Rob's Blog

I struggle to hold my own in verbal debates with people who think radically differently to me. It’s easy to be distracted from my point by constantly having to correct misconceptions.

I keep meaning to write dialogues — imaginary debates in which I rehearse my arguments. This is a start, .

The thing about economics is most people think it’s about money supply and inflation and defecits and that there are formulae that relate these things and that the whole thing works like that computer with the pipes. This stuff is impossible to debate. The nice thing about Austrian economics is you can talk about it.

So where to start? Let me try this:

A: The government is cutting jobs in the public sector. This will ruin the economy and cause a double-dip recession.

B: You can’t spend the same money twice.

A: Yes you can, money just goes round and around.

B: What I mean is, *you* can’t spend the same money twice. Let’s say I run a cake shop. I am forced at gunpoint to give you £100. You spend that £100 on buying my cakes. How has this helped the economy?

A: There are more cakes in existence than there otherwise would be. The world is richer.

B: The number of cakes I can make is fixed. I would have sold them to someone else and I would be £100 better off. Or, I would learn that nobody wants my cakes and I would find something to make that people *do* want.

A: But if I don’t get your £100, I will be unemployed and not doing any useful work.

B: The work you do can not be very useful if you can’t get people to pay for it voluntarily.

A: The work I do in the public sector will improve the quality of the transport infrastructure, thereby enabling you to get ingredients for your cakes more cheaply.

B: Yes, but if you were unemployed, I would still have my £100. I might use it to buy a better cake-making machine that will help me make cakes more cheaply. Or I might invest it in a transport infrastructure company.

A: How is that different?

B: Well, apart from the irrelevant (for the purposes of this discussion) fact that there is less violence involved, perhaps I might be better placed to decide how to spend my £100 than you. I might be better able to cut the cost of cake-making because I understand the business of making cakes.

[At this point the discussion veers off into the question of why distributed decision making is better than centralised control. Also, the parenthesis above is why I don't think of myself as a *consequentialist* libertarian. I would be opposed to the violence even if centralised control was more efficient.]

The coalition government wants to set an “annual limit on the number of non-EU economic migrants admitted into the UK to live and work”.

Immigration isn’t the problem it’s made out to be. The angle that the government is working is that immigrants will take your job, and the government will protect you from that. It’s the lump of labour fallacy. In the end, the more people there are, the more jobs there are to do. This is self evident: there are millions more people living in the UK than a hundred years ago and they are not all unemployed. The more people there are, the more people go out to restaurants, so the more waiters need to be employed. More fundamentally, a “job” is just a specialisation, something you get someone else to do because they can do it better or more cheaply or more conveniently than you can do it yourself. People will always do things for each other no matter how many people there are.

There are dynamics to the situation. Sudden changes in the make-up of the population can cause problems for some. If you’re a plumber, and lots of plumbers move from Poland and are prepared to do the same work as you for less money, I can see why you’d be worried: you don’t want to lower your prices, increase the quality of your service, or provide a different service. The government talks about limiting immigration because it wants your vote. But doing so doesn’t help people in general. The sudden influx of cheap plumbers is good for me: I get my plumbing done for less. And I have money left to spend on something else, so whoever provides the something else benefits too.

You can’t pretend that limits to immigration are good for “the economy”. No overall good is done by limiting immigration. It helps one group (the incumbent plumbers), but only at the expense of other groups (the would-be immigrants and anyone who wants to hire a plumber).

In the long run, freedom of movement makes everyone richer. You could say that it enables labour, like any other commodity, to move to where it is best able to be used. But there’s more to it than that. Being able to move freely is valuable for its own sake. Left alone, people figure out how to improve their lives. That improvement, whatever form it takes, is an increase in wealth. If a Pole wants to move to the UK and do my plumbing, and I want to pay him to do my plumbing, then left alone we are both richer.

If a third party wants to stop us from making that agreement, they have to initiate force. That’s inherently evil. That’s what goverments do: they’re the go to guys if you want evil done to make sure you can continue to charge high prices for your services.