Wednesday, 20 April 2016

There is another way

Hats off to the BBC for their more in-depth analysis of the issues around the EU referendum. Yes, we are going to be talking about this a lot over the next few weeks. Monday night's Newsnight discussion was interesting, with Evan Davis smacking down silliness on both sides.

One thing which we keep hearing from Remain boils down to "no, we won't be able to", in the context of negotiating trade deals outside the EU. We can discuss hypotheticals like whether a free trade agreement between the EU and Australia, for example, is being held back by Romania, and whether the UK could sort something out more quickly unencumbered, until we are blue in the eyes; the simple fact is that we do not know until we try. Would we have to press the Article 50 button until we have sorted some of this stuff out? Again, that rather depends on who is in government.

Tim Worstall has an interesting article on Forbes about whether trade deals matter at all. He points out that in the long term, economic strength and dynamism come from productivity and specialisation.

The basic point here is that we enjoy high living standards if we produce high-value goods and services. Tim says that the best way to encourage people and firms to produce the valuable stuff is to expose them to stiff competition. That means breaking up monopolies, not subsidising and mollycoddling  inefficient industries, stopping restrictive practices, and by opening ourselves to importing stuff if it makes more sense to do so.

And the beauty of this is that we can do this ourselves and without reference to the Romanians, Australians, or French farm lobby.

After Brexit, there is nothing to stop the UK from opening itself up to full international competition. If we choose to reduce import duties to nothing, then we boost competition and thus encourage our firms to do better. Once we are producing better stuff, people overseas will want to buy it - and if it is of good enough quality then tariffs won't matter. We gave up the widget trade a long time ago.

If we want to unleash the UK's potential we must (also) undertake lots of reforms whichever way the referendum goes. We must open ourselves up to more investment, from wherever it comes. We must restructure our public services and welfare systems, opening them up to red-blooded competition and making them ruthlessly efficient. We must privatise the railways and roads, making users pay for the actual services and in turn making the firms accountable to their customers. We must concentrate public spending on the essentials and root out the nice-to-haves with zeal. We must simplify the tax system and slash its burden. We must make people more responsible for saving for their old age. 

This will all need a leadership which does not care all that much for short-term popularity or an image of niceness. It will require a seriousness and sense of purpose which we haven't seen since at least the Omnishambles budget. But it will have to be done carefully, so as to not irritate the people who need to implement it - see the latest Academy policy for details.

Most of all, what is needed is public support for the direction of travel. Does the UK (in or out of the EU) want to muddle through and sit comfortably as a middle-ranking European economy or does it want to be a world leader, to set examples, to be copied, to be envied?


Nick Drew said...

... public support for the direction of travel. Does the UK (in or out of the EU) want to muddle through and sit comfortably ..?

hmm - unfortunately, we know the answer to this one

most of our fellow citizens, when in possession of a bit of spare cash, convert it into carbohydrates and eat themselves diabetic

they are a bit keen on 'sitting comfortably'

CityUnslicker said...

bloody hell BE - a brilliant post that I entirely agree with!

Blue Eyes said...

Lol ;-)

E-K said...

This should have been done under the Thatcherite reforms. Instead welfare increased to keep former industrial communities in place.

By now we would have been a technological, economic white dwarf rather than a welfarist black hole and a population that is unsustainable - certainly at the present standard of living.

I fear it`s a bit late to expect open competition to earn us that standard of living. It will only result in a race to bottom. That may well be inevitable anyway - however hard we work or however good we are.

The better our workforce gets the more people will come to undercut their wages and to seek our welfare.

Many of the things you mention would close without subsidy. The railways, for example. It may seem unfair that rail travellers don`t foot the full costs but here are some of the ways in which non-users benefit:

- The car driver has more road space and parking space
- The city homeowner suffers less congestion and housing pressures are reduced
- City wealth is distributed out to the provinces
- Our aged can retire away from the cities

Ask any homeowner whether he wants his local station closed but be sure to tell him what the effect would be on his house value (regardless of whether or not he uses rail.)

