Lambert here: I especially like one sentence toward the end. Of the immigration debate: “It is astonishing in retrospect how few people argued strongly for more services rather than fewer people.” True here, as well.
By Kevin O’Rourke, Chichele Professor of Economic History, All Souls College, University of Oxford; and Programme Director, CEPR. Originally published at VoxEU.
It has recently become commonplace to argue that globalisation can leave people behind, and that this can have severe political consequences. Since 23 June, this has even become conventional wisdom. While I welcome this belated acceptance of the blindingly obvious, I can’t but help feeling a little frustrated, since this has been self-evident for many years now. What we are seeing, in part, is what happens to conventional wisdom when, all of a sudden, it finds that it can no longer dismiss as irrelevant something that had been staring it in the face for a long time.
The main point of my 1999 book with Jeff Williamson was that globalisation produces both winners and losers, and that this can lead to an anti-globalisation backlash (O’Rourke and Williamson 1999). We argued this based on late-19th century evidence. Then, the main losers from trade were European landowners, who found themselves competing with an elastic supply of cheap New World land. The result was that in Germany and France, Italy and Sweden, the move towards ever-freer trade that had been ongoing for several years was halted, and replaced by a shift towards protection that benefited not only agricultural interests, but industrial ones as well. Meanwhile, across the Atlantic, immigration restrictions were gradually tightened, as workers found themselves competing with European migrants coming from ever-poorer source countries.
While Jeff and I were firmly focused on economic history, we were writing with an eye on the ‘trade and wages’ debate that was raging during the 1990s. There was an obvious potential parallel between 19th-century European landowners, newly exposed to competition with elastic supplies of New World land, and late 20th-century OECD unskilled workers, newly exposed to competition with elastic supplies of Asian, and especially Chinese, labour.
In our concluding chapter, we noted that economists who base their views of globalisation, convergence, inequality, and policy solely on the years since 1970 are making a great mistake. The globalisation experience of the Atlantic economy prior to the Great War speaks directly and eloquently to globalisation debates today – and the political lessons from this are sobering.
“Politicians, journalists, and market analysts have a tendency to extrapolate the immediate past into the indefinite future, and such thinking suggests that the world is irreversibly headed toward ever greater levels of economic integration. The historical record suggests the contrary.”
“Unless politicians worry about who gains and who loses,î we continued, ìthey may be forced by the electorate to stop efforts to strengthen global economy links, and perhaps even to dismantle them … We hope that this book will help them to avoid that mistake – or remedy it.”
This Time It Is Not Different
You may argue that the economic history of a century ago is irrelevant–after all, this time is different. But ever since the beginning of the present century, at the very latest, it has been obvious that the politics of globalisation today bears a family resemblance to that of 100 years ago.
- It was as long ago as 2001 that Kenneth Scheve and Matthew Slaughter published an article finding that Heckscher-Ohlin logic did a pretty good job of explaining American attitudes towards trade – lower-skilled workers were more protectionist (Scheve and Slaughter 2001: 267).
Later work extended this finding to the rest of the world.
- If the high skilled were more favourably inclined towards free trade in all countries, this would not be consistent with Heckscher-Ohlin theory, but that is not what the opinion survey evidence suggested – the Scheve-Slaughter finding held in rich countries, but not in poor ones (O’Rourke and Sinnott 2001: 157, Mayda and Rodrik 2005: 1393).
You may further argue that such political science evidence is irrelevant, or at least that conventional wisdom could be forgiven for ignoring it. But by the first decade of the 21st century, again at the very latest, it was clear that these forces could have tangible political effects.
- In 2005, a French referendum rejected the so-called ‘Constitutional Treaty’ by a convincing margin.
While the treaty itself was a technical document largely having to do with decision-making procedures inside the EU, the referendum campaign ended up becoming, to a very large extent, a debate about globalisation in its local, European manifestation.
