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Ideas Instead of Gifts - IUF in the Media 2/2006

Oliver Marc Hartwich, IUF UK Representative

Think tanks inspired Margaret Thatcher's policies. German businesses could also invest more in public debates. See article in Die Welt, 25 November 2006 (www.welt.de) by Dr. Oliver Marc Harwich, IUF UK Representative.  


By Oliver Marc Harwich  


Have you gotten all of your Christmas gifts together yet -- no, not for your family and close friends, but for your clients, suppliers and business partners? If not, then you have obviously missed a trend. The Association of Advertising and Business has determined that every year German businesses give away 2.8 billion euros in gifts. This definitely does not include the ubiquitous plastic ballpoint pen with the firm logo. For Christmas, the gift should be a bit more pretentious. An entire industry is specializing in turning office tables into gift tables just in time for the holidays. Such gifts range from homemade panettone, posh wines and personal appointment calendars made of calfskin to the custom-made, 24-carat gold bracelet watch from Tiffany's, which you can have with or without engraving.  


If business partners wish to solidify a mutual respect at the end of the year, then it is not too expensive for German businessmen and executives to take part in the generosity of gift giving, especially because such gifts are business expenses that can be written off their taxes. You can rest assured that the majority of company gifts are given for altruistic reasons. Small and large gifts alike will maintain the friendship. Nowadays, such attention to the business relationship is not only a legitimate business practice but also an essential one.  


Although it cannot be denied that many German businesses give to meaningful charitable causes (many give funds to sport clubs and hospitals), unfortunately, with regard to its relationship with the community, German businesses show far less commitment. Moreover, with regard to initiatives, German entrepreneurs and businesses have neglected a vital area of social commitments. The discussion concerns the sponsorship of political and economic education. Admittedly, the discussion does not include focusing on the influence of certain political decisions or lobbying practices: In this regard, German firms understand their business very well. However, much is lacking at the German institutions that create a social climate in which significant political issues can be debated. In turn, such a social climate would benefit the business.  


In other countries, private entities and companies are significantly better at giving financial support to institutes that usually fall under the category of think tanks (in German, think tanks are literally but inadequately translated as "think factories" (Denkfabriken)). In London alone, there are at least twenty such institutes in existence, where ideas about differing political ideas are developed, their results widely communicated and then disseminated across the political spectrum. There are several think tanks in existence; namely, the socialistic Fabian Society, the environmentally-slanted New Economics Foundation, the liberal Adam Smith Institute and the EU-skeptical Initiative Open Europe, just to name a few. Each think tank enhances the political debate because they have a significant advantage at their disposal: They are independent and neither bound to the state, individual businesses nor industries. Think tanks are also not bound to any particular political party. And they believe the only consideration that should be taken into account is the power of the argument.  


For all intents and purposes, the patriarch of all contemporary think tanks is the Institute of Economic Affairs (IEA). Its history explains what inspires the founders and sponsors of think tanks to commit to this type of policy. Among other things, the IEA is proof that the influence of ideas developed by think tanks can reflect the politics of a country.  


After the end of the Second World War, socialist ideas dominated politics in Great Britain. Clement Attlee, who was elected the Labour Prime Minister in 1945, began nationalizing additional sectors of the British economy and the welfare state was massively enlarged through the creation of the National Health System. Liberal economic ideas as well as the economist Friedrich A. Hayek barely gained an ear among those in the political discussion of the time. Coincidentally, however, Hayek's polemic pamphlet, "The Road to Serfdom," fell into the hands of Antony Fisher, a returning Air Force pilot from the War. Fisher was so impressed with the pamphlet that he asked Hayek, who was teaching at the London School of Economics at the time, for a meeting. Apparently Fisher planned to ask for advice regarding his political career but Hayek had a better plan for him. Hayek believed that Fisher should establish an institute that strove for the development and dissemination of a liberal body of thought. In the long-term, Hayek was convinced that, with regard to the political discussion, nothing was as important as the power of ideas. According to Hayek, the intellectuals had to be reached; let them be the "professional secondhand dealers in ideas," which he later wrote in his essay entitled, "The Intellectuals and Socialism."  


Antony Fisher, who, after the war, became a successful and wealthy poultry farmer, was in a position to donate 5,000 British Pounds in the mid-1950s - a handsome sum for the time - and employ two young economists, Ralph Harris and Arthur Seldon. From this, the IEA was born. Harris and Seldon emerged as a creative and productive duo, and together they published a multitude of pamphlets in which they were against regulations and in favor of the privatization of national entities. During this time, they thought the unthinkable; their proposals were outrageous in the post-war consensus of the welfare state and consequently remained unheard of for a long time.  


But a group of young conservatives who were close to two Members of the House of Commons, Keith Joseph and Margaret Thatcher, were inspired by the IEA-publications and facilitated the distribution of liberal ideas within the party and the parliament. When Mrs. Thatcher eventually became Prime Minister in 1979, the core of her governmental programs, which could be found in dozens of IEA publications, had already been prepared for implementation. While she was still in office she admitted that she never would have achieved anything without the groundwork of the IEA. Because of this, Hayek's plan of the power of ideas had arisen.  


The IEA's success story encouraged many followers in Great Britain as well as in the English-speaking world. In fact, in relation to the number of independent think tanks in other countries, only Germany has remained in a developing phase. In Berlin, Wolfgang Müller, the President of the newly established Institute for Free Enterprise, raises funds for his IEA-oriented think tank. However, he is constantly reminded of how difficult it is to convince German businesses to make such a commitment.  


Perhaps it actually would be much easier for him to make his clients pretentious Christmas gifts by hand. However, those employers, who wanted their businesses to make a difference in the community, could have followed Antony Fisher's example. And an economy that can give away 2.8 billion euros in gifts each year conceivably should have a smidgen of this amount left over for a think thank.  


The author works as a publicist and economic consultant in London.  


This article was published on 25 November 2006.  


Yes, I want current messages of the Institute for Free Enterprise:


Frédéric Bastiat (1801-1850)

"The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended. Government is the great fiction, through which everybody endeavors to live at the expense of everybody else"

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