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Three years in the making, Dr Madsen Pirie, President & Dr Eamonn Butler, Director, of the Adam Smith Institute achieved a world first: the first major public monument to Adam Smith. Unveiled by Nobel Prize winner in Economics, Professor Vernon L. Smith, the magnificent statute was revealed to the world on July 4th 2008, during two days of celebrations. Standing ten feet tall, upon a ten foot pedestal, the striking bronze monument is a fitting, and belated, tribute to the pioneering economist and key thinker of the Scottish Enlightenment. From ASI's own website, we learn that:
"The Statue shows Smith in later life — he spent his last years in
Edinburgh — but still strong. Behind him is a plough, modelled from a
contemporary plough in the Scottish Farming Museum, reminding us of the
agrarian economics which Smith supplanted. Before him is a beehive, a
symbol of the industry on which he believed progress was based. On top
is a globe on which Smith rests his hand — made invisible by his
academic gown. The gown itself reminds us of Smith the philosopher,
exploring eternal ideas; and behind, St. Giles’s Cathedral completes
the evocation. From the other side, we see Smith’s 18thC dress, with
the City Chambers beyond, reminding us of Smith the economist, dealing
with practical matters. His neckware is modelled on that worn by Thomas
Jefferson, his wig is based on one of George Washington’s — recalling
Smith’s strong support for free trade with America."
Funded entirely by private donations, it is an outstanding reminder of his role in founding modern economics.
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This is one of those rare pieces that actually has personal content. The Blog is primarily a starting point for discussion of recent events from a business, economic and political perspective.
However, on a recent visit to my home city of Liverpool, I went to take a closer look at the standing sculpture of Antony Gormley’s “Another Place”.
Feelings have been high over this installation; feelings that it has little or nothing to do with the industrial heritage, indeed commercial present, of today’s Liverpool. In this photo, we see a serene and beautiful panorama. If one does a 180 degree turn, you will look directly towards the brute commerce of Liverpool’s container docks. What was the centre of maritime commerce not only for Great Britain, but for the world. At the start of the 19th Century over 40% of the world trade – and more than this by way of value – was passing through Liverpool. What, other than gazing at times past, does Antony Gormley’s iron men signify for Liverpool?
Well, I would argue that this isn’t the point. I know this beach profoundly well – in fact here on this website it shall first publicly be cited as “my beach” (I claimed ownership approximately aged 8). I grew up here and knew every eddy, the tidal reach, the coldness of the water and the danger of the sands. I am uniquely qualified to say that this stretch of land has never looked so good. The high power wind turbines in the distance are precisely indicative of the fact that Liverpool is very much part of the modern world. Out of shot to the right of this, further out in Liverpool Bay, sits a large incandescent gas rig. One energy source replaces another: Liverpool becoming critical as a centre for the UK offshore energy industry. New industries of multimedia, stemming from Liverpool's centres of excellence at two of its three universities - another important revenue and creative force for the city - and television production through Granada Studios, show that perhaps the city has finally turned a corner. Few people would believe that Europe's largerst property development project has just been completed this summer at "Liverpool One" a gargantuan shopping and office complex, generating thousands of new jobs. For the lower skilled there is now employment in call centres dotted around the city, themselves leading change in what had previously been a criticised work environment, but one that has the capacity to soak up many of the displaced workers from the city's heavier industrial past. With European Capital of Culture 2008 also now securing a strong and proud base from which to venture, back into the whole of the world that was originally only accessible from this port.
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Today, the Chancellor Alistair Darling delivered his first budget, prompting what can only be described as a lacklustre response. Financially cautious with limited social engineering intentions, it aimed to be a budget that halfway nodded towards the preoccupations of the moment.
 These include green levies, such as the "aim" to levy a charge on plastic bags. Fuel tax manipulation has been put on hold, with an acknowledgement of $110 oil having pushed petrol prices to an already recent high. On Growth, the forecast for this year has been lowered to between 1.75 and 2.25 per cent. On Inflation, recent fuel and energy prices will stoke inflation during 2008, though he predicts a return to target (Target - 2%), by 2009.