Opponents of the treaty pointed to the outsourcing of jobs to cheap labour competitors in Eastern Europe, and to the famous Polish plumber. Predictably enough, professionals voted overwhelmingly in favour of the treaty, while blue-collar workers, clerical workers and farmers rejected it. The net result was a clear rejection of the treaty.
Lessons not Learned
Shamefully, the response was to repackage the treaty, give it a new name, and push it through regardless – a shabby manoeuver that has done much to fuel Euroscepticism in France. There was of course no referendum on the Lisbon Treaty in that country, but there was in Ireland in 2008. Once again, a clear class divide opened up, with rich areas overwhelmingly supporting Lisbon, and poor areas overwhelmingly rejecting it. Survey evidence commissioned afterwards by the Irish government suggested that what canvassers on the doorsteps had found was indeed the case – hostility towards immigration in the poorer parts of Dublin was an important factor explaining the “No” vote there (O’Rourke 2008, Sinnott et al. 2010).
For a long time, conventional wisdom ignored these rather large straws in the wind – after all, the Irish could always be asked to vote again, while the French could always be told that they couldn’t vote again. And so the show could go on. But now Brexit is happening, and the obvious cannot be ignored any longer.
Recent work suggests that exposure to Chinese import competition was a common factor in many British regions that voted to leave the EU (Colantone and Stanig 2016). If this finding survives the scholarly scrutiny that it deserves, it will hardly come as a surprise. But it is nevertheless crucial, since these are precisely the kinds of regions that are voting for the National Front in France. And unlike Britain, France is absolutely central to the European project.
What Can Be Done? Great Openness Requires Greater Governments
This is where Dani Rodrik’s finding that more open states had bigger governments in the late 20th century comes in (Rodrik 1998). Dani – who was long ago asking whether globalisation had gone too far (Rodrik 1997) – argues that markets expose workers to risk, and that government expenditure of various sorts can help protect them from those risks.
In a series of articles (e.g. Huberman and Meissner 2009) and a book (Huberman 2012), Michael Huberman showed that this correlation between states and markets was present before 1914 as well. Countries with more liberal trade policies tended to have more advanced social protections of various sorts, and this helped maintain political support for openness.
Anti-immigration sentiment was clearly crucial in delivering an anti-EU vote in England. And if you talk to ordinary people, it seems clear that competition for scarce public housing and other public services was one important factor behind this. But if the problem was a lack of services per capita, then there were two possible solutions:
- Reduce the number of ‘capitas’ by restricting immigration; or
- Increase the supply of services.
It is astonishing in retrospect how few people argued strongly for more services rather than fewer people.
Concluding Remarks and Possible Solutions
If the Tories had really wanted to maintain support for the EU, investment in public services and public housing would have been the way to do it. If these had been elastically supplied, that would have muted the impression that there was a zero-sum competition between natives and immigrants. It wouldnít have satisfied the xenophobes, but not all anti-immigrant voters are xenophobes. But of course the Tories were never going to do that, at least not with George Osborne at the helm.
If the English want continued Single Market access, they will have to swallow continued labour mobility. There are complementary domestic policies that could help in making that politically feasible. We will have to wait and see what the English decide. But there are also lessons for the 27 remaining EU states (28 if, as I hope, Scotland remains a member). Too much market and too little state invites a backlash. Take the politics into account, and it becomes clear (as Dani Rodrik has often argued) that markets and states are complements, not substitutes.
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UK Toryism today is not so much a political party espousing an ideology as it is an ideology that has taken over a political party. It is the ideolgy of exploitation of a tiny clique over an entire society and has become, through extensive and relentless propoganda, embedded the fabric of UK society. It is a class ideology that requires a middle classes and poorer apirants to the middle classes to accept cuts to their influence and hence wealth by creating an demonising a constructed underclass. The underclass serves as:
1. a frightening lesson to those who do not conform
2. scapegoats for every kind of social and cultural ill
3. a fungible source of wandering labour who can be compelled to exploitation and discarded at will
It demands the destruction of the state that supports people and replaces it with a state that supports business interests only. Everything must become a commodity – especially humans. It is an ideology that decries income distribution to the less wealthy but in every instance creates laws that ensure distribution of vast majority of wealth to the wealthiest. It is the insurance company for the wealthy as well. The taxpayer is the insurer.
