WES Presents: Dr. Madsen Pirie

Posted on the 19th January 2017 by Orsola Maria

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Dr. Madsen Pirie, President of the Adam Smith Institute, took the stage on 18th January as WES Presents’ second speaker of the academic year.

To open with, Dr. Pirie informed the audience about the key political events that he correctly predicted, unlike the polls, media, markets, and other gamblers: the Tory victory in the 2015 British general elections, Brexit, and Donald Trump’s victory in the United States Presidential election last November. Furthermore, he was sure to emphasize that all predictions are relatively based on polls, which may be inaccurate due to the prevalence of silent conservatives: those who are ashamed to admit their conservatism due to the wide-spread unacceptability of such views in this day and age. Following this inaccuracy, the resulting 82% of media outlets may have mistaken their predictions of the economic impact of Brexit, envisioning an economic recession, while it presents highest growth rate of any advanced economy.

Dr. Pirie attributes the failure of academic economists to predict the outcomes of events, such as the financial crisis and Brexit, to the use of models and equations based on unrealistic assumptions, like perfect information of all stakeholders involved in the market. “The economy is not an object”, he reminded us, “but a complex process involving the interactions of millions of people deciding what to buy and sell; it is too messy to model or sum up in an equation”.

In addition to this, he went on to defend neoliberalism, attributing phenomena such as the increase in life expectancy, rising standards of living, and decreases in unemployment and infant mortality rates across the globe to the wealth created by globalization and worldwide trade. He argued that raising money to address social needs via taxation is less effective than using funds generated by economic growth.

Following the talk, the Q&A session featured a lively debate. When asked about global wealth inequality, Dr. Pirie retorted, “the world’s wealthiest 80 individuals have given more money to charity than Oxfam ever will”. He further added that “Oxfam’s assumption is that the poor are poor because the rich are rich” and that this was not the case in the developed world, “where people get rich by giving people the products that they want” and therefore “making the world a better place”.

Written by Ben Taylor

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