Don’t believe your eyes


11:35 am - October 28th 2009

by Chris Dillow    


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Two different comments on different subjects reveal a common error in thinking about social affairs.

First, in response to my claim that much of the gender pay gap is due to women having children, Toto says: “you didn't consult any childless women before writing this, did you?” You’re damn right, I didn’t.

Second, a commenter on a post by DK says:

Both commenters make the same mistake – they think we can trust the evidence of our own eyes. We can’t.

Such evidence is subject to horrible distortions.

The obvious one is small sample bias. What we see ourselves is only an infinitesimally small fraction of the 60 million people in our country. Drawing inferences from such teeny samples is fraught with problems, for example:

1. Selection bias. The people we see are rarely a representative sample. For example, the childless women I know earn much more than the national average.

This can lead us into horrible errors. For example, journalists see colleagues and university friends earning good money and infer than average incomes across the country are high, which leads to the middle England error.

2. Overconfidence. People under-estimate error margins. So they fail to appreciate the huge sampling error of a small amount of evidence.

3. Out-group homogeneity bias. We tend to believe that “others” are more alike than they really are. So, from seeing one or two immigrants act in a particular way, it’s easy to infer that many do.

4. Confirmation bias. Having made the above errors, we compound them by subsequently over-weighting the significance of apparently corroborative evidence.

These problems mean we cannot rely upon our own eyes. We need large-scale studies. And in these two cases, these happen to disconfirm the commenters.

For example Bob Rowthorn estimates that the net fiscal cost of immigration to the UK is roughly zero. Yes, some immigrants require the tax-payer to stump up more money. But other immigrants provide these taxes. It’s a wash.

And this paper (pdf) says that some 36% of the pay gap is due to women’s different life-time working patterns. This one (pdf) finds that 10 percentage points of the 25 percentage points gap between women and men’s pay after 10 years is due to differences in human capital accumulation.

And National Statistics – which don’t adjust for other things – show (pdf)  that the full-time gender pay gap is actually negative for single people, but increases sharply with the number of children. I think all this is consistent with my use of the word “much”: not “all”, or “most” – just “much”.

Which brings me to a problem.

Most people, I suspect, don’t base their beliefs about society upon rigorous social studies but rely instead upon their own eyes. Does this matter? The wisdom of crowds hypothesis says not. For everyone who sees an outlying woman earn more than a man, others see women earning less. Across everyone, the crowds get it right.

Or do they? Let’s take immigration. Maybe, if you walk into a doctor’s surgery you will see lots of immigrants (not just the doctor himself!) and infer they are a drain on the tax-payer. In principle, this inference could be offset by people walking into factories or farms and seeing hardworking immigrants who pay tax.

But this doesn’t happen. Many more people wander into surgeries than into factories. The availability heuristic therefore leads people to over-estimate the extent to which immigrants are a burden.

Perhaps, therefore, the evidence of our own eyes can be systematically misleading, even when aggregated over everyone. Which in turn implies that the opinion of the majority might be wrong, even if it is not affected by the trash media.

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Reader comments


My wife worked as a translator mainly serving many NHS surgeries and hospitals throughout Birmingham. Her view is that there are many immigrants who are doing well on British benefits without having paid into the British system and that significant numbers of NHS staff are rude and lazy.

I admit to falling foul to confirmation bias by over-weighting the significance of this apparently corroborative evidence.

“a commenter on a post by DK says: *blank*

yes, that sounds typical of the signal-to-noise ratio of a DK commenter.

For example Bob Rowthorn estimates that the net fiscal cost of immigration to the UK is roughly zero.

Am I being statistically dense, or does this mean that the net fiscal benefit of immigration to the UK is also therefore roughly zero? In which case, all arguments of the ‘enormous economic benefits of immigration’ are as worthless as those of the ‘huge economic costs of immigration’

What the hell is anyone going to talk about?

@3 – indeed, but that leaves out the uncosted impact of the country becoming more and more crowded…

leaving aside that the costs/benefits are unevenly distributed

If say I owned a house in central London (whose price – over time – will rise in real terms) and employed staff (whose wages will be kept under pressure) I would be in clover…

Everything you say about statistical errors is very interesting and no doubt correct, but it doesn’t lead to your conclusion. “People” (not all of us) assume that immigrants are a burden because they are moronic racists who want to believe that. No matter how much immigrants contribute there will always be people (and if I’m allowed to air my prejudices I’d have to say it looks to me like they tend to be people who don’t exactly contribute very much themselves) who go round moaning that they are a burden of some sort. Those people should be told to do something ending with off, not lauded as the “white working class” and promised “British jobs for British workers.

6. the a&e charge nurse

A rather large can of worms is being opened once ‘evidence’ is required to support or refute reality claims made by individuals.

