Weekend reading: First that, now this

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• 1 Dorf November 12, 2016, 11:39 am

  Keep speaking out on your political convictions! We need to defend humanistic values! I for one appreciate your work a lot.
• 2 Faustus November 12, 2016, 11:56 am

  Beautifully expressed. I admire your convictions as well as sharing them.

  As you suggest, civilisation is fragile; the enemies of an open society are often much closer to home than most people realise. No surprise therefore to see the Johnsons and Farages of this world trying to shame and silence those who are troubled by its demise.

  Great range of links to digest – thank you.
• 3 Gregory November 12, 2016, 12:00 pm

  Weekend without Monevator’s reading is like my mug without coffe. 🙂
• 4 hosimpson November 12, 2016, 12:04 pm

  “That things don’t turn out as badly as they can do once his sort of rhetoric is legitimized.”
  I wish there was a way to somehow shove crap back up the hole it came from, but my rational brain tells me that the possibility of this is remote.
  To be honest, the state of what used to be First World frightens me. Because voting far right and blaming minorities for an economic downturn has worked so well in the past — is that why we’re doing it again?
• 5 Mroptimistic November 12, 2016, 12:32 pm

  On a bit of a tangent from your reading links, be careful about woodburning stoves. They are messy, the glass panels tar up and you’ll need a stainless steel liner in the chimney which needs sweeping once a year owing to resin build up. It also puts a few hundred on my house insurance (thatch plus multitude stove). A closable stove, like mine, can reach extremely high temperatures if you get it wrong so they need to be managed. Just about to clear the tray and ash now……

  Two downsides of rural life: no gas supply and crap broadband.
• 6 Faustus November 12, 2016, 12:52 pm

  @MrOptimistic

  I agree that woodburning stoves should not normally be thought of in terms of saving money, unless you own a forest and use them for all your heating needs (and even then there is the downside of having to constantly feed the thing). The cost of installation, flue lining, sweeping, maintenance, insurance, logs etc. means that they almost always work out more expensive than gas heating, and possibly oil-fired too.

  It is more a lifestyle choice and understanding the pros and cons. I inherited one, and though it doesn’t really save money, I do derive a kind of primordial pleasure from splitting wood and burning it to keep the house cosy on a winter weekend. Not sure that I’d want to rely on it though when I am old and decrepit!
• 7 ermine November 12, 2016, 12:58 pm

  Bravo. I don’t think that many of us are rich enough to insulate ourselves from the effects of the rising tide of simplistic thinking. It would be a shame if we don’t get to make 100 years from the events hosimpson refers to before the wheel turns full circle.
• 8 PC November 12, 2016, 1:10 pm

  Keep up the good work!

  I’m somewhat relieved that almost all the pro Brexit people I’ve come across are anti Trump – makes no sense to me, they both seem to be driven by the same forces.
• 9 Grumpy Old Paul November 12, 2016, 1:50 pm

  An eloquent, restrained and thoughtful response to the election of Trump. For me, having lived through the sixties (and fifties), it is depressing to see the resurgence of attitudes and values which I believed to be rightfully consigned to the dustbin of history. I’m more concerned about that than the economic risks but, above all, the thought of someone as erratic as Trump having his finger on the nuclear button is nothing short of horrific.

  I’ve been anticipating Monevator’s response to the election since the outcome became clear and it has exceeded expectations. I did wonder whether it was going to be comment-free though!

  @PC – I’m relieved to hear of your experience of Brexit voters. I have a few friends who voted for Brexit but I’ve not spoken to them since the US election. Some of them are now regretting their vote; one has said that it was too complex an issue to be put to the popular vote.
• 10 EUOrphan November 12, 2016, 2:09 pm

  Please do not forget the comments before Reagan was elected. The proof of the pudding is in the eating and he has already started to change his outbursts, it is a new period of uncertainty for at least 4 years.
• 11 Neverland November 12, 2016, 2:48 pm

  @euorphan

  Congratulations on your magical thinking

  Reagan, even Nixon, had considerable government experience in California, just by itself one of the largest economies in the world

  Trump is a divisive TV personality who won due to gerrymandering of electoral districts who couldn’t even unite the Republican party
• 12 The Investor November 12, 2016, 3:03 pm

  Thanks for the comments so far everyone. Let’s please try to keep any ensuing debate constructive and civil.
• 13 Optimist November 12, 2016, 3:12 pm

  I too have been eagerly awaiting the Monevator response to the election. The feeling on anxiety through the night was fuelled for me that, like Brexit, I didn’t see it coming. I just could not believe that enough voters could take Trump seriously and/or stomach his views. A distraught American friend is taking heart from the outbursts. I agree with others that he isn’t comparable to Reagan or Nixon. Checks and balances exist but he will still have a great deal of power.

  My first reaction was that this was worse and more dangerous than Brexit, but hopefully Trump will be out in four years, if he is not impeached earlier, and Brexit is for ever. This is not a civil or constructive comment but where the hell is Lee Harvey Oswald when you need him?
• 14 dearieme November 12, 2016, 3:22 pm

  Clinton gave every sign of wanting to provoke war with Russia. Thank goodness she lost.
• 15 Mark November 12, 2016, 3:40 pm

  While I don’t disagree that the mean income of Trump voters was higher than that of Clinton supporters, the former is boosted by rich, old Republicans who vote GOP no matter what, while the latter is held down by students and by Clinton’s greater support among women, who earn less than men.

  As with Brexit, it’s more helpful to consider swings and those who voted in larger-than-expected numbers. Here, the message is clear: Trump turned the Democrat-voting rust belt, the rural and small-town America left behind by globalisation, red.

  I therefore think the narrative that says that left-wing parties formed to safeguard the interests of the working class increasingly represent middle-class metropolitan liberals, leaving a space to be occupied by right-wing populists, is largely true.

  The more interesting question is whether the coalition between rich old people and a disenfranchised working class will hold. Early signs from the US are negative. Trump has already rowed back on some of his promises, has been silent on others (the wall, incarcerating Hillary) and is rumoured to be putting together a cabinet comprising precisely the people his new supporters abhor: CEOs of rent-seeking corporations, investment bankers and old stagers from the GOP.

  In truth, Trump may just be a spoiled billionaire who fancied the media attention, knew what it took to get noticed, and now finds himself rowing back to the achievable having unexpectedly been elected. If so, I shudder to think how his voters will react, and what this means for the 2020 contest.
• 16 Pete November 12, 2016, 5:22 pm

  @Mark
  Don’t forget 2018 mid-term elections – lots of places in the houses and state governorships up for grabs!
• 17 FI Warrior November 12, 2016, 5:33 pm

  Nobody here in the UK at least should have been surprised by the elevation of a billionaire TV mogul to the ‘leadership’ of the ‘free’ world, it’s merely the natural end of the process of dumbing down our civilisation. Welcome to the Idiocracy as detailed in the link to SLIS. Especially in the final build-up to the actual vote date, all the indicators were a deja vu of Brexit, polls, experts, bookies,bankers all wrong; basically, it’s sh*t simple, people are too hypocritical to admit they were going to vote like savages.

  The interesting thing was that Hilary actually won the most votes by a fraction of a percent, yet The Donald ends up legally president due to ‘The electoral college’ system, which as pointed out in an earlier post is jargon for gerrymandering. (which itself is jargon for cheating, but thinly-veiled enough for the stupid voters to notice) Funny then that you don’t hear ‘the losers’ over there telling the ‘winners’ to stop moaning and accept the will of the majority of the electorate. Irony, innit.

  If the monkey doesn’t press the interesting red button in the next 4 years so we are still alive at the end, then I’m hoping that counter-intuitively it could be a safer world. If Trump accelerates the US decline, then the power relationship ordering the planet will be more multipolar. In that case, we little people have to hope it leads to detente like when the protagonists in the cold war took a breather, rather than resulting in opposing coalitions, like when 2 broad alliances blundered into the 1st WW by running at each other and cracking skulls bighorn sheep-style. We all know how that worked out; truly the majority deserve the leaders they choose. Sadly the rest of us have to also suffer alongside.
• 18 StevieD November 12, 2016, 5:49 pm

  It was very, very sad that, in both the UK referendum and the US election, our better angels did not prevail. But, providing we speak out against the uglier aspects, these times will soon pass.
• 19 Jed November 12, 2016, 5:49 pm

  The piece by Oaktree Capital is one of the better discourses on Trumpism/Brexit well worth a read. Interview in the Guardian with Gina Miller also worth reading https://www.theguardian.com/politics/2016/nov/11/article-50-claimant-gina-miller-safe-outside-brexit
• 20 Learner November 12, 2016, 5:58 pm

  2016, what a year. The past few days have honestly been pretty depressing. Hate crime surging as it did after Brexit. I’ve been avoiding newspapers but news gets through all the same.

