The progressive’s immigration dilemma

The freedom and wellbeing of all human beings should be important to us, regardless of their race or nationality. Because migration allows very poor people to dramatically improve their lives, often increasing their income by an order of magnitude, we should have a strong preference for more liberal migration laws in the developed world, particularly laws that favour low-skilled workers from the poorest countries.

The progressive’s dilemma is usually seen as being the fact that higher levels of immigration seem to make voters support redistributive domestic policies less. People are less happy to share with people who aren’t much like them. David Goodhart discusses this here. But this is a two-way street: the more redistributive your state, the more sceptical voters are of (at least low-skilled) immigration – this polling seems to reinforce that.

This might be aggravated in cases where immigrants don’t do much or even have a negative effect on the wages of low-skilled native workers. Not only are these guys competing with you for welfare, they’re driving down your wages too – even if theirs are rising by five hundred percent, yours falling by five percent still hurts.

But that isn’t usually what actually happens: immigrants to the UK generally don’t drive down native wages, even for low-skilled workers in the medium-to-long-run, and in Denmark they actually seem to have had a significant positive effect on low-skilled workers’ long-term earnings. In the US, there is a big positive link between immigration and native productivity (which eventually translates into higher wages). In the UK that link is also positive but is very small, almost zero.

However, in France, immigrants do seem to hurt work outcomes for natives – both in terms of jobs and, for short-term contract workers, wages.

What explains the difference? The authors of the Danish study say Denmark’s flexible labour market is what allowed the market to absorb immigrants to make everyone better off, and the author of the French study says the rigidity of France’s wage structure is what makes immigration harm natives. Incidentally, the UK, where immigrants have a fairly neutral impact on natives, is roughly halfway between those two countries in terms of labour market flexibility (according to the Heritage Foundation’s Index of Economic Freedom).

This trend seems to hold across Europe: the more rigid a labour market, the worse immigration is for native workers. That must be a factor in considering the costs and benefits of any given labour market regulation.

Poor people’s lives are made enormously better off by moving from poor countries to rich countries. Thanks to remittances, migrants also may have a significant positive impact on their home countries. For any progressive who wants to improve human welfare, facilitating more immigration from poor to rich countries should be an overriding priority.

Not only does a big welfare state reduce the number of immigrants that are politically accepted, a heavily regulated labour market seems to be associated with immigrants having a worse impact on natives. Even policies that seem like they would be good for Britons might still do much more harm than good if they make Britons less willing to accept higher levels of immigration.

This is a serious dilemma for any progressive who wants all humans to live good lives, not just ones of the same race or nationality. It means that these political concerns alone may demand a low regulation, low redistribution state.

Willy Hutton is starting to parody himself

Will Hutton’s managed to argue himself into a most interesting little corner. He’s been shouting for years that we need companies to be managed for the long term, not just for the short term interests of share traders. OK, not an argument we share (for the price of a share is the net present value of all future income, therefore it is a long term matter) but interesting in a manner. Hutton’s also one who shouts about how appalling all this inequality is. And the rich shouldn’t be allowed to own everything and other such generally lefty ideas.

And then we get to this:

In fairness, part of Tesco’s problem is that Britain’s retailing landscape is being transformed by two different challenges – online shopping and discount retailers Aldi and Lidl, whose market share has doubled in the past five years to more than 10%. Tesco’s grandiose out-of-town hypermarkets are now stranded behemoths no longer attracting, as they once did, shoppers who now prefer to go online. Tesco has recognised the reality, stopped building new stores, closed others and written down the value of its fixed assets by £4.7bn.

But Aldi’s and Lidl’s success is rooted in something more profound than just capitalising on newly cost-conscious, financially pressed consumers. They are privately owned businesses that think long term and whose business purpose, enshrined by the owners, is to focus on a very narrow range of goods they can sell at high volumes and thus price incredibly keenly. British supermarkets, having to please shareholders with no such commitment, can never price so keenly even if they could match Aldi’s and Lidl’s logistical capacity and focus.

He’s seriously arguing that it’s better for everything to be owned by a few billionaires than it is for all of us, in a rather more minor manner, to be capitalists and owning the businesses of the country through our own savings and or pensions.