To begin with, in the best tradition of ‘Animal Farm’, not all evidence is equal.
In medicine, for example, there is a pyramid of authority which will determine how much weight should be attached to any findings
http://phpartners.org/tutorial/04-ebph/2-keyConcepts/4.2.7.html

Now despite years of refinement and a tendency to ask relatively narrow research questions (e.g. is drug A better than drug B) this process is still fraught with methodological problems in some instances.

If we apply the same standard expected when conducting medical research (to social interaction) we run into all sorts of problems, especially once we try to shoe-horn complex phenomena into a technically valid design.
At the same time interpreting ‘results’ probably says more about the bias of the researcher rather than the phenomena being explored.

If you are saying that we pay selective inattention to reality, then this tendency has been known about for some time
http://psychology.wikia.com/wiki/Selective_inattention

Of course there is London centred humanities educated middle class left wing Guardian reading error as well ! I do not see much life experience from the Millibands, Balls, Cooper etc, etc. In fact Lord Carrington has more experience living and working with the working class when he fought in the Guards in WW2 than most of the Labour cabinet. Carrington and the Queen have more experience of working with machinery most of the Labour cabinet.The Queen, when in the ATS, learnt how to maintain vehicles and Carrington was a tank commander in WW2.

The lack of practical life experience of most of Labour MPs probably explains why so many white working amd lower middle class no longer bother to vote for the party. If Labour MPs included articulate former foreman from the textile industries who lived in the areas where they had worked, then perhaps the party’s vote would be higher and the BNP’s lower. Frank Field and Anner Cryer seem only a very small number of Labour MPs who have made the effort to understand concerns of their constituents and not have their thoughts controlled by London centred humanities educated middle class left wing Guardian reading types.

8. Left Outside

@3 Well it depends if you want to include the effect it has on the migrant.

Our fiscal situation is on balance not affected and theirs personal situation is vastly improved.

Thats why arguments of the ‘enormous economic benefits of immigration’ are more worthwhile than those of the ‘huge economic costs of immigration’

Also the paper above is discussing the fiscal impact, i.e. the effect on government finances and not on the economy in general terms. So there may be a large economic benefit to immigration combined with a neutral fiscal element too.

I’m sure you realise the state and economy are very different things, even under ZaNuLieBore 😉

@3 ditto .. yep, the main economic effect is constraining wage inflation. cjcjc is of course right that some, especially those who own more capital, benefit far more from than others, but wrong if he thinks we don’t all benefit in the long term.

The fiscal balance can also be adjusted, quite easily, although the left would scream.

The positive impact on the migrant is the most powerful argument, certainly.

9 and 10 . So immigration helps to keep the wages down of British people working in the construction,manufacturing and agricultural sectors. No wonder British working and lower middle class people employed in these sectors are less inclined to vote for Labour.

” Manufacturing, construction and agicultural workers of Britain; vote Labour and see your wages fall behind others.”

You forgot about ignoring the base-rate!

@Charlie

Without Albanians, there wouldn’t be a Greek yoghurt industry. Without Latvians, lots of UK farmers would go out or business, the beans and peas would have to be sourced elsewhere, which would hit everybody inzepocket.

More infrastructure projects are needed, not just as makework but as cost-effectively as possible, to enable profitable operation of businesses. Furthering capital formation does benefit everyone, eventually; that was true even under Stalin.

These are not truths to win elections with. Nobody likes being told that some bloody foreigner can do their job for less; even doctors hate that. Better not to be individually a loser than to be collectively a winner. Governments, however, have to keep the wheels turning, which is why, despite their nationalistic protestations, every OECD government of whatever colour welcomes some immigration, and not for altruistic reasons.

Also the paper above is discussing the fiscal impact, i.e. the effect on government finances and not on the economy in general terms. So there may be a large economic benefit to immigration combined with a neutral fiscal element too.

I’m sure you realise the state and economy are very different things, even under ZaNuLieBore

Another area where I reveal my ignorance is, obviously, economics. But wouldn’t a large economic benefit be reflected in a fiscal boost? Increased economic activity = increased tax revenues; increased employment = increased tax revenues etc.

And I’m sure I’ve never said ZaNuLieBore!

13 V.E Bott. Labour and those in the education system( who are largely Labour voters ) have failed to create a decent vocational educationl/ apprenticeship schemes which has meant Britain does not have the number of craftsmen needed. If government did not tax the first £10k of income and had a sliding scale for reducing benefit when people started earning; then the need for economic immigration would have been greatly reduced.

If say I owned a house in central London (whose price – over time – will rise in real terms) and employed staff (whose wages will be kept under pressure) I would be in clover…

Funny how that’s all one sided. The rise in house prices has also helped a lot of people immensely. The same goes for the fall in general prices thanks to wages being kept low (though I think Tories like you are intensely hypocritical – you either want low wages to be protected, by way of a Minimum Wage, or you want wages to rise every year by having a tightly regulated market. Tories want neither, and yet they still complain about immigrants depressing wages.)