  A little respite yesterday in Trump’s appearing to back down on revoking some of the protections the ACA provides, which many people need to live. And I suppose one positive aspect is that America finally elected an Independent despite their two party system. Try not to think about a theocratic supreme court for the next few generations..

  (The DNC carries the can for the result IMO, thinking they could sleepwalk their “name brand” candidate into the oval office, knocking down other candidates who were more in touch with the electorate. The voters stayed home and here we are. Will they learn the lesson in time for 2020?)

  For all Brexit and Trump have in common, fascinating that the market and dollar bounced back within 24 hours of the result whereas the pound is still in the toilet.
• 21 rick24 November 12, 2016, 6:23 pm

  I believe Trump is the lesser evil as Hillary would likely have liberalized abortion, the taking of a human life, whereas Trump, though not particularly trustworthy on this or any other issue, is unlikely to appoint supreme court judges that would favour such liberalization. This is much more than an economic issue but mass abortion will also have a severe effect on the demographics and therefore long-terms prospects of any nation where it is practised.
• 22 Richard November 12, 2016, 6:45 pm

  it is certainly interesting times. I am actually finding myself quite intrigued about the future. At least one good thing from all this is politics have gone from being the thing going on in the background while shopping or living our lives to being mainstream again. People are once again becoming active in politics, waking from their slumber. Who knows, this may push us to a better world rather than a worse one.
• 23 Neverland November 12, 2016, 6:53 pm

  @Learner

  “fascinating that the market and dollar bounced back within 24 hours of the result whereas the pound is still in the toilet”

  USA is still the world’s only superpower with the exorbitant privilege of the dollar

  UK is just a middling European nation that’s optional as an investment
• 24 PC November 12, 2016, 6:56 pm

  @Richard I’d quite like to go back to politics being a noise in the background. I’ve found the last few months exhausting
• 25 zxspectrum48k November 12, 2016, 7:43 pm

  @Learner. Domestically, it is assumed that Trump will prioritize corporate tax cuts and infrastructure spending. These are likely to be good for US domestic growth, somewhat reflationary and fiscally expansionary. More fiscal stimulus could allow the Fed more room to hike. So equities rally back modestly and bonds get carted out (the US long bond future has fallen almost 10 points since Tuesday 3am). Externally, the fear is for protectionist trade policy. Moreover, there is an idea that the Trumpster might set a low tax on corporates who wish to repatriate offshore USD dollar holdings. That would be a huge drain on global dollar liquidity (effectively a reversal of the flows from QE). So it’s no surprise that the USD rallied and EM currencies got slapped pretty badly.
• 26 M November 12, 2016, 7:45 pm

  Seems like anyone who voted for Trump or Brexit would be mad to make themselves known on this site, as they will be shouted down as racists. Sad
• 27 Jaygti November 12, 2016, 8:17 pm

  Re logburners,
  Everyone a knew who had one, had a lounge like a sauna, whilst the rest of the house was Luke warm, so I was not that impressed.
  i then got an inexhaustible supply of free wood, which would have been a shame to waste.
  When I looked into it further, I saw that you could buy log boilers.
  These things look exactly the same as a log burner, but are connected to the central heating system, so it heats the water and the radiators when it’s on , but you can still use the normal heating when it’s not.
  The boiler and installation cost £3900
  Two and a half years ago.
  When I had it installed I had 500ltrs of oil in my tank, and I still haven’t topped it up as it just heats water in the summer now mainly. I used to use 1200ltrs a year before.
• 28 The Weasel November 12, 2016, 9:01 pm

  Part of me wishes Trump goes ahead with every single one of his promises. Just to see what his supporters do when they get what they asked for. This is a watch the world burn kind of thing…

  However he’s been behaving like your average politician after the election. But if he keeps breaking his promises (and is already backtracking on obamacare) he’ll have a tremendous number of disgruntled followers 😉

  The other part tries to see this as an anti-globalisation movement, led by the poor of the rich countries who’ve perceived their labour offer undercut by globalisation (immigration, free trade etc) and technology. In any case, interesting times ahead.
• 29 The Investor November 12, 2016, 9:25 pm

  Trump could have a solid four years of Reaganite pomp and it wouldn’t undo the damage as far as I’m concerned. The ends do not justify his means.

  As far as his economic policies are discernible, infrastructure spending and fiscal loosening is something many people have wanted for years — including those much-maligned central bankers (Bernanke asked for it pretty much every time he was called to testify). Perhaps he’ll be the equivalent of banging the side of a torpid machine until it springs back into life again. On the evidence of the first three days (which is scant evidence, and may prove to represent simply market re-positioning) our last two long articles about low rates seem timely.

  I think protectionism and America First trade policies and all the rest would be bad-to-disastrous, obviously. Ironically we could actually end up seeing the re-run of the Great Depression the Zero Hedge crowd kept predicting in that case; protectionism was one of the factors that deepened that slump (and led to worse).

  But who knows, perhaps he was lying about all that.
• 30 The Investor November 12, 2016, 10:37 pm

  @M — Well, it’s a shame if it comes across that way but I guess I can understand why it might have. These are polarized times.

  I have certainly shouted down racists as racists on this site (or more often deleted their racist comments).

  But the issue that repeatedly came up with Brexit voters, and that you may be referring to, is that if you point out a significant chunk of Brexit voters (how many? 20%? 30%? 50%?) were at the least xenophobic, if not racist, that most of the vox pops and comment threads ultimately tend to complaints about immigrants, that politicians at least pandered to these sentiments and at worst provoked them, and that motivations of that sort were why Leave won enough votes to get over the 50% margin, they hear (you heard?) “All Brexit voters are racist.”

  It’s a basic failure of logic.

  I’ve been through this so many times now, I can’t really be bothered to do it again. The last time I tried here on Monevator somebody (who has reappeared on this thread) signed off challenging me that I was: “Standing square and facing us. We are the English. Look at us.”

  (At least nobody has mentioned Zionist conspiracies so far today.)

  It’s ironic to me. In my “real-life” I’ve spent years arguing with my more left-wing “liberal elite” friends that they have to stop labeling anyone white and male as automatically “privileged” and they have to stop trying to deny the value of someone’s opinion based on their perceived level of victim-hood.

  This Nick Cohen article sums up that issue for the Left in the wake of Trump’s win well.

  I didn’t argue with them because I want to give the ignorant or boorish yet another platform on the Internet. There are plenty of other websites for that. (The comment sections of almost any mainstream newspaper, for example).

  It was because such labeling is (a) unfair and (b) counterproductive.

  A big flaw with the Left turning everything into identity politics was that sooner or later somebody was going to do a headcount.

  Trump did that, told tens of millions of people that actually *they* were the victims of (in reality economically disadvantaged and politically weak) minorities, immigrants, and so forth, and that they were right to fear they’d be blown up by a bomb smuggled in by one of them (as if the Rust Belt is a big target of terrorists, as if the risk of being killed in a terrorist incident in America is bigger than the chances of you being killed by a bee.)

  And then, when I hear that from Trump, I realize anew to some extent what this “white male privilege” they go on about is.

  It’s the privilege of hearing a man lying, shrieking, manipulating, and distorting his way in the most powerful job in the world, and potentially not feeling threatened by it.

  The privilege of being able to shrug and say hey, it might not be so bad.
• 31 Hariseldon November 13, 2016, 12:46 am

  It is extraordinary that an apparent buffoon gets elected to US president, this tells us that the majority of the population feel deeply let down. Ditto Brexit.

  The speed of change has alarmed people without being explained or justified, this is not the failing of these individuals but an elite ruling class/media that is deeply out of touch and has no one else to blame. An enormous amount of damage will be caused and it will be many years to get back to where we were.

  The only hope is that the damage and chaos caused is not as bad as we fear, gaps have to be bridged and labeling anyone with different opinions as a lesser being who is in error is not the way to explain and justify a more liberal approach…
• 32 nomis November 13, 2016, 12:48 am

  Two things on Trump,

  Firstly, however he turns out as president you can’t undo the things he did to get there. The wall, the Muslims, the threats including jail for his opponent, the mysogynistic replies to questions and opponents. Others will copy this around the world, they will probably be worse.

