Adam Smith and Economic Liberalism

HOP 9. Adam Smith and Economic Liberalism

Andrew Skinner

Understanding Mrs Thatcher: Conservative Economic Policy 1979-87

HOP 8. Understanding Mrs Thatcher: Conservative Economic Policy 1979-87

David Simpson

The Novelist’s View of the Market Economy

HOP 7. The Novelist’s View of the Market Economy

Allan Massie

The Regulation of the Telecommunication Industry

HOP 6. The Regulation of the Telecommunication Industry

Bryan Carsberg

In this paper Bryan Carsberg shares his thoughts on the industry based on his practical experience as Director General of Telecommunications. The paper focuses on the promotion of competition, the regulation of monopoly business and privatisation as they are being applied - or have been applied - to the telecommunications industry.

BRYAN CARSBERG was appointed as the first Director General of the Office of Telecommunications in 1984, on leave from his position as Arthur Andersen Professor of Accounting at the London School of Economics and Political Science, University of London. He has held senior academic, research and business posts in the USA and the UK, specialising in the study of the financial performance of companies in both the private and public sector.

Economic Issues in Merger Policy

HOP 5. Economic Issues in Merger Policy

E Victor Morgan

This brief paper is concerned with policy towards mergers and, in particular, with the policy of confining merger references to the Monopolies and Mergers Commission (MMC) largely to cases which seem likely to cause a significant reduction of competition.

E. VICTOR MORGAN recently retired as Professor of Economics at the University of Reading, having previously held Chairs in Economics at the University College of Swansea (1945-66) and the University of Manchester ( 1966-74). He is a well-known expert on the economics of domestic and international finance and has long consultancy experience in the field of competition policy. He took a major part in the recent debate on the future of the pensions system. His Choice in Pensions (1984) was published by the Institute of Economic Affairs, on whose Advisory Council he has served for many years.

How Safe is the Banking System?

HOP 4. How Safe is the Banking System?

Richard Dale

Professor Dale discusses potential sources of structural or systemic weakness in the banking system at three levels. First there is the possibility of major shocks to the system: here the focus is on Third World debt, the pace of financial innovation and the expansion of banks into non-bank, particularly securities, activities. Second, there is the problem of contagion—that is the propensity for banking problems in one area to spread to other areas; and finally Professor Dale discusses the availability of lender of last resort facilities in the event that a major financial disturbance should occur.

Richard Dale is Professor of International Banking and Financial Studies at Heriot-Watt University, Edinburgh, and Editor of the Financial Times Regulation Report. He was previously a full-time consultant to N. M. Rothschild and Sons Ltd and in 1981-1983 held a Rockefeller Foundation International Relations Fellowship at the Brookings Institution, Washington DC. He is a member of the Advisory Council of The David Hume Institute.

The Regularities of Regulation

HOP 3. The Regularities of Regulation

George J Stigler

Professor George Stigler, Nobel Laureate in Economics, was the Institute's first Honorary President for the period 1985-1987. He delivered a Presidential Address on 1st May 1986 at the Conference on Financial Deregulation.

Professor Stigler took an episode in American financial history—the deregulation of the securities market—in order to challenges the view that the influence of opinion determines the growth and scope of legislation. His alternative hypothesis is that 'the propensity to use the state is like the propensity to use coal: we use coal when it is the most efficient resource with which to heat our houses and power our factories. Similarly, we use the state to build our roads or tax our consumers when the state is the most efficient way to reach those goals’. It follows that the deregulation of the securities market is better explained by the influence of changing economic circumstances on the interests of business than by some emergent ideology of deregulation.

Professor Stigler sees a role for economists as predictors of what the effect of economic policies will be and therefore indirectly as predictors of the state's role in regulation. His own prediction is that 'when the economic environment has stabilised for a time, we shall see new regulations serving to shelter the new financial markets that will develop'.

The Political Economy of Pension Provision

HOP 2. The Political Economy of Pension Provision

Alan Peacock, Norman Barry

These papers were first presented at a Conference on Pensions arranged by The David Hume Institute which took place in Edinburgh in June 1985 but have been modified in the light of the government's White Paper which appeared in December 1985.

Professor Peacock's paper argues that the debate has concentrated too narrowly on the provision of pensions rather than on the provision for retirement and that the government's own arguments point towards the complete abolition of the State Earnings Related Pension Scheme (SERPS) coupled with the raising of the basic pension.

Professor Barry's paper argues that the 'consensus' over SERPS is a convenient myth perpetuated by the interest groups seeking to maximise the utility of their members by an ever growing public sector. The fact that the British system of government helps to create such groups results in a legacy of problems, such as the burden of pensions, which are virtually insoluble; any major changes in policy impose significant costs on those affected by such changes.

What to do about the over-valued dollar

HOP 1. What to do about the over-valued dollar

Ronald McKinnon

In 1985 the US dollar was over-valued by as much as 30 to 40 percent when measured against European currencies and about 20 percent against the Japanese yen. This imposed undue competitive pressure and great distress across a broad spectrum of American farming, mining and manufacturing activities and pressure to restrict imports is rapidly increasing. Professor McKinnon explores what can be done about it.