Pike sets out how the illicit market has grown to around 80% of all tobacco sold in Australia, with the illicit vape market above 95%. He explains how tax of roughly $1.53 per cigarette, about £17 a packet before sales tax, opened a gap that organised crime moved to fill, with black market packets selling for a fraction of the legal price. The discussion covers the violence that has followed, including murders and hundreds of fire bombings, the rise of a multi-billion dollar criminal syndicate, and why enforcement at the border can only ever stop a small share of what comes through.

The second half turns to Britain. Snowdon and Pike argue that the UK is only a few years behind Australia, pointing to high tobacco duty, the tax escalator, the planned vape tax and official figures that they say understate the size of the illicit trade. Pike argues that the answer is not tougher enforcement alone but lower excise, consistent enforcement and an honest approach to harm reduction, contrasting Australia’s stance on vaping with the position taken in the UK and New Zealand. He closes with a warning for the Treasury and for ministers that the same path leads to the same result.

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On the social media ban, the panel weighs up whether the policy can actually be enforced, pointing to Australia’s experience and the ease with which children use VPNs to get around age checks. They consider the case for and against leaving the decision to parents, the coordination problem this creates for families, and the oddity of a digital curfew for 17 year olds at the same time as the Government wants 16 year olds to be able to vote. They also place the policy in a wider pattern of governments reaching for bans that poll well but prove difficult in practice, drawing on Christopher Snowdon’s new book on evidence-based policy.

The conversation then turns to Elon Musk and what his trillion-dollar fortune says about how markets reward people, covering consumer surplus, company valuations, and why the size of a fortune does not track hours worked. Finally, the panel examines Thomas Piketty’s call for a per capita GDP cap of around €60,000, a forced shift from material to immaterial sectors, and the global institutions he proposes to run it. They question how such a system could be enforced, what it would mean for ordinary living standards, and the use of taxpayer funding for degrowth research.

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Snowdon explains that each policy tended to rest on a similar package of evidence: modelling showing how the measure would work in theory, an example from another country that had tried something similar, and an expert review that gave it a stamp of approval. He argues that much of this evidence was weak or asked the wrong question. Plain packs were obviously less attractive, but that did not mean people would give up smoking. Modelling predicted large falls in alcohol deaths and in obesity that never materialised once minimum pricing and the sugar tax came in. In his view the evidence was rarely what decided the outcome.

The second half turns to what really drove these policies through. Snowdon makes the case that pressure, not evidence, was the deciding factor, with professional and often state-funded campaign groups generating media coverage while almost nobody organised against the measures. He draws on public choice theory to explain why millions of affected consumers stayed silent, why politicians took the path of least resistance, and why ministers from George Osborne to Rishi Sunak reached for these policies to build a legacy or shift the headlines. He closes on the recent move by the Government to restrict social media for under-sixteens, argues that opinion polls are a poor basis for lawmaking, and suggests defunding state-backed pressure groups as a place to start.

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They discuss why the British establishment looked down on trade for so long while outsiders such as Quaker families and immigrant banking dynasties built much of the country’s industry, why Britain never produced the public business heroes that America did, and how the Thatcher years briefly made enterprise admired before the mood turned again. Vander Weyer argues that financial capitalism has repeatedly damaged its own reputation, through executive pay rows, the mis-selling of personal pensions, the dot-com bubble and the 2008 crisis and bailouts. The discussion also covers the shortage of growth capital for British firms, the difference between what banks and investors should fund, private equity and venture capital, the effect of AI on jobs and careers, and why he sees entrepreneurship as the route out.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Kristian Niemietz sets out why degrowth cannot happen voluntarily and what kind of state would actually be required to impose it. Lord Hannan draws on history — from the post-financial crisis recession to FDR’s destruction of food during the Great Depression — to show that the intuitions driving both degrowth and price controls are as old as they are wrong. On industrial policy, both argue that the government’s concierge scheme is simply a guide around obstacles the government itself created, and that cutting taxes and regulation would do more for growth than any managed scheme.

The episode ends with a discussion of prices as signals, why supermarket profit margins tell a very different story to Polanski’s claims, and a striking account of how the Prophet Muhammad — himself a merchant — understood the consequences of price caps over a thousand years before Adam Smith put it into words.