  Secondly, the idea that he is a vote against the global elite. He is the global elite, he’s just one from the rich side that doesn’t care about trampling people, rather than the political class side that at least pretends to care.

  To have lost this one, wow, what a monumental cock up for humanity.
• 33 Learner November 13, 2016, 1:50 am

  I want to be rich enough to not be substantially affected by changes in government policy, but not be the kind of sociopath who would actually think it doesn’t matter.
• 34 Richard November 13, 2016, 9:40 am

  @TI – an interesting POV. In essence that the ‘white man’ is fed up with being demonised and seemingly ignored in preference to minorities and a politician who comes along and says, no you are the victims, it really resonates with them.

  I do think the left has been successful to date in changing what people say. The problem is have they really changed what people think? Though I hadn’t considered the impact of labelling. For example immigration is a valid topic of debate, but it does feel like if you are ‘against it’ you are labelled a racist. And that label makes you feel demonised / marginalised. So when someone comes out and says actually no, you are not a racist for thinking that, you are the victim, you can see why it appeals. Labels have hidden certain sentiments by making it politically incorrect to talk about them. They don’t solve the root cause which continues to fester until someone comes along and suddenly makes it OK to break cover.
• 35 zxspectrum48k November 13, 2016, 12:55 pm

  I see the anti-immigration rhetoric and racism of Brexit and the Trumpster as primarily an expression of economic insecurity. These people implicitly voted for a rollback in globalization and a taming of neo-liberal economics. The problem is that even if (big if) those were delivered, that would still leave the huge impact of technology. Effectively, we’ve moved into a post-scarcity era for human labour. That drives a big bifurcation in income levels. Most human labour is becoming either obsolete or commoditized, with devastating implications for wage levels. Just a few, highly skilled individuals will find themselves being ever more highly valued.
  I feel echoes from the 1930s in what is going on now but I think perhaps a better analogy is what happened to society at the start of the industrial revolution.
• 36 The Investor November 13, 2016, 1:24 pm

  It’s worth reading the LSE article linked to above for more on this issue of economic insecurity and change.

  Essentially it highlights a split between people who want order versus those who are happy/thrive in change. This is not quite the same as educated/skilled etc.

  E.g. London is full of ambitious young people who left Eastern Europe for better prospects here. It’s so rare you meet one of these people who has any sort of bad attitude that people like me (who did similar, in a much more conventional “leave the provinces to go to the city” sense) are mystified that anybody would criticise them, certainly on a personal level. We see kindred spirits.

  These people have confronted change on a massive level. It’s routine to hear about say Polish graduates starting off working in Costa Coffee when after they have travelled hundreds of miles to set up a life in a foreign country, far from family etc. Working in Costa is again not why they got a degree etc.

  Set against that you have the archetypal economically margininalized segment of Brexit/Trump voters. In interview after interview they look down the street and say “there’s no jobs for us *here*”. Or they are the wrong kind of jobs. (Eg services not factories).

  Again, the likes of me hears that and thinks “move!!”. Like some of us did and like those maligned immigrants did. Or st least “be flexible”.

  But that’s not the way they think. They are more emotionally rooted to place and tradition and order. Again, see the LSE stats.

  This is difficult firstly because we’re talking at cross purposes (it’s taken me months of post Brexit debate to feel closer to empathy here) and partly because as @ZXSpectrum says, the world is going in the direction of change.

  Trump isn’t going to bring the 1950s back and nor is Brexit. And yes, the robots are coming.

  Finally, one huge clue the election response to a large degree about personal identity / culture at best, and, well, much worse at worse is that it is the right that’s in ascendancy.

  In Brexit this chunk of the Leave voted has sided with forces that were too far right to be satisfied with the Tory party (UKIP etc) against the far more sympathetic and left leaning EU. In the US, similarly, they’ve swung right for Trump.

  If it was genuinely a vote for an alternative economic direction, I don’t think they’d be doubling down on economic right of Centre parties.
• 37 NorthWestIan November 13, 2016, 3:41 pm

  Much as it might suit Nigel Farage to conflate Brexit with the Trump victory I’m not at all sure the two are linked. Trump won on the lowest turnout for many years because the Democrats could not get the vote out vote for their candidate; in fact the low turnout suggests a plague on both houses rather than a shift to the right.
  The UK brexit vote is interesting. In 1975 17.4m voted to remain, 8.5m to leave out of a total electorate of 40.5m. In 2016 16.2m voted to remain and 17.4m to leave out of a total electorate of 46.5m. So, there was clearly a reduced enthusiasm to stay and a greater enthusiasm to leave. As I recall the vote was taken after the renegotiation (who remembers that?) and perhaps recognises the poor outcome of those discussions.
• 38 PC November 13, 2016, 4:01 pm

  http://blogs.lse.ac.uk/politicsandpolicy/personal-values-brexit-vote/ covers similar ground by the same author (written earlier) on ‘open and change’ v ‘closed and order’.

  Maybe because I’ve spent my working life in London, but grew up in a village in Cambridgeshire I feel much the same way as @theInvestor.

  (Although the distance is only 60 miles, it always felt to me like a different country, except for Cambridge itself).
• 39 hotairmail November 13, 2016, 5:03 pm

  I will give you my thoughts as to what is going on. The bottom 2 charts of the following link basically cut to it in my mind. It is NOT the narrative of ignorant white blue collar people. Republicans earn more and the only reason they are ‘uneducated’ is because they are older and it correlates strongly with age (and opportunity). Basically, it is whether your personal situation has been improving or worsening. The first to blame in all these situations is who is filling up the surgery, the schools, the roads and trains, depressing your wages, increasing your housing costs.

  https://baselinescenario.com/2016/11/10/narratives/

  I would argue that perhaps one of the biggest true causes of the fissure is urban versus ex-urban. You will note that the Democrat areas are the largely urbanised areas on the west and east coasts. For Remain, virtually every city (INCLUDING THE NORTH!) voted Remain, but most of the country voted Leave (leaving countries with nationalist issues of their own aside). Basically, over a long period of time the urban centres involving many middle class jobs have been doing a lot better – banking, lawyers, accountants, head offices, main hospitals, etc etc. This then feeds into the local land market and creates a localised mini credit bubble that all in the urban centre benefit from. And these people have simultaneously loved the lower prices to be paid on manufactured goods and manual services from globalisation and mass immigration. Immigration into the urban centres has not impacted on incomes to the same extent. Ex urban centres including (former) manufacturing and farming etc. have come under pressure from mass immigration of low value.

  When the credit bubble was being blown up to 2007, these trends could be hidden from view with tax receipts in bubble territory too. But in the wake of the financial crisis, we have the BIG REVEAL where in our reduced state we are forced to reduce budgets per capita, cut jobs, etc etc And the manner of dealing with the financial crisis (QE, ultra low rates, mass immigration) means the effects have been felt differently between the two areas. Indeed, it has only served to blow the localised land bubbles in urban centres to a disproportionate effect which helps all those jobs centred in the urban environment. Policy has attempted to continue the disatrous policies of the decades previous to 2007, but instead of just private credit inflation, by drastically lowering rates and printing Bank money inflating assets of all kinds and letting it drip out into the urban environment.

  What you’ll notice is if you think of the issue in terms of urban and ex-urban is that it correlates to many of the other divisions being bandied about – age, formal educational attainment, race and importantly job type. But I feel when you look at it through this lens, you get a more meaningful analysis than calling people names and urging further re-education. People’s reactions to what they see around them in the surgeries, schools etc. is only natural and those who are better off should really have more empathy about the fundamental underlying causes and taking the radical steps to bring about a more harmonious society.

  At the end of the day, the cause of the difference in outcomes is a lot to do with policy of one kind or another – trade policy, wages policy, tax policy, immigration policy, city and industry policy – but perhaps the most, our banking system and how it relates to the land market.

  I quote Keynes again:

  https://www.mtholyoke.edu/acad/intrel/interwar/keynes.htm

  Written in 1933 in the wake of the 1929 crash and before the second world war where international trade was being rolled back and trade wars were being fought, hatred of ‘immigrants’ rising as the economy struggled etc. He urged disentanglement to avoid war. Contrary to perceived wisdom he felt international trade was war by any other name. I’m not saying that we should try and close our borders to people and goods entirely, but merely that those who are more thinking about the wider world think about helping those less well off in our society first and foremost in order to avoid inevitable and nasty backlashes that we all condemn. I would start with radically higher taxes as in post World War Two, set about a mass housebuilding programme and positive attempts to bring down house and land prices, a land tax and a brake on low value immigration that takes come from the common pot in the form of tax credits and housing benefits.

