Road to Damascus
Patrick Cosgrave
Late in 1969 1 received an invitation from the Institute of Economic Affairs to a function called a Hobart lunch, to be held at 2 Lord North Street. I had not long finished research in Cambridge in diplomatic history, and I was working at the Conservative Research Department on—such is the contradictory but invaluable instinct of many British institutions—not foreign policy, the only subject 1 really knew, but Home Office Affairs. My interest in, let alone my knowledge of, economic matters was Sketchy, and confined to an instinctive approval of the kind of package later commended at Selsdon Park. But I should ernPhasise that I did not take the great economic debate that had recently enlivened Conservative Party politics very seriously: Mine was the somewhat mandarin tradition Of Curzon and Home, in which the essential Identity of the nation was to be expressed less in what it did at home than in the clash and flux of its relations with other powers.
.Anyway, out of curiosity and an appreci: anon of free lunches I accepted the invitathanA few days before it was due to take Place I inquired of a senior Tory politician What the !EA was. 1 was informed that it was a decade-old institute of mad hatters founded by a lunatic named Anthony Fisher who had made a fortune in chickens or something like that, and dedicated to the se. 1f-evidently absurd idea of mounting an intellectual defence of economic liberalism Or, as my friend dubbed it, eighteenthcentury capitalism. Nonetheless, I was told I would find them all extremely agreeable.
My friend's judgment seemed strongly supported by the circumstantial evidence Which confronted me when I visited Lord North Street. There was the tail figure of Mr Ralph Harris, the lEA's Director, voluble, bespectacled, moustachioed, and adorned with a solar topee. There was the tiny, bright-eyed, also moustachioed figure of his colleague, Mr Arthur Seldon, and there the slightly-stooping, more withdrawn, but nonetheless intense person of Mr John Wood. The first two at least talked Tien more rapidly than I did, and with even less tolerance for the conventional and Mutually respectful norms of British political discourse. Their enthusiasm was Infectious, their charm very evident—but could they possibly be taken seriously, with their scorn for public expenditure, their adoration of pure market forces, their Preoccupation with some strange thing, sounding rather like a disease, called microeconomics, and their genial contempt for the whole economic record of the Conservative Party under Mr Macmillan ? On the Other hand, that lunch was the second
occasion on which 1 met Mr Enoch Powell and the first on which I encountered Sir Keith Joseph.
It was, for me, the exact equivalent of St Paul's famous stop on the road to Damascus. I have always delighted in other people's shop, always loved intellectual enthusiasm, always been instinctively contemptuous of that amorphous body of opinion which dubs any policy that can be called exciting or radical politically impossible. Over the next few years, but particularly after 1972, when the Heath government began the great retreat from the policies on which it was elected in 1970, 2 Lord North Street became to me an intellectual home as much as Peterhouse ever was, and Messrs Harris, Seldon and Wood became my friends. It is too often forgotten, 1 think, that to many young people like myself the victory of 1970 seemed at the time no triumph for hard-headed and hardfaced managerial capitalism but—however imperfectly we understood the general body of political doctrine propounded by Mr Heath, and however little we understood the looseness of his commitment to it—the beginning of a new political era, the dawning of a new freedom. When, subsequently, some of us—particularly in journalism, in the Spectator and the Daily Telegraph— assailed Mr Heath in harsh and even bitter terms, our purpose was neither malign nor disloyal nor destructive, as many of his friends asserted, but arose, rather, from a furious sense of betrayal, not of ourselves merely, but of hope. As I read more and more in economics and political and economic philosophy it was at the I EA, and in the elegant publications of the lEA, that I found the body of argument that gave substance to my own growing doubts and criticisms, and provided me with a response to the increasingly (as it seemed to me) socialist, syndicalist and destructive doctrines advocated by Heath, Walker and Barber.
Thus my own odyssey. In the year of the twentieth anniversary of the lEA, however, it is clear that Mr Harris and those about him have succeeded in a great deal more than influencing the mind of one rather academic young student of foreign policy. Almost every proposition the lEA has enunciated has become, if not as yet anything like broadly accepted public doctrine, then at least a feature in the forefront of the landscape of economic debate, and something to be treated with respect rather than derision. Even Socialist Chancellors make obeisance to the (in 1969) arcane doctrine of controlled money supply. Even Mr Roy Hattersley bows before the theory of market forces. 'Keynesianism' has become a word that can be effectively deployed in political abuse, and Hayek and Friedman, whose causes and arguments have fuelled LEA philosophy, and both of whom have published a number of papers with the LEA, have won their Nobel prizes. Best of all, the wheel has turned full circle for the Conservative Party: Mr Heath has fallen, and the Tories have a Leader who herself has been a regular attender at those Hobart lunches, who has herself sat at the feet of Hayek, and who has, with Sir Keith Joseph, founded another institution—the Centre for Policy Studies—in which a small group of brilliant young men carry over into politics (the LEA being strictly a non-political organisation) many of the ideas propounded at Lord North Street.
The magnitude of what the Institute has achieved—even if one were to confine one's judgment only to the limited world of comment and fashion—has been immense. In 1957, when Mr Fisher and Mr Harris started, the views of Adam Smith (their historical guru) were regarded at best as dead curiosities in nearly all university departments of economics, when today they are at the centre of argument. Reasonably enough, therefore, and not without a certain air of quiet satisfaction, Mr Harris and Mr Seldon have produced a book, Not from Benevolence* summarising the arguments advanced by 250 LEA authors over the past two decades. Their title comes from Smith's judgment in The Wealth of Nations that 'It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interests.' The use of the quotation neatly encapsulates both sides of the lEA thesis: not only do they argue that the great ideas of collectivism and state control of markets and provision, which seemed so unassailable in the 'fifties, do not, as a matter of practical economics, work, but also that in practice they simply do not produce the goods required to provide what is needed for the poor, the sick, the halt and the lame, consideration for whose needs, and concern for whose care, is the chief glory of the twentieth-century conscience.
To my great regret Mr Harris and Mr Seldon have not found time to write a proper history of the lEA, one that recalls in its account of human relations and human struggle all the loneliness and adversity and struggle of those twenty years of existence. Rather is theirs a purely intellectual summary of what has been advanced, from which the reader may judge what has been achieved. Perhaps, though, it is just as well: the larger task, and the book that will excite debate among historians for generations to come, may properly be the task of a historian from outside the Institute. If another two decades is to elapse before it is produced I hope the second half at least will have the sub-title 'Twenty years of economic assent,' as the present volume has that of 'Twenty years of economic dissent.'
*[EA Hobart Paperback, £2.00
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