An economist friend once wrote: “Hyper-regulation is a subsidy from small business to big business”.
This immediately rang true from my experiences in business, so true that it hurts.
It seems that the same can be said within the EU from small country to Big Country.
And always, always, the hyper-regulation arrives under the banner of protecting something, or “fairness”.
Hyper-regulation of the UK energy industry has resulted in all the benefits of privatisation being lost and the government having more control than they did during nationalisation. The result is skyrocketing costs and threats of an unreliable supply system.
Rubbish. The failure was privatising the utilities in the first place. Supply and demand simply doesn’t work in industries of monopolies or when the customer doesn’t have the option of walking away entirely.
The problem with neoliberalist thinking is that it falls into the same trap as the communists. When communism started failing, the answer to their problems was always to go harder, more communism and even more state control. After over 30 years of neoliberalism not delivering the results we were promised, it’s cheerleaders response is always if we deregulate even more it will work the next time, conveniently ignoring the rampant inequality, stagnant wages and soaring asset prices that have happened since its introduction
That’s quite true actually. Though they can never see it, the bureaucrats who create such systems end up paying more for the services they commission. As the owner of a small business it made no economic sense to get all the certification needed. However bigger firms got the contracts & then subbed them out to people like us & put 15% on top of our costs
And then you hire compliance consultants who mostly turn out to be enforcement bureaucrats who’ve jumped the fence. I mean, who better to guide you through the legislation than its creators?
The moral hazard should be obvious but they think that they’re the good guys.
HJ
Jon Redman
2 years ago
Brussels must urgently cut a New Deal for its inland empire
That would entail reform. Not gonna happen; Brussels doesn’t do reform.
TF
Terence Fitch
2 years ago
So he’s saying freedom of movement is a bad idea? As we know, it suits affluent folk of course and affects adversely the less well off and causes housing problems etc. Certainly the UK building industry with their insane management bonuses love population growth- cheap labour without pesky training and housing demand. Kerching! And never mind ‘rewilding’ or the environment.
The affluent and well-educated can more easily get employment visas and work permits so don’t need “freedom of movement” (freedom of movement for employment, really, since post-Brexit, other movement for stays up to 90 days total p/a is unchanged as UK was never in Schengen).
CE
Colin Elliott
2 years ago
I thought the article gave me a new insight into the situation, and indicated some contrasts and some parallels with the UK, but left the depressing thought that it is too difficult for any CEE to correct without substantial political change and pain; the EC has used Brexit as a warning to others.
It also touches on the bizarre fact that ‘freedom of movement’ has exacerbated overpopulation in the UK and underpopulation in the CEE.
Actually the real issue isn’t the myth of overpopulation of the UK, it’s really Germany that’s got the problem
JG
Jon Grant
2 years ago
Thanks for the detailed numbers of which I was unaware.
WC
William Clothier
2 years ago
Thank you Matthew for presenting some interesting stats here. But your article for me paints a bit of a one sided story and signs of playing the victim card. As a young budding entrepreneur I moved from London to Budapest nearly 20 years ago, contra to the general population flow as you point out. I have set up and managed a group of businesses in the property and hospitality sector. For me your article misses a few balancing points. For instance, I would be interested to see data on the amount of money being sent back by Eastern workers in the West to their families back East. Is there good data for that? And as for why they don’t return east? Since 2004 i can see a great improvement in living standards and quality of life in Hungary. I speak to many Hungarians that still live abroad and many would return if they were not so put off by the current void in moral and cultural leadership that fails to set the right conditions and inspire the kinds of people that might build the businesses you note are absent. There are of course many angles to this, for setting better conditions for growth and prosperity. For example, the abuse of EU funds for self enrichment of the few and fully ensuring their businesses are massively profitable is a very poor example to set to any budding entrepreneur who might be taking big personal risks to start something. And if wealth creation is largely about being ‘juiced in’, why invest in training to make your employees better leaders or managers or more productive teams, as your productivity data clearly points out! Indeed, the conditions are not favourable in producing the kinds of businesses you say are missing, but those conditions are far from all externally set.