The greatest single example of wealth redistribution from the politically weak is the student loan wheeze. The mob in their greatest exploits could not have contrived a more elaborate form of extortion. As Tory idoeology ‘crapifies’ every job in the UK, they goad the young into what have become school factories, turning out people with certificates but often very little relevant qualification for a shrinking economy. Meanwhile the governement sells the loans to “investors” (themselves and their friends) for pence on the pound.
Create the law that create the conditions that create the cash flow, and never lift a finger to do a real days work.
What’s not to like?
Given the over population of the island, that oil is running out, and that they have gutted any social and cultural cohesive factor, and even if Brexit evaporates, the long term bodes ill anyway.
Well put and 100% correct.
1000%.
So if the EU was completely different in action and intent, we would not have had brexit?
Is labour mobility a really an expression of individual freedom, or coercive displacement in the face of the internal devaluation insisted upon by the technocrats?
Its the former for JC Juncker and the latter for the workers at the sports direct gulags.
Globalisation is a mechanism to strengthen corporations and the elites that own them, we would never had heard of the term otherwise.
The europroject has steadfastly committed itself to this end and nothing will be allowed to interfere with it.
A highly coupled,regionally constrained ‘free trade’ area is the only way to achieve this end.
Why is brexit going to be painful? The same reason a chinese finger trap is difficult to get out of, it’s designed that way.
The eurogroup cannot admit that it now only serves as an iron lung for the financial sector.
Popular reaction against it is to be welcomed, It’s the only thing that will work.
“It is astonishing in retrospect how few people argued strongly for more services rather than fewer people.”
Well, Jeremy Corbyn did…
“Learning abroad and working abroad, increases the opportunities and skills of British people and migration brings benefits as well as challenges at home.
But it’s only if there is government action to train enough skilled workers to stop the exploitation of migrant labour to undercut wages and invest in local services and housing in areas of rapid population growth that they will be felt across the country.’
And this Government has done nothing of the sort. Instead, its failure to train enough skilled workers means we have become reliant on migration to keep our economy functioning.”
and
“It is sometimes easier to blame the EU, or worse to blame foreigners, than to face up to our own problems. At the head of which right now is a Conservative Government that is failing the people of Britain.”
http://labourlist.org/2016/04/europe-needs-to-change-but-i-am-voting-to-stay-corbyns-full-speech-on-the-eu/
…but the Tories couldn’t – they have been demonising the service users as “scroungers” and “skivers” since Osborne introduced his austerity policies in 2010. Why on earth would he and Cameron – leading the Remain campaign, take the opinions of such people (like me) into account?
And yet the Guardian and the BBC are piling onto his statement that there would be no second referendum, as if he has sole responsibility for the outcome.
Jeremy Corbyn has the strange quality of revealing his supporters and detractors true nature.
He can’t (and, I believe, worldn’t) argue otherwise because his own legitimacy rests upon the mandate of Labour Party supoorters – not the cabal of non co-operative Labour Party Members of Parliament. Democracy in action – representatives of the people’s party in Parliament really don’t like it.
I don’t believe the lack of skilled workers is the problem. The problem is the wages that professionals WANT to pay for skills do match up with what labor needs/wants to make. Tech workers are a perfect example. US tech companies want more HB1 visas, claiming there is not enough skilled labor. The part they leave out is the skilled labor wages. A US citizen carrying six figures in student load dept demands a higher wage than an Indian immigrant on an HB1.
