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November 17, 2015

Comments

Bob

Blissex, your view on this Billy Blog re Eurozone? Bill has been quite critical of it.
http://bilbo.economicoutlook.net/blog/?p=32350

A

Do the public not get a say in the matter?

Phil

The idea that a welfare state requires closed borders - because otherwise it'll be burdened by limitless numbers of immigrants - gets things exactly backwards. A better-than-average welfare state can only be paid for by higher-than-average taxation - and a high-welfare, high-tax state demands *open* borders, so that everyone who wishes to pay the taxes and take the benefits can live here and everyone who doesn't can leave.

In any case, if I was compiling a list of champions of the welfare state it would be a long time before I got to David Cameron. His goal at the moment seems to be to make cuts to welfare more popular by making them affect immigrants first. It's despicable on more than one level.

Rumplestatskin

The same is true of all borders, including private property within countries. If you are born without a large estate, you have radically lower outcomes given the same set of human skills at birth.

Bob

"A better-than-average welfare state can only be paid for by higher-than-average taxation"
Taxes don't pay for spending in a government that issues its own currency. Government spending always pays for itself - by generating an amount of tax not saving AFTER the spending. The government then voluntarily swaps reserves with Gilts.
Spending is limited by real resources.
"A better-than-average welfare state can only be paid for by higher-than-average taxation - and a high-welfare, high-tax state demands *open* borders, so that everyone who wishes to pay the taxes and take the benefits can live here and everyone who doesn't can leave."

The difference between giving someone £15,000 per year (weekly/monthly), and giving them a £10/hr job 30 hours a week is that when they get a £10.50/hr job in the normal job sector, there is an automatic reduction in state spending. Which means that you don't have to put taxes up as much to recover, you don't disrupt the private sector pay structure, and the 'dead zone' between the guaranteed income and the income required for a 'normal job' is less.

Full employment is when you can walk out of a Job and into another. That is how you improve the capital stock and productivity of the country and take everyone in it out of poverty.

People don't like paying taxes. They like other people to pay taxes. Time to realise that.

Lord

Political unions are established to resolve these sorts of questions and they are the right frame in which to decide them. Justice doesn't exist for people to pick and choose, and property can only be considered as just when held in trust for everyone and the future, and what may appear unjust in isolation, may in fact be just in a broader and longer sense, and what isn't is up to us to address.

Bob

"and what may appear unjust in isolation, may in fact be just in a broader and longer sense,"
Correct.
For example it's important to note that the elderly in the UK receive a basic income. The income needs are met, but the social ones are not.

Riikka

Oh great. Bring the welfare state (here in the Scandinavia, not there) into the picture. What happens?

Poor people become much richer. Why? Not because they work but because the state gives them plenty of benefits (unemployment in some immigrant groups is as high as 80 percent, no incentives for low-paid work). Where does the state get the money? From the taxes, of course - paid by those employed.

Is it working? No, it isn't. We are in fact in deep trouble. The amount of tax payers is decreasing all the time.

Global redistribution and poverty reduction? If you like.

nick ford

Unlike other leftists, Chris is at least honest about who the primary beneficiaries of immigration are: it is the immigrants themselves. He is also honest about the motivation to permit immigration - to give these immigrants a helping hand.
We might contrast this with the misleading rhetoric of most of the liberal left, who regularly tried to fool the public that immigration is good for them eg by using misleading phrases like 'immigration is good for the economy' or 'the NHS would collapse without immigrants'.
In terms of the general public, immigration generally benefits the rich and disadvantages the poor. It drives up returns on capital (rents, profits) and drives down wages. It is bizarrely magnanimous of policy makers in this country to give a helping hand to immigrants, at the expense of the indigenous poor.

Calgacus

Bob: "As part of implementing the Job Guarantee you restrict the open borders to other parts of the world that have an equivalent Job Guarantee programme and social infrastructure (universal healthcare, etc.)"

