Spotlight: Enterprising Economist


Stuart Butler introduced the concept of the enterprise zone to the United States in a paper for the Heritage Foundation in 1979. The idea of setting up areas in decaying inner cities as "free zones" with greatly reduced government regulation and taxes had been bandied about for a year or so in Great Britain. Butler made the idea available to Rep. Jack Kemp (R–N.Y.) and the others who have since pushed for "mini Hong Kongs" inside American cities to revitalize the areas and show what unrestricted free enterprise makes possible.

Butler says his "classical liberalism" was an intellectual awakening that happened mostly "while at university." The university was St. Andrews on the east coast of Scotland, about 15 miles from the home of Adam Smith. Butler fell in with and became one of the leaders of a group of free marketeers called the Conservative Association. "It was at that time," Butler says, "that I moved from being a foggy conservative without thinking much about things to much more libertarian positions, which I have since modified toward getting action on particular issues because I am much more interested in winning battles than going down with a perfect 100 percent score."

The St. Andrews group has been credited with introducing the works of free-market economists F.A. Hayek, Milton Friedman, and P.T. Bauer to the English conservative student movement and hence to the British political movement. They imported American fiction by Ayn Rand, Robert Heinlein, and other individualist writers and even created the Adam Smith tie that is worn so widely today.

The group used a colorful variety of leftist-style political tactics to outflank the left. An underground paper aimed barbs at the leftist student government at St. Andrews and was so successful that it spread to other universities in Great Britain. They attracted media attention by showing up at demonstrations in St. Andrews's traditional bright-red gowns. In full regalia, they would picket a factory where unionization had been forced on all workers or steal the show at a leftist rally for increased government benefits to students.

Much of the influence on the English Conservative Party and the Thatcher administration can be traced back to that student group operating in the late '60s and early '70s. Members have since become leaders in many areas of England.

Butler received his first degree in physics and mathematics, his masters in history and economics, and his doctorate in American economic history. He taught for a year at Swinton Conservative College but was discouraged by the loss of the Conservative government the year before, in 1974. In 1975 he emigrated to the United States with his brother, Eamonn Butler, and Madsen Pirie to teach at Hillsdale College in Michigan. "But it was only about six months," Butler says, "before we started planning another attack on the British government. We created the Adam Smith Institute, which was registered both in the United States and England. Like the British leaving Dunkirk, we retreated and consolidated, and now we are reinvading."

The Adam Smith Institute has been responsible for pioneering the privatization issue in England. Butler says that the British have been more successful in wresting functions from the government bureaucrats because "the condition there is so much worse." With Eamonn Butler in charge of the institute in England, there is a Butler on both sides of the Atlantic, which has facilitated the flow of information in both directions. Though the concept of enterprise zones came from England, Stuart says, "Our links with organizations in the United States, in particular with REASON and the kinds of things discussed in REASON, has been at the heart of a lot of the discussion in England."

Butler's book, Enterprise Zones: Greenlining the Inner City, has been out in America since 1981 but has just been published in England. The inner city has long been a focus of Butler's interest. "The inner-city areas are full of people who have been totally disillusioned by big government," he says. "Liberals have poured money into the inner cities and torn down whole neighborhoods, bulldozing them for renewal. People aren't stupid; they've seen what happens. But they have turned toward radical centralized solutions because the only people who have gone in to talk to them are people who blame capitalism and say they've got to demand more grant money. I have found a tremendous belief in capitalism, but there are very few people who are willing to go in and tell them how to do it."

Butler worked on enterprise zones and other projects for the Heritage Foundation for three years after leaving Hillsdale College. He left to assist the start-up of the National Center for Neighborhood Enterprise, which works with inner-city groups, and has now returned to Heritage as director of domestic policy studies. He remains an adjunct researcher at NCNE and recently joined the advisory board of the Reason Foundation.

"You don't need 51 percent of the voters to change the world," Butler advises individualists. "I learned very, very well how the left operates and the nature of getting change in a political system. A group of people, not in the majority, can get their views debated and implemented even though they're not in the majority. I think in those terms." Butler goes on to say, "One sees in Europe how a minority has dominated the political scene. I've used what I learned there to affect change here."

Patrick Cox is a free-lance writer.