There's a theme emerging in the new international political economy post-Brexit.
The US is willing to offer the UK a trade deal, with a condition attached. That condition seems to be freedom of movement for people.
Australia is willing to offer a trade deal. But wants relaxed migration rules.
Not long ago India made clear that it was in the same place.
And so, I suspect, will be all other states.
And there's logic to this. Although not often stated the simple fact is that if you allow free movement to trade and capital and deny it to labour the inevitable consequence is that the likely rate of return to capital is increased compared to that for labour. The logic is simple: without restriction capital can seek the best returns. With restrictions labour can't. Cut out all the other important factors and if you're going to control labour you have to, at the very least, control capital as much. Actually, because capital has not got family, school, in-law and other ties you almost certainly have to control it more than labour to balance returns.
So of course countries want as much freedom to move as they can get if free trade is sought. It's the only way to make sure their people aren't exploited.
We have, then, three options.
The first is to accept free movement of people.
Or we can constrain free movement of people and accept that capital wins as a result, labour loses, and inequality increases.
Third, we can constrain capital in the hope of balancing the rates of return in a new world where we cannot be sure whether we're going to be better off or not.
We were relatively close to the first option in the EU.
We're going for option two, which is the worst possible outcome.
Option three is the Trump route. Colin Hines has proposed an alternative in Progressive Protectionism, which no one has ever tried.
This leaves a conundrum. Progressives will reject option two, and rationally so. With protectionism dominated by Trump few will risk going that way. So free movement remains on the agenda for many - subject to conditions to manage the rate of change to which communities may be exposed, I think - and we're already finding the world is forcing us back in that direction. May might find trade negotiations very uncomfortable as a result.
The fact is that Brexit was the wrong answer to a badly formed question. As governments of the world realise, people are demanding that the return to labour be increased. And the worst way to do that is to restrict its movement by more than capital is constrained.
The way forward is to discuss how migration can work, as even the US are requiring. But what must happen at the same time is that proper debate on capital controls must take place. If not we get nowhere.
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I’m not sure if you heard the Turkish representative on the channel 4 program a few days ago. Very happy to do a trade deal but also wanted free movement of people. Indeed he seemed surprised when the question was put as it was a “no brainer” (not that he used these terms).
Maybe the darkest hour comes before the dawn; here is a fairly optimistic message
https://shift.newco.co/https-medium-com-peteleyden-why-trumps-inauguration-is-not-the-beginning-of-an-era-but-the-end-72a86833f0a3#.y17ef95v2
I did not see that
But so obvious it is ridiculous
The NewCo piece is interesting but the author and his business are firmly in the high tech camp and the piece is very thin on new forms of social and political organisation, even though he recognises the need. His description of the new 21st century civiilisation, which we are already a third of the way into realising he thinks, as ‘run totally on digital technologies, smarter and smarter, more and more interconnected computers… it will be totally global and operate on a planetary scale’ just highlights the scale of the challenge to make the brave new world socially as well as technologically progressive. Big tech people are not notably socially enlightened. Doesn’t do much for my optimism.
Hmmmmmm
‘The Darkest hour comes before the dawn’
Crosby, Stills and Nash fan are we Sean?
‘The fact is that Brexit was the wrong answer to a badly formed question.’
Even at the time, I joked that the referendum question was so vague as to be on a par with Douglas Adams’ ultimate question of ‘life, the universe and everything’. With the benefit of hindsight, it’s hardly surprising that, just as Adams’ philosophers struggled to make sense of the answer to the ultimate question (’42’, for those who are unfamiliar with THHGTTG), we now find ourselves in the unenviable position of having to grapple with interpreting just what the result of the referendum ought to mean.
I frequently refer to 42 in my teaching
I use it to explain the meaningless of numbers out of context
But it applies to anything out of context almost as well
Richard – the issue of capital controls is indeed the elephant in the room. I will try to mix it into the discussions I have with people as many are quite fixated on immigration.
Thank you for highlighting this important issue that if left unchallenged means that the 1% carry on as before.
I have no doubt that a number of these trade deals will include freedom of movement of people, but with the exception of the EU they invariably mean “freedom of movement of certain people” whereas the EU version was “freedom of movement for everybody”. It really is an apples and oranges comparison.
Did anybody voting Brexit really think it would mean absolutely no migrants at all?
Many do
Many thought lots of things that were wrong about Brexit
Brexiters deliberately misled them
The political reaction to their realisation is as yet unknown
I fear it might be ugly
It has always been about freedom of movement for *workers* within the EU. The idea that EU rules require freedom of movement for everybody, without restriction or limits, is a myth.
So free movement of honest workers is a good thing. But is it a good thing to have policies that drive unemployment upwards in Poland Romania and Greece for example, and for the UK to currently contribute substantial funds to support those programmes as part of EU membership, the result of which is that the displaced labour force goes looking for work elsewhere in the EU. Ironically they go to the countries that have the biggest clout in enforcement of the Single Currency, and in the case of the UK, to the country that provides the 2nd biggest contribution.