By Will Denayer. This article was first published on Flassbeck Economics.
I am disgusted with the policies of the right everywhere, the policies (‘economic governance’) of the EU, the violence in the world, the unwillingness to tackle climate change and I am disgusted with the views of many on immigration. They are wrong.
- An example
Take Robert Skidelsky. Lord Skidelsky wrote the best biography of John Maynard Keynes to date. He is an accomplished political economist in his own right. Skidelsky wrote an article for Social Europe last week, ‘The failure of free migration.’ Skidelsky explains that, throughout the Western world, a toxic mix of physical, economic and cultural insecurity is fuelling anti-immigration sentiment, precisely at the moment when the disintegration of post-colonial states across the Islamic crescent is producing a refugee problem on a scale not seen since World War II” (see here).
Finding a solution will be by no means an easy feat:
“(E)nding the flow of refugees from the Middle East and Africa is (…) daunting. Restoration of order and creation of legitimate authority are preconditions of economic development, and we don’t know how this is to be done. In some cases, it may require redrawing borders. But it is hard to see that happening without years of fighting, or to know how the West can reduce the bloodshed” (see here).
I do not want to go into this right now, although it is the essence of the whole problem. These post-colonial states are of course our post-colonial states – after the partition of the Ottoman Empire, Turkey, Iran, Iraq, Syria, Lebanon, Palestine, Jordan, Egypt, Libya, Tunisia, Algeria and Morocco were either British or French mandates, Kuwait never existed as such before the English occupied this part of the world. Yemen (‘Aden Colony’) was also British. For the rest, the whole of Africa was in European hands: British, French, German, Belgian, Dutch, Italian, Spanish and Portuguese. The era of decolonisation made countries independent – countries which never existed before, borders based on the division of Western powers (which have been fuelling resentment and dysfunction ever since), ethnic and other groups which came to power because the West considered them useful, etc. These countries always had a hard time developing: the organisation of the global economy makes it impossible for them to properly develop. The best that the West could do was to get out and let people decide for themselves. The worst it could do is what it does: bombing places to smithereens. Surely, if the West would have stayed out of Iraq and Syria, millions of people would now not be running for their lives. Everybody knows this.
Picture: Homs in Syria. Those who flee have the right to protection (Source: Google images).
So, what is all of this about the failure of free migration? We cause it. The problem does not lie with those who have the choice to stay and get killed or to become the pariahs of the world. The problem lies in our imperialism, in our neo-con wars, our illegal occupations, our complete neglect of human rights, all for money, oil, influence, minerals and business. Who talks about that? When you talk about it, people shy away as if you have some sort of an infectious disease. As if any of this is not the plain and obvious truth, nothing else than a statement of how the world is and as is has been documented in thousands of scientific sources. But no one wants to hear the truth if it puts them in a bad light.
Some on the ‘left’ – this really need redefining – are writing up articles against migration these days. When is the last time that any of these ‘analysts’ also said that 63 (or 62) people in the meantime owe as much wealth as the bottom 50% of humankind – some 3.6 billion people? When is the last time someone wrote an article on the complete and utter failure of development and equality on this planet (except Flassbeck, who did it last week)?
Anyway, this is not even the point now. Why did free migration fail according to Skidelsky? “In the last 30 years or so, a key benchmark for liberal-democratic societies has been their openness to newcomers. Only bigots could not see that immigration benefits both hosts and migrants; so the task of political leadership was to keep such views out of the dominant discourse, and to facilitate integration or assimilation” (see here).
If this is correct, what then is the problem? It is that today there is so much dysfunction, violence and destruction in the world that too many people flee these inhumane conditions. Not only are there too many, the problem is also that the line between refugees and economic migrants blurs over time. Most refugees do not return to their country of origin. It takes too long for extreme insecurity to subside and, meanwhile, the lure of a better life takes hold. This is unsustainable. Sidelsky is right: this line does blur over time.
So what? In the meantime, the United Kingdom, a country which is of course fully involved in a military campaign in Syria, accepted 5.000 Syrian refugees, while Cameron promised to take up 20.000 by 2020. As a comparison, Germany took up more than 800.000. Jordan took up more than 2.7 million.
