So let me find a small silver lining if I can. This is that tariffs are back on the agenda, where they belong. The Ricardian ideal that competitive advantage alone should determine who has the commercial right to determine the source of supply for a country, irrespective of national interest, was always flawed and yet whole economic systems – including the EU – have been built upon it.
Ricardo is about comparative advantage, not competitive. Sheesh. The one non-trivial and non-obvious idea in all of economics and our 0.2 of the Professor of International Political Economy doesn’t get it.
But it does, of course, get worse:
The same is true for the movement of capital. Capital comes in all sorts of forms. There is human, emotional, intellectual, environmental, national, personal, corporate and financial capital. We have, perversely, chosen that financial capital shall have almost complete freedom whilst limiting in some way most others. The consequence has been predictable. Just as unfettered migration creates processes of change that can be too difficult to accommodate so too can the unfettered movement of capital be harmful. We have now suffered that free movement for too long and are seeing the consequences.
So, a bunch of Indians come over here, lose £5 billion of their money on a steel business no one else wanted and we’re the people suffering?
The implication is obvious. A policy that favours the movement of capital must also, and simultaneously, constrain that movement to ensure that the common good is achieved.
This is no new departure for me;
No Ritchie, it isn’t. Because what you really want is that Brits cannot take their capital out of the country. That way you can tax it more heavily.
Isn’t it just amazing how so many nominal lefties get all wet at the gusset over the idea of fascist autarky?