If the plants are not growing well, adding more water (ie eu funds) might not be the answer, perhaps ones attention should turn to how to improve the soil….
IF
Ian French
2 years ago
An eyeopener article. Wealth and need frequently propels the qualified in local populations to seek better rewards abroad. As a result relocating the gains of foreign opportunity seekers back home will occur. This is not new and has be repeated across the globe. I was made aware of this happening when I was a student in Poland 41 years ago, where Poles were allowed to possess foreign currency and use in foreign currency-only Pevex shops. Anything was available to anyone with hard currency, whereas Russians were prohibited and could get 7 years imprisonment for doing the same in the Beryozka buying tourist tat. Even then there was a sizable Polish diaspora sending money to family back in the old country. Such figures are not included in this article and although they are dwarfed by outflow to the EU, they will still be substantial nonetheless.
Last edited 2 years ago by Ian French
GB
Gordon Black
2 years ago
Well, I have ploughed through the 4 main articles today: each one I started speed-reading halfway in because I get the drift … (white) feminists bad; (white) animal lovers bad; (white) Americans bad; (white) western Europeans bad …… boring.
The author had painted the people of Eastern block as a victims of the Western behemoth. I have experienced the transition from communism to capitalism in Poland by visiting twice a year for the past 40 years having been brought up in communist Poland. And I am proud of Polish people’s resilience and resourcefulness. I am also quite unsettled to see how quickly they embraced the rules of capitalism eg getting cheap labour. There is a sizeable workforce from Ukraine and Belarus working in hospitality, cleaning, care homes and shops while Deliveroo (and the likes) employ from further east. I do worry about the latter as they can be easily identified by their darker skin and Polish people are not used to it ( read: racist). But these days, when you visit Poland people will smile at you! I should find this the norm but I am still amazed and delighted to see that happening in a place that I remember very vividly in gray colours.
Sounds great, Kasia, but look at Polish retail where French and German chains are sucking the profits out of Poland. I can believe the statistics, take Carrefour, Aucan, Intermarche, Castorama, Rossmann, Saturn (MediaMarkt), then there’s IKEA and Jula from Sweden and Jysk from Denmark.
Poland is a rich hunting ground for western retail chains.
Thanks to EU shared funding infrastructure is improving rapidly and would make countries like Scotland look like 3rd world such ones.
I’ve been coming 4 times a year for the last 30. Poland could well be the future model for Europe if they could just get rid of Kaczinski.
CW
Chris Wheatley
2 years ago
This article is written in a ‘Shock! Horror!’ journalistic way and seems to me to be illogical.
I am very anti-EU but I can see a sort of point to it. The Eastern European countries lost communism in 1991, as did Russia. What happened to Russia? The vacuum brought in rich, gangster-like business men who captured all of the assets of the country. Arguably, Russian life (especially away from Moscow) has not improved much in the last 30 years.
Imagine now when Scotland goes solo and joins the EU. A million educated Eastern Europeans will flock into the country and take the best jobs. This will have two results. The people in Scotland will become more competitive and try harder to compete with the new immigrants and the latter will learn about democracy and will provide an intellectual backbone for their old country. They might send money back, they might go back home with more modern business ideas, they will certainly go home and tell about the new life in Scotland. After about 30 years there will be an equilibration. Scotland will win IF the people have the will to compete. If they don’t have this will, they will decline.
The hidden factor is that individual people have to try. They can’t just sit there and expect everything to be wonderful.
Regarding your paragraphs about Scotland, in the unlikely event that we go solo and join the EU, it’s as likely that the movement of “a million educated” will be outward.
Imagine now when Scotland goes solo and joins the EU. A million educated Eastern Europeans will flock into the country and take the best jobs.
Why didn’t that happen prior to 2019 when the UK was in the EU? The thing is, anyway, that “the best jobs” in Scotland will instantly disappear if Scotland were to leave the UK.
Plenty of CE/EE, educated and uneducated, came to Aberdeen and Edinburgh, the only two net productive regions in Scotland with oil & gas engineering and finance industries respectively. Naturally, those are two industries that the SNP-Greens are most hostile to.