Can Tories both complain about depressed wages and rejoice over greater profits?

It’s generally not Tories who are doing the complaining, it is the ex-Labour voters who are switching to the BNP…but who cares about them, eh?

The rise in house prices has also helped a lot of people immensely.

(Hahaha – I never thought of you as a house price booster!)

So it has – the owners of said houses.
(I am such an owner, and I employ staff.)
While it has hurt future owners.
It represents, in other words, a redistribution from the poor to the rich – something which I thought you were against.

Those increases over income growth that is…

It’s generally not Tories who are doing the complaining, it is the ex-Labour voters who are switching to the BNP…but who cares about them, eh?

I see you’ve not stopped pulling old memes out of your ass. But if you actually did any research on this you’d find it to be rubbish:
http://politicalbetting.com/index.php/archives/2009/10/25/where-are-the-bnp-votes-coming-from/

Now I wait for you to drop this meme, but I suspect you won’t because it fits nicely into your pre-conceived notions.

Hahaha – I never thought of you as a house price booster!

It doesn’t matter what you think of me as. The point is that rising house prices offer benefits too. Yes or no? So why leave that out of your (quite poor) cost-benefit analysis?

It represents, in other words, a redistribution from the poor to the rich
Oh dear. On an article which says people using personal experiences to advocate policy are stupid – you use personal experiences to advocate policy. You won’t ever learn will you?

I know there’s something called facts you Tories hate. But I suggest try using them sometimes.

Eh? There’s nothing personal about it.

When the price of something rises at a high real rate, that represents a transfer of wealth to the owner of that thing from the person who wants to buy that thing.

There is no *net* benefit to society. There is merely a transfer.

If you could point me to the benefits of that process I would be interested.
I can see none.

There is no *net* benefit to society. There is merely a transfer.

There can be, especially if foreign companies are buying some of that property and therefore have to invest more money into the UK. Which has also been the case,

Any response to the ‘BNP are ex-Labour voters’ point?

21 – from the link you posted, BNP voters are twice as likely to have previously identified as Labour voters than any other party. They are also twice as likely to come from ‘Labour backgrounds’ than any other party.

The two main targets for the BNP are those anti-establishment voters who hate all parties (which is why more than half of the BNP’s support have never voted for any of the main parties) and ex Labour voters who are now disillusioned with the party (hence the ‘we are the Labour party your father voted for’ posters and the fact, mentioned above, that BNP voters are twice as likely to have been Labour voters than any other party).

rom the link you posted, BNP voters are twice as likely to have previously identified as Labour voters than any other party. They are also twice as likely to come from ‘Labour backgrounds’ than any other party.

In those areas Labour is way more popular than the Tories anyway. A generation ago those same people would be small c conservative working class people.

What’s a ‘Labour background’? Meaning a poor background? See my point above.

ence the ‘we are the Labour party your father voted for’ posters

The BNP use different posters and tactics in different areas given the background of voters.

24. Sunder Katwala

good post.

i think education is another area where everyone is an expert, based on their own experience, even a couple of decades ago

#22 answers for me

I’m not sure how you contradict him by saying that “In those areas Labour is way more popular than the Tories anyway”

In those areas Labour is way more popular than the Tories anyway. A generation ago those same people would be small c conservative working class people.

What’s a ‘Labour background’? Meaning a poor background? See my point above.

What areas? The polling evidence (which is, after all, what you cited) isn’t done by area, but by party identification. And the evidence is fairly clear: most BNP voters haven’t ever voted for a major party, of those that have, twice as many voted for Labour than any other party.

And by Labour background I mean ‘parents generally voted Labour’. Again twice as many BNP voters (and nearly half of all BNP voters) state that their parents were labour voters than any other party. You’ll like the source.

http://politicalbetting.com/index.php/archives/2009/10/22/what-do-we-know-about-bnp-voters/

The polling evidence is reasonably clear. The BNP get most of their support from the totally disillusioned, and of the rest, more comes from former labour voters than any other.

The BNP get most of their support from the totally disillusioned, and of the rest, more comes from former labour voters than any other.

Exactly, and that does not chime with the above stated view that most BNP supporters are ex-Labour voters. Of the few that did vote, just because twice the number voted for Labour over Tory still means only a small percentage of those BNP voters are ex-Labour.

That is NOT even a majority. And anyway, how your parents voted is not necessarily a good indicator to how you vote.

What some of you are saying is – because twice as many of your parents voted Labour over Tories, we’ll assume you’re all ex-Labour voters.

What absolute rubbish.

