Diagnosing the British Economy

Much of the early work of the Institute of Economic Affairs (IEA) formed a coherent programme in which the agreed answer to certain economic problems was to be found in consumer sovereignty. As the last chapter demonstrated this was practically the opposite of saying that government needed to concern itself with consumer protection and with minimizing the power of large corporations, either through specific legislation or nationalization. The early publications of the IEA assumed that consumers were already equipped with the necessary faculties to make appropriate and discerning choices and, with their inherent adaptability, facilitate change and progress. Yet, for IEA authors, the experience of the 1960s and 1970s demonstrated that there was something wrong with the British economy; a malaise had infected it that needed to be identified and diagnosed. ¹ Britain’s economic growth and productivity rates were consistently below the level of other developed countries and for the IEA this meant that the consumer was not facilitating change and progress. Instead they believed that government involvement in the economy, while being well intentioned, was decidedly problematic.