Philip Booth

State Pension Reform in a Public Choice Framework

Social security systems for old age have been explicitly studied in a public choice framework for more than 30 years. They illustrate extremely well the problems of allocating economic resources through a system of voting. Despite actuarial interest in state pension systems and despite the actuarial calculations that are needed to understand long-term public choice trends, there is almost no reference to public choice economics in the actuarial pensions literature. It can be argued that pension systems currently provide some of the most significant threats to the long-term budget positions of developed countries, a point that was made in the Nobel Laureate lecture of Professor James Buchanan over 24 years ago. In this article, we look at the costs and benefits that will be faced by different groups of voters as a result of state pension reform in the United Kingdom. The results of this analysis suggest that a majority of the electorate will have a strong financial interest in opposing state pension reform except where reform involves raising retirement ages. These results are in accordance not just with theoretical work but with other empirical work and practical observations.

Towards a Liberal Utopia

Towards a Liberal Utopia? is a free-market manifesto for the next fifty years covering a diverse range of policy areas, including health, education, social security, pensions, labour markets, tax policy, Europe and the environment. In addition to these visions of the future, Ralph Harris describes the success of the IEA in changing the climate of opinion in its first 50 years. Given the impact that the ideas of IEA authors have had on policy-making in the last 50 years - for example in trade union reform, removal of exchange and rent controls, the control of inflation, independence of central banks and the development of road user charging - Towards a Liberal Utopia? is essential reading for those keen to learn about the ideas that should dominate the policy agenda in the coming decades.

Stock Exchanges as Lighthouses

Abstract Over the years, it has frequently been argued by economists that lighthouses need to be provided by the state. Ronald Coase demonstrated, in fact, that they could be provided privately. The same is true of financial regulation. Though many economists, using blackboard economics, argue that financial markets need to be regulated by the state, it is found that regulatory mechanisms evolve in the market which are effective and stable. It is feasible that a central bank could also evolve as a private institution to regulate the banking sector. Nevertheless, there could be legitimate concern that such institutions will become concentrations of market power or will require legal privileges to operate. In fact, this was one of the concerns that was expressed in relation to the private provision of lighthouses. The analogy between private regulatory institutions such as stock exchanges and lighthouses is therefore remarkably close.

Monetary policy, asset prices and financial institutions

Abstract The operation of monetary policy is likely to affect securities markets and asset values. This is of relevance to actuaries who work in or advise non-bank financial institutions such as pension funds and insurance companies. This paper examines different theories of monetary policy and the relationship between monetary policy and asset prices. It is found that central bank models have, at least until recently, tended to sideline consideration of the transmission of monetary policy through asset markets but that, with the implementation of quantitative easing, it is a subject that cannot be ignored. Many monetary schools, in fact, suggest that asset markets can be significantly affected by changes to monetary policy and those schools have lessons for important aspects of actuarial theory and practice.

Issues in monetary policy : the relationship between money and the financial markets

Since the Bank of England was made independent in 1997, the conduct of monetary policy has been relatively uncontroversial. The debates between Keyneisans, monetarists and supporters of fixed exchange rate mechanisms now appear very distant. n nDespite the apparent consensus there are many issues related to the conduct of monetary policy that are not yet settled and which will soon come to the fore. Is the current form of independence for the Bank of England appropriate? Should a central bank target inflation or the prices level? How does a central bank deal with asset price deflation? Should more account be taken of monetary aggregates? Should central banks target asset prices? What is the relationship between the money supply and asset price inflation? How should central banks ensure financial stability? n nThe IEA was at the forefront of changing the parameters of the debate surrounding monetary policy in the 1970s and 1980s. This text, brings together some of the leading authors in the field, including the current Governor of the Bank of England, to discuss current issues in monetary policy and the relationship between monetary policy and financial markets. It is appropriate for undergraduates and postgraduates in economics and finance as well as for practitioners in financial markets.

Ethical Dilemmas for Large Corporations in Under-developed Countries

The purpose of this chapter is to identify moral and ethical dilemmas that large corporations might encounter when operating in underdeveloped countries — particularly when those countries have a poor institutional environment. The chapter is not designed to condemn what some might regard as unethical behaviour; and it is also not designed to excuse unethical behaviour by large corporations on utilitarian grounds. The first objective is to provide an economic context for actions that businesses may take, which some might dismiss as being unethical because of their first-round economic consequences. Second, the chapter highlights genuine ethical dilemmas that are not necessarily easily resolved, and which do not arise as a result of the actions of the firms themselves but rather as a result of the environment in which they are operating. The chapter is written largely from a Roman Catholic perspective. However, the Catholic aspects of the chapter generally relate to principles and ideas that are shared by all Christians.

Globalization and free trade

Philip Booth and Richard Wellings have brought together key papers originally published by the Institute of Economic Affairs, which, for the past 50 years, has been vigorously defending the case for free trade, and for globalization more generally. These important papers, which are not widely available, trace the development of the debate on the benefits of free trade during the last 50 years.