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Max explains the international comparisons, contrasting the UK’s position with lower-tax economies such as Singapore (15th March), Switzerland (21st April) and the United States (16th April), and argues that competition between states and cantons restrains tax growth in ways that centralised systems cannot. The conversation also covers the Cost of Government Day, which falls on 13th July when borrowing is included, the demographic pressures driving welfare and pension spending, and the finding that over 52% of the British population are in some way dependent on the state for income.

The discussion closes with Max’s priorities for reform: rationalising the tax code, cutting red tape, pushing ahead with planning reform, and abolishing stamp duty to unlock the property market. He offers cautious optimism that some political figures are beginning to take the scale of the problem seriously, though he warns the trajectory points towards Tax Freedom Day reaching 13th June by 2030 without significant policy change.

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The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Lord Hannan argues that tax rises are always harmful to growth, pointing to the “triple whammy” facing employers from National Insurance hikes, the Employment Rights Bill, and minimum wage increases. The conversation turns to whether the OBR’s mandate should be reformed and whether a competitive market in economic forecasting would produce better results. On free speech, all three agree that banning the American commentators was petty authoritarianism, with Hannan and Niemietz both arguing that consistent application of free speech principles matters more than whether you agree with the speaker. Hannan raises the uncomfortable question of whether the liberal free speech consensus of recent decades was merely a temporary standoff between competing hegemonies.

The episode closes with Kristian Niemietz’s response to the Polanski/Zucman exchange on wealth taxes. Niemietz agrees that past wealth taxes have largely failed, but disputes Zucman’s claim that a broader, exemption-free version would succeed, arguing the valuation bureaucracy required would be enormous and the disincentive effects on business owners would be severe. Lord Hannan draws on his time in Brussels during Francois Hollande’s wealth tax to illustrate how quickly such policies drive wealth creators out, and argues that the true motive behind wealth tax proposals is egalitarian rather than fiscal.

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Dr Davies examines the Engels Pause (roughly 1790–1850), the period when British GDP grew by 46% while real wages rose only 12%, and traces where the missing wealth went — captured primarily by landlords and asset owners rather than workers. He explains how this reversed after 1850, when real wages surged by 123% as deflation took hold, the Corn Laws were repealed, and the elastic labour supply from the countryside began to dry up. The talk also draws a direct parallel between 19th century rural-to-urban migration in Britain and modern global migration, examines the moralistic and romantic literary critiques of industrialisation against what working-class diaries of the period actually record, and closes with the question of why China — as technologically advanced as Europe in the 14th century — failed to industrialise, and what the Ming Dynasty’s deliberate suppression of innovation reveals about how elites throughout history have blocked economic progress.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

David breaks down the two main cost drivers: subsidies and grid integration costs. Subsidies are forecast to rise by around £3 billion a year by 2031, while grid integration costs, covering the capacity market, grid balancing, and transmission network expansion, are set to triple from £8 billion to £25 billion over the same period. That adds roughly £20 billion to the annual cost of running the electricity system, against a backdrop where the UK already had the most expensive industrial electricity prices in the developed world in 2024. David contrasts this with Ed Miliband’s claim that Clean Power 2030 can bring bills down for good, describing it as stretching a point beyond credulity.

The discussion then turns to what the opposition parties are actually proposing. David assesses the Conservatives’ pledges to scrap the Renewables Obligation and remove carbon taxes, alongside Reform’s commitment to cancel contracts from Allocation Round 7. He finds both welcome but insufficient, with costs still set to be over £8 billion higher in 2030/31 than today even if a right-of-centre government takes power in 2028. The conversation covers the legal difficulties of unwinding offshore wind contracts, the ageing gas fleet, the risk of supply shortfalls, and what a future government would need to do to bring industrial electricity prices into the lowest quartile of the OECD.

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The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Dr Maher walks through the core findings of his analysis, explaining how the Conservatives held on to just 31% of their seats, Labour to 22%, while the Lib Dems retained eight in ten. Reform, meanwhile, drew its support roughly equally from Conservative and Labour voters. His model proved directionally accurate and in several cases outperformed prominent MRP polling, though the actual local election results saw both Labour and the Conservatives perform better than the by-election data predicted, with the migration to Reform falling short of expectations. The conversation explores why — with theories ranging from small-c conservative bias when the stakes are higher, to Labour voters pulling back from the brink when faced with genuine council losses.

The discussion closes with broader reflections on political fragmentation in Britain, the historical precedents of party realignment from the Whig-Tory era through to Labour’s displacement of the Liberals in the 1920s, and whether prediction markets and AI are set to disrupt the actuarial profession.

