Sigh

There’s a theme emerging in the new international political economy post-Brexit.

The US is willing to offer the UK a trade deal, with a condition attached. That condition seems to be freedom of movement for people.

Australia is willing to offer a trade deal. But wants relaxed migration rules.

Not long ago India made clear that it was in the same place.

And so, I suspect, will be all other states.

And there’s logic to this. Although not often stated the simple fact is that if you allow free movement to trade and capital and deny it to labour the inevitable consequence is that the likely rate of return to capital is increased compared to that for labour. The logic is simple: without restriction capital can seek the best returns. With restrictions labour can’t. Cut out all the other important factors and if you’re going to control labour you have to, at the very least, control capital as much. Actually, because capital has not got family, school, in-law and other ties you almost certainly have to control it more than labour to balance returns.

So of course countries want as much freedom to move as they can get if free trade is sought. It’s the only way to make sure their people aren’t exploited.

We have, then, three options.

The first is to accept free movement of people.

“Freer” movement of people is not the same thing as “free” movement of people.

34 comments on “Sigh

  1. The US is willing to offer the UK a trade deal, with a condition attached. That condition seems to be freedom of movement for people.

    Doubt it.

    Australia is willing to offer a trade deal. But wants relaxed migration rules.

    They want to make it easier to move to Australia? Cool.

    Not long ago India made clear that it was in the same place.

    Dear India,

    Love you, but no thanks.

    Xxx

    Britain

  2. Hey, I’d take freer movement of Indian IT peeps (which is what the Indians were asking for) for a guarantee of truth in their declared competencies.

    That would cut down on the numbers more than a bit 🙂

  3. Nothing but nothing is “free”. There are always consequences and costs one way or another. More to the point many of those on the move are not making a free choice. They move because of disasters or because they are forced out. Also often there is nothing for them where they would prefer to be.

  4. This is the new argument against Brexit – that free trade agreements come with strings attached. As if our current arrangement with Europe had no costs involved at all.

    At root it’s just a reformulation of the old claim that, since countries are not free to act completely unilaterally, desiring greater autonomy over the things you can control is irrational. Oikophobic drivel.

  5. There’s a fundamental difference between free movement of capital & free movement of people. Any foreigner should be free to choose to move their capital to your country. But there is no obligation on you, as an individual of that country, to personally accept it. A balance of choice operates.
    But with free movement of people, it’s the immigrant who individually chooses to come to your country. You, as an individual, have no choice in the matter.

  6. I’m all in favour of the four freedoms with Canada, Australia, New Zealand, the US and Uruguay.

    I don’t want the four freedoms with the EU or anybody else (does that make me some kind of selective racist xenophobe ?)

  7. BobRocket

    I would argue that the freedom of movement that we had with the comparable GDP / capita democracies of western Europe worked and was a win-win. Economically and culturally.

    Our wrinklies shuffled off to the Med (where locals gratefully relieved them of their UK pensions), and attractive young signoritas came to London, worked and paid taxes.

    No significant imbalances in whatever combinations of people numbers / money etc.

    Eastern Europe (with increasingly much lower GDP / capita) started to distort / become more of a one way process.

    And we don’t really know what would have happened subsequently and which would have been totally outside of our control had we stayed.

  8. One initial control we should introduce on immigrants is the toilet test.

    Anyone who uses their bare hands to wipe their arse and does not sit on a toilet seat, but stands squatting on it, is not culturally appropriate for migration to the UK.

  9. In economic terms should it not be freedom of movement of labour… movement of labour from an area of oversupply to one of undersupply and with the skills required?

    Freedom of movement of people being migration of granny, grandpa, auntie, kids, moochers, and indigents to the most readily available benefits system

    If it is the case that Western economies are sending low skill, low wage jobs to poorer Countries or replacing them with machines, what sense does it make to encourage the people who would do those jobs in their home Countries to come to those Western economies that the jobs have left?

    What will they do when they get here?

    And isn’t that exactly the current problem with unmanaged immigration into UK and Europe?

  10. Further point. People move to places where they expect to be better off. Mostly that means moving from poor areas to rich ones.
    Free movement between Britain and the US would result in a net flow into the US, probably mostly involving poorer people and recent immigrants.
    So we loose a lot of people with low skills and little attachment to the country.
    OTOH a free movement deal with a poor country results in us importing people with low usable skills and little attachment to the country.

  11. PF:

    Well put. Romanian’s on street corners shouting ‘Beeg Isshu!’, or working in dodgy car washes, don’t bring much to the UK’s party.

    Bravefart: That toilet test would eliminate quite a few white Frenchies, too. But then wogs and Calais and all that.
    (Apologies to monoi and Hedgehog.)

  12. Steady on, the Eastern European car wash, at around 15 quid for the full inside and out is a great step forward.

    I was mostly too puritanical to spend 5 quid or so on a regular car wash, but 15 on a valet is awesome.

    There may be an economic lesson here also. The ability of capitalism to find new things to sell? Something like that.

  13. Jack C

    I was referring to “balance” and the bigger picture effects and consequences otherwise as much as anything?

  14. PF,
    I agree with your wider point.

    Free movement between two wildly different economies is bound to cause issues, as the richer economy will suck in the other’s talent (and often under-use that talent).

    It’s a win in some ways, but certainly not in all.

