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Chris Dillow: Stumbling and Mumbling

Stumbling and Mumbling is a personal blog of Chris Dillow, an economist who spent eight years with one of Japan’s largest banks. He blogs about British politics and provides thoughtful analyses on the British economy and sports.

Corbyn’s success: centrists’ failure

For months the Times has been running a series of columns on how centrists are befuddled by Corbynism. Nick Cohen improves upon those pieces. His piece contains a big truth – that Corbyn “won the left-behind middle class.” Not only are Labour members disproportionately professionals, but also Corbyn’s Labour polled well among the AB social group. This happened in large part because, as Rick said, the middle-class isn’t as posh as it used to be. Younger professionals especially have become...

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UK vs US capitalism

Frances Coppola says that in developed economies: Wages have not kept pace with productivity for the whole of the 21st century. Workers' wages simply don't reflect their marginal productivity any more. However, this is perhaps not so true in the UK as it is in the US. My first chart compares the real wages of full-time men in skilled trades (which I'm using as a proxy for median wages)* to labour productivity. This shows that since data began in 2001 real wages have indeed...

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Economic roots of post-truth politics

Here’s a conjecture: the rise of “post-truth” politics (defined by the OED as a process whereby “objective facts are less influential in shaping public opinion than emotional appeals”) is in part the product of deindustrialization. What I mean is that in manufacturing, facts defeat emotions and opinions. If your steel cracks, or your bottles leak or your cars won’t start, all your hopes and fancy beliefs are wrong. Truth trumps opinion. Contrast this with sales occupations. In these,...

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Immigrants as scapegoats

People who care about things like evidence and prosperity have pointed out that proposals to limit EU immigration after Brexit are bad for the economy. It’s not sufficient, however, merely to point out facts. We must also ask: why – of all the false beliefs it is possible to have about the economy – is the idea that migrants significantly depress wages so widespread and entrenched? In some cases, of course, it’s simply a rationalization of hostility to migrants. Some people would hate...

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Against high CEO pay

Imagine we lived in a feudal society in which lords exploited peasants. A defender of the system might argue that wealthy lords perform a useful service; they protect their peasants from invasion and theft thus giving them security and a little prosperity. And competition between lords should improve these services; bad lords will find their lands and peasants seized by better lords who become wealthier as a result.   Such an argument would, however, miss the point. The case against...

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On models & downs

Simon has a nice post on the contrast between economic models which are theoretically coherent but empirically weak, such as microfounded DSGE models, and empirically stronger but theoretically weak models such as VARs. This poses the question: why do we need both? To see why, think about American football. A team has four attempts (“downs”) to advance ten yards. If it doesn’t do so, its opponents gain possession. Many teams therefore often punt the ball downfield on the fourth down, so...

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In defence of Laura Pidcock

Laura Pidcock’s claim that she has “absolutely no intention of being friends” with Tories because they are “the enemy” raises the question of whether tribalism in politics is a good thing. I suspect that, for her, it is. This seems an odd thing to say. I don’t want politics to consist of a set of echo chambers in which people only talk to the like-minded, and I like to think this blog sometimes tries to speak to non-leftists. “My side right or wrong” has given us the ugly spectacle of...

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The weather/climate bias

Ben and Simon complain about the BBC’s unbalanced coverage of Patrick Minford’s Brexit fantasies. I sympathize. I suspect this was due to the BBC being so desperate to avoid the allegation of being biased against Brexit that it toppled over too far the other way. Such an error is in theory easily remediable. I fear, though, that there might be a more insidious bias at the BBC, which arises from the very nature of news itself – a tendency to report the weather rather than the climate. What...

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A new capital?

What does capital do in the digital economy? This is the question posed by Phil in an important post. He says: Capital is proving itself surplus to the requirements of social production and is therefore assuming ever more parasitical, rentier forms…How long can these parasitic relations last? When will Uber drivers call time on the very visible deductions made from their fares and replace the app with a cooperative effort? Is the time coming when Silicon Valley can no longer ponce...

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Willing the ends but not the means

There’s a link between two of my recent posts which I’d like to bring out. It’s that actually-existing centrists and rightists make a mistake of willing the ends but not the means. For example, centrists rightly want us to remain in the EU. Many, however, fail to appreciate that the vote to leave was strengthened by economic conditions which they helped to create. Austerity – in which the Lib Dems colluded – and capitalist stagnation (of which some have been insufficiently attentive)...

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