  The question boils down to “what is society”? Claiming ourselves as citizens of the world and let all try and swim alone in the face of globalisation and mass immigration is not acceptable to my mind as the consequences are too terrible to conceive. There is more to life than personal advancement and wealth.

  “But I am not persuaded that the economic advantages of the international division of labor to-day are at all comparable with what they were. I must not be understood to carry my argument beyond a certain point. A considerable degree of international specialization is necessary in a rational world in all cases where it is dictated by wide differences of climate, natural resources, native aptitudes, level of culture and density of population. But over an increasingly wide range of industrial products, and perhaps of agricultural products also, I have become doubtful whether the economic loss of national self-sufficiency is great enough to outweigh the other advantages of gradually bringing the product and the consumer within the ambit of the same national, economic, and financial organization. Experience accumulates to prove that most modem processes of mass production can be performed in most countries and climates with almost equal efficiency. Moreover, with greater wealth, both primary and manufactured products play a smaller relative part in the national economy compared with houses, personal services, and local amenities, which are not equally available for international exchange; with the result that a moderate increase in the real cost of primary and manufactured products consequent on greater national self-sufficiency may cease to be of serious consequence when weighed in the balance against advantages of a different kind. National self-sufficiency, in short, though it costs something, may be becoming a luxury which we can afford, if we happen to want it.”
• 40 Mr optimistic November 13, 2016, 6:47 pm

  @The Investor, was that me ? If so, and it could have been after a few glasses, perhaps it just meant that the vote showed what people didn’t want any more and they were prepared to do something about it, and they deserve to be listened to and are not something to be ashamed about. Ditto Trump, peculiar as he seems. He did go through all the primaries and the rest of it so there were numerous opportunities for the electorate to reject him. As a reluctant remain voter my regret is that the EU didn’t stick to its washing but instead went for expansion, unification and control. Ironic that most post vote chat is actually about the economic consequences of leaving, nothing about the regret of no longer moving closer to this mythical Europe. As for the US, you have to feel that Clinton lost it rather than Trump winning. If, after all her years in the public eye this is what the US voters thought, who are we as distant observers to challenge that?
• 41 Richard November 13, 2016, 7:18 pm

  @mr optimistic – I have been thinking about that as well. If 48% voted remain, coming off the back of a campaign of economic Armageddon, it does make you wonder how many really want to remain in the EU project if economic concerns were removed. It may even suggest that the desire to leave is actually greater than the 52% that voted for it, but many didn’t out of fear of what they may lose……
• 42 Mr optimistic November 13, 2016, 7:31 pm

  I voted remain as I didn’t want to vote against my children. After all it will be their country much longer than it will be mine. However, I am not sure how much thought they had given the matter. I was taken aback, here in rural Bedfordshire how just about everyone in my social circle were angry leave voters. This included all the farmers I know, rich business owners, builders, the lot. However I don’t know that many young people, and those I do know through work, aren’t exactly clued up on the politics and economic implications of EU membership. The old are not stupid necessarily, nor are the young wise.

  Reading these blogs, you would think that the silly leave voters who didn’t understand the complexities have now woken up and are reading the FT and coming to the slow realisation that they were duped or otherwise enticed to vote against their own self interest. You think?

  What I notice is that the EU, faced with our defection, isn’t considering how it’s policies and actions brought this about, including risking right wing resurgence in its member states, and how they may have made a mistake. Not that I’ve heard. Point one. Point two, how are they shaping up to now treat us. With sympathy and humanity, let’s work together and make this work for all of us. Nope. Seems rather that they want it to be punitive to stop others getting ideas. Hmm, is that the club you want to be in?

  Finally, one thing I think has been missed is the UK’s moral obligation to honour commitments whilst a member. I reckon we will, and should, honour any EU budget commitments made whilst we were in the decision loop. This will be a strong negotiation position, let’s just hope the BBC and political plot the political course to keep the voters inside.
• 43 @algernond November 13, 2016, 9:11 pm

  A couple of mentions here that far right groups supported Trump over Hilary.
  On the flip-side, it should be noted that Islamist groups supported Hilary over Trump.
• 44 Mark November 13, 2016, 11:39 pm

  @ Hotairmail, I think you’re closer to the truth than anyone else who’s posted here, and all bar a handful of the commentators. Median stats about Trump vs Clinton voters’ incomes are affected by factors such as age and gender. The core determinants of voting choice were geography (the further from a global metropolis your habitat, the less likely you were to back Hillary) and attitude (Trump voters generally feeling they’d been poorly served by government in recent years).

  Much the same applied to Brexit. It was wrongly portrayed as a North-South divide. Yet cosmopolitan Northern cities such as Manchester voted Remain while many suburban, small-town and rural areas in the South went Leave. Leavers included people with above-average incomes and plentiful assets, but they were mainly older voters.

  The tragedy of the Left in both countries is that it is inclined to dismiss its once-core vote as stupid or racist when in fact it is expressing an honestly-held view that globalisation and immigration have harmed the interests of unskilled and low-skilled labour and benefited those of capital – the latter being the group for which the left came into being, and the latter being the group that it has served in recent times.

  Two paradoxes. First, unlike Crooked Hillary, Labour’s current leader doesn’t serve the Davos set. Quite the reverse: he’d napalm the lot of them, given half a chance. So why isn’t he electable? Because the rhetoric isn’t matched by the policies. While hating the super-rich is part of the Momentum mindset, anything less than open-door immigration is an anathema to this coalition between the trades union movement and the liberal, metropolitan left. The left-behinds don’t want to tax the rich and distribute the spoils as benefits. They want the workers to earn a higher share of the value they create, at capital’s expense. The pre-distribution that Miliband talked about, but never translated into election pledges.

  Second, why did many rich old Republicans support Trump, and so many ageing golf club Tories (and closet ‘Kippers), many of whom are the fiftysomething Blimps about whom Monevator wrote following the Referendum, supported Brexit? Because the retired know that their incomes are largely frozen in Aspic and their capital fixed, and therefore resent paying any more tax than is absolutely necessary. They recognise that a situation in which many of their fellow country-people survive on benefits and tax credits because of uncontrolled immigration is one in which those transfers must come from someone. And they’re sitting ducks, whereas those footloose global corporations that are the true beneficiaries of wage repression generally find a way around such impositions.

  Trump, and Brexit, are in my mind therefore the result of a coalition of what Clinton would call deplorables, but I would refer to as those whose wage rate pricing power has been diminished by globalisation and immigration and the asset-rich mass affluent who don’t want to pick up the resulting benefits tab.

  If the left recognises this and faces up to the need for a schism between its metro and working class wings, it could survive. If not, it’s going the way of Crooked Hillary.
• 45 The Investor November 14, 2016, 12:54 am

  @Mark — This weekend’s discussion has probably been the most constructive we’ve had on this subject since the day after the Referendum; I haven’t had to delete a post! 🙂

  So I’m a bit reluctant to do the quote and complain thing… but I can’t let this sneak in: “They recognise that a situation in which many of their fellow country-people survive on benefits and tax credits because of uncontrolled immigration.”.

  There was and is no evidence of this. From memory the most evidence any credible study was able to find was a very small reduction of one particular decile’s wages. (Admittedly a decile where a small reduction would be more felt. But anyway as I say this was only one study — the others found no impact, probably because immigration increases demand as well as supply and hence boosts economic growth as an offset). Again from memory the reduction in this one study was so small I’d not be surprised if even for that cohort it was balanced by other factors where even they financially benefit as consumers of foods/goods/services.

  I agree with you that many fear/suspect it. And there are other maybe areas where there is evidence of more than just perception (e.g. access to crowded social services or housing, to a limited localized extent). However without wanting to re-run the Brexit debate, the vote was not won by the people of places like Boston. As was repeatedly documented at the time, huge swathes of the country voted for Leave where immigration was very low. As @hotairmail says cities, where immigration is net highest, actually voted for Remain.

  I am trying to understand more and judge a tad less — and to be fair from day one I tried to use words like ‘culturally opposed’ or for a more extreme cohort ‘xenophobic’ where I could instead of say racist (although I have and will say racist for a minority) — but personally I am not going to let that trying to understand drift into believing a false economic narrative about immigration.

  Stating the general anti-globalization theme (and the fact that a chunk of the population has disproportionately suffered from that) I have no argument, although personally I think it’s overall a positive force. Anyway, unfortunately I think that whereas one could control immigration, if one really wants to for some reason and is prepared to pay the potential social cost, I don’t think you can really turn your back on globalization without huge consequences of all sorts.