28. Planeshift

“s. But wouldn’t a large economic benefit be reflected in a fiscal boost?”

Depends on how much tax the government took, whether immigrants worked legally or illegally, whether they spent all their cash on booze etc.

Its why estimates of fiscal benefits tend to vary – it depends on how many years you measure, what you measure. Eg: A migrant arrives workes illegally – so no fiscal benefit then unless they are a smoker or drinker – then moves into legal min wage job – some taxation there – then moves up the ladder – each time adding more to the tax take. So in this scenario the greatest benefit is if migrants are long term and move up the ladder into well paid jobs. Except you then have to factor in the proportion who have children and the cost of educating them, costs of health care, old age etc. But wait! – if they have children, then 20 years down the line the child becomes a taxpayer as well!, so we need to calcualte lifetime revanue and expenditure for the children, and their children etc etc. In other words stuff we can’t possibly know and our estimates will be pointless (after all the tax rate is hardly going to remain the same is it?).

I think it also worth pointing out that Phillipe Legrain cites several studies in his book that claim an overall fiscal benefit to migration – so Chris’s use of a study that states no overall cost or benefit isn’t really putting the case in the strongest possible terms. On the other hand I’m not aware of any showing a net loss to the taxpayer (do correct me – peer reviewed stuff only please). Even if there were – all that we would need to do to correct this is simply spend less on services predominantly used by migrant workers….

This is why the economic impacts need to be stated in terms beyond simply fiscal contribution: questions like What is the effect on inflation? does immigration keep some sectors of the economy alive (agriculture)? Do migrant workers become entrepreneurial and end up employing domestic workers? etc etc.

What some of you are saying is – because twice as many of your parents voted Labour over Tories, we’ll assume you’re all ex-Labour voters.

What absolute rubbish.

Hurrah! Arty McStrawman! I’m not asserting anything. I’m simply analysing the polling data that you cited. The BNP get most of their support from the totally disillusioned, and of the rest, twice as much comes from former labour voters than any other.

Besides, if we’re going to be really pedantic, cjcjc referred to the majority of those switching their votes to the BNP. Since people who didn’t vote before aren’t switching their votes anywhere, his assertion that the majority of those switching their votes to the BNP are ex-Labour is, on the basis of your cited evidence, correct isn’t it?

30. Donut Hinge Party

Tim,

No-one ‘switched’. In the regions where the BNP won, the BNP vote was actually down on last time. What happened was that the previous Labour voters couldn’t bring themselves to vote for Labour this time around, and the BNP won through attrition – like Hitler when the anti-communist parties split the vote in ’33, and he managed to agree to a coalition with the Catholic party.

21. Sunny H. In central London where most foreign companies invest, the land owned by Britons include the Queen, Duchy of Cornwall, Duke of Westminster, Earl of Cadogan, property developers and large land owing companiesetc, etc : little is owned by the working class. Therefore foreign investment increases assets and income of the wealthiest Britons.

When it comes to property construction, there is shortage of British workers in S England which means people have to commute to London.Therefore construction workers have to pay commuting and lodging costs, which reduces their income. On large civil engineering projects such as motorways, T5, CTRL, etc, etc, there are often sites where construction workers can park their caravans; this option is rare in London. Consequently British workes have to live in cramped lodgings in the London area. Immigrant workers often live several to a room in order to keep costs down. Overall there is a massive constraint on the pay of British workers due to immigration which benefits the construction employers and the clients, such as the Duke of Westminster. If we are concerned about income inequality, then I cannot understand how constraining the pay of British construction workers helps to solve the problem.

The construction boom of the 80s greatly increased the income of workers in this sector and assisted in reducing income inequality. Labourers at Canary Wharf earned up to £35Kon a pro-rate basis. A Tory construction boom did more to assist in increasing the pay of construction workers than a Labour boom.

Ernie Bevin and Jo Gormley belived only the best was good enough for the working class. W Churchill believed every worker should have a cottage. A labour party largely comprising and led by white collar humanities educated middle class with no experience of the armed forces, industry or agriculture shows less respect and understanding for the British working class than Harold MacMillan. H MacMillan, an Eton educated Guards officer served with miners in the trenches and always respected them thereafter.

Chris Dillow is correct, David Milliband who lives in primrose Hill, London is unlikley to have a grasp of the opinions of millions of working class Britons living in the run down former industrial areas of Briton. An public shool educated officer who has shared the cramped conditions of a base in Iraq and Afghanistan with working class soldiers, has probably a greater understanding of the conditions in the run down industrial parts of Briton than most Labour MPs; after all that is where man of our soldiers are recruited.

“Ernie Bevin and Jo Gormley belived only the best was good enough for the working class.”

Just who are the working class nowadays? Does the Governor of the Bank of England count because he, too, works for a living?

