The Adam Smith Institute (ASI) was established in 1977 by Madsen Pirie, Eamonn Butler and Stuart Butler after they returned from working in the US with Edwin Feulner, who was a founder of the Heritage Foundation. Antony Fisher from the Institute of Economic Affairs helped set up the ASI with a policy focus.
ASI was initially chaired by Friedrich von Hayek and published pamphlets by and on Hayek but also specific policy proposals. It was, in its own words, ‘part of a worldwide movement towards free markets and free trade.’ It still publishes tributes to Hayek and Milton Friedman and bills itself as ‘Britain's leading innovator of market economic policies’.
The ASI had a budget of £200,000 in 1988, mainly from business donations. It worked closely with a group of Tory MPs calling themselves the No Turning Back group who were ‘devoted to renewing the energy of radical Tory ideas and keeping the Government up to the ideological mark.’
The ASI was a driving force behind privatization in Britain and in other nations. It sought to make privatization acceptable to the public by creating interests in favour of it through ‘encouraging management buy-outs, cheap or free shares to employees and widespread share ownership among the public’. It organized ‘right-wing talk-ins’ and distributed pro-privatization literature to councillors, civil servants and the media.
The ASI also campaigns for reduced taxes, less regulation and smaller government:
The Institute is not just a think-tank - it is a do-tank. It became known in the 1980s for its pioneering work on privatization, contracting-out, tax reduction, and internal markets in health and education. Now it is leading the debates on deregulation, smaller government, and thoroughgoing public service reform.
The Guardian credits ASI reports with the achieving cuts to the top rates of taxation and also promoting business-oriented school reforms into UK schools. The ASI has a reputation for getting radical ideas turned into policy:
It is a handy sort of body for the government to have around. It can trample on taboos, shout the unthinkable, sit back and take the flack. In time the hubbub subsides and in the still reflection that follows the idea no longer seems quite so outrageous. Whereupon along comes a minister and polishes off the job.
According to Foreign Policy magazine, the Adam Smith Institute is one of the top ten think tanks outside the US in terms of influence although it only has an annual budget of £300,000.