Look at how any area regenerates on news of rail connections.

Any decent society has a mixture of free market and subsidised infrastructure. But in truth there is no such thing as a free market. Even the capitalist USA has a heavily subsidised navy to protect its resources and trade routes.

There`s nothing open about that !

Anonymous said...

I sometimes wonder how anyone bothers to try to run a business in the UK. SMEs, staining under the idiocies of enforced legislation pertaining to diversity quotas even in the outer Hebrides, Ballybogofnowhere, Devon and Dorzit, and those loony green initiatives and attendant green reports and levies, endless nitpicking bureaucracy: regulation, regulation, regulation!
Then, those fantastic overheads inclusive of, business rates, refuse charges, rent, leasing and taxed all the way up to the hilt, it's OK for the big boys they all know the boss of HMRC and every fekker in the Treasury is on first name terms and of course "do no evil, see no evil, smell no evil" in Silicon valley California but ALWAYS, ferkin ALWAYS make sure to SCREW the little guy into the ground, phew!

Small stuff - oh yeah, the eastern Europeans have it off best - cash only jobs and keep moving around, accommodation addresses, business premises, cities, countries - (HMRC have no chance) and good luck to them. The southern Asians just tell the government to "piss off" - but not quite so politely.

EU - stick it.

Roger said...

Economic dynamism comes from productivity and specialisation, trade deals etc not needed. Nor should being in or out of the EU make the slightest difference if we are the premium designers and service providers of world class products and services. So what is holding us back, why are we not the premium designers and providers already? Why have our leaders failed to bring us up to scratch? What difference can in or out make? IMHO absolutely none, we are screwed for more fundamental reasons and hiring the Even Nastier Party will not help Jo and Jane Average - quite the opposite.

So why are we screwed? The reason is that to be top designers and providers we also need top class social infrastructure across the piece. The education systems need to be much better and to achieve that the social support systems providing the national feedstock also needs to be much better. A step change in cultural outlook. Merely beating up the existing teachers in existing schools will not cut it. In short our national average intellectual development is nowhere near good enough to support the imagined nirvana of becoming premium designers and service providers. All this costs and takes time and is unlikely to happen because there is a simpler and cheaper agenda, the hard and difficult path will not be taken.

The real agenda hidden behind Leave is the barely concealed proposal of cutting public services, ruthless efficiency, making life nastier for everyone but the elite. When we have done all this we will still not be the premium designers and service providers, we will be cheapest burger-flippers in the world. That is the Even Nastier Party's agenda.

E-K said...

Roger - Remainers do not explain how we are going to keep our standard of living and ability to produce high end products by:

- failing to select people who live here on their abilities and IQ

- importing millions of poor people who will compete for welfare and low skilled work

All that is very much determined on whether or not we remain in the EU and is the reason why the `ENP` has forced a referendum.

You are clearly 180 degrees from the truth on this.

Antisthenes said...

Welcome to the world of sanity. Now all the the spite, hatred and abuse that the insane can conjurer up is going to come your way in bucket loads. You have trampled on the toes of those who believe that dependency and entitlement is their sacred right and compounded that by demanding that they pay for things that are currently paid by others for them themselves. You want to remove their mouths from the generous taxpayers teats.

Few will be brave enough to follow your lead especially a politician. So like me you can only add it to your wish list knowing full well that is where it will remain. You have entered the realm of unpalatable truths and the majority is not going to listen or act on them.

Electro-Kevin said...

Antisthenes - I don't understand how this free market Utopia will come about while we are under the rule of foreign politicians who:

- can set our taxes (the tampon tax)
- determine our contribution to the EU
- tell us we cannot be selective about whom we allow into the country nor their numbers

We can build as many houses as we wish, produce as many world class widgets as we can - the EU will keep shoving people our way so that the workers can never benefit from a commensurate standard of living.


In the EU we are ruled by a governing elite whom we may never cross examine nor fire as we can our own parliamentarians.

