction to examine the fundamental flaws of socialism.

Kristian and Editorial Manager Madeline Grant discuss the popular meme that socialism is a great idea in theory, but only fails due to bad implementation, or corrupt officials - as advocated by trendy millennial socialists today.

Kristian debunks this idea, but explores how it has been extremely influential in art, culture and fiction over the last century. We look at why it has proven so compelling, and whether free marketeers need to do more to make the moral and philosophical case for capitalism - as well as arguing on raw economic grounds.

If you like what you hear, be sure to subscribe to our podcast channel, IEA Conversations,

The Banny State

The Banny State

November 29, 2018

Have we reached peak nanny state – or as the Chief Secretary to the Treasury Liz Truss recently put it – peak banny state?

Politicians seem to be sneaking in nanny state legislation through the back door, often in the face of hostile public opinion. Labour brought in a draconian smoking ban in 2007 despite its 2005 manifesto explicitly exempting drinking establishments that did not serve food. David Cameron made no mention of plain packaging in his 2010 manifesto and the sugar tax did not feature in his 2015 manifesto. 

These politicians violate John Stuart Mill’s famous principle that people should be free to do whatever they like, provided they harm no one but themselves.

How did we get here? Joining the IEA's Digital Manager Darren Grimes to discuss the banny state are the IEA’s Christopher Snowdon, Head of Lifestyle Economics at the IEA and the author of Killjoys, a critique of the health paternalism that has been adopted by governments around the world, and Rebecca Lowe, Director of the IEA’s initiative, FREER, which works to promote a freer economy and a freer society.

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