The professional class and corporations want to pay lower wages for everything from child care to roofers to junior managers, so of course they are all in favor of globalization and worker movement. There’s bit of classism there as well. The senior manager is pissed that some random coder is making almost as much as he is. The professional is offended that a child care worker can afford their own home and drive a middle class car. Keeping wages low allows the professionals to maintain distinction of rank and value.
You can see that impact in every discussion about minimum wages and people complaining about fast food workers getting $15 a hour for “low-skill” work.
Lambert,
The subtext of this article is a fawning acceptance of the desirability of globalization. Many of us reject globalization outright. We don’t believe that it can, or ever will, be “tamed”. Nor do we desire to live in a world where its pernicious effects must be forever mitigated. We do not want to be the recipients of such long-term mitigation, with the consequent loss of dignity.
Instead, let us return to local products and services, produced by our neighbors. The money we spend will stay in our community. What’s more, the social benefits of such local trade and the resulting thriving local economy go well beyond economic ones.
The destruction of social cohesion is the primary externality that results from “free trade”. And, in my opinion, no amount of money can adequately compensate for it. Returning to Brexit question, it is not clear to me that these non-economic costs of free trade are made worthwhile by the supposed non-economic benefits of the European project. From this side of the Atlantic, it seems doubtful.
Excellent comment!
Agreed. I come at it from the other side: I think the (reasonably controlled) exchange of people, ideas, goods, and services across national borders is a good thing; however, I respect the right of those who dislike globalization to do so. This post instead treats them with a thinly veiled heaping of scorn on top of an implicit claim of calling people both stupid and racist.
The notion at the end of the article that Brexit specifically, or opposition to globalization more generally, is about market vs. the state is nonsensical bordering on purposeful obtuseness. Western society today is not characterized by too little state. The problem is what the state does.
It’s the services (government handouts) that drive immigration into Britain. A study was published in 2014 that showed non-European immigration “cost” Britain £120 billion. People from the 3rd world come to Britain to benefit from the free services. And so increasing the services would only increase the flow of poor immigrants into Britain. At some point this dynamic collapse the system.
Open borders and the welfare state are natural and implacable enemies. The NeoLiberals know this very well; and they love the cheap labor they get from immigrants, who if they do work, generally work in low-paid or even under-the-table work while still collecting benefits often for their extended “families” they manage to get into the country as well.
This is the great tragedy of the 1st world Left in the past 30 years. Given a choice between having an healthy and expanding welfare state with increasing salaries for the working classes or having some utopian multi-ethnic society filled with poor people from the 3rd world, the Left have chosen the later, much to the delight of the globalist oligarchic class.
What have 3rd World immigrants got to do with the EU? The EU is not 3ed World.
What a pile of crap, people come for the same reasons my parents left ireland 60 years ago, to be able to make a living because they couldn’t do so in their place of birth.
You are clearly unfamiliar with one of the meanest, most vindictive safety nets in europe. There aren’t that many services and none are free. You also do not know of the considerable hurdles to be overcome for non eu citizens.
And who is this ‘1st world left of the past 30 years’?
We’ve only had neoliberals in drag untill recently.
Well said. Except the NHS is free at the point of service. And so are libraries (the few we have left), and museums and art galleries (just), and schools (well, state funded ones). And roads (except toll bridges and tunnels). But, yes, I agree with your sentiments.
I was talking more about social security payments as I thought the OP was referring to that, I should have been clearer.
The ones you mention are nice in the context of an income that will alow you enjoy them, but I doubt anyone goes through the considerable ball ache of relocation beause of them.
You need a car or a bus fare to use the roads.
Noone wants to spend that much time in hospital.
Our schools can’t be that good if all these countries are supplying the skills we apparently desperately need
I’m afraid that services has become a catch all under the Tories, as has welfare (which now, apparently, includes state pensions). No “benefits” anymore, only “allowances”. Who still believes language does not modify attitudes and behaviour eh?