Skidelsky concludes: “’Unregulated mass population movement’ is a shibboleth of the failed neoliberal project of maximizing market-based resource allocation. Critics of neoliberalism cannot consistently exempt population movements from regulation. Indeed, the fatal flaw of free mobility in the EU is that it always presupposed a state to manage the movement. (…) Giving people an EU passport doesn’t legitimize a single labor market, which is why “emergency brakes” on migration within the EU are inevitable” (see here).
So what is the bottom line here? Should we give up on political asylum now that there are ‘too many’? We did this before. It did not end well. The world community agreed to never let this happen again. There is no fatal flaw of free mobility in the EU. It does not exist.
- Social dumping
Skidelsky is far from the only one who is saying this. Recently, Stiglitz wrote that “Free migration within Europe (leads to) depressed wages and higher unemployment, while employers benefit from cheaper labour.” Since recently so much cabal in the UK has been made about social dumping – desperate immigrants taking up any work for any wage – I looked into it. I cannot find one serious study that proves black on white that free migration leads to depressed wages and higher unemployment. In fact, the reverse is true. Petrongolo argues that immigration has had a positive impact on net fiscal receipts without hurting the labour market prospects of UK-born workers. The UK-born workers are therefore unlikely to benefit from any restrictions imposed on immigration from the EU (see here). The contrary may well be true: under any conservative government, UK-born workers may well suffer from the restriction on immigrant workers. I come back to Stiglitz’s claim about employers benefiting from cheaper labour in a moment.
What is social dumping? Social dumping is “the practice, undertaken by self-interested market participants, of undermining or evading existing social regulations with the aim of gaining competitive advantage.” It has been argued that the creation of the internal market and EU enlargement to the east and to the south have made social dumping more pertinent “by providing market participants with new strategic opportunities to contest social norms.”
To makes this concrete, now read ‘employers’ instead of ‘market participants’ and ‘social entitlements’ instead of ‘social norms.’ Social dumping, if anything else, is a reason for the left to defend immigrant workers. Social dumping only exists because employers and member states (including those governed by ‘left’ leaning governments) are breaking laws and rules – European rules among them: not paying people the minimum wage, forcing people to do unpaid overtime, refusing people sick leave and holidays. That is the reality of social dumping. It could only happen because many on the left – or the left which turned neoliberal, such as New Labour – accepted this noxious discourse. It’s easy to see why. No political party is going to win votes defending foreign workers – at least no political party that does not find the courage to explain that it is not foreign workers that are the problem but the rich and powerful. But since something like that sounds way too socialist, so let’s go into it. The unions will not defend foreign workers, or at least not to the same degree as their ‘own’ workers. Although, thankfully, sometimes things are changing for the better (see below).
As for social welfare and other contributions, the balance of immigration is positive. Immigrant workers contribute more than they take out. They are, on average, also younger, less sick and higher educated. If there is welfare fraud, it is often negative: people refrain from requesting benefits they are entitled to because, given the political climate, they do not want to end up in trouble with Immigration. The social-democratic leaning Joseph Rowntree Foundation published several reports on this. There is no doubt that this is true.
- No minimum wage, no standards, no unions, no representation, forced free labour
Seventy percent of workers in London’s hospitality sector are migrants. Over the past 5 years, resources which should be in place to prevent abuse and exploitation of all workers, regardless of nationality, have been consistently cut back and undermined by the government. This is nothing new. The New Labour governments also could not find sufficient inspectors to enforce the minimum wage. What do Tony Blair and Gordon Brown care about people on or below the minimum wage? We all live in the ‘deserving society’ now and if you do not get the minimum wage it’s proof that you don’t deserve it. That was New Labour in a nutshell.
There are not enough inspectors to enforce the minimum wage, not enough HSE inspectors to enforce health and safety, not enough Environmental Health officers to enforce food hygiene and staff accommodation laws. Tribunal fees are so punitive that workers cannot afford to claim their rights and claims for unlawful deductions have collapsed. Coverage by collective bargaining agreements in the UK has dropped to 23%. On the other hand, immigration raids are up by 80%. – today they average 11 a day in London. Immigrant workers are being accused of having false papers and are being arrested in plain sight, street theatre included (see here). Do you see employers who abuse and exploit workers publicly humiliated and led away in handcuffs? Of course not. In post-Brexit UK, no one give a damn about workers. The situation would presumably substantially improve if Corbyn would become prime minister.
