Founding father of the IEA
Published: 12 October 2005
Arthur Seldon, economist: born London 29 May 1916; Editorial Director,
Institute of Economic Affairs 1957-81, consultant 1981-88, Founder
President 1990-2005; Editor, Economic Affairs 1980-88; CBE 1983;
married 1948 Marjorie Willett (three sons); died Godden Green,
Kent 11 October 2005.
The founding fathers of the Institute of Economic Affairs, Arthur
Seldon and Ralph Harris, were for long widely regarded as political
crackpots. Their advocacy in the 1960s and 1970s of free-market
economics and pricing for public services was dismissed even by
the Conservative Party. By the early 1980s however, they gradually
began to win over the political establishment. It is a remarkable
story of the power of ideas.
It was to the IEA that Sir Keith Joseph turned, in his own words, "for
an education" in free-market economics, following the Conservative
general election defeat in February 1974. Those meetings led to
the creation of the Centre for Policy Studies, development of Thatcherism,
and the frontal assault on the post-war collectivist consensus.
The great Austrian economist Joseph Schumpeter had warned in 1942
that capitalism would decline because it did not have persuasive
defenders. Businessmen lacked charisma and were too busy seeking
favours from government in the form of subsidies and restricting
competition. The case for the free market and profits paled beside
that of planning and social justice. Even as Prime Minister, Margaret
Thatcher still complained in private that capitalism was discredited
in schools, universities, churches and media. The IEA may have
been a voice in the wilderness in the 1960s but, as she often acknowledged,
it prepared the path for Thatcherism.
Seldon was born in the East End of London in 1916 and had few
advantages. He was orphaned at the age of three (his parents died
of Spanish flu) and then adopted by a childless cobbler and his
wife. A legacy of that experience was his strong belief in self-help.
To the end of his life he complained that the bureaucratically
managed welfare state and priceless goods and services, supplied "free" by
the Government, discouraged independence and self-esteem among
He wanted people to receive money and vouchers so that they could
choose their own schools and hospital treatment. That would encourage
their commitment to self-improvement and independence and break
the power of "bossy" bureaucrats and welfare providers.
Indeed state welfare actually undermined the traditional forms
of self-help, through the community, charities and friendly societies.
His Judaism reinforced these beliefs.
Seldon's scholarship to the London School of Economics was decisive
for his intellectual development. He embraced the classical liberal
economics, taught by Professors Lionel Robbins, Friedrich Hayek
and Arnold Plant, rather than the Fabianism found elsewhere in
the school. In 1940 Plant headed a small survey research unit at
the Ministry of Information and for a time employed the young Seldon
to draw up the sampling frame for interviews. After the Second
World War, in which he served in the Army in Africa and Italy,
Seldon taught evening classes as the LSE, and conducted research
for the brewery industry.
Harris was put in by the entrepreneur Anthony Fisher as General
Director of the IEA in 1957 and Seldon as part-time editor soon
after. They were an unlikely combination. Harris, the front man,
was confident, colourful, moustachioed, and often sported a bow
tie and bright shirt. Seldon dressed soberly, was short, stocky
and studious and cursed with a terrible stammer that limited his
public role. The impediment meant that he shone in print not on
the platform. At their first meeting Harris wondered how such a
retiring person would fare in an entrepreneurial body. Both men
kept clear of party politics, though Seldon was a traditional Liberal.
But it was the free-market wing of the Conservative Party that
was most sympathetic to their ideas.
The first 30 years of the IEA were inseparable from the personalities
of Seldon and Harris. It was organised in 1957 as a research and
educational trust - today it would be called a think tank. For
a time it attracted the support of only the non-Keynesian economists
and Conservatives disillusioned with the collectivist drift of
the party; at the time both were beleaguered minorities. It promoted
and published the work of Milton Friedman and Friedrich Hayek on
monetarism and markets. Indeed Seldon regularly edited and polished
the work of the latter.
The job of commissioning, reviewing and editing (he ruthlessly
excised jargon) over 350 papers and pamphlets was a demanding one.
Many young authors owed their first start to Seldon's skills in
developing neglected topics and fussily transforming first drafts
into polished prose. The pamphlets and seminars were aimed at the
informed public in the belief that shaping the climate of opinion
was the best way of influencing politicians.
Seldon actually wrote the first IEA pamphlet in 1957, Pensions
in a Free Society. It argued for personal private pensions, something
achieved 30 years later. Although he was a generous man and interested
in new ideas, the years of derision and indifference from politicians
and media left a mark on him. Sympathetic politicians (like the
young Geoffrey Howe, Enoch Powell or Sir Keith Joseph in 1964)
were treasured as "a friend" or "a supporter".
