Must-Read: Tony Yates: The Perceived-Grievance-Wrong-Headed Sop Vortex

Must-Read: Tony Yates: The Perceived-Grievance-Wrong-Headed Sop Vortex: “A desire to respond to the perceived grievances of those who voted to give incumbent governments a kick…

…But in so far as these grievances are not genuine, responding to them in ways that harm everyone and don’t address the economy’s underlying problems sets us all up for a vortex of ever diminishing prosperity and more spiteful policies and politics…. The UK is embarked on Brexit, voted for by the older, less educated, less skilled… likely to pitch us into a protracted period of weak growth or recession to which we are ill-placed to respond. Both… will be disproportionately felt by those at the bottom of the pile whose Brexit vote got us here… will not benefit those who voted for Brexit, except in their imaginations. In fact the process of reallocation may well, if past such experiences are to be repeated, hit hardest those who are oldest, and have least time or aptitude to retrain, or are least able to relocate….

Several risks…. The policy response shrinks the aggregate… pie… does not help the aggrieved constituency.  In the next round, the wounded group takes aim at a new component of the status quo, dismantling our wealth creating machine even further. Another risk is that responding legitimises unfounded prejudice…. Yet another risk of the unfounded-sop response to the perceived grievance is that it rewards dishonest political opportunism….

Is there a way out of this?… Our state capacity should focus on the real problems: improving its insurance functions… redistributing to the young… addressing the housing and planning problem… doubling down on the functions where there is a comparative advantage and need, like health and education… [recognize] that migration, whatever focus groups and opinion polls say, is almost entirely beneficial…