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March 10, 2016


Rodrigo de la Fuente

Question: why is the desire to suppress the living standards of foreigners living abroad by limiting their country's export potential morally superior to any alarm that actual and potential Labour voters might feel about immigrants competing for work opportunities at home and by raising the supply of able and willing labour cap wages?

Rodrigo de la Fuente

Apols for the typos. I'll try again.
Question: why is the desire to suppress the living standards of foreigners living abroad by limiting their country's export potential morally superior to any alarm that actual and potential Labour voters might feel about immigrants competing for work opportunities at home by raising the supply of labour able and willing to do the work for less?


"New Labour didn’t see – with sufficient clarity – the downsides of globalization."

Yeah, I didn't really get this point of his. IIRC, Blair exactly saw the downsides of globalisation and its effect on working class wages and this was central to two key Labour initiatives - working tax credits to subsidise those low wages, and massive investment in "education, education, education" to skill the workforce.

It may be that neither initiative was very successful, and if Jarvis has a better solution I'd love to hear it. But isn't it wrong to say New Labour didn't see identify problem "with sufficient clarity"?

I suspect you're wrong to give him the benefit of the doubt.

Chris S

Because I suspect that it's easier to gloss over that bit of history rather than bringing it up and then getting into a long debate about why it may or may not have worked.

Especially as people are worse off, so they 'know' it didn't.

Luis Enrique

"Even the most highly educated of our young people -doctors and investment bankers - are unhappy. This tells us that education is not sufficient."

This does not tell us that increasing education is not important and (part of) correct policy response. If you want to take seriously the idea that young doctors and investment bankers are not significantly better off than most other young people and apply that consistently it would invalidate most left wing thought. More importantly, complaining young professionals does not tell us about what changing composition of labour force in terms of education would do to sectoral balance of supply and demand for labour, wages etc. - before writing off education you need to show those mechanisms won't operate

Dave Timoney

Jarvis's spurious claim about New Labour's naivety (obviously not a trained economist among them) shows that treating the electorate as idiots remains the order of the day.

When you combine this with the fatuous comments of Michael Dugher et al, it is clear that the Blairites are the new Bourbons: they have learned nothing, they have forgotten nothing.

Meanwhile, Jess Philips prepares to reprise the role of Charlotte Corday ...


Novel to call Michael Dugher a Blairite

gastro george

Drum roll while others post "more suitable" adjectives.


«expansionary macro policy to create genuine full employment and a serious jobs guarantee»

Plus *obviously* fully free immigration from countries with lots of unemployment and much lower wages.

After all it has been proven that immigration (and imports) from countries with lots of unemployment and much lower wages simply stops wages rising (and helps massive property appreciation).

As to ambition, for the UK government to offer «full employment and a serious jobs guarantee» to all the unemployed and low paid workers of the world who are willing to immigrate to the UK is a truly ambitious project!


«the idea that young doctors and investment bankers are not significantly better off than most other young people»

The question is what percentage of the UK population can be doctors and investment bankers (and barristers and stockbrokers and business executives and famous actors and professional footballers etc.).

There are countries where "todos caballeros", lots of ambitious young people make a go for the well-paid professions, and get law, business, medicine, etc. degrees, and then only a tiny minority work in the area of their degree, usually thanks to inheriting an established business or professional practice from their father; the others work as government paper papers on low wages (the lucky or well connected minority) and the rest spend their days writing pointless jobs applications.

Sure, the dream is that the UK were the headquarters of the world, and all the well-paid, desk-based comfortable staff jobs of the world ended up in London and Sunderland, and countries like China and India were happy to keep only the low paid hardscrabble factory floor line jobs and trades, and delegate all the top jobs to UK citizens.

But there is no obvious reasons why the UK should be the London of the world, and the China and India governments should help with that.

The dream of first-world economy "headquarterization" is just a delusion to fool the middle classes; the indians and the chinese are not pillocks.


«globalization. They knew it meant cheap consumer goods. But, they didn’t recognize that too often, it meant cheap labour too.»

They knew that it meant ever growing property prices, which is what wins elections, thanks to both imports and immigration from low wage countries.

Because labor price arbitrage means at least putting a ceiling on employment and wage growth, and thus enabling a fantastically loose credit policy.

Then middle and upper class voters have rewarded that electorally, by returning to government whoever looked likelier to give them bigger better property prices (and cheaper less bolshie hired help).

But much of the punditry rarely acknowledge the enormous political impact of bigger property prices (and cheaper hired help), and prefer to talk of mediamacro topics like "austerity".


