MichaelCD - The Blog.

The thoughts of Michael Cadwallader. Coffee loving, history book reading, Cheshire man.

Wednesday, September 27, 2006

Sir John on immigration

Sir John Bull has an excellent post up on his blog. Amongst other thing in his sights is GDP, which is one of my particular bugbears. To misquote Churchill, GDP is the worst form of economic calculation, except for the all the others that have been tried.

The best example of the mendacity of GDP is the change in the status of women. In the 50's a woman stayed at home, cooked dinner, did the laundry, looked after children e.t.c. None of this was recorded as economic activity. Nowadays most women work. So, whilst GDP has grown since the 50's, how much of this is just the monetarisation of previously unrecorded activites? Day care, fast food, an extra car (as the woman will have to commute to work), new clothes for the career, all of this has boosted the GDP. Are we really richer, though? No.

What seems to be repeatedly swept under the carpet, when we are talking about immigration, is that GDP can grow whilst people get poorer. People like Kelvin McKenzie point to GDP increases as the reason we should welcome even more Poles. Well interestingly, GDP has actually declined since Poles were let in, in May 2004. But, even if they have added to GDP in terms of economic activity, increases are based on low end services - eating out, having a coffee, buying groceries e.t.c. All of them add to the GDP, but unless the immigrant is highly skilled and thus we can all reap the 'consumption price effect', GDP per capita will actually decline.


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