As for you other points – another time, another thread maybe.
The EU seems to be all about trade and the economy we now find.
Why didn’t the UK know this in the 40 years before the referendum?
UK elites wanted to take all the credit for themselves and not give any credit to the EU.
We are the UK “wealth creators” we take all the credit and all the rewards.
The BoE has taken more action that won’t help and its been a long time since 2008.
More and more people have read Richard Koo’s book and know fiscal stimulus is required.
Ben Bernake and Janet Yellen had read Richard Koo’s book and ensured the US didn’t impose austerity and go over the fiscal cliff.
Mario hasn’t read Richard Koo’s book and pushed the Club-Med nations over the fiscal cliff.
The harsh austerity on Greece, killed the Greek economy altogether.
Reading Richard Koo’s book is important, if only Mario would get a copy before he wipes out the Club-Med economies and banking systems.
Mark Carney is from the Goldman stable and is naturally slow on the uptake and is set in his old-fashioned banker ways.
Before you make a complete fool of yourself like Mario, here is an essential video:
https://www.youtube.com/watch?v=8YTyJzmiHGk
You know what bankers are like.
The IMF and World Bank spent 50 years imposing austerity, selling off previously public companies and insisting on lower Government spending. The trail of wreckage is spread across the world, South America, Africa, Asia and finally Greece.
Bankers don’t take responsibility for anything and so never learn from their mistakes.
Well, The IMF, after 50 years, has finally realised this doesn’t work.
At 15.30 mins. into the video you can see the UK situation.
There are massive bank reserves, adding to them will make no difference.
Comparing the charts, the UK’s borrowing has gone down more since 2008 than the US and the Euro-zone.
We are doing all the wrong things, like austerity.
If we had done the right things straight away the UK might still be in the EU
(The Euro-zone figures look OK because the strong Northern nations aren’t doing too badly, looking at the Club-Med nations and Greece, it’s a very different story. The chart of Greece shows a nation being run into the ground.)
The hidden knowledge, the very nature of money itself, this is why everyone keeps coming to the wrong conclusions.
We don’t really seem to be getting anywhere after 2008.
Neoclassical economics was rolled out across the world for the globalisation project.
The most fundamental of all fundamentals is flawed in this economics, the very nature of money itself.
It assumes the money supply is constant and one person’s debt is an amount lent by someone else.
These flawed assumptions have created the mess we are in today and leads people to believe that lending of any type causes no problems.
The reality.
Money and debt are opposite sides of the same coin.
If there is no debt there is no money.
Money is created by loans and destroyed by repayments of those loans.
Banks were deregulated and reserve requirements were set very low to allow almost infinite credit to enter the system.
Before 2008, tons of new debt was coming into existence and the money supply increased and fed into the general economy. It felt like there was lots of money about because there was.
All this new money didn’t impact inflation figures that much because most of the inflation was taking place in real estate that isn’t included in the inflation figures.
After 2008, hardly anyone is taking on new debt and everyone is making repayments, the money supply shrinks and gets sucked out of the general economy. It feels like there isn’t much money about because there isn’t.
Your intuition is more accurate than the neoclassical economist who assumes the money supply is constant.
In the balance sheet recession, when the private sector isn’t borrowing, there is little new debt and lots of repayments causing the money supply to contract.
Government borrowing is the only way to stop the money supply contracting.
QE doesn’t work because the money goes to the banks but does not enter the general economy as no one is borrowing. This is why QE hasn’t caused inflation, the money has just gone into bank reserves and hasn’t entered the general economy.
When the money supply is contracting the worst thing you can do is austerity as Greece and the Club-Med nations demonstrate. As things get worse, loans default and their banks start to collapse.
We just don’t understand money, the most fundamental of all fundamentals in a Capitalist system.
Step out of the dark and into the light.
Here is the BoE to explain:
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneyintro.pdf
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
An incorrect assumption from the BoE (2nd link):
“Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system.”