The old Labour Party badge had a shovel crossed with a quill pen to symbolise workers by hand and by brain but I suppose all that went out with New Labour.

33. Left Outside

Another area where I reveal my ignorance is, obviously, economics. But wouldn’t a large economic benefit be reflected in a fiscal boost? Increased economic activity = increased tax revenues; increased employment = increased tax revenues etc.

Planeshift writes some sense on this subject. There’s a huge host of things which stop economic impact mapping onto fiscal impact.

Although there should be some correlation there’s no reason to suggest it has to be particularly strong.

And I’m sure I’ve never said ZaNuLieBore!

Thats true, sorry. But this is the blogosphere, and if can’t hurl around unsubstantiated claims here, where can you?

I refer to the comments relating to the economic benefits of economic migrants.

Nations with governments that have their own people’s interests at heart take a more intelligent and practical approach to the need for migrant labour. In the event of a genuine need for a particular skill such as an engineer or labourer – temporary guest workers will be recruited on the basis of 3, 6 or 12 month working visas.

-No state support whatsoever.
-The visa would not be renewed in the event that the labour is no longer required.
-Over stayers will be put into prison and only released upon the payment of a hefty fine.
-Gaining citizenship is out of the question.

The above the norm in the world outside of most the ‘western world’.

35. Left Outside

@abc

Well in my book that once again puts the scoreline at Western Civilisation 1 – Everyone Else 0. Although that might just be my British sense of Fair Play kicking in.

Once again, as someone else requested I’d like to see some links to these policies as my knowledge of migration legislation outside Europe, North America and China (internal), is minimal.

First of all, there’s the inconsistency of a world were capital and property (dead labour) is far more mobile than actually living people. As Alex Massie points out rather well here.

Next of course is the fact that there’s research provided above – which contains footnotes to even more positive research – that makes your policy sort of redundant. If migration is already neutral to fiscal policies, positive economically, and massively beneficial to the migrant then the only reason [1] to oppose migration is on cultural grounds. A perfectly valid set of arguments – morally and intellectually deficient to the task of justifying the violent subjugation of the mass of the worlds poor in my view – but not one related to economics.

It seems churlish to argue that migrants are economically beneficial but if we do it my way they’ll be more be even more economically beneficial. Even if that does result in millions being repressed, the creation of an even more illiberal state and the demotion of migrants to the status of second class citizens (not even citizens in fact), which would justify and legitimise other forms of prejudice.

EDIT: [1] Okay there’s one more. That the economic costs are borne by one group in a society while the benefits are enjoyed elsewhere. The problem with this is that it lacks logical consistency. Innovation destroys more jobs than migrants ever have, do we ban James Dyson? Those costs and benefits are distributed unevenly yet we accept it.

32. Bob B . Most Labour MPs would not know the difference between a spade and a shovel, let alone be able to use either one for 8 hours a day.

Sunny H,
What are the benefits of rising house prices? Given what happened in the late 80s, and the in the lead-up to the current mess one would have hoped that lessons had been learned on this.

In my view, home ownership has three key benefits:

1) Instead of paying rent, you’re buying an asset (whilst still gaining a place to live).
2) You also gain because the payments are fixed, other things being equal, whilst rents rise. (And they stop altogether when the mortgage is paid).
3) Ownership tends to affect behaviour in positive ways.

All of this is a particular boon to the lower-paid, and a great way of spreading a nation’s wealth.

If price rises exceed pay rises, houses become less affordable. If the value of my house rises by 20% in a year I’ve gained nothing. I will still have one house, but my children will be less likely to be able to enter the market.

Also, as values increased, the housing market collapsed, taking much employment with it.

The price of bread also rose rapidly in the recent past, but I didn’t celebrate because I had a spare loaf in the freezer.

@34

Unless every accessible and liguistically suitable European country adopted your policies, none could, because they wouldn’t get any migrants and their competitors would gain a lasting economic advantage.

Also, lumping people together is pretty meaningless, since there is such variety in their economic impact on the British economy. Some people such as the Poles, most EU immigrants, Phillippinos, Americans, Australians and Indians make a major contribution because they earn well and rarely claim income-support, unemployment benefit or disability benefits. On the other hand, those immigrants who have come here as refugees, and other less educated groups such as Pakistanis, Bangladeshis and Turks do so far more than the UK born.

http://www.ippr.org/publicationsandreports/publication.asp?id=563

One of their Lordships’ very jaundiced conclusions in the select committe report was that they “endorse the Government’s view that all low-skilled vacancies should be
met from within the EEA”. Personally, I feel the whole committee was hijacked by people who were determined to reach a conclusion before they started, but there you go, it’s difficult to put all the blame on Lamont and Lawson when the committee also included Skidelsky and Valance.