  (This is different from saying more can and should not be done to understand and try to remedy its impact on the displaced/disenfranchised. I have long thought it should.)
• 46 Fremantle November 14, 2016, 10:01 am

  I have to agree with Mr Optimistic, this election was lost by the Democrats through choice of candidate, but the result also holds true to the US election cycle in general. There have been few and far instances of a single party maintaining the White House over more than two election cycles, Reagan/Bush being the only occasion post Roosevelt/Truman.

  The instinct for change is strong and tribalism is triumphant. Clinton was unable to get her base out in enough numbers where it mattered to make a difference. Trump managed (just) to keep the GOP vote. It might be unpalatable that Trump’s rhetoric didn’t scare off more Republican voters (or motivate more to vote anyone but Trump), but he seems to have won despite his failings as a candidate, not because of them. The political leanings of US voters have not changed dramatically, just the quality of the candidates.

  Trump’s unexpected win has already resulted in a modification to his rhetoric, but both sides of the political divide have to learn that resorting to slander and xenophobia is ultimately unhelpful. It is hard to keep your base when you fail to deliver – even the Democrats couldn’t keep Obama’s hope generation with the current US president at 53% approval ratings.

  However candidates fear losing more than they desire winning the moral high ground (or even the political argument), so the negative rhetoric is likely to amplify. Perhaps Trump will be so spectacularly bad that his tactics will be discredited, at least for a while, especially if it costs the GOP at the mid-terms.

  The skill will be to find a candidate able to use subtle rhetoric than energises their base without alienating the opposition.
• 47 FI Warrior November 14, 2016, 10:21 am

  Agreed, this is a quality and interesting thread. Whether the disaffected were afraid of being left behind, (diminishing prosperity) or prompted into action by seeing the world they grew up in changing too radically for their comfort, the real culprit has been masked by the ruling elite. Neoliberal theft of national resources is indeed robbing them of their prospects and impoverishing their world, like the creeping privatisation of the NHS, to give one example:- http://www.thecanary.co/2016/11/11/still-recoiling-trump-branson-quietly-buys-biggest-chunk-nhs-yet/ ( http://www.mirror.co.uk/news/uk-news/700m-virgin-social-care-deal-9237399#ICID=sharebar_twitter )

  So they are right to feel agitated enough to revolt, but have been successfully deflected by the ruling elite into scapegoating ‘the other’ and/or ‘faceless, corrupt/inept bureaucrats in Brussels.’ All that’s really changed though, is that freed of some restrictions the EU agreements impose on national governments, the elite will now be able to accelerate the destruction of the social compact between the state and its people, before they get it.

  As one of the main character in the film The Big Short says, whenever the system crashes it’s always the same, the masses lash out at the poor and immigrants. (Basically the vulnerable, witness austerity inflicting cruelty on even the obviously sick here in the UK)
• 48 JDR November 14, 2016, 12:33 pm

  “Also, for the umpteenth time, you personally might have voted for UK sovereignty. Fine, I respect that. But that wasn’t why your side won the referendum”

  With sincere respect, the Ashcroft polling-day survey showed that democracy was the no. 1 reason for the Leave vote. Admittedly, without the anti-immigrant vote to get us over the line, Remain would have prevailed, but that’s obvious given the variety of viewpoints. Just as there were multiple reasons for Remain voters (status quo, identity, economic stability, political leanings, etc.), so there were multiple reasons for Leave.

  Although you might not intend it so, some others like to dismiss the Leave vote as naive populism, which is unwise as it ignores the other more genuine drivers. Equally, the (very different) Trump vote should not be ignored, although to be fair that one is driven by a hefty populist impulse.
• 49 Factor November 14, 2016, 2:33 pm

  @TI “Again, the likes of me hears that and thinks ‘move!!’ ”

  Forgive me and without malice, but that’s precisely what I think each time you complain here about London house prices.
• 50 Mark November 14, 2016, 3:34 pm

  @The Investor, I agree that the quality of the debate has been higher this time than over Brexit, perhaps because it’s 3500 miles away, most of us weren’t participants, so it all feels more remote and less personal. For that reason I think one positive aspect to Trump’s election is that it may help us come to a better collective understanding of what happened with Brexit, because it gives us a safe proxy that we can discuss in a more dispassionate way.

  I wondered whether you’d pick up on my comment; I phrased it carefully. Yes, I’m aware that research suggests that the impact of immigration on UK wage rates has been small. But, as with stats on the incomes of Trump voters, what matters is not so much the mean but the distribution. If there has been a big negative impact on a small number of people, the political impact can be large. Not only do they get the hump, but there are knock-on effects, for instance in terms of the resentment felt by those on fixed incomes who realise (or believe) they’re supplementing the wages of those whose incomes have been stagnant.

  You’re doubtless familiar with the economic concept of NAIRU (the non-accelerating inflation rate of unemployment). The idea is that a certain proportion of the population is, in essence, unemployable, since the inputs required to train and manage them exceed their potential output. As unemployment falls toward that level, wage rates typically start to climb quickly. This is partly because employers compete with each other to encourage people to switch jobs (an activity that entails risk – better the devil you know – and which therefore must be incentivised) but more because they have to pay premium rates to encourage existing staff to do more hours and tempt those who’ve chosen not to be in the workplace, such as the early retired and stay-at-home parents, to return.

  Forced to pay elevated wages, employers have to raise the prices of the products and services they produce. These prices ‘stick’, because households feel wealthier, so inflation doesn’t depress consumption. Instead, recognising that a buoyant labour market has handed them elevated pricing power, they demand higher salaries. Employers have no alternative but to comply, passing on the hike to their customers. Result? A classic wage-price spiral. Welcome to the 1970s!

  So what is NAIRU? The Office for Business Responsibility thinks it’s 5.4 percent. As we get close to that – some say within 10 percent of it, so around six percent of the labour force out of work – we should see real wages growing fast, and driving inflation in the prices of goods and services. What’s more, the OECD thinks NAIRU is even higher than the OBR estimate.

  Now here’s a thing: UK unemployment is currently at 4.9 percent, and it has been below six percent since the third quarter of 2014, more than two years ago. And yet, despite inflation being close to a record low level for most of that time, we’re seeing negligible real increases in wage rates, and absolutely no sign of an inflationary spiral taking hold.

  It’s difficult to avoid the conclusion that the reason for this is that importing labour from the EU – not just the accession countries, but nations such as Greece, Portugal, Italy, Spain and even France that have been struggling, wholly or in part as a result of their memberships of the Eurozone – is an attractive alternative for employers to the traditional option of paying the settled British population more, or indeed to investing in capital equipment to drive higher productivity from existing labour (capital investment and hence productivity have both atrophied since the GFC.)

  Right now, a bit of inflation would do a lot of good, reducing the real level of household, corporate and, in particular, Government indebtedness, which is too high in the UK, US and many other developed economies. There’s no shortage of economic evidence that economic growth is depressed when any one of these, and in particular the aggregate of all three, becomes too high.

  Whatever you think of the 2010-15 Coalition, it turned what could have been a post-GFC depression into a swift recovery in employment, resulting in the UK creating a record number of jobs. Unfortunately, around 80 percent of these went to recent arrivals, many of them from the EU.

  I voted to remain, partly because I feared that a leave vote might create a series of economic shocks as the ramifications played out (I still do; wait until we trigger Article 50 without satisfactory transitional arrangements, and check out the impact on capital and inward investment over the extended period until new trade agreements are in place) but also for selfish reasons: though of working class origins, I’m now on the side of capital, not labour.

  And yet… I have a lot of respect for those who voted to get out, particularly those in parts of the country, such as Sunderland, where major employers are manufacturers that export to the EU. And, in my heart of hearts, I believe they probably called it right: for the distribution (not redistribution) of wealth in the UK to change, workers need to be able to drive up the price of their labour, and the real value of debt needs to be deflated.

