Why the Institute exists

The premise

We start from a belief about people. They are not weak, and they are not revenue streams for governments or companies. They are full of potential, and that potential is wasted far more often than it needs to be. Sometimes institutions leave it no room. Sometimes the material means to act on it are missing. And sometimes a person simply cannot stand alone against a monopoly that sets the terms.

This is a prior, not a policy position. Everything the Institute publishes rests on it, and if it were false, most of what follows would make no sense. We hold it openly so that readers can judge our work against it.

It also tells us what we refuse to do. We will not treat people as problems to be managed. A proposal that sees citizens as cases to process, risks to contain or costs to minimise may still be clever, and it may even be popular. It falls outside the work of this Institute. Our question is always how people can be freed to act, and what stands in the way.

What success looks like

A proposal has to be judged by what it achieves, and so the target needs to be fixed before the arguing starts. Without one, policies get judged on intentions. Intentions cost nothing to claim.

GDP measures the size of an economy. It says little about the lives lived inside it. A country can post solid growth while rents rise every year, work gets less secure, and the next generation’s options shrink. A welfare system can pay out large sums and still trap the people it pays, because every extra euro earned costs them almost as much in lost benefits. For some households in EU member states such as Germany, Belgium and Austria, the loss of income-tested benefits pushes the marginal rate to 80, 90 or even 100 percent (European Commission research note on work incentives, EUROMOD calculations). On the headline figures, all is well. On any honest account of daily life, it is not.

Our measure is the actual life of actual people. Can they afford a home? Is their work fairly paid? Can they absorb a setback without losing everything? Do they have time for the people and things they care about? None of this is vague. It can be measured, and the OECD Better Life Index, which puts housing, health, education, environment, work-life balance and life satisfaction next to income, is a more honest reference than one growth figure.

Self-determination belongs in the measure too. Some institutional judgment is legitimate. A person may lack capacity for a time, or a decision may harm others. Dependency in itself is not the failure. The failure is a system that produces dependency as a structural feature, where the dependence is how the system keeps itself going rather than a means to solve anything. A benefits scheme that makes leaving it financially impossible is one example. Another is a rule that demands fresh approval each year for a decision that could be made once. A system that could give people the means to run their own affairs, and gives them procedures for managing their dependence instead, works against our premise.

The measure also runs across time. We judge proposals on a horizon of at least two generations. Pushing costs into the future is sometimes right, for instance when an investment in a transition lowers costs later on. But such a deferral has to be explicit and bounded, and it has to be tied to an outcome that reverses it. Europe carries several deferrals that meet none of those conditions. In 2004 the EU had almost four people aged 20 to 64 for every person aged 65 or over; now it has fewer than three (Eurostat, 2024: 37.0 percent), and pension systems are largely not built for that. Unpriced emissions are coming due as floods, failed harvests and insurance losses. A proposal that passes the short test and fails the long one is unfinished.

Three observations

Our work rests on three observations about how societies behave. They are not policies. They are constraints that any serious policy has to respect.

The first is that value has two sources. When a city grows around a plot of land, the land rises in value. Its owner did not cause that rise. The surrounding community did, through its investment, its density and its daily activity. The same holds well beyond land. A platform becomes worth more as more people join it. Many patents earn returns built on years of publicly funded research. A financial position yields income through legal structures the state created and keeps running. Private ownership and private returns remain legitimate. But collectively created value and individually created value are different things, and a system that treats them as one will keep moving the first kind into private hands. Over time that concentrates wealth by position rather than by contribution. We hold this as a prior. It is not a tax proposal, though any tax, property or competition policy has to be consistent with it.

The second is that systems generate their own instability. Stability is not the resting state of a complex system. Someone has to maintain it. Calm in financial markets invites more lending, more leverage and higher prices, which invite more of the same, until the structure can no longer carry itself. The crisis of 2008 was not a bolt from outside. Its fragility was built during the quiet decade before it. Energy supply chains, lean food systems and comfortable geopolitical dependencies show the same pattern. So a proposal that optimises one dimension, such as cost or efficiency, and never asks what it does to the system’s ability to absorb a shock, is incomplete.

The third is that freedom without a material base is formal, not real. Someone who cannot afford to turn down a bad offer is not free in any sense that matters, whatever the law says. This applies to workers with no alternative to poor conditions, to tenants with no option but to pay what is asked, and to anyone facing a counterparty who knows they have nowhere else to go. The absence of legal coercion is necessary. It is not enough. Real freedom needs an outside option, the practical ability to refuse. Where that is missing, people do not lack ambition or talent. They lack the conditions to use them, and this gap is where most of the wasted potential from our premise ends up.

Why an institute and not a party

The Institute takes its name from Tiberius and Gaius Gracchus, tribunes of Rome in the second century before Christ. They watched the senatorial elite monopolise the public land, the ager publicus, while the free citizen farmers who had carried the republic slid into dependence. Without land, a citizen lost his economic independence and with it his place in the republic. The brothers tried to restore that foundation through land reform. Both were met with violence, and about a century later the republic was gone. We do not read this as a story of moral decay. It shows what happens when the material base of citizenship is hollowed out while the institutions above it still look intact.

Why not found a party? Because we think parties without a worked-out theoretical foundation drift into empty shells. They confuse the goal with the path. An institution, a treaty or a federation becomes the aim in itself, while the economic mechanism that keeps things stuck goes unexamined. A party also has to recruit, and recruiting means compromise. That is a legitimate part of democratic politics. It is a poor environment for working out whether an idea is sound.

