Articles following the release of 'A Life For Liberty'
June 2009: Arthur Seldon - the thinker with free markets in his blood -
Arthur Seldon's economic ideas inspired Margaret Thatcher. Her successors should pay him closer attention, says Charles Moore.
It has often been said that the British are great inventors, but bad at the application of our scientific discoveries. The same applies to our economic and political ideas. Our great thinkers have often had their great thoughts in, as it were, a shed in the back garden. But there have not been enough people to wholesale, retail, package and advertise the ideas thus generated.
So it is interesting to read about a man who spent almost the whole of his working life promoting a set of economic ideas, for no other reason than that he believed in them. Because of his energy and sincerity, he succeeded.
Arthur Seldon was born Abraham Margolis in the East End of London in 1916. Both his parents died in the great flu epidemic of 1919, and he was adopted by a couple called Slaberdain. Perhaps because of the external threat to Jews, he took the name Seldon at the outbreak of the Second World War. His background of poverty, relieved by education and close family ties, laid the foundation for his beliefs.
Free markets are discredited in many people's eyes because they think they help only the rich. But Seldon well understood Adam Smith's famous observation that men of the same trade seldom gather together except to conspire against the public. In his youth, he was commissioned by Marks and Spencer to write a "structural analysis" of the company. When M&S realised that his work would expose its secrets, the firm cancelled the contract. Free markets tend to disclose the truth, so big companies, almost as much as governments, dislike them. Markets are the friend of the citizen, not of the powerful.
Seldon believed that markets made people freer, particularly poor people. In the Sixties, he wrote to the Tory shadow minister Lord Balniel about how best to relieve poverty: "You have never been poor. I have. The poor do not thank those who bring them gifts in kind which question their capacity and affront their dignity. Cash gives the power of choice; care, service in kind, denies choice. But much more than that; the poor who are given care or kind will never learn choice, judgment, discrimination, responsibility. To give cash is to take risks but they are the risks that a child takes when he learns to walk."
Post-1945, most politicians in Britain believed that our victory in the war had proved that the state was more benign than the individual, the family, or private enterprise. Seldon learnt the opposite lesson. Much influenced by Friedrich von Hayek, whose The Road to Serfdom was one of the great anti-collectivist books to emerge from world war, Seldon realised that the arguments in which he believed so strongly were very little known. With Ralph Harris, a communicator of genius, he ran the Institute of Economic Affairs for almost 40 years.
The inner workings of a think tank are of little interest to the outside world, and luckily this book does not dwell on them. The important point is that the think tank must choose. Either it must get close to governments and parties and prepare ideas in a practical form, improving policy. Or it must be more evangelical and "pure": set out the ideas without fear, and let others turn them into policy.
The IEA took the latter course. It cultivated intellectuals but forced them to make themselves clear. Thanks to Seldon's endless stream of pamphlets, the ordinary reader could come to understand how the price mechanism worked, or how the "power of exit" which markets offer (i.e. the freedom to buy elsewhere) is much more powerful than the "power of voice" (i.e. one's capacity to complain about something supplied by a monopoly).
Such ideas were then applied to particular cases – trade union privileges, nationalised industries, the opticians' monopoly, the Dock Labour Scheme, pay "comparability" – in provocative ways. This meant that, by the time Margaret Thatcher came into office in 1979, she knew the manifold symptoms of our economic disease, if not always the details of the cure.
As a young journalist attending the IEA's lunches in Lord North Street in the early Eighties, I was delighted by the egalitarianism among people excited by ideas. Any seeker after enlightenment was welcomed by Seldon and Harris to the bad food and good talk. Seldon had the amiable crankiness that often goes with strong belief. Once he nearly died after a haemorrhage because the right sort of blood (a rare group) was not available. He wrote a pamphlet called The Price of Blood, arguing that a market in blood, with paid donors, would be much more likely to ensure a ready supply than voluntary donation. As so often with eccentric ideas, this one was right.
Today, the ideas of people such as Arthur Seldon have prevailed in the economic management of society. But they are still misunderstood on the moral level. Seldon was passionate that the welfare state was not only inefficient, but actually wrong, because it infantilised people. Today, more than a quarter of the population is strapped into the state's buggy. It is a social disaster, and our leaders need a new Seldon to help them confront it.
This, then, is a timely publication, and there is only one thing Arthur Seldon would not have liked – its price. It is £19.99. Surely a round, honest £20 would have been more in keeping with the man.