IDEAS SHAPE the world. Last week a very important promoter of ideas, Ralph Harris, died at the age of 81. The liberal economic ideas that he popularised in the 1960s and 1970s became the basis of the Conservative reforms of the 1980s, and have remained the accepted basis of the Blair administration.

No other British propagandist of ideas in the second half of the 20th century had anything like the same influence on national policy. Lord Harris of High Cross taught Margaret Thatcher. He converted a whole generation of politicians and journalists to the free-market ideas in which he believed; he converted most economists as well. We are all, or almost all, Harrisites nowadays. I was one of his intellectual converts, became a colleague of his in the House of Lords, and regarded myself as a friend.

Lord Harris’s battlefield was a political one, fought for the minds of Westminster, Whitehall and Fleet Street, though in his most influential period he was careful to avoid the commitments of party politics. He had the free mind of a free spirit.

As a young man in the 1950s he stood for Parliament as a Conservative, as I did. But both of us found the cross benches in the Lords were our natural home when Mrs Thatcher made us life peers. We usually found ourselves voting together, particularly on European issues. The issues that he made his own were mostly economic, but they always defended the broader principles of the free society. His central belief was that a free society can survive only on the foundation of a free economy. He also believed in classical economic theory. He was an Adam Smith man through and through.

Harris overturned the Fabian consensus of the 1940s; he undid the economic work of the Webbs. To understand his achievement, one needs to go back to the intellectual climate of the immediate postwar period. Ralph Harris went up to Queens’ College, Cambridge, in the 1940s. That was the highwater mark of the Attlee Government and of national support for social democratic ideas.

Most economic theory then taught in universities was Keynesian; industrial policy was based on nationalisation and trade union power. Wartime regulations were still universal; rates of taxation went up to 90 per cent or higher. This was the triumph of the managed socialist economy in a democratic society. The left wing of the Labour Party still looked to the Soviet Union as the socialist pattern of industrial development; many leftwingers assumed that Soviet socialism was going to bury the less well organised economies of the West, including that of the United States.

The Conservative Party was nearly drowned by this wave of social democracy; it virtually accepted that Britain would have a Fabian future. Although the Conservative recovery after 1945 was far more rapid than it has been since 1997, Conservative confidence had been more completely shattered. Bright young Conservatives, such as I then was, regarded classical economic theory as distressingly old-fashioned. We had read Keynes, but not yet Adam Smith. As late as the mid-1970s, Ted Heath attacked David Ricardo in the House of Commons not for being wrong, but for belonging to the 19th century.

Almost everyone was infected by this socialist climate of ideas, though it was hostile to any restoration of the free society. In the 1950s I was working on The Financial Times. Although the paper was by its nature committed to capitalism, and we had Churchill’s friend, Brendan Bracken, as our chairman, we were as much affected by the socialist culture of the time as everyone else. Ralph was not, nor were a small and gallant band of his friends.

In 1957 Harris joined Anthony Fisher, the entrepreneur of Buxted Chickens, in setting up the Institute of Economic Affairs as an independent think-tank devoted to the argument for the free society. He became the first general director, a post he held until 1987. I was a friend of John Wood, one of the first recruits to a small and collegial staff. I remember discussing the IEA’s ideas with them in the late 1950s. Even then my own economic ideas, though broadly Keynesian, were not Fabian. Yet, as I listened to Ralph and John, I thought that they were out of touch with contemporary trends, even that they were likeable cranks. How wrong I was. It was I who was trapped in a false consensus from which I had to break free.

Ralph was not himself a creative analytical economist; where Keynes had been a propagandist for his own ideas, Ralph was largely a propagandist for the ideas of others. In this, his methods were closer to the Webbs than to Keynes. He had taught economics at St Andrews; he believed in the classical tradition, in Adam Smith, Ricardo and the Liberal School.

He was also influenced by the ideas of Friedrich von Hayek and the Austrian School. Like others of his generation, he had read Hayek’s The Road to Serfdom. He believed that socialism was by its own logic the enemy of freedom. He was also much influenced by the Chicago School, particularly by Milton Friedman.

In the 1960s and early 1970s the IEA moved from the fringe to a position of rising influence, largely as the result of the failure of economic controls. Many free-society pamphlets were published, brilliantly edited by Arthur Seldon. Meetings were held, lunches were given and Hayek and Friedman were introduced to a new British audience. The IEA became a focus of criticism when the Heath Government did a U-turn and tried to fight inflation by price and wage controls — by a policy that I was ignorant enough to support. What folly that now seems.

Ralph Harris was a very likeable man who knew what he believed. He did not invent the ideas of a free society based on a free economy, but he did convert the British establishment from Fabianism to Thatcherism. His ideas — put into effect by Mrs Thatcher in the 1980s — saved Britain from the decline of 1960s and 1970s. The ideas that the IEA was advocating in the 1970s provided a large part of the intellectual basis of the Thatcherite revolution. He deserves a statue: he helped to save the freedom of his country.

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