  The parallels between Brexit and Trump aren’t perfect: he’s a protectionist, and there are country-specific factors at play such as large numbers of undocumented illegals. But the overall picture, I think, is similar: a bunch of people whose standard of living has not kept pace, and another bunch of people resentful of paying taxes to support them to a state whose mistakes led to their helpless situation, together voting to displace a coalition of the winners.
• 51 ermine November 14, 2016, 5:29 pm

  @ Factor citing TI > “Again, the likes of me hears that and thinks ‘move!!’ ”

  Me too, indeed I left London many years ago for precisely that reason 😉

  On a more general observation, why is it such a great thing to force people to get on their bikes and move? Life is about more than work, and the fact that we are creating a society that forces people to move all the time or work in London, which the Torygraph described as a workhouse for the young isn’t to be celebrated.
• 52 Mark November 14, 2016, 5:47 pm

  @Ermine, agreed. In the mid-1980s, I remember minibuses full of guys from Liverpool, Newcastle and other disindustrialised Northern cities travelling down to London on Sunday nights to build and convert what are now iconic Docklands apartment buildings. Ironically, they were making homes for the Masters of the Universe whose good fortune drove the strong Pound, which was the downfall of their previous employers.

  Today, the direction of travel is West rather than South as workers from low-income parts of the EU head for the UK instead.

  This kind of migration is easiest for the very young and for men with career-free wives or partners. It’s no way to build a cohesive and equal society.

  The root cause, I believe, is financialisation, and the solution is to weaken banking and related professional services as a proportion of the UK economy. Not only would this weaken our currency – temporarily, we’re seeing its benefits now, as markets price in disinvestment due to Brexit – but it would also divert more of our brightest minds from this rent-seeking sector and start to diminish the economic chasm between London and the rest of the UK.
• 53 Richard November 14, 2016, 7:17 pm

  I do also worry that we are seeing a resurgence of Victorian type attitudes of the well off. The poor are poor because they are lazy or because they won’t move or because they don’t try hard enough or some other failing of theirs. For some this may be true, but is it really that straight forward? As Mark says for the young and single probably but once you start to have a family, aging parents etc it suddenly because much harder.
• 54 zxspectrum48k November 14, 2016, 10:04 pm

  @Mark: you might want to “divert … our brightest minds from this rent-seeking sector [finance]” and “diminish the economic chasm between London and the rest of the UK” but what else are they to do exactly, why would they ever want to work in the regions? Other than tech start-ups, what can compete with Goldman? I left Oxbridge with a PhD in Theoretical Physics, almost 20 years ago, and my choices were a) a good post-doc at MIT in the US (I wasn’t doing one in the UK since it paid a miserable £10k/annum b) a £15k/year job in a dying UK engineering company with no future career progression or c) £40k/year starting salary+ 100% bonus at a US investment bank. I took the IB job and have only been paid six/seven figure sums since. I do think constantly of leaving finance and doing something “useful” but what has better working conditions than a hedge fund? I never work weekends, work one/two days from home, and never have to deal with crap like management, HR, employee reviews etc. Just a percentage of what I make at the end of the year. Finally, I love globalization, so it’s London or another major world city; why would I ever want to work in Newcastle …
• 55 Mr optimistic November 14, 2016, 10:59 pm

  @Mark. Yup. I was surprised by the strength of the leave vote in the north. Dave C dreams up a referendum to shoot UKIP’s fox to stem losses in the election and look what happens. Oh, the he bails. Cheers Dave.

  The EU does have a smite image problem though. Who rejoices in the UK for the splendid investment in infrastructure thanks to EU support in country x ? When you hear about domestic politics in France, Germany etc it is still framed in the internal politics of that country. No tradeoffs across borders. What’s the youth unemployment in Spain, 20% plus. Greece, who knows. How about Lincoln or Newcastle for that matter. If the EU isn’t seen to be acting to help all you are left with are negatives. So you hear foreign accents in the town, rumours that it’s no good applying there unless you are of a particular nationality, resentment. And then someone asks your opinion by referendum.
• 56 Mr optimistic November 14, 2016, 11:09 pm

  Sorry to double post but the issue of locations with high immigration voting remain. What counts is proportion of population. Perhaps check on Slough, Boston, Peterborough, Northampton?
• 57 FI Warrior November 14, 2016, 11:17 pm

  Divide and rule, it never fails because it targets our achilles heel, self-interest, if we stuck together and retained the empathy that distinguishes humans from basic primate behaviour, we wouldn’t have to only be able to live well via financially approved occupations. This was possible only a generation ago and everything is related, life in Newcastle would be fine if everyone had this attitude so that it wouldn’t have to be a choice between joining the 1% living well in London vs ‘bare survival’ in a wasteland of poverty or mediocrity beyond the M25. (Half of all the kindnesses I’ve had in my life have come from Geordies and considering I never lived there and they’re a fraction of the population of the UK, there’s a message in there somewhere; it’s not just about money)

  I’m with the Ermine on having to move to survive, context is all, for sure you should move for your dream job IF that’s a real choice, (I did) but why should you have to leave the town you were born in wherever that is, only because corrupt leadership allowed speculative spiv developers to price you out. Why should non-dom/non-taxpayers for example, (same native ethnicity to be clear) be able to have a second home in a nice place so a local who is a nurse, teacher or anything else useful can’t afford to live where they came from? That’s what this misdirected backlash is all about; unfortunately the ruling elite are still laughing because whichever way the vote goes, the hands controlling the different puppets lead back to the same master.

  But you never get to know who is attritionally degrading your future, because they hide behind a highly paid army of professionals, that second home is owned by a shell company registered in a tax-haven. So who is easier to take the frustration out on? The sh*t-poor Eastern Europeans picking vegetables in winter on isolated farms while living in freezing caravans, because they’re robbing the locals on that experience they really, really wanted. Please.
• 58 Mark November 14, 2016, 11:26 pm

  @zxspectrum48k, I think you just made my point for me. Your choice of a career in finance in London rather than, say, engineering in Newcastle is highly rational given the economic incentives. Same goes for your support for globalisation.

  Trouble is, not everyone can get a seat at Goldman or a hedge fund. And the rest of them (us) lose out as a result of the fortune experienced by you, and others like you, since the industry drives up the exchange rate, bids up London property prices – freezing out less remunerative occupations – and, as you’ve experienced, buys up talent that could have benefited other sectors.

  I stress that I imply no criticism of you personally; you may well be brilliant, hard-working and entirely ethical. But anyone who has dealt with misconduct in your industry, as I have, knows that any correlation between those merits and rewards in investment banking and the hedge funds is imprecise, or perhaps somewhat inverse.

  So I think one of the messages of both Brexit and Trump is that participants in the real economy want to rebalance in their favour and at the expense of financialisation. I just hope that special pleading by the City doesn’t result in us trading labour movement controls for passporting. At least the loathsome Osborne is off the scene, so there’s a chance…
• 59 Mr optimistic November 14, 2016, 11:35 pm

  The real danger isn’t here yet. Two years of negotiations, 26 ? foreign leaders to deal with. Harsh words, aggressive stance, a f’u UK you left of your own volition we are not going to make it easy. Reported in the UK press, attitudes harden. The main responsibility is with the EU. My guess is they’ll blow it and try a Greece Mk2 approach. In 18 months a blog like this may not be wise!
• 60 The Rhino November 14, 2016, 11:39 pm

  @zx what would constitute something useful from your perspective, and what would it take to tilt you in that direction?
• 61 zxspectrum48k November 15, 2016, 2:23 am

  @Mark. You won’t get any complaints from me about reducing the dependence of the UK on financial services or about rolling back the excesses of neoliberal capitalism. What I don’t like, however, is the negativity toward service industries and the constant desire to rebalance the economy back to manufacturing. With the exception of some areas of precision engineering, most bulk manufacturing is poorly paid. You’re not going to get strong wage growth when it is effectively capped by a) offshoring or b) automation. We should be designing widgets, but we don’t want necessarily to be manufacturing them. I’m from a old industrial northern city and I remember what it was like in the early 80s when I was a child and it was s**t. It’s far better now with all the manufacturing gone. Standards of living are better, the jobs are far safer; yet still people somehow pine for working in the steel mill! (if they had seen what it did to my uncle’s lungs they might not).

  As I said in an earlier comment in this thread, we have entered a post-scarcity era for human labour. The rise of emerging market labour pools, women in the work place and technology, all create huge aggregate labour supply without the corresponding aggregate demand. Human labour becomes either obsolete or commoditized, driving down real wage levels. Yes, the UK has created many jobs since 2008 but most a relatively poorly paid and productivity has fallen due to low skill levels. Anti-globalization/anti-immigration policies may slow the trend (and at a huge possibly cost) but technology is eventually going replace many jobs.

  Instead, we need to move away from the idea that work somehow defines a person and embrace the idea that unemployment/underemployment is normal, and even good. We need to stop putting “hard working families” on a pedestal because there is nothing positive about having to flog your guts out (my dad did 80-100 hour weeks as an unskilled worker and it did him no good at all). The social contract between citizens and the nation-state needs to be redrawn, probably with a universal living wage. The minority who earn the large sums and the corporates need to pay for it. Problem is that it sounds more like something the EU would do than the new ultra-right wing Brexit Britain.