An institute can do what a party cannot. It can hold to doctrinal purity. Our models close or they do not; every flow has a source and every claim a counterpart. We will not water down a result to make it easier to sell. A balance that does not close gets reported as one that does not close.

This lets us play a different role in public debate. Instead of defending a programme of our own, we rate the proposals of others against a public standard. Party programmes and EU directives alike can be put to the same questions. Does this proposal raise the burden on human labour, or does it recover passive extraction and monopoly rents? Who pays, and does the arithmetic hold? The rating is open to anyone. Any party or movement may use our work, and any of them may fail our test.

We publish in two tracks. Public essays show how structural faults turn up in ordinary life, in the poverty trap, the housing market or the bill nobody can pay. Technical papers set out formal models in full, with their assumptions stated. The models themselves are open, so others can run them, check them and break them.

None of this works without independence. The Institute belongs to no party or movement and takes instructions from none. If our work helps someone, we are glad. If it embarrasses someone, the work stands anyway.

The standard

Every proposal we publish or assess must answer four questions. We apply them to our own work first.

Who bears the costs, and when? Every proposal moves something, whether money, risk, opportunity or environmental burden, between people and across time. “Society benefits” is not an answer. We want to know which people lose, under what conditions, and when the loss arrives. Costs pushed into the future count as costs, and they have bearers too.

What is the funded source? Every new expenditure needs a named source. One sector’s deficit is another sector’s surplus, so the books have to balance on both sides. A proposal that spends without a source is a preference with the arithmetic postponed. Promising that a commission will find the money later doesn’t count as a source.

At what scale does it work, and why? A proposal must say whether it operates locally, nationally, at European level or globally, and why that level fits. A national answer to a problem whose cause crosses borders solves only the domestic political version of it. This question belongs at the design stage, not after the policy has failed.

What do we not know, and how do we mark it? Every proposal must separate what is modelled from what is estimated and from what is genuinely uncertain. Uncertainty is information the reader needs. A paper that presents guesses as facts, or hides its assumptions, is weaker for it, whatever its tone. We don’t ask for omniscience. We ask for an honest line between what is known and what is assumed.

Resilient liberalism

We are liberals. We value freedom of organisation, the right to dissent and the autonomy of communities to decide their own affairs. But we do not share the older liberal assumption that a free order, once built, keeps itself standing. We call the alternative resilient liberalism.

History argues otherwise. Liberal institutions have been taken apart from the inside, by actors who used the freedoms those institutions granted to gather the power to end them. The Weimar Republic is the canonical case, and the pattern has returned often enough to count as a feature of free societies, not an accident.

A free order is therefore a condition someone has to maintain. This follows from our second observation. The political twin of financial fragility is the capture of institutions by interests that profit from dismantling the rules. Defending the conditions that make freedom possible, including fair competition, open institutions and a material floor under every citizen, is part of liberalism. We don’t regard it as a betrayal of it.

This is no argument for central control. Our principle of scale is to decide at the lowest level that can do the job. Whatever a town, region or country can settle for itself, it should settle for itself. Only problems whose causes or effects cross those borders belong higher up, and the burden of proof runs both ways. A centre must justify each claim on local autonomy. A local actor must justify the claim that its decision affects nobody else.

Why European scale follows

From the observations and the scale question, a European level follows for certain problems. We hold no federalism as an article of faith. The point is a mismatch between the scale of some problems and the scale of the institutions now responsible for them.

Some problems are European by nature. Capital moves freely across 27 regulatory regimes and goes to the most permissive one. Tighten the rules in one country and the activity moves next door. This tendency toward a race to the bottom, well documented for tax competition, is no failure of political will. The incentives produce it, and it stops only at the level where the race itself is governed. Energy supply, financial risk and digital infrastructure follow the same logic.

Other problems are generational. Energy transition, fundamental research and demographic change need investment horizons far longer than one electoral cycle, and a government elected for four years cannot credibly promise thirty. Some institution has to match both the reach and the duration of these problems.

History also shows how such institutions get built. European integration has moved through material benefit, through coal and steel, the common market and the single currency, rather than through constitutional aspiration. People commit to institutions that deliver. Our job is to work out what would deliver, and to show the arithmetic.

Clear the base before adding a layer

A European level earns its place only if it makes the layers beneath it simpler. Federations risk doing the opposite. A new level arrives, writes its own rules on top of the existing ones, and leaves the national bureaucracies underneath as they were. Nothing is cleared away. Citizens now deal with one more authority, and the people who apply the rules have to deal with one more set of requirements that may conflict with the old ones.

We think this is a design fault. A federal level can do two things well. It can set the few conditions that every part of the system must meet, and it can supply a working default for those who do not want to build their own. What it should not do is set the conditions and leave the implementation to chance. Each member state then builds its own workaround, the workarounds collide with the conditions, and the result is a legal deadlock that no single government can untangle.

So we apply a subtraction test to any federal proposal. What does it remove? Which existing rules, forms and offices does it make unnecessary? A proposal that only adds a layer fails the test, however good its intentions. A federation that integrates should be able to deregulate as it goes, not accumulate.

What the Institute will do

The Institute will publish its models, its assumptions and its doubts, and it will hold its own work to the standard it applies to others. It will rate proposals from any side by the same four questions. It will not run for office, take instructions from a party or soften a result to make it popular. What it offers is a test that anyone can apply, including to us.