Perhaps Nosemonkey shouldn\’t try to do economics

Eh?

Norway has oil. Switzerland’s a tax haven. Both have far, far smaller populations than the UK, accounting for their far higher GDPs per capita (and hence relative prosperity).

You what? A small population means a high GDP per capita?

Err, tell that to Kiribati, Cape Verde, Tuvalu, The Comoros, why don\’t you?

And actually, we expect the effect to run the other way. The larger the country, the larger the free trade area and thus the higher we would expect the GDP per capita to be. This should be obvious for it\’s the driving force behind the whole Single Market thing that Nosemonkey is trying, so ineffectually, to defend.

Because you know what you need for a Common Market to function? Common rules and regulations.

No, it doesn\’t actually. It does not require common political or bureaucratically created rules and regulations at least. This is to buy into the entire Continental fallacy, that we need to be told what to do. All that is needed is a common set of rules about what we cannot impose political or bureaucratic rules upon.

Take, for example that evergreen set of banana rules. Class I may not be bendy and all that. These rules have the force of law, it\’s illegal (a criminal offence, punishable by 6 months in pokey and or a £5,000 fine) to sell overly bendy bananas for direct human consumption in the EU.

That\’s certainly one way of getting common rules, getting the pointy headed pencil suckers to tabulate how we all must act.

There is another way of course. Let the people in the industry write the rules themselves. Anyone and everyone is entirely free to use these rules or not, as they wish. Industry standards, industry norms: it\’s how the global (please note, global) metals industry works. You want to sell nickel you go off to the London Metals Exchange and look up their nickel contract definition. You can make to that standard or not, as you wish. But everyone uses that standard as a way of pricing your material: produce better stuff and if someone needs better stuff they\’ll pay more for it. Produce worse and peeps will insist on a discount.

Note that there\’s no insistence in the law that you cannot sell nickel that doesn\’t meet this standard. It\’s an entirely organic, within the industry, set of standards. And this doesn\’t just apply to nickel, nor just to non-ferrous metals. This is how the entire global metals industry operates.

We in the industry ponder and decide upon whatever standards we think might aid us in doing business. Shit, even I\’ve written one of the industry standards with no input whatsoever from taxgobblers. The one for scandium. There\’s no legal force to it at all: but it works as a standard.

One reason it does is that it was written by an expert of course, not a tax gobbler:

In the case of Scandium, purity is quoted as a 99% min. Sc2O3 total actual purity- not TREO basis.

No, you don\’t understand that, no taxgobbler understands it. But an entirely voluntary standard still does work for it provides the useful information that people need.

So, I refute entirely the suggestion that a common market requires skyscrapers full of santorum dribbling civil servants to write common rules and regulations. A common market will quite happily write its own common rules and regulations: as we can actually see from a real world example of a common market without the santorum suckers.

You see – it’s all very well saying “let’s leave the EU”. But if you’re advocating ditching the status quo you’d better have a pretty bloody well thought-through alternative plan.

We do. Hang the bureaucrats, shoot the politicians and declare unilateral free trade. Immediate 3% boost to GDP.

 

15 comments on “Perhaps Nosemonkey shouldn\’t try to do economics

  1. “And actually, we expect the effect to run the other way. The larger the country, the larger the free trade area and thus the higher we would expect the GDP per capita to be. This should be obvious for it’s the driving force behind the whole Single Market thing that Nosemonkey is trying, so ineffectually, to defend.”

    Well that would be true if economics were what mattered. I would bet that it is not. Politics is what matters. It seems to me that the larger a country is, the worse it performs economically. The top ten countries by GDP (PPP) per capita are:

    1 Luxembourg 59,590
    — Macau 57,390
    2 Norway 55,420
    3 Singapore 49,780
    4 Switzerland 47,100
    5 United States 45,640
    — Hong Kong 44,540
    6 Netherlands 39,740
    7 Denmark 38,780
    8 Australia 38,510
    9 Austria 38,410
    10 Sweden 38,050

    Notice that the US – with its highly federal system – is the only one with a large population. Australia, another federal system, has about 20 million and I would guess that is the next biggest. The rest tend to be around the 4 to 10 million range.

    It looks like local politics trumps large currency areas as a cause for economic wealth.

