|Type||Free market think tank|
|Headquarters||London, United Kingdom|
The Institute of Economic Affairs (IEA) is a British charity and right-wing think tank associated with the New Right. The IEA describes itself as an "educational research institute", says it seeks to "further the dissemination of free-market thinking", and says it does this by "analysing and expounding the role of markets in solving economic and social problems." The IEA promotes right-wing and neoliberal policies and political views. The IEA is based in Westminster, London, England.
Founded by businessman and battery farming pioneer Antony Fisher in 1955, the IEA was one of the first modern think tanks, and promoted Thatcherite political ideology, and free market and monetarist economic policies. The IEA has been criticised for operating in a manner closer to that of a lobbying operation than as a genuine think tank due to the overtly political nature of the organisation's campaigning, and refusal to disclose its sources of funding. The IEA publishes a magazine (Economic Affairs), a student magazine (EA), books and discussion papers, and holds regular lectures.
In 1945, Antony Fisher read an article in Reader's Digest, which summarised The Road to Serfdom by Friedrich Hayek. Later that year, Fisher visited Hayek at the London School of Economics. Hayek dissuaded Fisher from embarking on a political and parliamentary career to try to prevent the spread of socialism and central planning. Instead, Hayek suggested the establishment of a body which could engage in research and reach the intellectuals with reasoned argument.
In June 1955, The Free Convertibility of Sterling by George Winder was published, with Fisher signing the foreword as Director of the IEA. In November 1955, the IEA's Original Trust Deed was signed by Fisher, John Harding and Oliver Smedley. Ralph Harris (later Lord Harris) began work as part-time General Director in January 1957. He was joined in 1958 by Arthur Seldon who was initially appointed Editorial Advisor and became the Editorial Director in 1959. Smedley wrote to Fisher that it was
"imperative that we should give no indication in our literature that we are working to educate the public along certain lines which might be interpreted as having a political bias. … That is why the first draft [of the IEA's aims] is written in rather cagey terms".
The Social Affairs Unit was established in December 1980 as an offshoot of the Institute of Economic Affairs to carry the IEA's economic ideas onto the battleground of sociology. "Within a few years the Social Affairs Unit became independent from the IEA, acquiring its own premises." In 1986 the IEA created a Health and Welfare Unit to focus on these aspects of social policy. Discussing the IEA's increasing influence under the Conservative government in the 1980s in relation to the "advent of Thatcherism" and the promotion of privatisation, Dieter Plehwe, a Research Fellow at the WZB Berlin Social Science Center, has written that
The arguably most influential think tank in British history... benefited from the close alignment of IEA's neoliberal agenda with corporate interests and the priorities of the Thatcher government.
In 2007, British journalist Andrew Marr called the IEA "undoubtedly the most influential think tank in modern British history". Damien Cahill, a Professor of Political Economy at the University of Sydney, has characterised the IEA as, "Britain's oldest and leading neoliberal think tank".
In October 2009, the IEA appointed Mark Littlewood as its Director General with effect from 1 December 2009.
The IEA's director Mark Littlewood said "We want to totally reframe the debate about the proper role of the state and civil society in our country … Our true mission is to change the climate of opinion."
The IEA has written policy papers arguing against government funding for pressure groups and charities involved in political campaigning. This does not affect IEA it does not accept money from government. Charity Commission rules state that "an organisation will not be charitable if its purposes are political". In July 2018 the Charity Commission announced that it was to investigate whether the IEA had broken its rules.
Since Britain voted to leave the European Union (Brexit) by March 2019, the IEA has lobbied consistently for a hard Brexit without customs and regulatory alignment, etc.; a report it published in July 2018 proposed using Brexit to remove rules protecting agency workers, to deregulate finance, annul the rules on hazardous chemicals and weaken food labelling laws.
The IEA supports privatising the National Health Service (NHS); campaigns against controls on junk food; attacks trades unions; and defends zero-hour contracts, unpaid internships and tax havens. Its staff frequently appear on BBC television promoting these positions.