But the question is, why should one do this? Why not just have a Job Guarantee, period? The question of immigration has next to nothing to do with it. JG without immigration works fine. JG with such conditionality on where the immigrant comes from works fine too. But JG + open immigration also works just fine for everyone. The upshot is - JG works fine, period, in any conditions.

I don't care about open immigration, especially about countries I don't live in. But this kind of argument and proposal seems illogical, unrealistic and ultimately founded on the getting-everything-backwards view of economics. A JG is not a social welfare program. Immigrant workers on a JG will be enriching, not impoverishing, the society to which they immigrate. And everyone in it and elsewhere. Deciding to have a JG is a universal win-win, like deciding to not stab yourself in the throat, like deciding that 2 + 2 = 4 after all, and not your favorite number , 5.

I disagree about the prospects of the JG in the USA, or that US society needs to become more sophisticated, whatever that means, for US society's outlook seems to me to be significantly more congenial to a JG than Europe's.

Bob

This is what you said on Neil's blog:
"The whole world had open borders until a century odd ago."

Correct. But they didn't have airplanes and they didn't have mass individual transportation units and they didn't have the majority of the population with a driving licence a century ago.

Check the commute distances between then and today and tell me transportation hasn't improved markedly and the willingness to move around hasn't increased.

But most importantly they didn't have instant person to person communications - mobile phones, Twitter, email. They didn't have mass distribution of pictures, videos. Street view on Google to see where you are going before you get there.

To use such ancient data is the very essence of the denial I'm getting at. Use the projections of EU travel to the UK from a decade ago and then the reality. You'll find that it was out by two orders of magnitude. The so-called understanding you appeal to is wrong *today*.

And that was for the chance of a job. The Job Guarantee is, in its correct form, *guaranteed*. Once word gets around - particularly across a devastated EU - there will be mass migration. How many of the 23 million you cannot predict, because you tried to predict ten years ago and got it completely wrong.

Word will get around quickly because of the mass communications architecture, which is much better today even than it was ten years ago.

It may even start slowly and the mass-movement delayed until the critical understanding gets around and gets back from the vanguard. But once you get a critical mass you'll get an influx along the lines of a refugee crisis.

"No, a JG is a proposal to tax the poor in real terms = spend money on them (only) in exchange for scarce and valuable labor."

Remember that the Job Guarantee is only cyclically supporting during a downturn. Once you get back to full operation, the JG just changes the unemployment buffer into an employment buffer at a higher level of benefit.

If labour was scarce and valuable, then you wouldn't need a JG in the first place. The labour used by the Job Guarantee is unlikely to be self-supporting because of the quality of it. It is low skilled. The reason that the private sector has left it alone is precisely because it isn't self-supporting.

The immigration levels now, when you actually focus correctly on the low level individuals that wouldn't otherwise get a visa, show in the data an impact on the wages of low level natives. Further proof that the labour quality isn't self-supporting.

If you can make efficient use of the labour then you will get less cross subsidy, but that is unlikely to be the case. The best you can hope for is effective use of the labour - something that the rest of society considers sufficient to justify supporting the individual.

This idea that the process is somehow self-limiting is again an appeal to market forces that simply does not occur in practice. Exactly how are the required schools, hospitals, roads, and most importantly water, sewerage, food and shelter going to get built in such a short period of time. They take years to get in place. The existing migration has already stressed the school system to its limit, and the housing system was broken well before then. It is an appeal to infinite fungibility that you can get sufficient skilled staff in place to operate the expanded services. You can't make a silk purse out of a sows ear.

And that's before you get onto the political debate - where the 'mass-migration' concept caused by open borders will be used against the idea of a JG, and the environmental argument - what is the carrying capacity of the country?

Clinging to open borders is a religious position. Why risk excess flows when a simple visa system ensures you get the right level of flow and the right type of migrant to build *your* society? That defeats all the arguments against the Job Guarantee and has considerable political support from the natives who actually vote for you.

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