  2. It works the other way for population as well. The top twenty countries for population?

    1 People’s Republic of Chinan2 1,339,724,852 November 1, 2010 19.36% 2010 China Census
    2 India 1,210,193,422 March 1, 2011 17.49% Provisional 2011 Indian Census result
    3 United States 311,436,000 May 28, 2011 4.5% Official United States Population Clock
    4 Indonesia 237,556,363 May 2010 3.43% 2010 Indonesian Census
    5 Brazil 190,732,694 August 1, 2010 2.76% 2010 Official Brazilian Census results
    6 Pakistan 176,168,000 May 28, 2011 2.55% Official Pakistani Population clock
    7 Nigeria 158,423,000 2010 2.29% UN estimate for 2010
    8 Bangladesh 150,632,000 May 28, 2011 2.18% Official Bangladeshi Population Clock
    9 Russia 142,905,200 January 1, 2011 2.06% 2010 Russian Census
    10 Japan 127,960,000 March 1, 2011 1.84% Official Japan Statistics Bureau
    11 Mexico 112,336,538 April 15, 2011 1.62% 2010 final census result
    12 Philippines 94,013,200 Mid-2010 1.36% National Statistics Office medium projection
    13 Vietnam 87,375,000 2011 1.26% Official estimate
    14 Germany 81,802,000 December 31, 2009 1.18% Official estimate
    15 Egypt 80,295,000 May 28, 2011 1.16% Official Egyptian Population clock
    16 Ethiopia 79,455,634 July 2010 1.15% Official estimate
    17 Iran 75,332,000 May 28, 2011 1.09% Official Iranian Population clock
    18 Turkey 73,722,988 December 31, 2010 1.07% Turkish Statistical Institute
    19 Thailand 67,041,000 July 1, 2010 0.97% Key Statistics of Thailand, 2009, Table 1.4 (Population projections), National Statistics Office of Thailand
    20 Dem. Rep. of Congo 65,966,000 2010 0.95% UN estimate for 2010

    Two rich countries in the top ten – the US again and the oddity, Japan. Three in the top twenty with the inclusion of (Federal) Germany.

    Another two wealthy countries are just outside the top twenty: France and Britain at 21 and 22 but the rule seems obvious – large economic markets do not wealth make. Flexible and responsive politics do.

    Which means the EU is a frackin’ disaster waiting to happen. As I suppose it is, as we see in Greece, Ireland and soon Portugal.

  3. Luxembourg is a bit of an anomaly because a lot of the workers live in neighbouring countries and commute in. So their production counts as Luxembourg GDP, but they don’t count as Luxembourgois in calculating GDP per head.

    But other than that, SMFS seems to have it right – the damaging effects of bad politics outweigh the beneficial effects of a larger market size.

    Which isn’t surprising, since politics controls 40-50% of the economy directly, and a large part of the rest indirectly through regulation.

  4. 1) Of course a small population doesn’t equal a large GDP per capita. A large GDP combined with a small population does.

    2) Did I say anything about those common rules and regulations having to be based on legal/bureaucratic mechanisms?

    Tim, dearest, try arguing on the points that were actually made, rather than the nonexistent ones that your own ideological bias leads you to insert between the lines.

  5. Your final para left out the final point – repeal all the bloody laws and regulations they implemented

  6. Re: Switzerland. I’m not sure how being a tax haven makes a country wealthy in itself. A small island, maybe. A country, not so sure.

  7. In the post that Tim links to you said:

    “Because you know what you need for a Common Market to function? Common rules and regulations.

    That’s the whole reason *why* the EEC has been shifting down the path towards elements of political union over the last five decades – you need a certain amount of political harmonisation to enable functional, stable economic harmonisation.”

    When one of your key arguments for an organisation is that it creates standards then pointing out that it is perfectly possible to come up with the needed standards without anything like said organisation is a perfectly reasonable point. Especially when the standards created by the EU happen to be so bad so often, the directive on Cookies that was supposed to come into force last week for example.

  8. Nosemonkey – “1) Of course a small population doesn’t equal a large GDP per capita. A large GDP combined with a small population does.”