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/82.pdf

39. Shatterface

‘It doesn’t matter what you think of me as. The point is that rising house prices offer benefits too. Yes or no? So why leave that out of your (quite poor) cost-benefit analysis?’

Are you really saying the housing bubble was a good thing – that the benefits outweighed the defecits?

As someone with little prospect of ever owning my own home I find this hard to swallow.

And please don’t use the word ‘meme’ as a synonym for ‘notion’. A meme is a cultural unit that propogates in a manner analogous to genes, i.e. by natural selection.

Spelling the English word ‘arse’ as ‘ass’ in a world in which the media is largely dominated by the USA is an example of a meme.

40. Shatterface

From the OP:

‘Perhaps, therefore, the evidence of our own eyes can be systematically misleading, even when aggregated over everyone. Which in turn implies that the opinion of the majority might be wrong, even if it is not affected by the trash media.’

ANY form of communication between the individuals concerned will skew the results, not just the mass media. The ‘wisdom of crowds’ is an aggregate of independent experience: as soon as the individuals concerned start to adapt their opinions to their expectations of others that ‘wisdom’ is lost.

Social pressures can make us collectively dumber.

Tim J: I’m simply analysing the polling data that you cited. The BNP get most of their support from the totally disillusioned, and of the rest, twice as much comes from former labour voters than any other.

The poll you cited was different to the one I cited. Secondly, a lot of these people aren’t ‘former Labour supporters’, but grew up in areas where Labour was the main party and hence their parents voted for Labour. A better explanation is here by MatGB:
http://www.pickledpolitics.com/archives/6353#comment-182939

I’m afraid these assertions still don’t hold.

little is owned by the working class. Therefore foreign investment increases assets and income of the wealthiest Britons.

That extra money is still coming into the country as investment and eventually finds its way into the economy. I didn’t say that it directly helped the working class. I simply said there are some benefits to some people through rising house prices. No one said it helped everyone (incl shatterface above).

My mother, a single mother, raised us and moved from a council flat to her own house and bought it originally for 60k and its now worth over three times that. she’s not alone in that net worth increase in worth.

Innovation destroys more jobs than migrants ever have, do we ban James Dyson? Those costs and benefits are distributed unevenly yet we accept it.

good point.

42. douglas clark

Chris Dillow,

There is, I think (and what is thinking worth), a conudrum in what you said.

Perhaps, therefore, the evidence of our own eyes can be systematically misleading, even when aggregated over everyone. Which in turn implies that the opinion of the majority might be wrong, even if it is not affected by the trash media .

.

Perhaps the opposite, that a consensus based on the opinion of the majority might be right. And that my sight, might be more realistic, if others agreed with my observations?

Good to know Sunny is a supporter of Thatcher’s right to buy policy…excellent

44. dreamingspire

Sunder@24: having had plenty of education, and worked in a technical support environment in higher ed, and done a very little teaching, and have numerous friends who are or were teachers, no, I’m not an expert in education. So there.

Chris’s article is excellent.

@39: “The point is that rising house prices offer benefits too. Yes or no?”

Rising house prices is one matter, house-price bubbles another.

The long term average ratio in Britain between house prices and average earnings is about 3.8. By the time the house-price bubble in Britain burst in the autumn of 2007, the ratio had increased to nearly 6.
http://www.housepricecrash.co.uk/graphs-average-house-price-to-earnings-ratio.php

“American house prices rose 124% between 1997 and 2006, while the Standard & Poor’s 500 index fell by 8%; half of US growth in 2005 was house-related. In the UK, house prices increased by 97% in the same period, while the FTSE 100 fell by 10%.”
Robert Skidelsky: Keynes – The Return of the Master (Allen Lane 2009) p.5.

Martin Wolf in the FT on Wednesday is very clear about the potential economic harm that bursting asset-price bubbles can inflict:
http://www.ft.com/cms/s/0/38164e12-c330-11de-8eca-00144feab49a.html?nclick_check=1

Wolf – rightly IMO – argues that central banks, including the Bank of England in Britain’s case, should have acted earlier to stop the bubble inflating, especially so in the context of a boom increase in household debt. By the time the bubble burst in Britain in 2007, household debt had increased to £1.4 trillion.

A chart in The Economist of 3 April 2008, based on IMF data, shows that the bubble in Britain inflated to larger proportions than in almost all other affluent countries.

I’ve tracked clear warnings in the press about the house-price bubble going back to 2002 and 2003 (links available) so HM Treasury and the BoE have no excuses for their failure to act.

Of course, house owners with no intention of moving stand to gain from house-price bubbles until the bubbles burst, as they inevitably do. House owners gain from the option to borrow, using their house as collateral, to finance holidays, the purchase of big ticket consumer durables and to fund, perhaps unwelcome, healthcare expenses.

