This week at Warwick, Dr. Madsen Pirie the founder and president of the Adam Smith Institute came to campus to give a talk as a taster session in the run up to Warwick Economic Summit which will be held in February.
Markets have a tendency to follow a herd-like mentality and suddenly change direction in unison.
Dr. Pirie is a pioneering academic, economist, researcher and educator and his talk outlined his views about the current economic climate in international politics and how his personal economic outlook shapes the predictions he makes regarding current affairs. In terms of attributing his success to personal instinct, Dr. Pirie gave greater emphasis to the tendency of markets to follow a herd-like mentality and suddenly change direction in unison with regards to predicting future economic developments.
He went on to talk about the growing gap between forecasts predicted by economists from an academic background and that of the ground reality of markets in the present world economy. Dr. Pirie believes this gap arises because academics base their economic models and equations on economic conditions of perfect situations which “disregards what happens on the ground in the real world”- for him the economy is not an absolute ‘thing’ it is more an evolving and constantly changing process with many interactive and relative variables.
He wrapped up his talk by outlining the core principles of his neo-liberal outlook; firstly that Adam Smith overlooked that the value of a product or service must relate to demand, secondly that considering the importance of time when making an investment is crucial and finally that the real world is imperfect therefore it makes sense to compare the present economic climate with past scenarios instead of focusing on a hypothetical idealistic future.
Following his talk Dr. Pirie took on questions from the audience which covered a wide variety of topics ranging from his next prediction ,which he hinted was regarding the French presidential election, to Brexit and whether aid ultimately helps developing countries or not.
Brexit will allow Britain to find the best trade deals for its benefit.
Known for being consistently optimistic, Dr. Pirie gave positive answers for most questions concerning Britain’s future regarding Brexit saying it will allow Britain to find the best trade deals for its benefit and truly play a role as a nation in the global stage for international politics.
When asked whether events such as Trump becoming President, or the richest 1% now owning the equivalent of the world’s poorest 99% Dr. Pirie concluded the evening with the observation that real market economics in the current political climate is inevitably messy, people everywhere are making the most of the choice made available to them- which is a statement most of us can agree with.