  What we can’t do though is try to recreate the 20th century. The nation-state… it wasn’t that great in the first place.
• 62 Richard November 15, 2016, 7:09 am

  @zx – but what is anyone not earning large sums supposed to do about it? How does your utopia of a citizen wage come about? Labour tried to solve this problem by sending everyone to university so we would all have amazing jobs. This failed as there just weren’t the jobs so you have people with degrees and lots of debt in 0 hour contracts in MW jobs. The corporates and those earning the large sums threaten to up and leave to some other major city (as they love globalisation and don’t have any real connection with the rest of the nation state) whenever the idea of taxing them more comes up. The political elites appear to bring in policies that reduce wages and create unemployment, appear to bail out / let off the hook one group of privileged people but let other groups (usually poorer workers) go to the wind, allow unlimited immigration that is seen as ‘stealing’ other people’s jobs. So how do these poor left behind people affect change? Through the ballot box. But no one is promising this utopia. Trump / Brexit promise a return to the good old days (rose tinted for sure). Clinton / remain promise more of the same. Do you blame them voting for what they believe will be real change?

  One hope from Brexit is that the powers that be will start to wake up. Indeed, the rhetoric to date has all been about embracing free trade and globalisation while forcing cooperates and high earners to take on more social responsibility. Whether this actually goes anywhere is yet to be seen but maybe it is moving in the right direction. Assuming people like you don’t just up sticks to some other majar city 🙂
• 63 Neverland November 15, 2016, 9:47 am

  @Mark

  You seem to be explicitly relaxed about you and other UK citizens becoming somewhat poorer in the short and medium term in order to leave the EU?
• 64 FI Warrior November 15, 2016, 10:03 am

  @zx, you make some good points and articulate them very well, I agree with all you say, a race to the bottom for brain-dead, dangerous jobs is the farthest thing from the answer. As to how to pay for a decent enough income for all from far less labour, I believe it is possible and not even difficult. What is difficult is the absence of political will to do it and changing a mindset born of a lifetime’s brainwashing; the answer is to reverse that step-by-step, kids could be educated from school already to manage their money just as this site does for us, it should be a part of basic maths.

  Then business taxes should be laddered based on profits, but also to produce the effect that the small companies pay the least and the corporates the most; sure some might then leave in a huff, but what all have you really lost? (Some junk food in the shops, rip-off services? we’ll survive) Since corporates tend to headquarter in Lichenstein so pay no local taxes, SMEs and small independents who having been out-competed before due to having to pay taxes, can now flourish. The fruits of local productivity then stays in the area and makes it a place people actually want to live in, this is what they’re trying to do with the Bristol £ for example.

  Small companies are easier for families to own and operate, as used to happen until just recently and these formed the backbone/strength of strong countries, families tend to look after their own, employing the vulnerable instead of getting a machine to do some things. This meant fuller employment and more taxes, the opposite of a burden for the state to pay for an army of skivers. As for playing the ‘who’ll pay for it all’ card, it never fails to make me laugh that there’s always endless ‘whatever it takes’ funding for prestige/pointless wars, white elephant projects or indirect subsidies to the corporates. (like in-work benefits which wouldn’t be necessary if people could live off their wages)
• 65 John November 15, 2016, 10:06 am

  @Richard – It all sounds rather appealing but the evidence just isn’t there. It’s easy to claim “The political elites appear to bring in policies that reduce wages and create unemployment” but based on what? It isn’t just the 1%ers who are vastly better off than they were in the 80s as a group for example.

  We have a huge amount of revenue from selling pharmaceuticals, financial services, and technology to other parts of the world. In order to facilitate that trade we’ve had to accept that poorer parts of the world can mine, produce consumer goods etc far more cheaply than we can. It is nothing more than a quaint fiction to imagine that we’d be better off if we pulled back this low skilled work as it would a) massively increase prices and b) be virtually entirely automated and in return; and that’s before you account for the devastating impact any reciprocal trade restrictions on our high value industries.

  And ironically given why some people voted this way what’s the most likely result of Brexit with regards to trade? That we aggressively pursue free-trade with less worker protections than the EU would. The kind of trade deals that will make it even less likely that we’ll bring manufacturing back from abroad.
• 66 hotairmail November 15, 2016, 10:40 am

  Whilst there are a number of steps suggested already, many are highly contentious, but certain initiataives need not be so, to start turning the tide of our economy towards a higher value added economy on average.

  The tax credit/housing benefit system has had the unfortunate outcome of generating low value jobs – hand car washes, strawberry picking etc. etc. and reduced the drive to automation including supermarket checkouts and the like. When we expanded to the east, we also seemingly had access to an unlimited number of people to fill these countless low value jobs generated. The trouble is, value added of such jobs is simply not sufficient to pay for the sorts of services in the society we would all like to dwell in. QE and low interest rates have often been fingered as being the problem, but whilst it no doubt contributes to zombification, it is not the sole cause.

  If we decide to roll back these tax credits (perhaps for non citizens only) etc, you may well say, well “who is going to pick those strawberries left rotting in the field”? I say ‘no one’. Leave them to rot. If it was worth growing them here where land and labour is expensive, they would be picked. But it simply does not make sense subsidising the gangmaster economy (that includes you Tesco). Doubly so when the labour leaving eastern europe has left many of their fields barren. Poland has had to import vast numbers of Ukrainians to undertake this work there.

  The effect is to press wages overall towards the minimum wage. Raising the minimum wage ensures more and more people are at that level which leaves many unhappy. Wage differentials are important for people as social animals.

  Changes to these items could be phased in relatively quickly and vastly reduce the pressure on this country as a whole (housing, schools, roads, health) whilst raising average gva to pay for the services we all want and demand.
• 67 Richard November 15, 2016, 10:40 am

  @John true but who needs evidence? When I say ‘appears’ I mean the perception these people have of our rulers. For me, it all stems from the 2008 crash, austerity and the types of articles the media produce. While everyone felt well off things were fine. But when things started to go down hill, when people were getting 0% pay rises (or being made redundant) while the cost of living increased they started looking for answers and solutions. The issue with the financial service, pharmaceuticals and technology is that I don’t think it employs enough people on its own to reverse the issues of austerity for the population as a whole.

  While I agree these votes are often self defeating, what other options do people have if they don’t agree with the status quo?
• 68 The Rhino November 15, 2016, 11:26 am

  @TI – ermine reminded me recently of the following FSF quote:

  “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”

  As you mentioned, this comment thread has been a notch or two better than previous

  Maybe its time for you to write a pro-brexit article?

  I think there’s the raw material here to get you started.

  You may have to get on the couch and regress 20 years to a pre-london pro-socialist younger self? Could be cathartic?

  Hell, If Boris can do it you should have no problems.

  It would be deeply impressive if you could make it convincing..
• 69 Mark November 15, 2016, 2:37 pm

  @zx, I accept there’s a model of the future in which a few people earn (or rather receive) huge salaries for working in investment banks, hedge funds and the professional services firms that serve (and protect) them, a few people (mainly recent migrants) toil in the service sector in roles that can’t be automated, while the rest of us sit on benefits watching Jeremy Kyle. Indeed, we travelled a long way down that path under Blair and Brown.

  Most rich people don’t like being heavily taxed and most poor people don’t love being dependent on handouts. So a better quality of life ensues for all if we can cut down on the rent-seeking at the top and improve the opportunities and pricing power at the bottom.

  For the avoidance of doubt, I’m not advocating a return to unskilled mass manufacturing. I recognise that automation and offshoring are killing those types of jobs. All I’m calling for is diversification away from finance. We Brits are great at the creative industries, biotech, software, luxury brands and more. Yes, we may offshore some of the grunt work, but the value-adding part is done well here.

  We should be managing down the finance sector and with it our currency, allowing market forces to pare remuneration in that industry and with it, London housing costs, while encouraging our brightest and best to consider other occupations.
• 70 hotairmail November 15, 2016, 2:55 pm

  I could be double posting as Mark. It is a peculiarly British, perhaps London centric view, where the perceived wisdom is that “we cannot do manufacturing anymore”. It is fairly easy to counteract that argument by pointing to Germany, Holland et al. Even France. What you’ll notice is that the productivity per head and gva is markedly greater in these countries than our own. Manufacturing and technical advancements are increasing this process rather than lessening it.