Banks don’t like to be tied down, so they came up with securitisation and other ways of shifting bad loans from their books.
Who would make a NINJA (no income, no job, no asset) mortgage if they couldn’t sell it on to some other mug. They know it’s going to blow up but as long as it isn’t on their books it doesn’t matter.
Today’s US sub-prime auto-loan lending works in a similar way.
The wiley old bankers thought ahead and were prepared when the whole system saturated with bad loans and collapsed.
“TBTF” should do nicely.
I voted Brexit not for the ‘immigration issue’ but for democracy. The EU bureaucracy has too much power and leverages its Central Bank to keep wayward states in line such as Greece, deliberately causing deflationary depressions and mass unemployment in their wake. The disdain with which democratic leaders are treated is typified by a rather famous video where a drunk Juncker greets various heads of democratic governments and proceeds to treat them disgracefully (search “Juncker bitch slap” on Youtube). That is not simply a video of a drunk man being inappropriate – it shows you where the power lies and what the bureaucracy routinely believes it can get away with.
Britain decided not to join the Euro bloc. It is well documented that its design is not sustainable. It will either blow up and the thing will fall apart, or they will need to implement new fiscal transfers from the rich parts of the bloc to the less well off, as with an ordinary country. The Euro bloc will need to make big changes to ensure the Euro stays together which involves large costs to the richer nations such as Germany and Holland. But as most of the EU decision making at inter governmental level is majority voting, it is likely the UK would be outvoted to implement this via the EU – NOT the Euro bloc. They will want to pick the pockets of the UK even though the reasons for the transfers is nothing to do with the UK.
Turning to the immigartion issue itself, it seems to me this is just as much about tax and benefits policy and its effects, as it is for free movement. As an EU citizen when you come to the UK, you are automatically treated the same as a UK citizen. This means you instantly have access to free health, free schools, housing benefit and in work tax credits. These sums really add up. The effect of these supports is to make labour very cheap to employers in the UK – people can do very low value work and still make their way. The expansion of the EU to the east made a vast pool of relatively poor labour available to employers and we have witnessed an explosion of low value added work from “hand car washes” to picking fruit (whilst fruit lays unpicked in their home countries). People wring ther hands about why productivity and tax revenue isn’t growing despite rising employment coupled with an exploding housing benefit and tax credit bill, pressure on schools and healthcare. Put quite simply the UK cannot afford the services it has become used to with low value added work, so something has to give. At the end of the day, a decent welfare state in fact is NOT compatible with open borders. This is something the left wing have yet to face properly. And ordinary people, far from being simply ‘racist’ and xenophobic, are simply exercising their choice at the ballot box and they basically don’t want to to see their lives get worse with lower wages, fewer opportunities, poorer housing and reduced welfare and services.
A word of warning though about whether Brexit or the EU is protectionist or left wing etc – there are actually quite well argued opinions on both sides. For many Brexiteers, the EU actually represents a protectionist bloc that hinders free trade with the world. Many on the left, coming from the pure “international socialism” of the proper left wing also believe in fighting for protections of workers on the international stage such as the EU and therefore are not necessarily in step with their less well off followers, wondering who stole their cheese. A free trading nation but with a controlled immigration policy is actually quite appealing and may help to squeeze out the explosion of low value added work.
On the democratic front, our politicians for decades have blamed the EU for why they can’t do x or y. Add in that for the ordinary Brit we’ve only ever read articles about rules to implement “straight bananas” and the like, whilst our media spends far more time covering the anglophone American election, you can see there is no proper functioning “demos”. And at the end of the day although “status quo” was always the position of the Remain side of things, this was never on the table. First we have the Euro issue and then we always have the Rome Treaty we signed up to which clearly states “Ever closer union”.