Dr George Maher’s IEA Paper is available here

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

On London, the panel picks apart the drivers behind the city’s decline: housing supply restrictions, a 71% marginal tax rate hitting high earners with student loans, the exodus of non-doms, and the post-pandemic shift away from office working. Daniel highlights that American tech firms now describe London’s talent pool as cheap relative to San Francisco, a back-handed compliment that has become the city’s chief selling point. Lord Frost raises the possibility that productive people are leaving while less productive arrivals replace them, and argues for decentralisation over national top-down fixes, pointing to Switzerland as a model for local decision-making on planning and regulation.

On the cost of living package, the panel credits the tariff reductions as the one straightforwardly positive measure while dismissing the VAT cuts on children’s cinema tickets and meals as a two-month gimmick that evidence suggests will not be passed on to consumers. The capital gains tax proposals are judged far less damaging than a genuine wealth tax, but the panel warns that raising rates to 45p would deter risk-taking investment, encourage evasion, and pile further complexity onto an already overburdened system — with no offsetting cuts, such as to stamp duty, to justify the trade-off.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Dr. Davies explains why time is the most radically scarce resource of all, unable to be reused or spent on two things simultaneously, and how this gives rise to the concept of opportunity cost -- the foregone benefit of the next best alternative use of your time and resources. He illustrates this with a concrete example, comparing the choice between a concert and a night at the cinema, and shows how the real cost of any decision is not just what you pay but what you give up.

The episode also tackles the subjectivity of value, explaining why the same concert ticket means something completely different to different people, and why Oscar Wilde’s famous quip about economists knowing the price of everything and the value of nothing fundamentally misses the point. Dr. Davies shows how prices in markets are not cold and empty but rich with information about what people actually value relative to everything else available to them.

The episode concludes with the crucial distinction between stated preferences and revealed preferences -- what people say they would like to do versus what they actually choose to do when opportunity cost is taken into account -- and why revealed preferences tell us far more about what people genuinely value.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

The conversation covers the record of NASA’s government-run programmes, particularly the Space Shuttle, whose per-flight costs vastly exceeded forecasts and which ultimately left the United States reliant on Russian rockets to reach the International Space Station. They discuss how SpaceX’s reusable rockets reduced launch costs by 95%, why the old Cost Plus contracting model incentivised waste rather than efficiency, and how Obama’s political indifference to space turned out to be its unlikely enabler. Zitelmann also takes aim at Mariana Mazzucato’s moonshot framing, arguing she cherry-picks a decade of success and ignores fifty years of failure.

The interview then turns to the frontier questions: asteroid mining, property rights in space, the Outer Space Treaty’s legal grey areas, and whether private ownership on Mars is not just desirable but necessary for survival. Zitelmann argues that socialism failed everywhere on Earth and would fail even faster in the hostile conditions of outer space, and sets out his proposal for how space property rights could be structured on the model of the American West.

📖 Buy New Space Capitalism by Dr. Rainer Zitelmann: https://www.amazon.co.uk/New-Space-Capitalism-Entrepreneurial-Stars-ebook/dp/B0GN9Q8C7H

📄 Read Dr. Zitelmann’s IEA paper, Exploring the Space Economy: https://iea.org.uk/publications/exploring-the-space-economy/

Dr Boboc and Kristian Niemietz dig into the UK’s deteriorating fiscal position, with around 8% of all public spending now going on debt interest alone. They assess why bond markets are nervous about whoever ends up leading the Government, arguing that the real problem is not the chaos itself but the absence of any credible plan on spending, growth, or taxation. The King’s Speech is assessed in detail, including the Government’s “Regulating for Growth” bill, the nationalisation of British Steel, and what Kristian describes as Chris Snowdon’s “capitalist command economy” thesis: a state that does not want to own industry directly but increasingly dictates what private companies produce and how.

The conversation closes with a look at a Labour backbench growth paper that Kristian describes as the closest thing to a centre-left supply-side agenda he has read in the British context. He and Dr Boboc explore why rationing key inputs like land, energy and childcare drives up costs and then triggers expensive spending programmes to compensate, and what genuine fiscal consolidation through growth might actually look like.