For a time there was something of an "us and them" attitude.
Over time, and particularly after 1979, Seldon and Harris saw
many of their supposedly eccentric ideas carried into policy, including
privatisation, control of the money supply, creation of an independent
university, student loans, trade-union reforms etc. But there were
setbacks. He and his wife, Marjorie, were ardent supporters of
school vouchers and had high hopes that Sir Keith Joseph, the Secretary
of State for Education between 1981 and 1986, would promote the
idea. They were disappointed when he accepted the objections of
his civil servants and aghast that his education reforms resulted
in such central control of schools and universities. Thatcher's
NHS reforms also found no place for health vouchers.
Seldon saw little point in curbing the power of the producers,
only to increase that of politicians and bureaucrats. The market
was more responsive to popular choice than the political process.
Genuine reform should empower consumers and customers. Seldon always
took the long view and believed that his ideas would win out eventually.
The relationship between Harris and Seldon, although fruitful,
was not without its strains. Seldon, overshadowed by his more high-profile
partner, was not pleased that Harris was singled out for a peerage
in 1979 (he took the title Lord Harris of High Cross). Many in
the IEA were embarrassed and regarded it as a slight to Seldon;
it seemed invidious to distinguish their contributions. His life
was the IEA and he looked askance at Harris's fund-raising on behalf
of the Mount Pèlerin Society and the private University
of Buckingham. Seldon was bored with Europe, while Harris was a
passionate Eurosceptic. Their shared vision and sense of achievement
overcame these differences.
Seldon retired as Editorial Director in 1981 but remained as
a very active consultant editor until 1988. A year later Harris
resigned. They disagreed over the appointment of Harris's successor.
Seldon did not regard Graham Mather, who wanted to target the policy
makers more directly and tackle wider issues, as the appropriate
choice as General Director. Both agreed, however, that the IEA
under Mather was becoming too close to John Major. After clashes
Mather resigned in 1992.
Arthur Seldon was a remarkable spotter of young authors. He brought
politicians and intellectuals together at lunches at the Lord North
Street offices, acquired in 1969. He encouraged his contributors
to follow their own ideas and "think the unthinkable".
His years as editor held him back from his own writing. But he
became productive in his later period and his publications include
The Great Pensions Swindle (1970), Charge (1977), Capitalism (1990),
The State is Rolling Back (1994: essays spanning 50 years), The
Dilemma of Democracy (1998) and The Making of the IEA (2002). His
death comes on the eve of the publication of the seventh and final
volume of his collected works.
The Seldons had three sons. Anthony, the youngest, is author of
acclaimed biographies of John Major and Tony Blair; he inherited
much of his father's editorial and networking talents but not his
Arthur and his remarkable wife, Marjorie (whose uncle invented
daylight saving), continued to host social and intellectual gatherings
at their home ("The Thatched Cottage") outside Sevenoaks.
He liked to call them "parties for non-conformists".
Arthur Seldon was one of the most powerful exponents of classical
liberalism in the second half of the 20th century - both as writer
and editor, writes Professor Colin Robinson. He was one of the
great editors. He was constantly seeking authors who would pursue
ideas to their logical conclusion, no matter how radical the ensuing
reform proposals. Authors' initial efforts would be peppered with
suggestions for change, particularly if the ideas were not clearly
expressed without technical jargon and if (the ultimate sin) reform
proposals were trimmed to take account of the "politically
At the same time he was a prolific author, starting at the age
of 21 and producing 28 books and some 230 articles. His work, ranging
from long books to short newspaper pieces, has been gathered by
Liberty Fund of Indianapolis under the title The Collected Works
of Arthur Seldon. The Collected Works is full of original ideas
and genuinely accessible to people with no formal training in economics.
His analysis, from the late 1950s onwards, of the inherent deficiencies
of the welfare state is far ahead of its time. He was also one
of the first to perceive the problem of over-government in representative
political systems where infrequent elections are insufficient to
keep politicians and civil servants in check.
Arthur could be impatient - for instance, with the slow pace of
economic reform in Britain in the 1980s and, more generally, with
socialism which he saw as a system that is fundamentally misguided
and incapable of being mended. But in his personal dealings he
was patience itself.
Summarising the contribution of a person of such stature is not
easy. But the economic and business worlds in Britain and abroad
would be quite different - and much more hostile to enterprise
- without the efforts of Arthur Seldon.
Professor Colin Robinson