And it’s likely that a fair chunk of Edinburgh’s financial sector will relocate to London in the event of independence as the SNP will want to tax the life out of it.
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An economist friend once wrote: “Hyper-regulation is a subsidy from small business to big business”.
This immediately rang true from my experiences in business, so true that it hurts.
It seems that the same can be said within the EU from small country to Big Country.
And always, always, the hyper-regulation arrives under the banner of protecting something, or “fairness”.
Hyper-regulation of the UK energy industry has resulted in all the benefits of privatisation being lost and the government having more control than they did during nationalisation. The result is skyrocketing costs and threats of an unreliable supply system.
Rubbish. The failure was privatising the utilities in the first place. Supply and demand simply doesn’t work in industries of monopolies or when the customer doesn’t have the option of walking away entirely.
The problem with neoliberalist thinking is that it falls into the same trap as the communists. When communism started failing, the answer to their problems was always to go harder, more communism and even more state control. After over 30 years of neoliberalism not delivering the results we were promised, it’s cheerleaders response is always if we deregulate even more it will work the next time, conveniently ignoring the rampant inequality, stagnant wages and soaring asset prices that have happened since its introduction
That’s quite true actually. Though they can never see it, the bureaucrats who create such systems end up paying more for the services they commission. As the owner of a small business it made no economic sense to get all the certification needed. However bigger firms got the contracts & then subbed them out to people like us & put 15% on top of our costs
And then you hire compliance consultants who mostly turn out to be enforcement bureaucrats who’ve jumped the fence. I mean, who better to guide you through the legislation than its creators?
The moral hazard should be obvious but they think that they’re the good guys.
That would entail reform. Not gonna happen; Brussels doesn’t do reform.
So he’s saying freedom of movement is a bad idea? As we know, it suits affluent folk of course and affects adversely the less well off and causes housing problems etc. Certainly the UK building industry with their insane management bonuses love population growth- cheap labour without pesky training and housing demand. Kerching! And never mind ‘rewilding’ or the environment.
The affluent and well-educated can more easily get employment visas and work permits so don’t need “freedom of movement” (freedom of movement for employment, really, since post-Brexit, other movement for stays up to 90 days total p/a is unchanged as UK was never in Schengen).
I thought the article gave me a new insight into the situation, and indicated some contrasts and some parallels with the UK, but left the depressing thought that it is too difficult for any CEE to correct without substantial political change and pain; the EC has used Brexit as a warning to others.
It also touches on the bizarre fact that ‘freedom of movement’ has exacerbated overpopulation in the UK and underpopulation in the CEE.
Actually the real issue isn’t the myth of overpopulation of the UK, it’s really Germany that’s got the problem
Thanks for the detailed numbers of which I was unaware.
Thank you Matthew for presenting some interesting stats here. But your article for me paints a bit of a one sided story and signs of playing the victim card. As a young budding entrepreneur I moved from London to Budapest nearly 20 years ago, contra to the general population flow as you point out. I have set up and managed a group of businesses in the property and hospitality sector. For me your article misses a few balancing points. For instance, I would be interested to see data on the amount of money being sent back by Eastern workers in the West to their families back East. Is there good data for that? And as for why they don’t return east? Since 2004 i can see a great improvement in living standards and quality of life in Hungary. I speak to many Hungarians that still live abroad and many would return if they were not so put off by the current void in moral and cultural leadership that fails to set the right conditions and inspire the kinds of people that might build the businesses you note are absent. There are of course many angles to this, for setting better conditions for growth and prosperity. For example, the abuse of EU funds for self enrichment of the few and fully ensuring their businesses are massively profitable is a very poor example to set to any budding entrepreneur who might be taking big personal risks to start something. And if wealth creation is largely about being ‘juiced in’, why invest in training to make your employees better leaders or managers or more productive teams, as your productivity data clearly points out! Indeed, the conditions are not favourable in producing the kinds of businesses you say are missing, but those conditions are far from all externally set.
If the plants are not growing well, adding more water (ie eu funds) might not be the answer, perhaps ones attention should turn to how to improve the soil….