«Novel to call Michael Dugher a Blairite»
«"more suitable" adjectives»

Well, I double checked a bit of his history and the impression I had of him was confirmed: slightly to the left of A Burnham, that is undoubtedly New Labour, but more Brownista instead of more Blairite/Mandelsonian.

But some people confuse New Labour with Blairism, which is in part fair, but also not quite right. A reminder from one of my favourite quotes, Lance Price's diary 1999-10-19:

«Philip Gould analysed our problem very clearly. We don’t know what we are. Gordon wants us to be a radical progressive, movement, but wants us to keep our heads down on Europe. Peter [Mandelson] thinks that we are a quasi-Conservative Party but that we should stick our necks out on Europe. Philip didn’t say this, but I think TB either can’t make up his mind or wants to be both at the same time.»

While somewhat equidistant in 1999 Blair became almost entirely Mandelsonian later, and while Brown moved a bit to the right, important differences in attitude remained (e.g. to VAT).


«the idea that young doctors and investment bankers are not significantly better off than most other young people»
«before writing off education you need to show those mechanisms won't operate»

Well, I;'ll give some hints here how things really work.

Suppose that education as such were what gives value, and therefore all well educated people would get a good well paying upper middle class job doing staff/headquarters/desk work.

Then there would be a tremendous demand for the best education and the suppliers of the best education would have a huge market to satisfy.

Then Eton and Balliol would be huge brands, with amazing expansion opportunities, because in the market better organizations selling better products displace those selling worse products, and better organizations take over and improve worse ones.

Therefore Eton would be running a large percentage of UK's schools, including Birkenhead and Grimsby, and there would be many Balliol college branches, including Newport, Gateshead and Northampton, all turning out large number of amazingly qualified people, millions of young people pretty much assured of getting jobs as judges, barristers, sSwanseaurgeons, journalists, stockbrokers, famous actors, CEOs, prime ministers, investment bankers.

But strangely enough the excellent education imparted by Eton and Balliol seems reserved to a minuscule number of establishment heirs plus a quota of tokenistas, despite their status as educational charities and their ample funds and prestige.

Of course it cannot be that there is a limited number of upper-end good jobs (being positional goods) and those are largely meant to go to the descendants of previous holders of those jobs, because having a good education means getting a good job, because «before writing off education you need to show those mechanisms won't operate».

So it is an enigma that the yearly intake of Eton and Balliol has not grown as fast as it could have :-).


"Instead, the solution is for the state to raise the demand for less skilled work through expansionary macro policy to create genuine full employment"

I don't understand this bit. If the problem is effective export of low-skill jobs to lower wage economies, (with usually much lower environmental and workforce regulatory protection - and I fail to see how this policy is consistent with maintaining such regulation at home) then why aren't the jobs created by this new State demand also just exported?

Because they cannot practically be (e.g. digging ditches)?

If they can be done elsewhere (e.g. factory labour) then how do you prevent them doing so whilst remaining OK with the policy that allowed the previously exported jobs?

thanks as ever for a loverly blog.


No one mentions import replacement.


«import replacement»

Well "education education education" is meant to result in every UK worker becoming a well paid investment banker educated in high value work by Eton and Balliol. :-)

But the UK does not (net) import investment banking services; it (net) imports sweatshop products products from low wage countries, and raw materials. So replacing those imports would result in low wage sweatshop jobs.

But every UK worker would be a well paid investment banker if the UK exported much more massive amounts of investment banking, that is if the UK were the sole financial headquarters of the world, and the rest of the world were happy to be forever the British Empire's low wage sweatshops and plantations.


In the first version of the Graun piece plugging Dan's speech - briefly preserved in Google News cache (though it's gone now) - there's a reference to "the impact of mass immigration on low-paid workers"; later versions replace this with "the impact of globalization on the wages of UK workers".

I wonder: did Dan's people put in the 'mass immigration' dogwhistle or did the Graun think of it for themselves?

I think this (from a piece in the Yorkshire Post) sums up DJ's position with regard to this one:

"Many are understandably anxious about high levels of immigration, which has become a proxy for people’s broader concerns about globalisation and feeling left behind."

Nice try, but if fear of immigration is actually a proxy for broader concerns, it's not 'understandable', is it? Except in the sense of "I understand why you're deluded".


Protectionism is the pejorative term used by middle class progressives for protecting the existential economic interests of a native people, a principle which the gentrified left have long since abandoned in favour of multiculturalism.

Free trade is a principle which promotes change and like all change favours some at the expense of others, such a principle when it is seen as only positive terms is likely to be taken to extremes.

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