How on Earth did anyone nominally on the left end up advocating such oligarchic policies?

It really is planning that is the problem with housing and house prices

We know, we go on about this almost ad nauseam. But it really is true that the basic problem with housing and house prices is the planning system. An interesting paper from the CEPR allows us, once again and via a different route, to prove this:

How have house prices evolved over the long‐run? This paper presents annual house prices
for 14 advanced economies since 1870. Based on extensive data collection, we show that real
house prices stayed constant from the 19th to the mid‐20th century, but rose strongly during
the second half of the 20th century. Land prices, not replacement costs, are the key to
understanding the trajectory of house prices. Rising land prices explain about 80 percent of
the global house price boom that has taken place since World War II. Higher land values have
pushed up wealth‐to‐income ratios in recent decades.

It is not that houses have become more expensive to build. The standard 3 bedder suburban semi can be put up, from scratch, for £120k and a little less than that in volume. What has become more expensive is that land. And, no, it’s not that we’re running out of land nor even that land itself has become more expensive. Even prime agricultural land in he SE tops out at £10k a hectare.

It is that land upon which you are allowed to build a house has become more expensive. And that of course is an entirely artificial shortage caused by the planning system itself.

So, if we want to deal with the “housing crisis” what we need to do is reform the planning system. Probably to the one we had before it caused this particular problem which was, essentially, to have no planning system at all.

An interesting idea to change copyright

We wouldn’t like to give anyone the idea that we think that the Green Party are anything other than somewhere between wildly misguided and entirely deluded on all matters. However, they have made one suggestion which is most certainly worthy of greater consideration. That’s to restrict the terms of copyright:

The Green party may be forced to backtrack on its proposals to limit UK copyright terms to 14 years after a howl of protest from prominent writers and artists including Linda Grant, Al Murray and Philip Pullman.

The Greens’ manifesto said the party aims to “make copyright shorter in length, fair and flexible” with the party’s policy website saying it would “introduce generally shorter copyright terms, with a usual maximum of 14 years”. Representatives of the party said on Thursday that length could be revised after a consultation.

There have indeed been howls of protest from just about everyone who has ever made a penny or two from stringing words together. As most of us here have made a penny or two from stringing words together as well perhaps we might add a little bit of grown up talk to the discussion?

The entire point of copyright (and also of patents) is to acknowledge that free markets, pure free markets entirely unadorned, are not the optimal solution to every problem. We’ll argue with anyone about the idea that they are the optimal solution to more problems than anyone currently allows them to be but we’re still insistent that this does not mean that they are perfect. And the issue of creation, whether of new ideas, new works of art or simply entertaining schlock is one of these areas. It’s difficult and time consuming, expensive in other words, to produce new material in any of these fields. It’s extraordinarily easy to copy it once that has been done.

This means that in a purely free market system it will be very difficult to profit from creation thus we think there will be less creation than we might want. So, we add protections for the creators. We have, simply, entirely invented this concept of “intellectual property”. That provides the incentive to create.

However, there’s also the point that we like derivative creation as well: someone creating atop the bones of what has gone before. And too long a, or too restrictive terms of, protection will limit and hinder this. So, some protection of creation is desirable and too much is not.

But note where this leads us. It is that original creation that we wish to encourage. And, if we’re honest about it, writing a book now is not influenced in any manner at all by the thought that a literary estate might still be earning from it 70 years after the authors’ death. The Sherlock Holmes stories only recently went out of copyright: does anyone think Conan Doyle was in the slightest influenced to write by what the stories might earn in the 1980s? Or take the lengthening of sound recording copyrights from 50 to 70 years just recently. Does anyone really think that Cliff Richard was incentivised to record “Living Doll” by how much it might make him in 2010? Sure, in 2010 he was very interested in the subject as he campaigned on the issue but what we want to know is what pushed him in the first place, not what he thinks post facto. Given that he did the recording under a 50 year protection does rather show that the 70 year protection was not necessary to encourage that original creation.

So, therefore, we probably shouldn’t have the longer protection.