The poll you cited was different to the one I cited. Secondly, a lot of these people aren’t ‘former Labour supporters’, but grew up in areas where Labour was the main party and hence their parents voted for Labour.

Come on Sunny, this is unworthy even of you. The statement that I have made, repeatedly, is that the BNP gets most of its support from the disillusioned, and the rest is twice as likely to be from former Labour voters than those of any other party. That comes from the polling data that you cited. Which bit of this are you disagreeing with?

The additional polling data that I cited, that states that half of all BNP voters state that they grew up in a Labour-voting household is less directly informative (how did they know, for example) but still illustrative, which is why I mentioned it but didn’t refer to it in my analysis of the breakdown of where BNP voters are coming from.

No-one ’switched’. In the regions where the BNP won, the BNP vote was actually down on last time. What happened was that the previous Labour voters couldn’t bring themselves to vote for Labour this time around, and the BNP won through attrition – like Hitler when the anti-communist parties split the vote in ‘33, and he managed to agree to a coalition with the Catholic party.

If someone used to vote for the Labour Party (or the Tories or the Lib Dems) and now votes for the BNP, that person has switched his vote. That’s uncontroversial surely?

47. Donut Hinge Party

Last time.

Frothing Bigots = BNP
Traditional Flat Cappers = Labour.

This time.
Frothing Bigots = Mostly BNP (vote went down)
Traditional Flat Cappers = nae bugger.

Now, I can’t prove that some of the previous BNP voters didn’t decide not to vote this time around, or put their vote to another party, or died en masse, leaving a vacuum for the disillusioned Labour voters, but it doesn’t seem all that likely, in all honesty, does it?

Now, I can’t prove that some of the previous BNP voters didn’t decide not to vote this time around, or put their vote to another party, or died en masse, leaving a vacuum for the disillusioned Labour voters, but it doesn’t seem all that likely, in all honesty, does it?

I don’t know. That’s why I was relying on the polling data. I’d have thought, given that the majority of BNP voters don’t usually vote, that lots of them couldn’t be bothered to vote this time round.

@ VE Bott 38
Thank you for your thoughtful and interesting response. I will read the reports when I find time but in the interim I would like to respond to your first para –

“Unless every accessible and liguistically suitable European country adopted your policies, none could, because they wouldn’t get any migrants and their competitors would gain a lasting economic advantage”

by saying that I am not aware that countries with the policies that I referred to (such as the UAE) have any difficulty in attracting labour – whether that be highly skilled professionals typically from the west or labourers from south asia.

If migrants are indeed intending to come to work and to adhere to the laws of the land then it follows that they should not have any concerns with such a policy.

@ Left outside 35

Thank you for your comment in response to my note at 34. Very interesting view point.

Please however allow me to challenge your comment below –

“It seems churlish to argue that migrants are economically beneficial but if we do it my way they’ll be more be even more economically beneficial. Even if that does result in millions being repressed, the creation of an even more illiberal state and the demotion of migrants to the status of second class citizens (not even citizens in fact), which would justify and legitimise other forms of prejudice”

Migrants – aliens – are of course not citizens and that is simply a matter of fact. Nor should they be regarded as citizens having equal rights to nationals. I don’t understand why you should imply that I am suggesting anything extraordinary. Are you proposing that the aliens should be given the right to vote or to sit on a jury in judgement of nationals – of course not – so it is only the degree of “repression” as you describe it that we are debating.

The policy I have outlined is the norm around the world where large numbers of migrant workers are required for the economy to function. The policy is not illiberal or extreme – you will see that it is the norm in most of the world should you chose to investigate.

@49

Charlie, the UAE pays very good wages for the privilege of granting nearly all the people who actually do any real work there so few rights.

So if we were competing with France and Germany to attract our hard working Poles, yet offered really poor health and social security safety nets, why should they choose Britain – apart from if our employers paid much higher wages of course, which rather defeats the object ? Knowing that you’re working in a civilised country is presumably part of the appeal.

And the Gulf states do have trouble getting skilled labour in, incidentally:

http://www.ameinfo.com/149665.html

” Over 160 construction projects in the UAE are being delayed because of a shortage of skilled labour, reported Gulf News. Samir Khosla, vice-chairman of Dynamic Staffing Solutions, said many contractors are now looking at technology as a way to reduce the labour component. At present, there are $160bn worth of projects in Dubai alone and around one million labourers in the construction industry, with about 95% of the workforce being foreigners. “

52. Left Outside

Its true that aliens are not citizens, and clearly should not be treated as such.

However, your argument goes far further than denying them full civil equality (voting rights, jury duty etc) and that is where I take exception to it.

Although you can characterise this discussion as favouring different levels of repression it might be better to look at it in a different way.