In October 2019, The Guardian accused the IEA of publishing "at least four books, as well as multiple articles and papers, over two decades suggesting manmade climate change may be uncertain or exaggerated [and that] climate change is either not significantly driven by human activity or will be positive". The IEA rejected these claims, describing them as "entirely unworthy of the paper’s proud history of inquiry and fair treatment of opponents".
David Davis, Steve Baker and Lord Callanan, ministers at the Department for Exiting the European Union (DExEU) at the time, all recorded meetings with the IEA in the first three months of 2018. The Observer reported on 29 July 2018 that the director of the IEA was secretly recorded in May and June telling an undercover reporter that funders could get to know ministers on first-name terms and that his organisation was in "the Brexit influencing game". While seeking funding, Littlewood said that the IEA allowed donors to affect the "salience" of reports and to shape "substantial content". The recording was to be given to the Charity Commission on 30 July.
The Charity Commission, considering that the allegations raised by the recordings were "of a serious nature", on 20 July 2018 opened a regulatory compliance case into the IEA due to concerns about its political independence, after it became known that it offered potential US donors access to ministers while raising funds for research to promote free-trade deals favoured by proponents of a "hard Brexit". The Commission has powers to examine IEA financial records, legally compel it to provide information, and to disqualify trustees. The IEA denies it has breached charity law.
The register of lobbyists was also considering whether the IEA should be registered. It was also revealed that, after the IEA published a report recommending more casinos, the casino industry donated £8,000 to the IEA.
Jon Trickett, the shadow Cabinet Office minister, welcoming the investigation into the IEA, said "on the road to Brexit, a small group of establishment figures, funded to the tune of millions, are covertly pursuing a political campaign in favour of extreme free trade, acting in effect as lobbyists for secretive corporate interests...there are serious questions that high-ranking Conservative ministers must now answer about their dealings with the IEA."
It was also revealed that Jersey Finance, representing financial interests in Jersey, paid for an IEA report saying that tax havens (such as Jersey) benefited the wider economy, and did not diminish tax revenues in other countries. The report recommended that their status be protected. The IEA did not disclose the funding from Jersey Finance. A similar IEA report about neighbouring Guernsey was funded by the financial services industry there. Following these revelations, the IEA said that funding they received never influenced the conclusions of reports, and that their output was independent and free from conflict of interest.
In March 2018 Freer was founded in order to promote a positive message of liberal, supply-side Conservative renewal. Freer held two meetings at the 2018 Conservative conference (with none in any other political parties' conferences) and is an offshoot of the IEA, remaining entirely within its structural and organisational control.
Cabinet ministers and MPs (notably Michael Gove and Liz Truss) spoke at the organisation's launch. Truss called for a neoliberal "Tory revolution" spearheaded by "Uber-riding, Airbnb-ing, Deliveroo-eating freedom-fighters", comments which were criticised by the Morning Star for failing to take into consideration the quality of employment within the companies mentioned. Conservative blogger Guido Fawkes said that the launch "piqued the interest of senior ministers including Michael Gove, Dom Raab and Brexit brain Shanker Singham". The organisation has 24 parliamentary supporters – including prominent figures such as Truss, Chris Skidmore, Priti Patel, Ben Bradley and Kemi Badenoch – all of whom are Conservative MPs. Freer also holds events and publishes pamphlets for Conservative MPs, and has been referred to the Charity Commission by Private Eye for political bias.
The IEA is a registered educational and research charity. The organisation states that it is funded by "voluntary donations from individuals, companies and foundations who want to support its work, plus income from book sales and conferences" and - despite extensive long-term involvement with the UK Conservative Party - claims that it is "independent of any political party or group". The IEA is rated by the accountability group Transparify as "highly opaque".
