Adam Smith Institute

The Adam Smith Institute (ASI) is a Westminster based "free-market" think tank which wants to dismantle the NHS, sack civil servants and council workers and slash income tax. It received Labour government funding of almost £8m in 2003. It is a former member of the Stockholm Network (membership was current in the years 2006-7 and 2007-8).

In a March 2009 presentation Tim Montgomerie and Matthew Elliott described ASI as part of the infrastructure of the conservative movement in Britain.

ASI, 23 Great Smith Street, SW1P - opposite the Department for Education and 1 minute from lobbyists PLMR and Central Lobby Consultants

History

ASI founders and principals, Madsen Pirie, Eamonn Butler and Stuart Butler were students together at University of St Andrews, Scotland. In 1973, they left Scotland to work with Edwin Feulner, who became co-founder of the free-market think tank the Heritage Foundation, in 1973. Edwin J. Feulner is a founder and current President of the Heritage Foundation and was a recipient of the Presidential Citizens Medal in 1989. The Heritage Foundation located in Washington, DC, is widely regarded as one of the world's most influential public policy research institutes.

After their apprenticeship in America, Eamonn Butler and Pirie returned to Scotland in 1977 to found the Adam Smith Institute, set up with the help of Antony Fisher of the Institute of Economic Affairs, one of the British think tanks associated with the Mont Pelerin Society.

Relationship with Adam Smith International

In 1992, the Institute founded a consulting company, Adam Smith International Ltd, which was "charged with overseeing the overseas work of the institute... [in] an attempt to capitalise on the growing international trend towards economic liberalization and marketization". Eamonn Butler and Madsen Pirie were, as of 1998, members of the management board of both organisations, but as of 2010 the management teams of Adam Smith International and the Adam Smith Institute are separate.

In 2004, Baroness Amos described Adam Smith International as "affiliated" with the Adam Smith Institute but financially independent from it:

Adam Smith International Limited, which is the consultancy arm of the institute, is a separate organisation. It is affiliated to the institute as a self-financing commercial organisation.

DfID overseas aid money

Baroness Amos's attempt at clarification of the relationship between the Adam Smith Institute and Adam Smith International came in answer to a question to the government in the House of Lords from Baroness Northover, as to:

What criteria they considered before giving the Adam Smith Institute £7.6 million in aid money last year for consultancy work? ... Is she content that the Adam Smith Institute has sufficient expertise in development issues to justify giving it such a large sum?

Baroness Amos defended the grant as follows:

the Department for International Development awarded three contracts to the Adam Smith Institute worth a total of £7.7 million in the past financial year. Each was awarded following open international competition on the basis of published evaluation criteria.

Amos added:

The work that has been carried out is significant. The three contracts awarded last year included one for support services for public enterprise restructuring in South Africa; one in Afghanistan to provide support in capacity building for the Ministry of Finance and the central bank; and one in the Kyrgyz Republic for pilot training and capacity building in international waterhouse law. There is a range of projects.

In 2008 Michael Foster stated that DfID "had not awarded any contracts to the Adam Smith Institute in the last five years. However, we have issued a number of contracts to Adam Smith International Ltd., which is a separate, self-financing commercial organisation".

Funding

In 1993 the Guardian reported:

The Institute itself stays relatively lean. 'Not more than eight full timers' was the plan and it has been kept to. But work has been done by 300 outside contractors, a long list of professors, and one pamphlet from an unknown Michael Portillo. The funding is unsinister, a budget of £350,000, just under half coming from sales of publications and quite profitable conferences: the rest from business. However, no one gives 10% of the total. What if they got such an offer? "No one turns away money, but we'd try to have it spread over a number of years." The Institute is now approached by civil servants, and is busily thinking strategically across Eastern Europe. Its director admired the prime minister, and that matters to Major.

Government ties

According to George Monbiot, writing in 2005, the British Government had been paying ASI up to £9m a year to oversee privatisation programmes in developing countries. In the six years alone till 2004, ASI's consultancy arm received $34m from the UK aid budget.

According to a previous article by George Monbiot in The Guardian, in 2004, Britain's Department for International Development (DFID) gave ASI £6.3 million for "public sector reform" in South Africa. The Institute has also been given "its own budget - £5m of British aid money - to disburse as it pleases". This lets DFID generate "the support it likes for privatization and public-private partnerships, while avoiding direct responsibility for the decisions the institute makes". In this, Monbiot says, DFID is clearly breaking the law since the International Development Act forbids it from spending money for any purpose other than the elimination of poverty, not to mention the rules forbidding it to "link aid money to deals for specific British businesses".

