Nick wrote: animist wrote:
Nick wrote:He's making a specific claim, which is untrue, and then attacking it. Classic straw man tactics.
what claim? (Actually your definition of a straw man is a bit odd - surely you mean "irrelevant" not "untrue")
Straw man does depend on irrelevance. In this case, he is set up a claim, which was untrue, and then tried to demolish it. Since it was untrue, then any such argument is irrelevant. If you'd prefer to call it something else, then I'm cool with that.
(The claim was "For the last few weeks, senior Brexiters have had a very specific script")
I cannot believe we are arguing about such trivia. Of course the straw man thing depends on irrelevance, that is just what I said. And anyway, what is incorrect about saying that Brexiters have been concentrating on a particular claim, which Dunt termed "a specific script"? He was just introducting his own take on that claim/script!
Nick wrote: So what is a "good" echange rate? There's no such thing, in and of itself. Only in terms of what benefits the UK citizens. And there is a huge difference between general everyday variations and sudden uncertainties caused by shock
I don't know exactly what a good rate is, but a seriously falling exchange rate, which I feel is the future post-Brexit, is NOT good, surely. Exports have increased since the referendum, but are they seriously closing the BOP gap?
Yes, together with import substitution, that is indeed what's happening. And I see no reason why the exchange rate should necessarily continue to fall, just because of Brexit. If that were true, then we would see the Euro continuing to strengthen against all other countries, which clearly isn't the case. And note, the recent strengthening in the Euro is as much the result of their appalling past performance as any current strength.
the rate is not continuing to fall, and I don't think anyone is claiming that it is, so your comments are not relevant. But if Brexit goes wrong, and there are so many reasons why it should, then I imagine that sterling will start to fall again
Nick wrote:So why would a cut in tariffs lead to higher unemployment?
it wouldn't, but what I meant was that this idyllic future that you propose will have been obtained via Brexit and loss of the access to the Single Market which we currently enjoy, and THAT is likely to lead to higher unemployment
...except that the supply of labour will not be as bountious as before.
which itself is likely to cause problems and is hardly the good economics which you espouse - instead it is the triumph of politics over economics; can you not see how inconsistent you are here?
Nick wrote:What costs of free trade? And how is it comparable with the arbitrary change in asset prices caused by immigration which hit the poor so very very hard. Never mind a couple of percentage points, we are talking tens of percentage points!
but - and I assume that you mean house prices - this is a matter which government could and should tackle by increasing housing supply.
Yes, I did mean house prices. Unfortunately, people rather dislike that suggestion overall. NIMBYism is a real thing.
agree on the last point, but nevertheless it could be done given the will; there are many brownfield sites which could be used (but I don't want to get into an argument about housing policy)
Government can deal with housing shortages,
but it cannot easily increase the number of economically active members of the UK population, and that is a demographic problem affecting not just Britain but much of the rich world.
It's done so in recent years, perhaps at the expense of growth, so there's some scope for improvement. But can we in all honesty continue by depriving the rest of the world? When all it does is to kick the can down the road for a generation?why are we depriving the world?
Migrants send remittance payments back home. Again, you seem to be dubious about allowing people to make the most of their economic opportunities - just so inconsistent with your general outlook
Yes, population growth, whether from immigration or not, is obviously going to increase pressure on housing prices, but then, the consensus is that we need immigation because we are an ageing population with too many oldies - like me, and your good self in good time!
We can choose to allow carers in if we want to, but it doesn't resolve the problem in the end, does it?
when does "the end" come? Ever? What is "the end"? As Keynes said, in the long run we are all dead
Nick wrote:As Alan has said so often, its not for me to justify, it's for Dunt. He doesn't. But at its simplest, if a reduction in tariffs wouldn't reduce prices by a corresponding amount, why don't the suppliers increase their prices now, since by doing so, they would increase their marginal revenue, even if sales fell by volume. It's all to do with the slope of the curves. So! Evidence please!
I cannot provide proper evidence, but I remember that soon after the referendum, supermarkets were attempting to shield consumers from the fall in the pound by taking the shock themselves. God, Nick, you really believe this stuff about curves, don't you?
Short term loss leaders by supermarkets, eh? Doesn't last.
we'll see, and I actually thought that a loss leader was a product used to publicise others even though it makes a loss
Nick wrote:...which are linked.
in some way no doubt, but it does not follow that a significant adverse effect on employment needs a significant fall in import prices - simply because we live in an economy which is in a sense competitive and in which marginal changes in prices can have substantial effects on decision making. If domestic producers are believed to be unable to compete with foreign ones on a continuing basis, then decisions may well be made which will affect investment in those industries, and hence employment.
Certainly, in the short term but that is how economies grow, by getting people to move to other economic areas where they are needed. Or should we have protected the jobs of telephonists, say? If technology had remained at 1945 levels, BT would have to employ every single school-leaver! Great for employment, but....!
haha - yes moving to areas where they are needed - like other countries!
Nick wrote:Certainly exports need to be won, but a sure way of losing exports is to protect your own market, thus stifling competition and innovation, which is what tariffs do.
cloud-cuckoo-land thinking. Look, I read enough of Paul Samuelson all those years ago to be convinced that in cloud-cuckoo-land we would all be better off without tariffs. I happen to think that Ian Dunt's argument, in his book rather than the article, has some merit - this is to the effect that for Britain to unilaterally drop all tariffs is equivalent to a duellist dropping his gun and then challenging his opponent to fire!
