The world's second lowest productivity industry
Unemployment. Furthermore, despite decades of technological advance in the rest of the economy, unemployment remains stubbornly at the bottom of the pile. There have been no major efficiency gains in unemployment in the last hundred years.
Normally I am sceptical of industrial policy, but when the government starts talking about moving resources out of unemployment, I think there is good reason to believe that they might be picking a winner.
[regular readers of this blog will, of course, be aware of what the world's first lowest productivity industry is, and perhaps of the curious tendency of right-wing political parties to want to subsidise it]
"The world's second lowest productivity industry"
ReplyDeleteFirst is Microeconomists, who have provided themselves idiots and worked to destroy Macro at the same time?
No, because microeconomists do at least, some of them, produce things that people are willing to pay for (economics textbooks mainly, admittedly, but the people buy wot the people buy and I am not paternalist about them wasting their money).
ReplyDeleteAt number 1 is the military, who (except when they are helping victims of natural disasters or breaking firefighters' strikes or some such) are either economically unemployed (best case) or producing output that people in aggregate would pay significant amounts to avoid.
(yes yes the second world war, OK you wowsers. "Security" is a public good, but as JQ always says, nearly every war is a clear Pareto loss from the status quo ante and the reason people always bring up WW2 is that it, along with arguably the American Civil War, is the only good example they have. The American Founding Fathers were dead right about standing armies).
""Security" is a public good, but as JQ always says, nearly every war is a clear Pareto loss from the status quo ante and the reason people always bring up WW2 is that it, along with arguably the American Civil War, is the only good example they have. The American Founding Fathers were dead right about standing armies)."
ReplyDeleteI'm confident the War for American Independence was a clear Pareto gain from the status quo ante, and I'm pretty sure the American Founding Fathers would agree with that, too.
A war of independence, by definition, can't be a Pareto gain. But was the American Revolutionary War a Pareto loss?
ReplyDeleteThe counterfactual is difficult, but the existence of Canada suggests to me otherwise; as a Crown colony with a more equitable taxation regime agreed by negotiation, the United Dominions Of America would have been able to avoid the Civil War and would have gained independence with a sensible administrative structure rather than a totally dysfunctional legislative and executive split. The world would also have been spared the worst of the Second World War too, as the UDA would have entered that on day one too, like Canada did.
Actually, I would think that not being a colonial power would in many circumstances count as a gain.
ReplyDeleteAs for the counterfactual, I find the idea that the US would have been better off without the Louisiana Purchase (which obviously wouldn't have happened under British rule) highly dubious, without even getting into the whole "freedom and democracy are better than being a colony in an empire in which suffrage was tightly restricted" thing.
You're assuming, I think, that the Abolition Act of 1833 would have gone down without a fuss in the Southern Dominions. (That said, the likely attempt at secession would have probably taken a lot less than 4.5 years to quash, with Her Majesty's Navy quickly sailing in to reinforce the armies of the North.)
ReplyDeleteAnonymous: "suffrage was tightly restricted" is an entirely correct description of the USA both before and after the revolution, and it's worth noting that England abolished slavery and granted women the vote within plus or minus ten years of the US in both cases. You can make many good cases for the American Revolution (not least that it established a major world economic power that was not explicitly imperialist and which at least for a while forswore a standing army), but voting rights are not among them.
ReplyDelete"The world would also have been spared the worst of the Second World War too, as the UDA would have entered that on day one too, like Canada did."
ReplyDeleteIs this counter-factual world one where the USSR is part of the UDA?
"Anonymous: "suffrage was tightly restricted" is an entirely correct description of the USA both before and after the revolution, and it's worth noting that England abolished slavery and granted women the vote within plus or minus ten years of the US in both cases. You can make many good cases for the American Revolution . . .but voting rights are not among them."
ReplyDeleteWell, this is completely wrong. By the early 1800s, male suffrage in just about all American states was based on taxpaying, not property, and most white males had the vote. In England at the beginning of the 19th century, by contrast, a tiny fraction of white males were allowed to vote, and even after the 1832 Reform Act, only one in seven adult males had the vote. Having the U.S. remaining under England's thumb would have been a huge negative for the cause of democracy. And that's not even to mention the value of having a written Bill of Rights.
I'd also had that if the U.S. South had been a part of Britain, it's very unlikely the Abolition Act of 1833 would ever have passed.
The suffrage rebellion that fashioned the UDA would of course already have flooded back to transform the voting rights situation in the British metropole: how else could the UDA have come to be? The American Revolution is, and this counterfactual evolution would have been, only Stage 3 of the British Revolution of 1642/88.
ReplyDeleteJust to clarify, do you consider the military (British Army) to be separate from the defence industry (BAE systems)? Or do you mean to say that spending on the military as a whole is less productive than DWP spending on the unemployed?
ReplyDeleteI can't help but observe that the American Revolution was a very bad thing for most of the contemporary inhabitants and their descendants of the majority of what is now the USA.
ReplyDeleteWorld War II wouldn't have happened with World War I, so I don't think that one's allowable.
ReplyDeleteThat leaves the civil war. Oh, and Gulf War II, obviously.
Are we counting imprisonment as a subset of unemployed in this schema?
ReplyDeleteActually, World War I would also arguably have been a lot less likely, in that the European powers wouldn't have been even nearly evenly matched if Britain owned the whole continent of North America.
ReplyDeleteJust to clarify, do you consider the military (British Army) to be separate from the defence industry (BAE systems)?
Interesting question, but I think I would argue that BAe produce goods that someone is prepared to pay for. The real destruction is done by the actual Army and Air Force. I think that, given the amount of invested capital, the amount of fuel they burn, and the fact that their positive contribution to the world is more or less limited to smallish airlifts of humanitarian aid while their negative contribution through bombing is huge, the Air Force takes the cup for economic worthlessness.