- Forced free labour – but who calls that social dumping?
A shocking Freedom of Information request has finally revealed the organisations which profited from free, forced labour (see here, here and here). The Department for Work and Pensions (DWP) set up a “Mandatory Work Activity” (MWA) scheme. The MWA was a system whereby unemployed individuals had to do a four-week unpaid “placement” at an employer, up to a maximum of 30 hours per week in order to meet the criteria for receiving their benefits. If the claimant refused of failed to complete a MWA placement she or he was sanctioned with a loss of benefits, either for 3 months, 6 months or 3 years. It is simple: work for free or we take away benefits that your life depends upon (see here).
The idea behind the scheme, which was first piloted under Labour as the Jobseeker Mandatory Activity in 2006. As former employment minister Grayling commented in 2012: “Where we use mandation (sic) in our welfare policies, it will be to do useful work on community projects. We will never mandate anyone to work for a big company” (see here).
Who profited from the MWA? The DWP refused to answer this question for four years. It took judicial action to force the DWP to publish the list. It shows that charities (545 of them) were among the biggest beneficiaries of the DWP scheme. High profile names included Age UK, Cancer Research UK, the Citizens Advice Bureau, Help the Aged, the RSPCA and the Salvation Army. Numerous local authorities also appeared on the list. And then there are the multinationals: Asda, Boots, the Co-op, DHL, Morrisons, Nando’s, Poundstretcher, Sainsbury’s, Somerfield, Superdrug, Tesco, The Range and WH Smith (see here, here and here). Essentially, these multinational corporations were getting free labour, of course at the expense of the taxpayer. Furthermore, an investigation by Corporate Watch found that of 84,000 people sent on the MWA between November 2011 and October 2012, around one in 10 of these people had their benefits stopped for between three and six months. The DWP refused to disclose the reasons for the sanctions (see here). In other words, 8.400 people worked for free and lost their benefits anyway. As Adam Lusher rightly says, these despicable, exploitative and unethical policies are nothing but the new Dickensian abuse of the poor (see here and here).
But in the dominant discourse, it is of course the immigrants who are putting pressure on wages and create unemployment. Who else would it be?
The left should never accept this. It has to fight it tooth to nail. It is not that there are no problems. There are always problems. The abolishment of slavery also created problems. At one point, we accepted the principle that slavery is inhumane. Therefore, nobody made the point that in order to solve the problem that the end of slavery created we should return to slavery. This may not be a great comparison, but then, a comparison is always between two things which are not exactly alike. We accepted the free flow of goods, capital can move from one country to another and within the EU people are free to move in order to work in any member state. That is how it should be. Someone’s nationality should make no difference whatsoever – a nice statement in a world which is slowly being ripped apart, not by immigrants, but by nationalism, xenophobia and racism. As has historically always been the case, the causal link – more immigrants, more racism – is questionable, at best. During the Dreyfus affair, anti-semitic resentment in France was highest in regions where there were the least Jews (see here). Some people who had never met a Jew became virulent anti-semites. In the Brexit referendum, the big urban centres, where there are a lot of immigrants, a lot of diversity, voted – for the most part overwhelmingly – in favour of remain (I will post an article on this later on). The hypothesis, or, rather, the assumption, that it is immigrants that fuel racism is incorrect. Intervening factors – such as work, poverty, literacy rate, industrial decay – are much more important. The phenomenon of racism without immigrants is well-documented.
In politics, facts don’t matter much. The xenophobic discourse is alive and well now in every European country. It is also alive in Germany, where the right wing AfD is constantly winning support. Heiner Flassbeck produced a great argument against it some time ago: when some German people think that too many foreigners head towards their country, it is time to realise that they come to Germany because of the German economy. So, end German wage moderation, which suffocates the European economy, and people will spread out to other countries. We need to ensure that, in Europe, people can work for decent wages, wherever they come from. The left should stand up for good and decent standards in the sphere of work, human rights, political representation, social welfare etc.. These standards should be exactly the same for everybody.