One final point about the vote split from the Ashcroft poll. You should note that only 2 parties voters supported Leave – UKIP (96%) and the Tories (56%). Labour and SNP were about the same at 62/63% to Remain. The idea that those who voted Leave are council house dwelling northerners is far from the mark. If you discount the fact that nationalist issues dominated proceedings in Scotland and Northern Ireland, the vote was more decisive than at first glance – hence why the Tories are treating this seemingly marginal result as so decisive – both amongst their own voters and the prize of the UKIP support in the future.
Sorry for the rambling comment but there are lots of different angles to the EU issue – I’d just like to leave you with how I feel the split amongst the electorate occurs. Imagine a 4 box matrix, 2×2, with ‘left’ and ‘right’ on the top and ‘nightmare’ and ‘dream’ along the left. Left wingers who voted to remain have an international socialist dream. Right wingers who voted to Remain see it as a rampant free trade dream. Those who voted to leave on the right saw it as a socialist, protectionist nightmare. Those who voted leave on the left saw it as a neo liberal nightmare. So, you can see the split isn’t just about whether you are left or right, free trade or protectionist – it has to be overlaid with whether the EU better represents your hopes or is a threat. The motivations for the vote are even more confusing than the coverage of those supposed reasons.
love your “box” — great description
This lack of clarity is inevitable in many yes/no votes where there are only 2 options. It’s an inadequate way of indicating the people’s will. Since it was a non-binding referendum, it’s a pity they didn’t consider some form of ranked-preference voting with a wider range of options, with the list of options being proposed by the people or a truly representative sample.
Shorter version: the only way to keep capitalism in check is to pair it with a strong dose of socialism which the greed of those in power rarely allows. Outcome is always the same: the peasants revolt and management wonders why.
The only reason globalization works for the meritorious technocrat class that supports it is because they are able to take advantage of differences in local currency values.
Funny how you hear all this talk about global trade being necessary and unavoidable but never a global currency.
And now in France, a so-called Socialist government has weakened labor protections. A situation where a proletariat forced to swallow this, along with an easy immigration program, would spell trouble to anyone who has a knowledge of history and human nature.
Plus, an even more immediate concern is that it appears globalization is an environmental disaster that we may very well have precious little time to correct.
As in, globalization is, in large part, a substitution of transportation(oil) for labor? This effect also applies within large countries like the US, of course.
Yes, the fundamental renewable wealth of the planet( it’s biodiversity) will be gone by the end of this century, along with all the non-renewable wealth( fossil fuels and minerals). Let alone the direct effects of anthropogenic climate change.
Paradise to penury and death within a couple of hundred years or so.
What a clever little species we are.
globalization isnt even all that popular among professionals since even their jobs are at risk now. but its extremely popular among executives because it makes their job easier. until their jobs end up being subject to it too. but among the among 1% its very popular, at least until it becomes very hard to make a profit or grow their business, since they all loose customers , and cant raise prices
People want “Well Paying Jobs”. To the extent uncontrolled migration displaces locals or suppresses their wages there will be an earned backlash.
People do not want “The Dole” (a.k.a. Services). A state of semi-permenant dependency is destructive to the human spirit, while a career provides place, purpose, and hopefully fulfillment.
The reason why popular opinion turns toward solutions involving immigration restriction rather than expansion of services is because….deficits. Watching the GOP primary ads in the hermetically sealed conservative bubble that passes for Kansas one would think that was the most pressing problem facing the US … course they throw in the usual memes of terrorist and Obama care dangers with a short sop about “more jobs” as rather an aside. The Powell memo propaganda machine has been very successful in redirecting the popular world view through the gaze of the 1%. Taxes = theft, just work harder (that one is finally wearing a bit thin though after the wives got into the work force and people got into deep debt over the past 40 years in a vain attempt to try and rise above stagnant salaries), safety net = dependency, poverty = lazy habits, privatization= efficiency, government and regulation = serfdom, and unions interfere with the celestial harmony of the spheres that is markets.
