Adam Smith Institute

It's sad to see a once proud institution enter a death spiral but we do have to consider quite seriously that the LSE might be doing so. The former home of luminaries such as Karl Popper and Freddie Hayek (and educator of some lesser talents) now has as one of its adornments a certain Professor Julian Le Grand who has come up with this idea:

A ban on the sale of cigarettes to anyone who does not pay for a government smoking permit has been proposed by Health England, a ministerial advisory board.

"Breaking the new year's resolution not to smoke would be costly in terms of both money and time ... [This] would probably have a greater impact on poor smokers than on rich ones, hence contributing to a reduction in health inequalities."

The money raised would go to the NHS.

But the ultimate fatuity is that of course such a scheme will only cover the UK. We will still all be free to purchase anywhere else in the EU without such a licence. And still free, as at present, to bring such back into the UK, for the free movement of legally purchased goods is a cornerstone of the entire enterprise.

Meaning, of course, that the numbers who do this will rise, leading to less revenue from the taxation of tobacco sales to pay for the NHS.

None of these effects are, from either my or the Professor's point of view, desirable. Something seems to have changed at the LSE: back in my day we were urged to think before making proposals. 

19. "Big business does not really produce what people want. It uses coercive advertising to make people buy what it wants to produce."

The Ford Edsell was produced by Ford of America and backed by a massive advertising campaign. It flopped utterly. The adverts for Strand cigarettes in Britain won many awards and were very popular. Alas, nobody bought the product, which is why Strand cigarettes have disappeared.

The notion of coercive advertising is pure theory. In fact most advertising is used to break into markets, or to open up new ones. Advertising informs the public of new products and processes, and can thus attack established products. Furthermore, it is very competitive. Skilled creative power pits product against product, company against company. It is self-regulated, too, refusing to allow ads which try to sell products by making people feel inadequate or exposed to ridicule without them.

Far from deciding what is convenient to produce and then trying to make the public want it, companies spend millions on market research trying to anticipate the tastes and needs of the public, and into designing and producing products to satisfy them. Despite this, they often get it wrong. Fortunately the market system directs resources to those who are good at this type of activity. Investors are more likely to back them, and stores are more likely to stock their goods.

Any business which did produce for its own convenience and then tried to make the public accept its goods would soon find its market taken from it by competitors who produced what the public really wanted. In practice, the only firms who can hope to get away with this sort of activity are state-controlled ones protected by monopoly. In these cases the public has no alternative but to accept what is produced, because no competitor is allowed to offer them the things they really want.

"What hope have seven quangocrats got of restraining Leviathan?"

– The Times' Camilla Cavendish on the news that the Better Regulation Commission is to be replaced by the Risk and Regulatory Advisory Council (only one member of which has a private-sector background). The whole article is well worth reading.