Monday, October 23, 2006

Lord Harris - pioneer of economic and freedom's revival

William Rees Mogg, former editor of The Times, writes a short appreciation of Ralph Harris, who died last week, and it is worth reading as an account of an intellectual struggle for sets of ideas, representative of the post-war years, which will find an echo with people who lived through those decades, and it is also an appropriate text for those who matured in the 1980s onwards and probably regard the period 1940-1990 as a foreign hinterland.

The man who saved Britain: Ralph Harris gave Thatcherism its intellectual foundation — and ended the nonsense of Fabianism” by William Ress Mogg

IDEAS SHAPE the world. Last week a very important promoter of ideas, Ralph Harris, died at the age of 81. The liberal economic ideas that he popularised in the 1960s and 1970s became the basis of the Conservative reforms of the 1980s, and have remained the accepted basis of the Blair administration.

His central belief was that a free society can survive only on the foundation of a free economy. He also believed in classical economic theory. He was an Adam Smith man through and through.

Most economic theory then taught in universities was Keynesian; industrial policy was based on nationalisation and trade union power. Wartime regulations were still universal; rates of taxation went up to 90 per cent or higher. This was the triumph of the managed socialist economy in a democratic society. The left wing of the Labour Party still looked to the Soviet Union as the socialist pattern of industrial development; many leftwingers assumed that Soviet socialism was going to bury the less well organised economies of the West, including that of the United States.

Ralph was not himself a creative analytical economist; where Keynes had been a propagandist for his own ideas, Ralph was largely a propagandist for the ideas of others. In this, his methods were closer to the Webbs than to Keynes. He had taught economics at St Andrews; he believed in the classical tradition, in Adam Smith, Ricardo and the Liberal School.

In the 1960s and early 1970s the IEA moved from the fringe to a position of rising influence, largely as the result of the failure of economic controls. Many free-society pamphlets were published, brilliantly edited by Arthur Seldon. Meetings were held, lunches were given and Hayek and Friedman were introduced to a new British audience. The IEA became a focus of criticism when the Heath Government did a U-turn and tried to fight inflation by price and wage controls — by a policy that I was ignorant enough to support. What folly that now seems.

Ralph Harris was a very likeable man who knew what he believed. He did not invent the ideas of a free society based on a free economy, but he did convert the British establishment from Fabianism to Thatcherism. His ideas — put into effect by Mrs Thatcher in the 1980s — saved Britain from the decline of 1960s and 1970s. The ideas that the IEA was advocating in the 1970s provided a large part of the intellectual basis of the Thatcherite revolution. He deserves a statue: he helped to save the freedom of his country

I never met Ralph Harris. If I had in the 1960s I would probably have disagreed with him. That was the decade of the high tide of Keynesianism in university teaching of economics. The ideas of Milton Friedman and the monetarists were making their way steadily across the political landscape and governments, both labour and conservative, were wrestling with how to make inflation and Keynesian work. Once governments found that they could pump demand into a near full employment economy (remember full employment was the consensus goal of governments then), they also created the basis for lack of industrial discipline manifesting itself in strikes for more pay and for more subsidies to keep bankrupt firms and nationalised industries open, despite the so-called ‘full employment’ which had more vacancies chasing the unemployed than ever before. It couldn’t last and it didn’t.

Though I never met him I met people who had, and I bought copies of the Institute of Economic Affairs pamphlets. I did meet William Rees Mogg once at a private interview in Glasgow in the late 70s, when we discussed prospects for Scotland and England if there was a breakthrough for the Scottish National Party (he was then editor of Times). He struck me as a patrician figure from the English upper class. The meeting was well mannered and pleasant, and he seemed disappointed to hear that the SNP was unlikely to settle for something less than devolution. It did eventually, of course, but there seemed no point in speaking frankly of these matters to someone I hardly knew on a personal level.

Since then I have commented on Lost legacy on remarks William Rees Mogg has made about Adam Smith, particularly on his recommendation that the ‘best’ edition of Wealth of Nations was the sixth edition by William Playfair(1806), which most Smithian scholars would say was among the ‘worst’ editions because of Playfair’s editorial insertions into Smith’s text.

Among Ralph Harris’s notable background pointers is the fact that he taught at St Andrews University, which was also the alma mater of several prominent leaders of the Adam Smith Institute. You should visit ASI at:, a daily Blog (plus its many other activities) that is well worth book-marking for daily visits for news of its tireless campaigns for the set of ideas initiated by Ralph Harris and the IEA.

William Rees Mogg’s account of the 1940s and 1980s strikes a chord. As does his statement that ‘where Keynes had been a propagandist for his own ideas, Ralph was largely a propagandist for the ideas of others.’ Others beside Keynes were advocating similar ideas around the same time (some governments were already ‘guilty’ of the Keynesian trap of pumping money into a flagging economy, often in pursuit of ‘national glory’). Keynes’ contribution was to give the policy a coherent theoretical basis (‘The General Theory’; it was still a set text in economics courses in the early 1960s).

That ‘[Harris] believed in the classical tradition, in Adam Smith, Ricardo and the Liberal School’, for me is problematical, not in the sense that Harris did not believe this, but in the sense that I think lumping Adam Smith as a ‘classical economist’ is an accepted shorthand to place him somewhere but it is also a major error of attribution. Smith was not an economist of any school; that he is described so is promiscuous. He was a moral philosopher imbued with a great sense of history from Roman and Greek civilisation to the end of the interregnum (5th to 15th century) following the Fall of Rome (476), and the recovery of the age of commerce in 17th- and 18th–century in Western Europe.

His interest in political economy sprang from a fairly narrow, but highly important, perspective in his research into what caused the wealth of nations, defined as the growth in the annual output of the necessaries and conveniences of life (GDP). He linked (hence the many so-called 'digressions') this theme to the political and constitutional changes of the establishment of Liberty in Britain, the institutions of Britain (religious, ‘great orders’, its history and global activities, including the American Colonies, East India and other chartered trading companies) and the mercantile policies pursued by governments, how markets worked, how capital accumulated, the role of currencies, and the raising and spending of taxation. Wealth of Nations was not an economics textbook; it was a report of his researched findings (a ‘one man Royal Commission’).

This places Smith outside the ‘classical economists’ box of Malthus, Ricardo, and Mill, to which should be added Cantillon, Turgot, Tucker and, perhaps, Petty. Wealth of Nations is a companion to Moral Sentiments and to his Lectures of Jurisprudence. It contains many ideas that were not original to Smith but the synthesis of these and other ideas were original to him.

None of this scholastic quibble takes one iota away from the life’s work of Ralph Harris. If William Rees Mogg speaks well of Lord Harris, then I am inclined to go along with his judgement too.

Read William Ress Mogg’s article at:,,6-2416850,00.html.


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