Sucks that all talk in this post (so far) about specifics of services is from the EU side of the pond. Over here it’s a blank spot, off the table, Nope. Maybe Nerp. or Nyep.
These same arguments can be made for the replacement of low skilled jobs by robots, Closing borders will not help in this situation. Governments need to start planning for a world where there will be less of what we now consider” jobs” More services provided by government and lowering hours in the work week soon have to be on the agenda for forward looking politicians or Dune’s Butlerian Jihad may come sooner than we think.
A guy named Karl Marx had an interesting little theory of value in capitalism which explains that the more hours a person works = more profit for the company. As automation deepens and spreads, companies will lay people off, but they will never willingly reduce the hours worked for the remaining employees.
Unless capitalism willingly adopts socialistic measures (and it never will), it will keep herding workers – and eventually, itself – off a cliff.
These stories and the studies they’re grounded in have been told over and over again for decades now. They’re true, and in some cases they are so complete and compelling as to demolish once and for all the consensus ideology of Neo-LibCon rule, and yet…
Our rulers do not listen. Our rulers do not care. They are lost in a post-modern decoupling of truth and fact from anything they need concern themselves with.
It’s pure religion tangled with power.
The more stories and studies showing just how wrong they and their ideology/religion are, the more they don’t listen, the more they don’t care.
Very well said! Here in the U.S. we have enshrined in our fundamental law the right: “to petition the government for a redress of grievances.” This first right amongst the bill of rights was only granted to us after Shay’s Rebellion showed the elites that the people wouldn’t simply roll over and subject themselves to an authoritarian government.
When this petitioning failed, in the 1770s, to produce satisfactory results our independent nation was born amidst great tumult. Now we face a similar crossroads: move forward into a potentially better life, after toppling the transnational kleptocracy, or guarantee the further degradation of humanity by failing to do more than meekly petition the kleptocrats to throw us a few more crumbs.
We need to stop trying to persuade those who benefit from exploiting us to stop through constructing ever more convincing arguments. The kleptocrats need to suffer tangible consequences for their crimes, through massive non-compliance with their wishes and monkey-wrenching of their systems. Indigenous peoples in Brazil have just shown us how to proceed by halting the dam.
http://www.thepeninsulaqatar.com/news/international/388953/indigenous-tribe-applauds-state-move-to-cancel-brazil-amazon-dam
Matthew Henry.
Zvi Namenwirth. He did a pioneering early study measuring the rhetoric of wealth transfer in American party platforms. I noticed twenty years ago that the swings tacked according to Kondratieff curves, which measure shifts between growth in manufacturing vs. agriculture. That’s likely what you’re seeing now with the balance shifting from labor to capital (the 1%) since the early ’70s. It’s not as important to look at general inflation as it is to measure the relative changes in prices among different sectors. Given that parties represent different interest groups, it’s likely these stresses show up in political speech.
But then that would mean politics drives economics and no economist wants to admit that.
I completely agree that the backlash has been a long time coming. We are decades into a slow motion train wreck at this point. The evidence is there for any who wish to see it.
I completely disagree, though, with the conclusion. What is going on is not about an insufficiently large state. Rather, it’s that the state has been entrenching inequality rather than addressing it. Our contemporary experience with excessive concentration of wealth and power is not an outcome of markets. It’s an outcome of public policy. Implying that Brexit voters specifically, or anti-globalization advocates more generally, are stupid and racist says a lot more about the biases and blind spots in our intellectual class than it does about the victims of globalization as western governments have implemented it over the past few decades.
The more stories and studies showing just how wrong they and their ideology/religion are, the more they don’t listen, the more they don’t care.
If I came to you with a waft of papers purporting to show how wrong you are, my guess is that you would be at least somewhat on the defensive.
You have forgotten that for a solution to be accepted, most people need to feel they have some ownership of it, as opposed to having it handed down to them by someone whom they feel has not, in the past, always acted in their best interests.