On Public Spending: to grow by 2.2 per cent in the next three years. On business, an interesting aim: target for small and medium-sized businesses to win 30 per cent of public sector contracts in the next five years. On Tax - new charge (anticipated at £30,000) on non-domiciled residents to be introduced from April and to remain in place for present and the next parliament. Beer duty to increase by 4p per pint, wine up 14p a bottle, cider up 3p a bottle and spirits up 55p a bottle. This could put the price of a pint in a typical pub, up by 12-15p, once VAT and margins accounted for - and the price of a bottle of spirits by 80p in a supermarket. These are significant increases and reflect growing Parliamentary acknowledgment of the need to "do something" to halt the permissive and pervasive attitude to drink in this country. Campaigners are not convinced that the tax system is the mechanism for achieving this change.
Tobacco duty to rise tonight by 11p per packet of 20 cigarettes and 4p for five cigars.
Supporting Budget 2008 documentation can be obtained from the UK Treasury's own site at http://www.hm-treasury.gov.uk/budget/budget_08/documents/bud_bud08_docsindex.cfm
We would argue that this is a profoundly flat budget, short on ideas, limited in scope and desperate for inspiration. Financially it states that extra revenue gleaned through additions to Duty will be re-directed to pulling more poor children out of the definition of poverty. Raising Child Benefit to £20 for the first child being the chief means of achieving this end, coupled with micro measures such as adjusting Child Tax Credits. These, however, are small beer and seem if anything, to be the tired and heavy breathing of a Government in much need of the recuperation of Opposition.
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Presidential politics is not very different to seeking a mandate from your local Parish – there are simply degrees of inertia and scale to contend with. Then there is what are disobligingly called the “retreads” – those who have already been around the block and muddy the recognition factor with a presentation of ‘wisdom’ and ‘experience’
 This is dubious – because of course, the corollary to that is that we simply didn’t want them last time either! Hilary Clinton is a hard act to follow: she has spent years now, casting out the perceptions of her as a dangerous and un-costed Liberal. She has become, or at least allowed herself to be perceived as being (the two are not typically the same) – an astute and worldly politician: one whom America could feel proud of representing her interests in far flung and commercially sensitive places. The sort of places where President George Bush could easily embarrass both himself and his country. The swagger and general self concern won’t wash any more – as recent fight backs on environmental policy have shown – American politics need to get into the 21st Century.
Barack Obama is a different deal altogether- he may well be the future if he doesn’t quite manage it this time around. Certainly, the Democrats have been more impressive overall than the Republicans. As John Gappers say’s in a recent FT article:
“Then there is Mr Obama. Hardly any business leader can hope to match his skill as a speaker. He has displayed perfect pitch in his oratory, including his rejoinder to Mrs Clinton’s barb about “raising false hopes” during his concession speech in New Hampshire: “In the unlikely story that is America, there has never been anything false about hope.”
The World Stage needs a new leading actor – we tired of the old one a long time ago. Let alone the fact that that very stage will be his (or hers) for less than they realise, as up come India and China, bounding along. Let alone a new spirit of political independence across the US’s backyard in Latin America – following the Chavez model of sloughing off the weight of their northern neighbour. Times remain interesting….
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A t a time when there is little consensus on the severity of the storms that approach us – the prevailing view at
least, appears to be for a hold in
Interest Rates by the UK Monetary Policy Committee (MPC).
The comparison with
the US
economy, in relation to the housing
market, is necessarily limited – as the
relation of demand and supply is very different. In the UK, we still have demand way ahead of supply, so any house price fall is likely to be more muted
and subject to corrective limitations. Prices are unlikely to fall
substantially – even if the rate of increase has itself dropped noticeably over
the last few months.
However – of course, it is not only for the sake of house prices that
the experts comprising the MPC will determine Interest Rates; it is for the
general feeling of wealthiness – and the prevailing inclination to retail
consumption – that house prices are the best indicator. If a person’s main asset
is falling, then they are less
likely to consume – further undermining impetus for growth.
Moreover – the link
between the Pound and other currencies is also a key determinant: if Interest
Rates are lowered, then
internationally the Pound seems less of a good option than before – lowering its
exchange rate. This in turn has inflationary effects,
as consumption from imports become correspondingly more expensive – causing further
tightening and concern. As has been noted also – the UK Chancellor (Finance Secretary), Alistair Darling,
has very limited room for manoeuvre with Fiscal Policy: UK Government debt is
at too high a level to start easing the fiscal reins….we wait in anticipation.
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