ISTM that Dunt is defending tariffs as a suitable policy in the long term, without seeking to make trade freer. Not good.
you need to read him rather than make assumptions. BTW, over the topic of Dunt and the IFS paper on savings from tariff reduction, here a quote from the FT article posted by Alan: "In a separate report on Tuesday, the Institute for Fiscal Studies said leaving the customs union would enable Britain to lower tariffs and prices should fall, but noted that the gains from such action would be small." So it was not a case of Ian Dunt distorting the IFS paper
Nick wrote:How can we remove tariffs imposed by the EU without leaving? We've suffered their tariffs for decades, and haven't been able to shift them. Cameron demonstrated they remain fundamentally deaf to reform.
I dunno about the EU and tariffs. I think that they are bothered about them, but tariffs are less important than other impediments to trade, and the EU have gone far in this direction.
Not nearly far enough! Not only have they failed to achieve free trade within the EU in services, but their ever increasing regulations continue to throttle trade, besides their anti-free trade practices (French passports for example).
the relationship between regulation and trade is complex, and anyway, regulation is often justified
They have also concluded many deals with other countries, and given some concessions to poorer producers. Not enough, I'm sure. But look, you here seem to move towards a very unpatriotic concern about poorer countries.
So concern for my fellow human is "unpatriotic" is it? You little Englander, you!
Besides which, it should be a benefit for both; it's not a zero sum game.
I was being ironic! Your general stance is patriotic ISTM
As I have said on TH many times, Britain will not be thinking about benefiting poor countries when and if we leave the EU.
We'll see, won't we? Would you vote to cut our UN level overseas development budget? (Which precious few of the EU manage).
no I would not, but most Brexiters would do so, I imagine
Can you not see the limitations of economics?
Certainly! That's one reason I am pro-Brexit!
makes no sense
All sorts of interests will come to the fore to protect their interests
...and should be resisted!
government is about balancing legitimate interests, not resisting them
It will be chaos, with social and political strife due to the disappointed hopes of those millions who, we are constantly reminded, voted to leave in the largest number ever to vote in a British political contest, and the last people to benefit from this chaos will be the poor producers.
So where is the social and political strife at the moment? In the UK or on the continent?
duh, I am talking about the future not the present. And the continental strife seems to have died down. It was fuelled by the refugee problem of 2015, in which Britain took a very limited role in housing refugees
The EU, in contrast, is rich enough to survive an inconvenience like Brexit.
They haven't decided how to replace the UK's contribution yet, have they...?
probably not, but Britain will be paying the EU for a long time for the sake of Brexit, so we are the ones who will feel the pinch
Nick wrote: Nick wrote:
No more than the strange bedfellows on the left. Have you taken a good look at your fellow travellers...?
just so irrelevant - and anyway, this is not a left-right matter. Look, it really does not matter if rich bankers voted Remain. A vote to stay in the EU was kind of a non-vote because it simply said, no change - a bit like if I decide NOT to spend any money I have on some expensive holiday or a golden gambling craze. The vote to leave, in contrast, has already opened huge cans of worms, whether economic, political, or social. Are you blinded with your pet topic of economic theory?
It amuses me how Remainers on the left play the economics card, right up until it means that they will have to abandon some of their economic principles! Still, it's nice they are now caring about bankers in the City!
ut in the fina analysis, I voted for Brexit because I beieve the structure of the EU is fundamentally flawed, is incapable of reform, and will end badly, not because the UK will profit in the shoort term. But economic theory is nevertheless important in evaluating what is likely to happen.
yep, I know what you think on the EU. You misunderstood what I was saying, but no matter
Nick wrote:Of course, but there is substitution between them, isn't there? Dunt seems to think there isn't!
I do not think that is the case, and if you read his book you'll see that he recognises that expensive car brands will still be bought by those who want them and can afford them, despite tariff increases due to Brexit
Then he's a clot! No-one says no cars will be bought, but fewer! Fewer people will want them, both because of worsening affordability, and because other alternatives will be relatively cheaper.
just read his book, you've got him wrong yet again
Nick wrote:Imprecise, yes, and individually yes, but collectively, and pari passu, they are knowable. Just look at the growth (and recent stalling) of international trade. Practice backs up the theory.
What theory and practice?
That increases in world trade yields higher growth.
not in dispute, but what might be in dispute is whether Britain in particular will benefit significantly
I think you mean "undisputable" rather than "knowable".
No. What I was driving at was that it is in practice unknowble if person A will respond in a particular way (income & substitution effects, for example) but we can make reasonable guesses in aggregate.
I am not sure that this follows, and we are talking quantities, not simply directions
Dunt's book makes the point that unilterally doing this free trade thing is like throwing down your gun and demanding that the other side surrender! Surely the experience so far is that it is multilateral concessions on trade (as with nuclear weaponry) that produces results
Except that such an approach has produced no overall trade deals between the EU and the USA, India or China, and many others too.
but it has made deals with many other countries, and Britain will somehow have to renegotiate these deals. Look, just watch the Dougan video!
I cannot be bothered to get into another spat about the EU. Really does not matter how gung-ho the Government is about deals outside the EU since it takes two to make a deal.
At least it will now be two, instead of 29!
I think there will be a spate fo new deals where none have existed before. We'll just have to see....
what you say ignores the much greater power that almost 30 countries have compared with one. We are governed by novices in matters of trade negotiations and risk being exploited by much larger countries. Read Dunt on this
You continually misunderstand me because of your narrow obsession with economics: when I talk about "sacrifice" I was talking about the fishing industry, which because of its smallness may well be sacrificed in a deal with the EU in order to save other industries - absolutely nothing to with comparative advantage, it is all politics and not economics
What bother me, is when decisions are made for political reasons based on bad economics!! The anti-austerity rhetoric of UnCut, for example
and Brexit for another