The IEA refuses to disclose the sources of their own funding, and has been criticised by health charities and by George Monbiot in The Guardian for receiving funds from major tobacco companies whilst campaigning on tobacco related public health issues. British American Tobacco (BAT) confirmed it had donated £40,000 to the IEA in 2013, £20,000 in 2012 and £10,000 in 2011, and Philip Morris International and Japan Tobacco International also confirmed they provide financial support to the IEA. In 2002, a leaked letter revealed that prominent IEA member, the conservative writer Roger Scruton, had authored an IEA pamphlet attacking the World Health Organisation's campaign on tobacco, whilst failing to disclose that he - Scruton -was receiving £54,000 a year from Japan Tobacco International. In response, the IEA said it would introduce an author declaration policy. Despite these revelations, the IEA claims that it "accepts no tied funding".
An organisation called 'American Friends of the IEA' had received $215,000 as of 2010 from the U.S.-based Donors Trust and Donors Capital Fund, donor-advised funds which support right-wing causes.
Think tank Transparify, which is funded by the Open Society Foundations, ranked the IEA as one of the top three least transparent think tanks in the UK in relation to funding. The IEA responded by saying "it is a matter for individual donors whether they wish their donation to be public or private – we leave that entirely to their discretion", and that it has not "earmarked money for commissioned research work from any company".
Funding to the IEA from the alcohol industry, food industry, and sugar industry has also been documented. IEA Research Fellow Christopher Snowdon disclosed alcohol industry funding in a response to a British Medical Journal article in 2014.
In October 2018, an investigation by Greenpeace found that the IEA was also receiving funding from the oil giant BP, which was "[using] this access to press ministers on issues ranging from environmental and safety standards to British tax rates." In May 2019, the British Medical Journal revealed that British American Tobacco was continuing to fund the IEA.
Arthur Seldon proposed a series of Papers for economists to explore the neoliberal approach to the issues of the day. Eventually these emerged as the Hobart Papers; 154 had been published by August 2006. In addition, 32 Hobart Paperbacks had been released along with 139 Occasional Papers, 61 Readings and 61 Research Monographs. A large number of other titles has been published in association with trade and university presses.
The Journal of Economic Affairs was first published in October 1980 and continues to be published to the present day. IEA publications are sold throughout the world – reprinted and translated into over twenty-five languages. In the UK, many IEA titles have become mandatory in university and classroom reading lists.
IEA papers are arranged in a series of titles, each with its own 'brand image'. The main series of publications is complemented by the IEA's quarterly journal Economic Affairs.
In September 2008, the institute started the IEA blog.
According to the IEA, although not an academic body, the institute's research activities are aided by an international Academic Advisory Council and a panel of Honorary Fellows. The IEA say that their papers are subjected to the same refereeing process used by academic journals, and that the views expressed in IEA papers are those of the authors and not of the IEA, its trustees, directors or advisers.
The IEA has also published research in areas including business ethics, economic development, education, pensions, regulation, taxation and transport.
The IEA holds a range of events throughout the year at its 2 Lord North Street headquarters, from book launches and debates to conferences and lectures (including the Annual Hayek Lecture), Working Lunches and Political Economy Suppers. The 20th Annual Hayek Lecture was delivered on 5 July 2011 by Robert Barro of Harvard University.
IEA's Shadow Monetary Policy Committee (SMPC) was established in July 1997. The SMPC has met on a monthly basis since then. The decisions and minutes of the SMPC are published a few days before the Bank of England's own interest rate decision each month.
The IEA hosts two essay competitions annually: the Dorian Fisher Memorial Prize and the Monetary Policy Essay Prize. The former is open to Year 12 and Year 13 pupils, whereas the latter is open to all Year 12, Year 13, undergraduates and postgraduates in the UK.
|Year||Title||Undergraduate Prizewinners||Sixth Form First Prize|
|2020||“Is monetary policy exhausted? Is it possible that the state cannot create extra money balances? In your answer discuss in detail the methods by which the state – understood to include both the government and the central bank – can create new money balances and the implications for the economy of those different methods.”||
|2021||“Will the pandemic be inflationary or disinflationary?”||TBC||TBC|