    That is, to borrow a phrase from somewhere, either obvious or trivial. By definition a small population with a large GNP has a large GNP per capita. So does a large country with an even larger GNP. It is simply restating the obvious. And that is not quite what you said:

    “Norway has oil. Switzerland’s a tax haven. Both have far, far smaller populations than the UK, accounting for their far higher GDPs per capita (and hence relative prosperity). They are not comparable with Britain.”

    The far, far smaller population *accounted* for their far higher GDPs per capita and hence their relative prosperity. You seem to be arguing that having a small population means you will be rich.

    “2) Did I say anything about those common rules and regulations having to be based on legal/bureaucratic mechanisms?”

    Actually I think you did:

    “Because both Norway and Switzerland also – without having any say in their formulation – have to abide by 80-90% of EU rules and regulations in order to be part of the Common Market.

    “Because you know what you need for a Common Market to function? Common rules and regulations.

    “That’s the whole reason *why* the EEC has been shifting down the path towards elements of political union over the last five decades – you need a certain amount of political harmonisation to enable functional, stable economic harmonisation.”

    You discuss those rules and regulations entirely in terms of government regulation by the EU. After all, if Norway is not a member of the EU, but trades, why can’t it take part in the non-government, non-bureaucratic regulation of trade? Your entire world view is premised on the notion that you have to be part of the new pan-European government to have a say in those regulations.

    “Tim, dearest, try arguing on the points that were actually made, rather than the nonexistent ones that your own ideological bias leads you to insert between the lines.”

    I think he did. I think you’re trying to wriggle out of what you said and clearly meant at the time because he has a point.

    Can you point out to me where you discussed the non-bureaucratic forms of regulation?

  9. @ comments 8 & 9

    *sigh*

    It was a short post, designed to cover a couple of key points.

    Neither of the sidetracking quibbles you or dear Mr Worstall are focussing on – both of which are based on (what appear to me to be deliberate) misunderstandings of the points I was raising – tackle the substantive point about what EFTA or EEA membership would mean for Britain in practice.

    On 1) the case for Norway and Switzerland being good role models is made because they appear to be wealthy. The point I was attempting to make is that their economies are very different to that of the UK – is that fair enough?

    The reason I raised their sizes was not just because GDP per capita is an (occasionally) useful measurement of relative wealth, but because population and economic size are – in the former – directly relevant to the amount of influence EU member states have, and – in the latter – how much both EU and EEA member states have to contribute to the EU budget.

    If it appeared from the context that I believe common rules and regulations *have* to be constituted on a political/legal basis, you’ve misunderstood my intentions again.

    Read the rest of the post and it should become obvious that I was talking about the current situation. The prime reason I think leaving the EU is a bad idea is because the EU exists. The EU currently regulates in a formal, rather than an informal manner.

    This is not necessarily my preferred way for it to operate, not is it necessarily the way that it *has* to operate. It just is the way that it currently operates – and that is even less likely to change if the UK leaves the EU than if we stay.

    So – rather than focus on the window dressing, how about you focus on the core argument that EFTA/EEA membership is not a viable alternative, because the UK would still have to follow EU rules and regulations *and* contribute to the EU budget, with *zero* say in how the EU is run?

    (I really can’t abide this pathetic 6th form debating society technique of attacking irrelevancies when you’re incapable of tackling the main argument. I used to think Tim was better than that…)

    Tim adds: And here at the nub of the argument (and no, the two points I made are not irrelevancies) “The prime reason I think leaving the EU is a bad idea is because the EU exists. The EU currently regulates in a formal, rather than an informal manner.”

    The reason we should leave the EU is because it exists, for it regulates in a formal manner.

    As someone who cares a great deal more about economics than most other people (or perhaps than is healthy) it really is the heart of the matter. In order to continue to advance an economy has to be flexible. This means that the rules, whatever they are, must themselves be flexible and changeable. An economy that operates under centralised and inflexible rules will end up going the way of the Ottoman, Soviet, economies.

    Because the EU regulates centrally and formally that’s why we must leave. If EEA or EFTA don’t solve that problem then we’ll just have to be free and independent again. Note that my final link was to a book and series of calculations which explores the effect of exactly that: and our economy would grow as a result.

    Don’t forget, there’s nothing that says we have to be a member of any of the three organisations, is there? Of the 200 odd countries in the world, only 30 odd currently are, so simply being outside it all is an entirely viable option.