The "implementation secretariat" for the Indian State of Andhra Pradesh's privatization program, funded by DFID and overseeing the privatization of the state's power sector, was also being run by ASI at the British Government's insistence with the money, once again, coming out of Britain's foreign aid budget.

Key proposals

• ASI is a key proponent of privatization both at home and abroad.
• ASI was in the vanguard of replacing central planning and state controls by "incentives, market opportunities and an entrepreneurial culture".
• ASI advocacy has led to cuts in the top rates of taxation to "create a business-friendly climate"
• ASI has oft likened government regulation of business and enterprise with totalitarianism while arguing that less regulation means lowers costs and opens opportunities for the development of innovative ideas.
• ASI is also at the forefront of a campaign to private educational institutions

Healthcare reform

ASI is a fierce critic of the NHS, which it describes as "centralized tax-funded monopoly". Instead it argues that the UK should "shift the balance of healthcare spending away from tax and more to the individual." At the same time, it says "we need to transform today’s state monopoly providers into independent, competitive ones" - ie private for-profit healthcare providers.

Healthcare articles and publications

• A scalpel is needed on health costs we can no longer afford, by Tom Clougherty, June 2010. In this article, Clougherty writes: "When it comes to health, the key question we need to ask is this: can we still afford to provide everyone with comprehensive healthcare, free at the point of use? Or should we focus scarce resources on those most in need, using government as a safety net and guarantor of minimum standards, rather than a provider of universal services?" He advocates gradually introducing user charges throughout the NHS."
• Road Map to Reform: Health, by Dr Michael Goldsmith & Dr David Gladstone, 2005. This report proposes "to unleash the power of enterprise and innovation in how healthcare is actually provided. This requires breaking through the ideological barricades - a public-private mixture is really the only way forward."
• NHS reform: towards consensus?, written by Anthony Browne and Matthew Young, 2002. It was part of ASI's Partnership for Better Health project – a programme of work to develop early, practicable reform of the NHS, which was led by Dr Eamonn Butler (Director-General) and Matthew Young (Projects Director). This report, which calls for an end to today's centralised health service and the adoption of competing European style social insurance has been endorsed by prominent health experts. The main thrust is that the government should neither provide nor finance health. It should merely regulate.

Healthcare events

ASI hosts regular events in the Cholmondeley Room of the House of Lords for 'senior people from the private, public and third sectors' in healthcare to 'network with leaders in the sector'. Held in conjunction with LCS International Consulting, these events have featured organisations such as McKinsey & Company, Deloitte and Optum, health ministers and former ministers, and members of the Lords, such as Norman Warner and Tim Clement-Jones.

UK government funding

The British government has funded ASI's affiliated company Adam Smith International with millions of pounds for various "consulting" activities around the world, and it certainly is curious that a Labour government would pass many such contracts to an avowedly right-wing/neoliberal institution. House of Commons hearings in January 2004 revealed substantial funding for its international operations.