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The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Chris and Kristian work through the evidence: boiler companies fined for not selling enough heat pumps, car manufacturers penalised for selling too many petrol vehicles, supermarkets being required to track and reduce the calories their customers buy, Gatwick Airport granted a new runway only on condition it controls how its passengers travel. They trace the roots of this model through price controls, rent regulation, minimum wage creep, and the Government’s habit of outsourcing its policy goals to business while escaping the blame when things go wrong.

The conversation closes with the question of whether this model is stable. Drawing on Mises’s concept of interventionism as an inherently unstable system, Kristian asks whether the capitalist command economy simply creates the conditions for a more conventional socialist government — or something else entirely. Chris argues the real problem is that Britain lacks even a word for what it has become, and that naming it is the first step to challenging it.

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The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

The conversation then turns to the Planning and Infrastructure Act and its restrictions on vexatious judicial reviews, using the recent case of a solar farm as the first real-world test. The panel assesses whether cutting the artificial waiting period from 14 months to two months represents a genuine turning point for infrastructure delivery in Britain, or whether NIMBYs will simply adapt and find new avenues for delay.

The final segment examines a warning from Conservative MP Neil O’Brien that Treasury forecasts for capital tax revenues may be built on shaky foundations. With the Government leaning heavily on stamp duty, capital gains tax, and inheritance tax to plug a fiscal gap, Boboc and Niemietz argue the tax base is too narrow, too volatile, and too geographically concentrated to deliver the roughly £30 billion the Treasury is counting on by 2030.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

The discussion opens with the challenge of winning public support for a smaller state, with Lord Frost arguing the current tax and spend model is close to exhausting itself and that the ideas need to be ready for when it does. The panel go on to address Milton Friedman’s monetary theory and how it applies to recent inflation, before turning to climate policy, where they make the case that adaptation through market incentives is preferable to emergency state-led intervention. The housing section examines why supply constraints drive price volatility, why migration has complicated the political case for building, and why expectations of ever-rising house prices are a consequence of policy rather than culture. The episode closes with questions on the Norway model, the Reform versus Greens policy comparison, whether small staters should work in the public sector, and Stephen Davies’ Great Realignment thesis.

The panel also reflect on passing 200 episodes of the weekly podcast and what the IEA’s role is in shaping the economic debate at a moment when the dominant political settlement looks increasingly fragile.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Thumbnail image: Greta Thunberg, Stockholm, 30 April 2024. Photo by Frankie Fouganthin, licensed under CC BY 4.0. via Wikimedia Commons.

Thumbnail image: Margaret Thatcher. Photo provided by Chris Collins of the Margaret Thatcher Foundation, licensed under CC BY-SA 3.0, via Wikimedia Commons.

Then the team turns to wealth taxes. Kristian has published a new IEA paper demolishing the case for them — and the arguments are sharper than you might expect. Britain already raises more from wealth-related taxes than almost any OECD country. Wealth inequality has been broadly flat since 1990. And even the most optimistic wealth tax proposal would raise, at best, 1% of GDP — nowhere near enough to fund the endless list of promises its advocates attach to it. The real question is why this idea has consumed so much of the national conversation when it solves almost nothing.

Finally, the Government’s plan to effectively ban traditional tumble dryers in favour of slower, less effective heat pump models. Is this net zero policy, EU alignment by stealth, or simply Ed Miliband picking your appliances for you? The team argues it is a perfect microcosm of everything wrong with British economic policy — a rich country solution imposed on a country that simply cannot afford it. Subscribe to the IEA on YouTube and on Substack at iea.org.uk for more.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

The conversation examines the core problems with a wealth tax in practice: the valuation difficulties, the risk of capital and people leaving the country, and the fundamental contradiction at the heart of the wealth tax campaign, which simultaneously promises to cut taxes on working people, fund the NHS, finance the climate transition, and reduce inequality. Advani draws on the Wealth Tax Commission’s findings, including the estimate that a 1% tax on wealth above £10 million could raise around £10 to £12 billion, but notes that behavioural responses mean the real figure would be considerably lower. Niemietz argues the real cost of the wealth tax debate is its opportunity cost: every hour spent on a policy that will not work is an hour not spent on things that would.

The final section turns to what should be done instead. Niemietz points to the genuine drivers of falling wealth inequality in the post-war period: wider pension saving and rising home ownership. He argues that liberalising planning rules and building more homes, at the scale Britain managed in the 1930s, would do more to spread wealth than any tax on it. Advani adds that fixing the existing, poorly designed taxes on capital income and transfers would be a more productive use of political energy than building an entirely new tax from scratch.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.