14 years might be too short a period of time. From memory that was actually the time period in the early 18th century, and it could be renewed at least once. Full marks to the Greens for actually recognising this as an interesting area for discussion. But we would have thought that reverting to that 18th century was a bit odd for them. For they normally want us to fast forward to the Middle Ages don’t they?

Scotland must Finnish that myth

Just after the independence referendum was a momentous time to be in that exhausted Chamber of the Scottish Parliament. It marked the first debate not focussed on the constitution for as long as we could remember. And education was finally the centre of attention.

The attainment gap in Scottish state schools is something that the main parties in Scotland care about a lot. Oft-quoted statistics portraying state schools practically next to each other as performing at opposite ends of the attainment spectrum provide the impetus. 

It is true – Scotland’s ‘educational apartheid’ has been described as a ‘national disgrace’. Now Scotland’s First Minister is behind a dangerously vague and impossible Education Bill (pdf) that proposes to outlaw inequality if it receives cross-party support in Holyrood this year.

So closing this ‘gulf’ in performance, to most Scottish politicians, is a worthy goal. And perhaps this remains part of the appeal of the Finnish education system. Its schools are among the most uniform in the world. 

Certainly in 2001, when Finland came to be regarded as an education superpower, its results in the OECD’s Programme for International Assessment (PISA) made it the most desirable model in the world. 

Of the 41 nations that took part that year, Finland was impressively topping the tables in science, mathematics and reading and competing with the notoriously well-performing Asian nations. Ever since then we have been making the most myopic movements in education reform in order to emulate their achievements.

Indeed, Scotland’s controversial Curriculum for Excellence was largely inspired by the Finnish model. Created in 2004 and implemented in 2010, CfE has been one of these unimaginative, inside-the-box changes in the Scottish schooling sphere. 

To counteract the case made that more school choice and competition between schools is the answer to spreading quality and innovation, the Finnish argument is still made. The correlation between the reforms in Finland and the time of its exemplary PISA results has led to the common conclusion that the reforms caused the success.

In this very debate following the referendum, Kezia Dugdale, the deputy leader of the Scottish Labour Party, once more spoke of her visit to Finland and lessons we should still be learning from the country’s example.

Remarkably, until now, nobody has actually scratched beneath the surface of this spiel. The Centre for Policy Studies has just published Real Finnish Lessons (pdf) by Gabriel Heller Sahlgren of CMRE. It is the first paper of its kind to take a reasoned and thorough look at the Finnish schooling sensation. 

The first point of note is that performance began declining since those reforms were enacted. 

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What the new analysis tell us is that Finland’s rise accelerated primarily during the old system when the traditionalist, rote-learning pedagogy was at its core. 

While results increased by approximately the equivalent of 23 TIMSS points between 1965 and 1980, they rose a further 32 points in the 1980s. They also increased a further 34 points in the 1990s, but started to level off in the latter part of the decade, and ultimately started to decline in the mid-2000s.

Considering the age of the pupils when they were tested, the strongest gains took place when pupils mostly attended school before the old system was entirely abolished.

Other data, too, supports the general trajectory of rise and decline in international surveys. 

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Here we see that performance improved while male youngsters attended primary—and lower—secondary school before the old system was entirely abolished and began falling when they became exposed to the new one. 

Real Finnish Lessons convincingly shows how Finland’s outcomes are better explained by a detailed examination of its political, social and cultural underpinnings by looking beyond the fashionable explanations in the international media. It concludes that those popular policy-related reasons for its rise to prominence do not stand up to scrutiny and if anything coincide with its slippage.

The current Scottish Government continues to prioritise eliminating inequality while advocating the Finnish school-style characteristics. But it is clear, now, as we still send our education ministers to Finland each year, that we have been following a flawed interpretation of their system. 

In a competitive system schools adopt the methods that work—not fashionable educationalist fads—and the misinterpretation of Finnish data would be much less likely to happen. Choice would see the schools that work spread whatever the orthodoxy of the day says. Unlike in a government-controlled system where well-meaning Progressive ministers can effectively overturn everything without parental consent.

So with increasing evidence in our favour, it is time to consider that steps towards choice, competition and innovation are key.