Year	Project title	Current value (£) (original contract value plus cost of any increases or extensions)	Country
1999	PR Unit Support for Parastatal Sector Reform Commission (PSRC)	430,625	Tanzania
1999	Privatisation Project Phase 3 and 4 Managing Consultant	1,718,736	Guyana
1999	Privatisation Agency Support Project Consultancy	560,752	Zimbabwe
1999	Technical Assistance for Public Enterprise Reform in Orissa	3,667,571	India
1999	Assistance to the Palestinian Negotiations Affairs Department	9,131,555	West Bank and Gaza
1999	Additional Support to the Privatisation Board	106,241	Bangladesh
1999	UK-Ireland Privatisation and Regulation Study Tour	11,145	Tanzania
1999	Medium Term Programme of Capacity Building for PURC	1,559,960	Ghana
1999	Initital Support to the Budgetary Processes of the Government of Macedonia	44,315	Macedonia
2000	Rehabilitation of Cyclone Damaged Lift Irrigation Points in Orissa	1,296,327	India
2000	Seminar on Export Credits and Developing Countries	102,594	United Kingdom
2000	Lead Adviser to Parastatal Sector Reform Commission (PSCR)	229,966	Tanzania
2000	Russia Trade Policy Project	1,199,986	Russia
2001	Conference on Disinvestment	70,000	India
2001	Support for Public Sector Undertaking Reforms & Social Safety Net in Madhya Pradesh	80,000	India
2001	PSCR: Water Privatisation and Regulation Study Tour	54,924	Tanzania
2001	Communications Film for Department of Disinvestment	89,500	India
2001	Consultants for Standards, Technical Regulatory Barriers Programme	92,870	Global (non project specific)
2002	Trade Training for DFID Staff	20,075	United Kingdom
2002	Pilot Training and Capacity Building in International Watercourse Law	151,008	Kyrgyz Republic
2002	Trade Training for DFID Staff-Bangkok	32,328	United Kingdom
2002	Support for Capacity-building in the Ministry of Finance and Central Bank	3,277,815	Afghanistan
2003	Support Services for Public Enterprise Restructuring in South Africa	6,363,435	South Africa, Republic of
2003	Support to Water Sector Regulation by PURC-Ghana	1,079,100	Ghana
2003	Andhra Pradesh Economic Restructuring Programme-Public Enterprise Reforms, Phase II	416,435	India
2003	Economic Support within 1st Military Division HQ Basra.	55,510	Iraq
2003	Economic Development within 1st Military Division HQ Basra.	119,848	Iraq
2003	Support to the Office of the Prime Minister and to the Cabinet Office.	100,400	West Bank and Gaza
2003	ITD-DFID Staff Training	288,685	Global (non project specific)
2003	Asia Trade Consultancy	44,200	United Kingdom
2003	International Lawyer within 1st Military Division HQ Basra.	131,868	Iraq
2003	Economic Support to Coalition Provisional Authority South (CPAS)	111,255	Iraq
2003	Secondment of Negotiations Support Staff to the Office of Prime Minister.	75,800	West Bank and Gaza
2003	Legal Adviser within Coalition Provisional Authority South (CPAS)	72,925	Iraq
Source

Publications

The ASI published a report recently called 'Privatisation Reviving the Momentum'. In it they argue for a return to the vigorous pursuit of privatisation. Targets include Scottish Water, Northern Irish Water Glas Cymru, Royal Mail, Channel 4 and BBC Worldwide. The author, Nigel Hawkins is a senior fellow at the Adam Smith Institute, he is also an investment banker in the City of London.

Media Friends

In his 2012 book Think Tank: The Story of the Adam Smith Institute, Madsen Pirie describes how 'it helped very much in our early days to have people in the media who broadly shared our agenda'. The ASI's media friends are listed as being John O'Sullivan of The Telegraph and The Times, Derrick Hill, Peter Hennessey, and Edward Pearce. Sir James Goldsmith's Now magazine is also described by Pirie as being 'invaluable'.

Adam Smith Institute articles were offered to the press and the Daily Mail printed them enthusiastically, the paper's editor David English and features editor Mac Keene would help the ASI develop their papers. The Daily Mail and Now magazine both paid the ASI 'particularly well' for producing articles for them. Pirie also worked part time as a relief leader writer for the Daily Mail..

Activities

Targeting youth

ASI specifically targets youth through its "seminar on the Open Society" where school students are indoctrinated in "free-market" ideas. The Next Generation meeting is another forum to get 18 to 33-year-olds together.

Weblogs

ASI's blog gets over 3,000 hits a day and according to the Daily Telegraph, their "most refreshing commentary on policy" is read by all political parties. They also issue a regular email bulletin to subscibers detailing their current preoccupations. These tend to be informal in tone at the level of "all politicians are useless" (as the issue of 1/8/2007 concludes - which could be seen as slightly ungrateful considering the level of funding noted above).

Key Personnel

Staff

• Madsen Pirie – President
• Eamonn Butler – Director:
• Tom Clougherty Executive director
• Dr Tim Evans Consultant director
• JP Floru Parliamentary liaison
• Sam Bowman Research manager
• Sally Thompson Communications director

Former staff

• Matthew Young – Director of special projects

Consultants

• Keith Boyfield

Affiliations

• Adam Smith International – related think-tank and consulting group (there is overlap)
• Stockholm Network - The ASI was a member of the SN in the years 2006-7 and 2007-8.
• University of St Andrews Liberty Club

References, Resources and Contact

Contact

Address: 23 Great Smith Street

London SW1P 3BL

Telephone: 020 7222 4995

Fax: 020 7222 7544

Email: info@adamsmith.org

Website: www.adamsmith.org

Related Articles

• George Monbiot, "Exploitation on tap", The Guardian, 19 October 2004.
• George Monbiot, "This is what we paid for", The Guardian, 18 May 2004.
• "Tanked Up", The Evening Standard (London), 29 April 2005.
• "Campaign features web of intrigue INTERNET", The Daily Telegraph, 6 April 2005.