And that's not even to mention the value of having a written Bill of Rights.
ReplyDeleteBritain has a written Bill of Rights, and had one a century before the US; it was signed in 1688 or so.
most white males had the vote
Well, that doesn't sound like a tightly restricted franchise at all!
if the US South had been a part of Britain, it's very unlikely the Abolition Act of 1833 would ever have passed.
No.
If the US South had been part of Britain itself - rather than being a colony or dominion - it would have been covered by the 1772 decision in R. v. Knowles, ex parte Sommerset, or by the Scottish 1778 decision in Knight v. Wedderburn, and slavery would have been illegal from the start. (Slavery was declared illegal in the UK almost a century before it was declared illegal in the US.)
And if the southern US had been a dominion, then it wouldn't have had a say in whether the Abolition Act passed or not, because it wouldn't have sent any MPs to Parliament.
the Louisiana Purchase (which obviously wouldn't have happened under British rule)
Obviously, why? Britain fought a 22-year war with France, won, and took over a lot of French colonial possessions as a result. You think they wouldn't have grabbed New Orleans?
the Louisiana Purchase (which obviously wouldn't have happened under British rule)
ReplyDeleteWe would also probably not have bothered with writing a cheque for Alaska. Ask the Quebecois; that's not really how Imperial Britain rolled.
I think England's mills would have wanted to keep the cotton flowing in somehow.
ReplyDeleteThis American 100% agrees the war for independence was a huge mistake, as demonstrated by Canada and Australia. It was also about 90% England's fault. In 1760 there were basically zero people in America agitating for independence, and not that many as late as 1770. England was really spoiling for a fight.
In 1760 there were basically zero people in America agitating for independence
ReplyDeleteFunny that, given that the British Army was doing the fighting for them out on the western frontier.
In reality, represented in Parliament or not, there was fierce lobbying against abolition from the West India interest. Add the cotton barons of the Dominion of Southern North America to that and it may very well be that abolition doesn't pass, or doesn't pass without a civil war.
ReplyDeleteBill: one reason there was lobbying against abolition was because the West India planters saw themselves losing out to their rivals in the US, who would still be able to use slaves and thus undercut the West Indians on prices. In fact the lobbying might be rather less fierce if Southern North America were also set to come under the Act.
ReplyDeleteCanada and Australia wouldn't be what they are except as reaction to America's bad example.
ReplyDeleteNo efficiency gains in the last 100 years? Bah, humbug! Consider improving technology in entertainment and psychopharmaceuticals!
ReplyDeleteAjay,
ReplyDeleteExcept that the West Indians were mostly sugar planters, and sugar played only a minor role in the southern US.
"I'm confident the War for American Independence was a clear Pareto gain from the status quo ante, and I'm pretty sure the American Founding Fathers would agree with that, too."
ReplyDeleteRight on! Those would be the same Founding Fathers who RELENTLESSLY fought against slavery, despite being forced to own slaves, right?
Several commenters here miss the point that selling colonies and trading posts was quite common among the various European countries from the 16th until the end of the 19th century. The Brits have bought and sold various colonies too.
ReplyDeleteYes, certain colonies have been taken over by force, during major conflicts. This includes the capture of New Netherlands (NY) in 1665 and New Sweden (Delaware). New York was also recaptured in 1672 and then again traded in the Peace of Westminster against other British colonies as they withdrew from their joint coalition with France - Cologne and Muenster to attack the Dutch Republic.
Also the Dutch Republic invaded the United Kingdom in 1688 after which event William of Orange became King of England with his wife Mary. The Brits call this event the Glorious Revolution today. For Orange it was an upgrade from an elected non-heriditary public Office in the Dutch Republic where he had to share executive power and respond to a parliament to become a King. Hence he was quite willing to give the British Parliament its rights.
That invasion of Great Britain and the follow up of creating an anti-Louis XIV coalition was one of the reasons the Dutch Republic did not recapture their colonies again in North-America.
It is also a well known fact that the American War of Independence was financed by France and the Dutch Republic and they also supplied most of the weapons for the revolutionary insurgents, as the British government had prohibited weapon production in their North-American colonies.
The Louisiana Purchase was bought by the USA from France and financed by Amsterdam based Bank of the Hope family and London based Barings Bank. It occurred before the Rothschilds made their fortune. Strikingly financing of that deal was done in the UK which was at that time regularly fighting France (Napoleon).
You surely need to look into history before creating counterfactuals and also consider that the North-American eastern coast could have become predominantly non-English colonies.
America might have become a continent were most people would speak a language between Cajun and Quebecquois or Dutch.
Netbrian: "Are we counting imprisonment as a subset of unemployed in this schema?"
ReplyDeleteGiven the recent upswing in the use of (cheap) prisoner-workers to replace (fully-paid) unionized workers, we probably shouldn't.
If the US South had been part of Britain itself - rather than being a colony or dominion - it would have been covered by the 1772 decision in R. v. Knowles, ex parte Sommerset, or by the Scottish 1778 decision in Knight v. Wedderburn, and slavery would have been illegal from the start.
ReplyDeleteI've just realised that, of course, the transatlantic slave trade grew up at least party as a result of the loss of indentured labour when, post-independence, the UK was no longer able to sentences its miscreants and bread-stealers to "transportation to the colonies" in Virginia (I forget what happened instead; something to do with South Wales).
"There have been no major efficiency gains in unemployment in the last hundred years."
ReplyDeleteA mere statistical artifact. The efficiency gains FROM unemployment are accrued off the balance sheet.