For example whereas you are seeking to add burdens to the migrant I would simply not extend certain privileges.

I think the argument is strong enough for me – that migrants are economically beneficial – to not justify the steps you recommend.

Where you say “gaining citizenship is out of the question” is what prompted me to claim you would create second class “citizens.”

The idea that someone resident in this country who works and contributes would be debarred from citizenship by virtue of their birth would of course legitimise prejudice, they would legally be unworthy of the privileges the majority enjoyed. I think this is where your argument falls down morally, where it has already failed economically.

“The policy is not illiberal or extreme – you will see that it is the norm in most of the world should you chose to investigate.”

Unfortunately, much of the world is illiberal and extreme, there is safety in numbers but rarely truth.

Just gone to read Rowthorn’s paper – but it is behind a paywall. Can someone summarise his methodology please? What does he count as contributions and what does he count as expenditure?

Alternatively, if somebody wants to violate copyright law and send me the thing 😉

@ OldBob

Yeah, Bangladeshi peasants get screwed everywhere, but even minimally skilled labour does get paid a reasonable whack in the Gulf.

I don’t know about the situation in the States, there’s some sort of work ethic thingy there I hear? Brits are perhaps a bit saner. I really don’t think you can be sure that the sort of really strenuous and frankly unpleasant work involved in bringing in many crops would find so many takers here – not at £10 an hour anyway, let alone £5.80.

But you make an interesting point: I was surprised to learn that in the UK, agricultural wage costs are a paltry £2.5 billion, compared to a total intermediate (seeds, vets, animal feed, fertilisers) input cost of £13 billion, never mind the capital cost of the land itself. https://statistics.defra.gov.uk/esg/quick/agri.asp.

However, the margins achieved are narrow, even with the subsidies, so while you’re probably right that it’s the richest farmers who really benefit from cheap labour, I think the point remains that without it, many farms could go down and some labour-intensive crops would be dropped altogether.

55. Donut Hinge Party

Sod the tillers of the fields, have you guys not heard of Margin 2 rates? Described to me as “the cost it takes to keep your bum on a seat”, and covering rent, lighting, equipment, HR costs and all the other hidden costs Margin 2 rates are often in excess of £100 an hour before even taking wages into consideration. So when an individual is sitting back smugly and saying “Yeah, I earned my £40 wage today,” they’re actually still £660 in the hole.

What are you on, Donut? Is it pleasant?

@54: “Just gone to read Rowthorn’s paper – but it is behind a paywall”

Rowthorn’s paper on the economics of immigration is here:
http://www.civitas.org.uk/pdf/Rowthorn_Immigration.pdf

See also the HoL Select Committee on Economics Affairs, 1st report of Session 2007-8:

The Economic Impact of Immigration Vol 1. Report:
http://www.parliament.the-stationery-office.co.uk/pa/ld200708/ldselect/ldeconaf/82/82.pdf

Vol. 2 Evidence
http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/82ii.pdf
Minutes of Evidence: Professor Rowthorn

58. Planeshift

Thanks Bob for the links.

However the link is from something Bob Rowthorn wrote in 2004. I was under the impression he was analysing the fiscal effects of immigration from eastern europe (where most of it has come from), which would mean to be any use he has to study the contribution and costs of the A8 migration after 2004 when such migration actually happened. The evidence he presented to parliament is similarly from 2007.

Is there anything more recent he has written that I can access without paying?

@61: “Is there anything more recent he has written that I can access without paying?”

There is much on the fiscal impact of immigration scattered through Vol 2 of the HoL report on: The Economic Impact of Immigration:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/82ii.pdf

By web references, Prof Rowthorn submitted his paper in the Oxford Review of Economic Policy 2008 Vol 28(3) pp560-580 on: “The fiscal impact of immigation on advance economies,” to the HoL Select Committee but it is not reprinted in Vol.2 Evidence, most likely because the submission was a published paper in an accessible academic journal.

Sometimes it is possible by diverse means to find ways over, under, or bypassing paywalls but I have not managed to do so in this case, sorry. The Oxford Review of Economic Policy – an excellent journal for keeping up with the academic literature on policy issues – is very protective of its copyright. For personal subscribers, each issue of the journal costs £17.
http://www.oxfordjournals.org/our_journals/ecopol/access_purchase/single_issues.html

At Left Outside 35

You asked for a link to info on alternative immigration policies of nations outside w europe and n america. see link – it is fairly balanced and readable brief report on Japan (of relevance as an advanced democracy).

http://www.migrationinformation.org/Feature/display.cfm?id=487

I could highlight an extract –

“Although modeled on the US system, the law from its inception was not designed to encourage migrants to settle in the country. Nor did the nationality law facilitate the acquisition of Japanese nationality by resident foreigners. “


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