  15. It’s strange how free movement has caused population reduction in LAT & LIT but not in free market EST. The depopulation of Liverpool and to some extent Glasgow in the late 1970s/early 80s seems connected to the very non-free market local economy.
    The majority on here seem to think it’s the different income level that drives the wrong sort of immigration to the UK. I differ, it’s different levels of freedom, and propose a test – find the three poorest free market economies which are similar in freedoms to the UK ( currently Chile, Taiwan, Mauritius based on the heritage foundation rankings ) and agree a free trade and movement deal. Then test the outcomes. If it goes badly, at least we’ll have done the rest of the world a favour by increasing human knowledge of how migrations flows are driven. If it goes well, then we da boss!

  16. Steady on, the Eastern European car wash, at around 15 quid for the full inside and out is a great step forward.

    It might be, Jack, if we weren’t on the hook for housing benefit, child support, NHS treatment, etc. for the entire clan.

    SE – Yarp. I’ve met some wonderfully talented Indian IT blokes but they’re very much in a minority.

  17. A small number of arrivals is fine.

    Vast–ie unlimited in practice if not in BluLab theory–is fucking not fine.

    Huge numbers of surly, clannish, low IQ EE farm labourers is not OK. Legions of RoP rapers and SS African criminals, non-working drones, witchcraft believers and the generally shiftless and lawless of 5 continents is not OK esp if we are subsidising their in-country (ours that is) breeding program.

    The scum of the left are trying to confuse the issue between modest numbers of the entrepreneurial and hard-working from overseas and the mass of dross such as are now infesting the continent.

  18. Jack C

    “Steady on, the Eastern European car wash, at around 15 quid for the full inside and out is a great step forward.”

    Up to a point. When I recently went to one, the Romanians tried to prevent me leaving after I declined the offered price. They insisted that my Audi Q3 was a very large car, so the charge for a basic wash was £10. I revved up and drove through them. Also, many such car washes are used to launder money from drugs and prostitution.

  19. Steve,

    Hadn’t got much of an opinion on them until the previous project, where there were about 80 of them. Two of whom I would employ if I was the decision maker (and the skill sets were appropriate.)

    The rest? Horrid misogyny, rigid hierarchicalism, disgusting toilet habits (and I’ve been to the loos in pubs in Newquay!) and a suspicious lack of any appreciable skill.

    And they all need to read “The Mythical Man-Month”.

  20. And New Zealand is never going to sign up to free movement with the UK for exactly the same reason that the UK will not sign up for it with India. We’d be swamped in a decade.

    If 5% of Kiwis decamped to the UK and 2% of the UK decamped to NZ then NZ was increase by by 4 million people to 5 million. There’s no way we could absorb that.

    It’s just a size difference. I doubt Australia will want genuine free movement either. They’re bigger, but the pull from UK to Australia is always going to be better because of the weather.

    What we wouldn’t mind is decent working visas for young people (both ways).

  21. I see no problem with free trade (goods and services) also including some reciprocal arrangements on freer movement of people as long as it is reciprocal and numbers are pretty much in balance (i.e. similar sorts of numbers moving in both directions)

    Where it becomes problematic is when the movements are disproportionate (as they probably would be with India / UK)

    Even with a UK / Australia deal, you would probably want an equivalent cap on numbers on both sides, say 100,000 active visas per year backed up by either a local sponsoring company (i.e. local branch or possibly client) or alternately a significant monetary bond to act as a disincentive for overstayers.

    There is absolutely nothing wrong with rules, caps, bonds or anything else as long as it is balanced and reciprocal.

    The problem lots of people in the UK have with immigration is not about people coming from other parts of the Anglosphere, since they can at least integrate quite easily and wouldn’t be a drain on taxes or services due to language issues or employment issues or simply coming here to become a welfare leech.

    What people generally have a problem with is people coming from third world countries that don’t speak English to any substantial degree, have no skills that benefit the economy, are a drain on welfare / services and have no desire to integrate into local communities, preferring their own ghetto’s.

    The fact that Cameron couldn’t gain any headway on these issues with the EU (indeed we were deemed racist for even raising the topic) was one of the reasons why people voted for BRExit.

    If the EU had taken a more rational stance on both movement within the EU and illegal immigration from without the EU then the outcome would probably have been a vote for “Remain” (although as a hardline BRExiteer I would have been disappointed by that outcome)

  22. “I’d rather have Eastern European car washes than Indian software developers.”

    Both tend to be a little too rapey.

  23. I’d rather have Eastern European car washes than Indian software developers.

    Can we agree on that?

    I’d be more comfortable with the Eastern Europeans if the Roma were excluded, but as they are impossible to exclude all of them get tarred with the same brush.

    So sorry Dragan, blame your infestation of Roma for removal of UK free movement privileges.

    At least with the Indian software developers, if they aren’t up to spec (chortle), we can send them back to India.

    No such luck with the bloody Roma.

  24. “At least with the Indian software developers, if they aren’t up to spec (chortle), we can send them back to India.”

    Yeah, that happens.

  25. ‘The US is willing to offer the UK a trade deal, with a condition attached. That condition seems to be freedom of movement for people.’

    That seems nonsensical. The US doesn’t care about the movement of people in the UK.

  26. To be totally honest I’m not anti free movement of people. The more the merrier and the more diverse the better.

    The only restriction that I would put on this is that benefits (including health, housing and schooling) are only available to citizens and people with permanent residency. Temporary residents must pay/insure their own way.

    Also people are only eligible for permanent residency and citizenship once they have shown that they have fully integrated into society.

  27. My pet hate is when politicians trot out the statement that increase in the minimum wage will lure more immigrants to our shores. Maybe, if they understand economics as well as Richie.

    The best thing the government can do to discourage immigration is to raise the minimum wage as low skill immigrants will not be able to find work at these levels. Insufficiently productive you see. Alternatively some form of minimum income for British nationals only should have a similar effect. (Obviously I’m not advocating either of these ideas!)

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