House of fun
The premise in Andrew Lilico’s article for CapX on housing, that credit has driven up UK house prices, is accurate. But now that houses are drastically unaffordable, by what mechanism are those who are effectively now imprisoned in rentals going to find release? The only way, surely, is for house prices to return to their long term average, which is a sensible multiple of annual wages. Thus I believe that Mr Lilico is predicting that a long overdue crash is on its way, and the only reason it has been delayed is state-backed mortgage subsidy in the form of low interest rates.
Peter Moore, London, UK
Britain could join the Euro, really
Britain needs to make its mind up about the EU. We cannot and should not expect our friends and allies in the EU to put up with the UK dragging its heels on Europe. We should ask the European Commission to outline its roadmap for the EU for the next 10 years and ask the people of this country whether they want to take a full and active part in shaping that vision, understanding that if they say “yes” then they are honour bound to accept it. Alternatively, we can gracefully bow out of ever closer union wishing our friends and allies in Europe success in their endeavour. This is a real choice between two different futures. Europe cannot, will not and should not stand still. The status quo is not an option.
Bill Stokes, Buckinghamshire, UK
Dan Hannan writes that the case for EU withdrawal should be put optimistically. I agree. But this is easier said than done. The ‘in’ case will be presented as a no-brainer; there will be massive scaremongering. And the sheer fear of daring to go against the status quo will weigh heavily in the minds of the undecided.
The British were lied to in 1975, not just by Heath but by much of the political establishment. Personally I cannot feel confident that we will not be lied to again. The “in” camp, which includes the PM of course, will have massive resources, not least from the EU itself, with the result that a fair campaign will be difficult, if not impossible.
A particular concern of mine is that a consequence of a vote to remain in will be that the government, and any successor, will need no further mandate to ditch the pound and adopt the euro. This consequence should be made absolutely clear in pre-referendum information and, if possible, in the wording of the question. But will it be? I very much doubt it, because while the question whether to remain in the EU might well produce a clear affirmative vote, the question of whether we should abandon our currency and join the Eurozone, with all its implications, would not be so clear cut.
George Aldis, Northampton, UK
More nonsense from Joseph Stiglitz
Chris Deerin rightly attacks Joseph Stiglitz’s BBC Radio 4 appearance on Monday. However, this is not the first time Stiglitz has spouted rubbish. A particularly reprehensible example is with regards to the work of the late Nobel Prize laureate, Elinor Ostrom. In 2009 Stiglitz was quoted in the New York Times as claiming that Ostrom’s theory of bottom up institutions and common property rights regimes show the “existence of social control mechanisms that regulate the use of commons without having to resort to property rights”. Ostrom’s theory can of course be critiqued; indeed, some may argue that awarding her the Nobel Prize was somewhat bizarre not least because she had no formal qualifications in economics.
But here, as with Monday’s radio programme, Stiglitz is just plain wrong. Private property rights serve as the core of Ostrom’s work. In her book ‘Governing the Commons’ (1990), Ostrom argues that in communities such as Törbel, Switzerland, which have a heavy reliance on common pool resources, actors have clear and enforceable property rights over areas of land in which their cattle graze. Private property rights are key to the success of such communities.
The right must be increasingly wary of Stiglitz and other high profile and highly acclaimed left-wing academics. Their word is not gospel, but all too easily treated as so.
Ben Judge, London, UK
Joseph Stiglitz, one of the world’s highest paid economists, advocates income tax at 70 per cent. He also advocates that natural resources are subject to near 100 per cent taxation, since they are immobile – a line totally at variance with the SNP’s call for reduced taxes on oil. The fact is that Laffer curve effects apply in both cases due to migration (humans) and substitution (fracking etc). His assertion that egalitarian societies have high growth is statistically invalid (Japan is egalitarian and has low growth; London is inegalitarian and has high growth – many examples of the contrary possibility). Stiglitz is just another in a long line of dirigiste authoritarian economists who appeal to the rhetoric of envy using snake-oil correlation suppositions.
Peter Smaill, Scotland
The case for the living wage makes no sense out of London
Adam Memon (author of The case for a living wage) has no feel for the employment market in places like the West Midlands where, until recently, I ran a company with nearly 100 staff.
1. The West Midlands used to provided a large number of relatively low-paid manufacturing jobs. Those people who had those jobs now have no jobs. Rising costs, regulation and rising wages are depriving the low skilled of gainful employment in a relatively open world market.
2. With a minimum wage of £2 per hour in Romania and Bulgaria, and a ‘living wage’ of £8 or more in the UK, the steady attraction of workers from the eastern Europe to the UK Is unpreventable with open EU borders. Who suffers? The poorly skilled UK worker.
3. With the cost of labour so high, every sane employer sweats blood to shed every job he can. Again, the low skilled worker is the one who suffers. No I am not going to employ a gardener – I’m going for lowest possible landscape maintenance.
4. How can the English regions compete with the Southeast if their labour costs can’t reflect their lower costs of living? Here you can buy reasonable houses from £60,000. If the wages reflected property prices, costs would be lower in the regions. Then there would be market reasons for the private sector to open businesses here. At the moment the regions are propped up by public subsidy – national minimum wages, national public sector salary scales, national benefit rates – forever depriving us of the prosperity that comes from earning our own keep.
Mark Ellse, West Midlands, UK
