Celebrating 60 years of the Institute of Economic Affairs (IEA)

The Business Secretary pays tribute to leading British think-tank the IEA, and discusses the importance of defending the free market.

Business Secretary Sajid Javid - photo from FCO

Let me start by congratulating the Institute of Economic Affairs (IEA) on its 60th birthday.

We all know how hard it is to get economists to agree on anything.

As President Reagan said, if Trivial Pursuit was designed by economists it would have 100 questions…

…and 3,000 answers.

But I’m sure everyone here tonight agrees that it’s an amazing achievement for a think-tank to reach its diamond jubilee.

For 60 years now you’ve been thinking the unthinkable…

…winning hearts and minds and influencing governments from Westminster to Washington to Warsaw and everywhere in between.

Of course, it could have all been very different.

After leaving the RAF a young Sir Antony Fisher was set on a career in politics.

But Friedrich Hayek told him that if he really wanted to change the world he should forget about becoming an MP…

…and start a think-tank instead.

I don’t know if that means I’m in the wrong job!

But I do know that we should all be very grateful for Hayek’s intervention.

Because the think-tank Sir Antony established, would go on to play a huge and important role in political and economic history.

When I was born, the IEA was already a teenager.

By the time I joined, as a student down in Exeter, it was well into middle age…

…and was probably one of the most influential think-tanks anywhere in the Western World.

The Institute’s work really resonated with me, taking the theories of the economists I admired…

…Hayek, Friedman, and Minford…

…and showing how easily and practically they could be applied in the real world.

It both reflected and deeply influenced my views, helping to develop the economic and political philosophy that guides me to this day.

And its back story spoke to me too, showing that you don’t have to be fabulously wealthy to think capitalism is a good thing.

Like Ralph Harris I’m a working class kid who grew up on an inner-city estate.

Like Ralph Harris I saw first-hand the realities of poverty.

And, like Ralph Harris, I have never been in any doubt that free enterprise is the best way to bring prosperity to as many people as possible.

That the free market can solve not just economic problems, but social ones too.

That was true back when I was a student and it’s true today.

Our economy is growing faster than any of our G7 rivals, and more people are in work than ever before.

But if that success is going to be maintained and built on, we cannot afford to stand still.

We need to increase productivity, drive investment in industry, grow our exports.

Not just to make individuals better off, although that is a noble aim in itself.

But also because a strong economy allows us to protect our most vulnerable citizens.

To pay for the NHS, for our schools and armed forces and police.

To build roads and railways, and to give our young people the skills they need to get on in the modern world.

None of this can be achieved without a strong economy.

And a strong economy will never be delivered by attacking big business, or by endlessly raising taxes, or wrapping innovators up in red tape.

That’s why my Enterprise Bill will free businesses from another £10 billion of needless regulation.

That’s why we’ll keep on cutting taxes.

And that’s why I want Britain to be the best place in the world to start and grow a business.

During the Cold War, the physical bulwark against Communism was provided by the formidable military might of the NATO alliance.

But throughout that time the ideological bulwark, the theoretical and philosophical defence, was brigaded by the likes of the Institute of Economic Affairs.

While our troops and bombs and planes protected the West from the Red Army, in the battle for ideas our generals were Sir Antony, Lord Harris and Arthur Seldon.

Today the Cold War is rapidly becoming a distant memory, consigned to the textbooks of political history.

Most economics students arriving at university this autumn will have been born 8 years after the Berlin Wall fell.

But the work of the IEA is just as important as ever.

Because the free market is the most efficient, most enduring, most effective system ever devised by mankind.

Since the 1970s the number of people in the world living on $1 a day, adjusted for inflation, has fallen by 80%.

That’s the biggest increase in prosperity the world has ever experienced.

And it didn’t happen because of international aid, or thanks to the IMF or World Bank.

It was brought about by the spread of capitalism.

The free market is the greatest force every created for lifting people out of poverty.

But we must not lose sight of the fact that it’s an artificial creation.

It is not the natural order of things.

We have to consciously choose to embrace it, choose to continue its legacy.

President Reagan was talking about democracy when he said that that freedom is never more than one generation away from extinction.

But his idea – that freedom is not passed on but must be fought for, protected and defended – applies equally to free market.

We neglect it at our peril and if we fail to support it, it could still crumble in the face of countless tiny attacks.

Or, as George W Bush put it in slightly more succinct terms during the global financial crisis: “this sucker could go down”.

If the price of freedom is eternal vigilance, then we will always need the likes of the IEA to be the watchmen for capitalism.

We will always need the heirs of Fisher, Harris and Seldon to make the case for free enterprise, to be its last line of defence and first line of attack.

That is the role the IEA has played for the past 60 years, and you have much to celebrate tonight.

But I’ve always believed that the best birthdays are those that have yet to arrive.

And I know that, in spite of everything it has achieved since 1955, the Institute of Economic Affairs’ best years are still to come.

Published 19 June 2015