As for refugees, absolutely everybody has the right to protection in another state when her or his life is in danger. The 1951 Convention has become an anachronism. It should be amended to include the legal figure of environmental refugee. The reason is that climate change, droughts, floods, plummeting agricultural yields, increased desertification, changing weather patterns and other disasters will create migration on a scale unseen in history. As there is not one government in the world which prepares for this, it is clear what will happen eventually – indeed it is happening already. In some of the poorest countries of the world – countries which contributed the least to climate change (their contribution is negligible) – people will end up in refugee camps and be dependent for their survival on food and water aid – as is now already the case in Malawi and Zambia. If food prices spike on the world market – which they certainly will – millions of people risk dying from hunger, illnesses that are easily curable and mere destitution. And what we are doing? The right to asylum is being questioned in several EU countries – countries which are historically, legally and morally the most responsible for climate change as well as for much of the chaos across the world.
- ‘Straight talking, honest politics’ (Corbyn in Liverpool)
It is not immigrants which are the problem. It’s work. And anyone who says employment ends up saying the same, at least when she remains logical. What we need are fiscal policies, investment, deficit spending and higher wages. It is simply complete debilitating nonsense to point towards record employment figures when it goes together with a record level of poverty among those in work. More than 6 million workers earn less than the living wage. Work for many millions has become insecure and stressful (see here).
Corbyn just said this much in the Guardian (see here). He gives the example of a warehouse in Shirebrook that used to employ large numbers of well-paid, unionised, skilled workers. Today, thousands are employed as agency workers and on zero-hours contracts. That is the conservative counterrevolution. It has nothing to do with immigration whatsoever.
To his extreme credit, Corbyn fully understands this. He provides a great counter-example: The Fawley oil refinery. Unionised workers on £125 per day saw workers brought in from Italy and Bulgaria on just £48. Last week, impending industrial action won backdated pay parity for their co-workers. By working together through their union, the workforce stopped established workers being undercut and migrant workers being exploited (see here).
The lesson is simple: Labour and the unions have to stand up for all workers. Corbyn’s promise to get rid of zero-hours contracts is great. As he says, people need to know what their hours and earnings are from one week to the next and they need security in their earnings. The best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively (see here).
Why write about the man and never let him speak for himself? Here is a quote that I hope will resonate all over social democracy and beyond all over Europe:
“Last week, Lloyds bank, an institution that would probably not exist but for government support, announced a 101% increase in its profits. On the same day, the bank announced it would be sacking 3,000 workers, on top of 9,000 other redundancies. Corporate Britain has to change (…) That will also benefit the many companies that do innovate and invest in their staff and pay their taxes – and should not be undercut by the unethical practices of a few. But it isn’t only stronger employment rights and corporate reform that will deliver decent jobs and rebuild the communities left behind by economic failure and corporate globalisation. That’s why Labour will put public investment in infrastructure and the industries of the future centre stage, driven by a national investment bank in every region of the country. It’s only through raising investment to a new level that we can transform our economy, provide the high-skill jobs and end the race to the bottom” (see here).
- Four or five Corbyns
All these people who talk about nothing else than problems, failures – and most of the time, it’s of course their failures – about things which cannot be accomplished, policies which can never be implemented, economic regulation which is finished, etc. are but the soldiers of defeatism – blame the wrong people, keep an unworkable and morally bankrupt system intact. In politics, everything is always impossible until someone starts doing it. To end the EU’s economic problems, it suffices that four men or women stand up in Europe. Since the Brexit, the Labour Party gained another 200.000 members. That is absolutely incredible. Where is the German Corbyn, the French one, the Italian one, the Spanish one? Why does the right wing in the party not stop plotting against him? Is it because he is unelectable?
Picture: Corbyn, the unelectable one, at a meeting in Liverpool last night (August 1st) (picture: Maureen Anne Fitzsimmons, Labour Party).
Picture: Corbyn’s policies (picture: Labour Party).
As the Americans say, it isn’t rocket science. It just needs to be done.