  10. OK, Tim – now that you’ve deigned to respond (theough not, I note, to admit that you were deliberately misrepresenting me and wilfully avoiding the point) I’ll bite one last time…

    Name me a single country with a passably decent standard of living and/or viable economy that *doesn’t* regulate in ways similar to the way the EU does.

    Ignore the EU existing, that’s a symptom not a cause. As long as it is the norm to regulate in a binding manner, it is better to regulate at as high a level as possible.

    Argument made is slightly more detail here: http://www.jcm.org.uk/blog/2010/01/the-libertarian-case-for-european-integration/

    Tim adds:

    “Name me a single country with a passably decent standard of living and/or viable economy that *doesn’t* regulate in ways similar to the way the EU does”

    Hong Kong.

  11. Hong Kong?

    Not entirely true, now, is it? In *certain* areas it regulates in a more hands-off manner, for sure. But the same goes for certain areas within the EU or UK. In many areas, Hong Kong regulates in a similarly beaucratic-legal manner as in Europe.

    And as long as such binding rules and regulations are considered needed in any area, my contention remains that it’s better to have just one set for everyone. Fairer, less confusion, easier for trade. Simple.

    Tim adds: And now you’re changing your argument. I said less regulation is better, less government regulation that is. And I provide an example of a place which has less government regulation, which is growing faster than we are and is also richer than we are.

    My point I think.

    At which you come back and say that there should still only be one regulator. Which is a different argument.

    And my response to that argument is that no, we don’t want one regulator, any more than we want one car manufacturer, one music label or one global government. We want a market in car, music, government and regulation production. Without that, how can we possibly experiment, how can we have any method of measuring whether what is being produced is either worth the costs of producing it or whether there can be better ways of doing so?

    Centralised regulation of society by one group of omniscient and beneficient bureaucrats (snigger) is just as stupid a concept as centralised production of bread by one group of omniscient and beneficient bureaucrats.

    For it’s not the regulation, bread, cars, music or government that’s the problem, it’s the very concept of the omniscient and beneficient bureaucrat which is.

    Hang them all I say, precisely and exactly because they’re stupid enough to have such hubris.

  12. I’m not changing my argument in the slightest. This has been my consistent argument on this point for years.

    The point is that regulations with legal standing are the norm globally, therefore we have to work within this norm – at least for now. Your Hong Kong example didn’t disprove that.

    We’re in perfect agreement that there should be as few regulations as possible to allow for the smooth functioning of the market – a high regulatory burden can *of course* have a negative impact. And it’s *obvious* that there will be different quantities in different countries/markets – saying Hong Kong has fewer regulations doesn’t alter a thing.

    My argument is simply that in order to reduce the number of regulations, it’s better to cut out the national layer and have a minimum set of common rules across as many countries as possible to simplify everything and reduce costs for everyone.

    This in turn would reduce the number of your hated bureaucrats, simply by reducing the multiple overlapping layers of national regulation.

    You, however, appear not to have a viable, practical proposal for actually reducing their number. All you’re doing is saying “scrap ’em” without explaining *how*.

    Tim adds:

    Tim sez “let’s have fewer regulations”.

    Nose sez “How?”

    Tim sez “Let’s scrap the people who make the regulations and not have so many regulations”.

    Nose says “But How?”

    Tim sez “By scrapping the people who….”

    How to reduce the number of regulations is simply to reduce the number of regulations. Scrap ’em. That’s it.

  13. I see there’s no point. And here was me coming back hoping for something that displayed just an inkling of political practicalities.

    Few regulations = desirable. But currently not the case.

    Scrapping the entire apperatus in one go = impractical.

    Rationalising the current system to minimise contradictions and overlaps = plausible.

    From there, you’d be in a far better position to start scrapping more and more.

    You need a viable withdrawal/revocation strategy. Merely going “we’ll just scrap em!” is never going to convince or work. You know that full well, but it seems you’ve given up on bothering with serious debate. Which is a shame – I used to enjoy it back in the day…

    Tim adds: Scrapping the apparatus? Simply repeal the 1972 European Communities Act. Simple.

    BTW, “Tim doesn’t agree with me therefore he’s not arguing seriously” is not a useful rhetorical trick.

  14. Pingback: The EU saved Britain from itself « Left Outside

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