Tell me what is sane about wanting that, exactly ?

And as for spite hatred and abuse...

Well. In recent weeks we've had ageism - a particular contempt reserved for old English people who are resistant to the EU and the rapid changes brought upon this country.

We have, in this, thread a description of the Tory party and (one assumes) UKIP being called the 'nasty' and 'nastier' party.

What ? Because they have a different point of view ? Don't you people like democracy ? (I'm starting to think not.)

All of this bile is from Remainers.

Show me once where spite, hatred and abuse from 'insane' people has been exhibited towards members of the CU website except in your fevered imagination.

On past records I don't see why you would think any will be forthcoming now.

Antisthenes said...

EK@ I apologise it was not my intention convey that wishing to remain in the EU was the sane thing to do. In fact I was alluding to those who choose state control and monopoly as opposed to free market capitalist solutions. The former being the insane ones. No doubt the stayers are mostly from that group as if you want the EU you want satism and multi layered costly, inefficient and wasteful government. Who want to feed off the largess of the state(taxpayers) rather than be self reliant and accept personal responsibility.

They are insane because they do not realise that their selfishness will only in the end impoverish them and the rest of us. They are the ones who will heap opprobrium on anyone who suggests that they give that all up. On this site yes if they get a whiff of our heresy.

Electro-Kevin said...
This comment has been removed by the author.
Electro-Kevin said...

Antisthenes - I was going to post an edited version of that comment to soften it a bit. But you've read it already. Glad you've taken it in the fair spirit it was intended, if clumsily worded.

Blue Eyes said...

EK I disagree about undercutting of wages. In skilled work which we are talking about, wages cannot be undercut by someone of lower skills. In unskilled work, sure. No illiterate halfwit is coming to undercut me or any of our regulars here.

I think your view on Thatcher not reforming welfare is an interesting one. Of course most people did escape the dead industrial areas, to find new work elsewhere. Leaving those who could or would not. The paradox of welfare reform is that it is much easier done when the economy is doing well, but is much less pressing when the economy is doing well. Blair/Brown had a golden opportunity and flunked it. Clinton did not.

I don't disagree about the benefits of infrastructure. I have argued many times in favour of more investment. The question is: who pays for it. Should the homeowner who gets a fillip pay more, or should the general taxpayer? The situation we have now is the worst possible setup: rail operators run services at the government's behest on government owned track and with trains specified and ordered by the government. Fare payers pay about half of the total cost and the general taxpayer pays the other half. I am saying that the fare payer should pay more; other beneficiaries maybe should too, through better local taxation.

Your point about rail taking traffic off the roads is also sound, but in a free market private investors would be building roads if they thought it was worth it; road prices on busy stretches would be more than they are now. A different balance would arise.

Ken Livingstone did the most free market thing imaginable when he introduced road pricing in central London. Amazing for a communist.

The Labour government started thinking about national road pricing and council tax reform. Both are long overdue. The problem is, of course, voters...

Electro-Kevin said...

Forgot to mention that the *capitalist* USA is also imposing punitive tariffs on Chinese steel.

Will respond on the rest a bit later - much to agree on, in fact.

Electro-Kevin said...

"EK I disagree about undercutting of wages. In skilled work which we are talking about, wages cannot be undercut by someone of lower skills. In unskilled work, sure. No illiterate halfwit is coming to undercut me or any of our regulars here."

Then expect to subsidise 'halfwit' wages and welfare forever more - unless you are happy to see fellow Brits (wherever they were born) living in poverty.

This is the price of and endless supply of 'cheap' labour through porous borders.

This statement smacks of "we're alright, Jack"

My boys are to be better qualified than you or me (big news soon - hopefully) but the only Jack they will be able to afford is Jack shit.

I am humbled by the sheer effort one of them in particular has put into his education and CV (all of it unpaid.)

The poor kid is going to get FUCK all for it in the end. Compared to you, compared to me.

I'm ashamed.

Why aren't you ?

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adham said...

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