  It is also a false dichotomy to talk about either-or. Either manufacturing or services. The best services to be involved with are those related to where you are in greater control of the real side too. When you lose that and financial services becomes an end its own and fails to perform its lauded role in the capitalistic process, it is then drawn to the shadows – the skimming and scamming and the rent seeking that is effectively destroying what is left of the rest. It is also very questionable whether in the long run, without all sorts of subsidies and assistance of various kinds, how profitable the financial sector really is beyond its proponents who walk away with their wages and bonuses leaving a hole behind.
• 71 ermine November 16, 2016, 12:29 am

  @hotairmail re manufacturing as a percentage of GDP, Germany is higher at 23% to our 11%, yes fair enough. Re Holland and France the World Bank begs to differ. I was surprised that it is as high as 11% of GDP in the UK. Of course it doesn’t employ loads of people like it did in the past as it’s presumably high value add, zxspectrum’s design rather than manufacturing like ARM’s fabless IP ‘products’ (OK ARM isn’t British anymore, but was in 2014) rather than say the Bristol lot bashing out transputer chips in the 1980s.
• 72 MrMoneyBanks November 16, 2016, 8:57 am

  @Neverland

  …and what exactly is wrong with accepting that we take a short term him for a longer term gain. One of the issues during the Brexit debate is that it was framed as a decision that had impacts over the next 15 years. This was wrong. The decision had a long term, generational impact. You weren’t voting just for your future, you were voting on behalf of your children and your children’s children etc. How can you weigh your short term pain against the long term futures of multiple generations. If you believe that the UK would have been better off in several decades time then the answer is you must prioritise future generations over your own.
• 73 The Investor November 17, 2016, 1:42 pm

  This is a good TED video from earlier this month about what’s going on, and why it really IS so different from the dichotomy of the 20th Century:

  http://www.ted.com/talks/jonathan_haidt_can_a_divided_america_heal

  The chap being interviewed, Jonathan Haidt, is strong at understanding both sides of the divide.
• 74 The Rhino November 17, 2016, 2:53 pm

  @TI thanks for that link, he is good. I have a few of his books on the shelf. I would argue that the ‘Righteous Mind’ is required reading for everyone.

  I agree with his thesis that the authoritarian/liberal divide is perhaps currently the biggest challenge hiding in plain sight. Its effects have become very negative and damaging.

  Reminds me of your line – ‘Nah, I know who I am..’ – maybe thats not the problem, its knowing who everyone else is too that’s the tricky bit? Even when they disgust you? But being disgusted by half your country isn’t a sustainable position if you have any aspirations of living the Socratean ‘good-life’. At least I don’t think it is?

  Disgust is probably too strong a word here – I just lifted its use from that TED discussion as my vocabulary didn’t offer up a more appropriate alternative..
• 75 The Investor November 17, 2016, 3:25 pm

  @TheRhino — If you go back to my first post on Brexit — which was undoubtedly influenced by hurt and anger, I don’t deny that — it was *almost* as much about how I thought that the under-performing provinces had voted against their own interest as that they’d voted against mine. I may or may not be right about that, but my point is I’ve followed and tried to understand their grievances for years. Triply so in the case of this identity talk gone wild type stuff. I’m far (far) from the “if you’re rich then you’re clearly hardworking and right” or “if you’re poor then you’re a victim” polarities.

  Still, I have become aware over the past few months post-Brexit that I was still bringing my own biases to these discussions. I’m seeing some evidence in these discussions that others have done a bit of self-reflection. Other regular commentators, not so much. I see repeatedly on Facebook people talking about discussion and understanding, but we all want the other side to be the ones who understand! 😉 The trouble perhaps is that the stakes feel like they’ve been raised so much by the hideous rhetoric / echo chambers of the past few years it’s doubly hard to back down.

  I appreciate my critics over the past few months may not agree, but I genuinely feel I sit towards the middle of the spectrum. I have voted for four different political parties since 2000. I’m the archetypal floating voter election decider, and far from tribal.
• 76 The Rhino November 17, 2016, 3:49 pm

  well thats a sensible position to hold

  As a general rule of thumb, its probably not good to take a strongly partisan position on an issue that splits a large group, i.e. a country, roughly 50/50. It will make you miserable, as lack of empathy always eventually does.

  As an avid MV reader, I will confess that I must have mis-construed your brexit pieces as exhibiting a degree of negative partisanship (to coin Haidt’s term). But really, this a massively widespread problem we all seem to be suffering from to such a degree that it’s getting pretty unhealthy.
• 77 The Investor November 17, 2016, 4:09 pm

  @The Rhino — As I just acknowledged, my Brexit pieces were influenced/coloured by anger and hurt, especially the early ones, and the past few months has brought me a bit more awareness than in the week following the Referendum. I’m not trying to unsay anything here.

  But even in that first post I said I could see a way to get say a 30-40% reason to vote for Brexit (I forget the exact figure I used, and haven’t time to look up on my phone! 🙂 ) And as I’ve said before I’ve used words like “cultural” and “xenophobia” where possible, as opposed to say “racist”, for the reasons Haidt cites (i.e. For the reason that such feelings are not always racism).

  But racism does exist, and I believe it has been empowered by the Brexit vote and now the Trump vote. Understanding more why someone feels alienated doesn’t undo that.

  Similarly, and more controversial, my Barry Blimp shorthand describes a real type of angry 50-something well-off British male who I believe is under-documented, just as much as one can talk about campus feminists sheltering in safe rooms because the University Film Society put on a showing of an old Carry On… film. It’s probably not 100% perfect to talk about stereotypes, but blogs exist to discuss ideas and opinions, and to be read.

  Also I think there are (or were, I think I’ve driven many of them away from here) a very disproportionate number of Blimps versus Crazy Pixie Girls in the investing sphere, which was probably a further factor as to why the Monevator take seemed/seems so at odds with what investors are reading on other investing forums day after day about Brexit. Something like ADVFN is a Brexit bastion.

  What truly made me cross about both Brexit and Trump is the manner of how those victories were won – through distortion and ugly alliances – and the aftermath. Without the distortion and the more extreme views, Brexit didn’t win. I’m not sure re: Trump, but I can believe that if he hadn’t spent years saying Obama wasn’t American and more recently that he was going to throw “crooked Hilary” in jail that her popular majority might have turned into sufficient electoral seats.

  It’s giddy when people see votes going their way to the extent that they can be happy to overlook how they’re winning, but these are dark forces. For instance, the Daily Mail at al condemning the judiciary as “the enemy of the people”. That sort of talk by Britain’s most popular daily newspaper is really dangerous, history is littered with examples. (Incidentally, and as evidence of my balance, I’m currently having a debate in Facebook with my left-wing friends who are sharing an article condemning the BBC as “doing the far-rights work for them”, and suggesting they might be biased).

  I have to say I’m seeing negligible soul-searching on the “winners” side, to be frank. But perhaps that’s understandable for now given the winning.
• 78 The Rhino November 17, 2016, 4:33 pm

  But how to undo it all? I’m not sure I like the implication of Haidt’s that we need a good war to bring us all back together. Could we just administer half a gramme of Soma?
• 79 The Investor November 17, 2016, 4:49 pm

  @TheRhino — There’s a great line in one of the Fitzgerald novels from the 1920s where a couple of US types are looking at a World War 1 battlefield a few years after Verdun and The Somme etc and wondering how it came to that… One of them says it took 100 years of relative prosperity and progress and going to church on a Sunday and so on — i.e. that the war was built on the back of them having had it good for so long.

  I think something like that is true today.

  In broad terms (not every voter to the limit, as it seems I have to explicitly state every time! 🙂 ) the Blimps and Trumpets are angry, despite, respectively, the UK doing relatively amazingly in Europe and the US being by far the world’s richest country and the world’s one global superpower. Meanwhile the left have spent the last few years being preoccupied with identity politics despite the (Western) world never having been more equal, especially with respect to gender, and with capitalism being supposedly bankrupt despite it pulling literally billions out of poverty over the past 30 years (among many other benefits).

  When we couldn’t even be happy let alone celebrate the gains… hard to be optimistic. I do think the WW1/WW2 experience provided a measure of vaccination for the West against extremism. But I think/fear our herd immunity has run out. 🙁
• 80 PC November 17, 2016, 5:35 pm

  Thanks for the TED link.

  The next link it auto-played is good too – from 2008 about Bush v Gore – but a very similar theme of openness and ideology and the “moral matrix”
  http://www.ted.com/talks/jonathan_haidt_on_the_moral_mind