Adam Smith Institute

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The Adam Smith Institute (ASI), based in London, has been a major force for the introduction of market-based policies in Britain. It operates as a UK think tank.

Name confusion

In the early 1990s, the Institute extensively licensed and sold its name around the world. IIR, the world's largest conference company, has the rights to the name Adam Smith Institute in Russia. In Western Europe, Marketforce Communications Ltd has the right to organize conferences under the ASI name. At one point Business Seminars International Ltd had a license to use the ASI name.

Confusion abounded after a commercial consultancy firm, Adam Smith International Limited, which had been using the Institute's name started bidding for contracts from the Department for International Development. (An example of the work including the Reconstruction of Iraq contractors working as part of the Iraq Public Administration Reform Programme.) It led the former Communications Director of the Foreign Policy Centre, Rob Blackhurst in the New Statesman to write: "...The Adam Smith Institute - once the informal common room of Conservative Central Office - courted the new government in 1997 with seminars on "how to achieve Labour's goals". Now the government is the institute's biggest funder, paying more than £7m out of the overseas aid budget last year for advice on "public sector reform" in developing countries such as Afghanistan and Palestine..."[1] None of this £7m actually found its way to the Adam Smith Institute.


Madsen Pirie, Eamonn Butler and Stuart Butler were students together at University of St Andrews, Scotland. In 1973, they left Scotland to work with Edward Feulner, an Senator from the State of Illinois who became co-founder of the free-market think tank the Heritage Foundation, in 1973.

After their apprenticeship in America, Pirie and Butler returned to Scotland in 1977 to found their own think tank, the Adam Smith Institute, set up with the help of Antony Fisher of the Institute of Economic Affairs.[2]

The ASI was influential in publishing papers outlining the fundamentals of the poll tax between 1981 and 1985, instituted by the British government in 1991.[citation needed]

Funding the Palestinian negotiating unit

Most official and semi-official Palestinian organizations depend on foreign funding, and the key Negotiations Support Unit (NSU) which is a support group to the Palestinian Negotiations Affairs Department is funded indirectly by the British government via ASI (the government funds ASI). Khaled Amayreh, an eminent Palestinian journalist, writes:

Palestinian mediocrity, or even incompetence, in negotiations with Israel, is not imputed to lack of financial and human resources. The main reason may well lie in corruption at the highest levels and virtual absence of accountability. The PLO Negotiations Affairs Department (NAD) has at its disposal the services of the Negotiations Support Unit (NSU), which has received tens of million of dollars of funds, but has done very little to make Palestinian negotiators better equipped to face their Israeli counterparts.
Just take a look at the document formulated jointly between Israel and the PA at the last minute at the Annapolis conference. This document, which the NSU helped formulate, was completely void of any call for ending the manifestly criminal blockade of Gaza, the removal of Israeli checkpoints and roadblocks in the West Bank or release of Palestinian prisoners from Israeli dungeons and detention camps. Moreover, not a word was mentioned about freezing Israeli settlement expansions. The NSU is funded and effectively controlled by the Adam Smith Institute (ASI), a think-tank based in London which is vulnerable to pressure from pro- Israeli circles. For example, two years ago, the ASI forced the NSU to fire two highly-qualified Palestinian-American lawyers, Michael Tarazi and Diana Butto, for going too far in defending Palestinian rights, especially during TV debates with Israeli spokesmen. According to inside sources, one of the persons who pushed for firing the two Palestinian-American lawyers is Glenn Robinson, the author or co-author of the controversial RAND project "The Arc: A Formal Structure for a Palestinian State". Eventually, Tarazi and Butto were accused by pro-Israeli lobbyists, including some British MPs, of hindering the development of the Palestinian Ministry of Information and of not ensuring sufficient coordination with the PLO. Of course, these accusations were merely red herrings.
ASI defines itself as the UK's leading innovator of practical market economic policies. The institute's main focus is on reforming governments and state enterprises in order to promote choice, competition, and user-focus. It works through research, reports, conferences, advice and media debate. Since 1999, ASI relegated nearly $50 million to the Ramallah-based NSU despite the fact that NSU staff and employees were sitting in their homes, doing nothing, since the peace process was paralysed.
A British diplomat based in Israel explained why the British government, which pays the lion's share of the NSU budget, and other donors, continued to pay all these millions to the ASI and NSU, despite the international boycott of the Palestinians from March 2006 to June 2007. "We were hoping that negotiations would be resumed anytime." But, the main problem lies with the Palestinian Authority itself and its relations with the NSU, mostly based on cronyism and nepotism. The author sought to contact the NSU in Ramallah, but received a hostile response. One lady told me "why don't you go and negotiate with Israel. Maybe you could do a better job."[2]

Observations from a Palestinian who for some time was associated with the NUS (email dated 11 December 2007)[3]:

Regarding ASI, I cannot say that they vetoed Palestinian positions when I was there - that was not the problem. The problem is that ASI is a FOR PROFIT organization that runs the NSU. It received funds from the donors (remember, this is money that is earmarked for the Palestinians) and ASI receives a cut of these funds. When [...] the donors decide that they do not want a certain activity to be carried out, it is not in ASI's interest to go against the dictates of the donors because doing so will mean that its funds (and profits) will be diminished.
[...] When the donors determined that they did not want the NSU to be engaged in public communications activities (owing to pressure from the pro-Israel lobby), it was not in ASI's interest to come to our defence or to demand otherwise. Why? Because coming to our defence would mean the potential for ASI's funds and profits to be diminished if they are seen as going against the will of the donors. ASI feared that the entire project would be cut by the donors if they took a principled stance against the donors.
[...] I did see direct donor interference as regarded the communications work that was done. They also expressed their discontent regarding the work that we did on the Wall (the ICJ ruling).
Again, the problem is that Palestinian national interests are subject to the will of "for profit" organizations. If negotiations are so vital to Palestinian national interests, I am not sure why the PLO allows outside organizations to either (a) control our negotiations or (b) make profit off of our negotiations.

Tobacco industry involvement

According to an internal Philip Morris report on the influence of the Adam Smith Institute, a series of specific points in ASI proposals have become policy and been enacted into law.[4] These include:

  • requiring local authorities to allow private contractors to perform city services
  • building public infrastructure using private finance
  • deregulating urban bus services
  • cutting income tax to a maximum of 40%
  • using private firms to build and operate prisons
  • Liberalizing laws relating to sale and consumption of alcohol
  • keeping down duties on alcohol and tobacco

According to an 1992 internal PM memo written by Craig Fuller of Philip Morris, PM worked with ASI on creating an international center to train journalists to be "idealogically consistent with PM's issues and interests." The journalist training center model was based on a similar program successfully implemented at the PM-supported National Journalism Center in Washington, D.C.[5]

The Confederation of European Community Cigarette Manufacturers (CECCM) used ASI to coordinate projects to oppose European tobacco control initiatives. In 1992 the CCEM's board gathered to considered hosw to respond to restrictions proposed by the European Commission. The board's agenda listed for discussion a "two-phased Adam Smith Institute project on a counter-defence of the traditional values of European individual freedom - within a special project budget of £30,000."[6]

CCEM's Advertising and Sponsorship Study Group recommended to the board that it fund two reports to help defend the industry.

"The first proposal was for an Adam Smith institute (AS1) report by Russell Lewis and Timothy Evans of some 20,000 to 25,000 wards, a draft of which could be available by the end of November 1992. The report would position the EC anti-tobacco proposals in the context of a host of proposals which progressively restrict personal freedom, and present a punitive counter-argument for the traditional values of European individual freedom. The AS] has agreed in principle to adopt the proposed report and effectively to market it as an ASI report The ASI has contacts with a number or institutes across Europe and will attempt, if required, a collaborative public relations campaign on the report; its tobacco report may therefore be expected to generate substantial press and media coverage.[7]


ASI Fellows

Former personnel


Contact details

Adam Smith Institute
23 Great Smith Street
London SW1P 3BL
Tel +44 (0)20 7222 4995

Articles and resources

Related SourceWatch articles


  1. Rob Blackhurst, "The sad decline of the policy wonks", New Statesman, January 31, 2005.
  2. Khaled Amayreh, Empty heads and full pockets, Al Ahram Weekly, Issue 874, 6 December 2007. Note that the Palestinian authority and Israel have tried on various occasions to silence Amayreh. Sometimes Amayreh's articles appear in the Al Ahram Weekly home page only to be removed afterwards.
  3. The person who wrote the information below did not wish to be identified because he still lives in the occupied territories
  4. Philip Morris, "The Influence of the Adam Smith Institute", Legacy Tobacco Documents Library, Bates No 2065244208, December 1994 (estimated).
  5. Craig Fuller "January Monthly Report", Memo, February 4, 1992, Bates Number 2024671858/1861.
  6. Confederation of European Community Cigarette Manufacturers Limited, "Board Meeting to be held at 1000am on Tuesday, 8 September 1992", page 2. Bates number:500002882-500002883.
  7. Confederation of European Community Cigarette Manufacturers Limited, "Minutes in extenso of board Meeting held at 10 00 a. m. on Tuesday, 8 September 1992", page 7. Bates Number 301151511.

External resources

External articles

  • Keith Dixon, Les évangélistes du Marché, (Paris, Raisons d’Agir- 1998, 1998).
  • Richard Cockett,Thinking the unthinkable: think-tanks and the economic counter-revolution, 1931-1983, Fontana Press, 1995.
  • Rebecca Smithers, "Fair trade branded 'unfair': A report by the Adam Smith Institute says fair trade offers a better deal to some producers at the expense of the great majority of farmers", Guardian, February 25 2008.
  • The palm oil PR offensive is gathering pace – but not weight

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