An eyeopener article. Wealth and need frequently propels the qualified in local populations to seek better rewards abroad. As a result relocating the gains of foreign opportunity seekers back home will occur. This is not new and has be repeated across the globe. I was made aware of this happening when I was a student in Poland 41 years ago, where Poles were allowed to possess foreign currency and use in foreign currency-only Pevex shops. Anything was available to anyone with hard currency, whereas Russians were prohibited and could get 7 years imprisonment for doing the same in the Beryozka buying tourist tat. Even then there was a sizable Polish diaspora sending money to family back in the old country. Such figures are not included in this article and although they are dwarfed by outflow to the EU, they will still be substantial nonetheless.
Well, I have ploughed through the 4 main articles today: each one I started speed-reading halfway in because I get the drift … (white) feminists bad; (white) animal lovers bad; (white) Americans bad; (white) western Europeans bad …… boring.
It’s a whiteout!
There’s probably some truth to this article but I suspect that if the EU put up barriers to eastern emigration it would be criticised as much.
The author had painted the people of Eastern block as a victims of the Western behemoth. I have experienced the transition from communism to capitalism in Poland by visiting twice a year for the past 40 years having been brought up in communist Poland. And I am proud of Polish people’s resilience and resourcefulness. I am also quite unsettled to see how quickly they embraced the rules of capitalism eg getting cheap labour. There is a sizeable workforce from Ukraine and Belarus working in hospitality, cleaning, care homes and shops while Deliveroo (and the likes) employ from further east. I do worry about the latter as they can be easily identified by their darker skin and Polish people are not used to it ( read: racist). But these days, when you visit Poland people will smile at you! I should find this the norm but I am still amazed and delighted to see that happening in a place that I remember very vividly in gray colours.
Sounds great, Kasia, but look at Polish retail where French and German chains are sucking the profits out of Poland. I can believe the statistics, take Carrefour, Aucan, Intermarche, Castorama, Rossmann, Saturn (MediaMarkt), then there’s IKEA and Jula from Sweden and Jysk from Denmark.
Poland is a rich hunting ground for western retail chains.
Thanks to EU shared funding infrastructure is improving rapidly and would make countries like Scotland look like 3rd world such ones.
I’ve been coming 4 times a year for the last 30. Poland could well be the future model for Europe if they could just get rid of Kaczinski.
This article is written in a ‘Shock! Horror!’ journalistic way and seems to me to be illogical.
I am very anti-EU but I can see a sort of point to it. The Eastern European countries lost communism in 1991, as did Russia. What happened to Russia? The vacuum brought in rich, gangster-like business men who captured all of the assets of the country. Arguably, Russian life (especially away from Moscow) has not improved much in the last 30 years.
Imagine now when Scotland goes solo and joins the EU. A million educated Eastern Europeans will flock into the country and take the best jobs. This will have two results. The people in Scotland will become more competitive and try harder to compete with the new immigrants and the latter will learn about democracy and will provide an intellectual backbone for their old country. They might send money back, they might go back home with more modern business ideas, they will certainly go home and tell about the new life in Scotland. After about 30 years there will be an equilibration. Scotland will win IF the people have the will to compete. If they don’t have this will, they will decline.
The hidden factor is that individual people have to try. They can’t just sit there and expect everything to be wonderful.
Regarding your paragraphs about Scotland, in the unlikely event that we go solo and join the EU, it’s as likely that the movement of “a million educated” will be outward.
It didnt happen before when Scotland was part of the EU.
It would more likely though with an EU/UK border at Berwick and a separatist tax-and-spend, ban-and-prosecute, SNP-Greens government running Scotland.
They come to England.
Why didn’t that happen prior to 2019 when the UK was in the EU?
The thing is, anyway, that “the best jobs” in Scotland will instantly disappear if Scotland were to leave the UK.
Plenty of CE/EE, educated and uneducated, came to Aberdeen and Edinburgh, the only two net productive regions in Scotland with oil & gas engineering and finance industries respectively. Naturally, those are two industries that the SNP-Greens are most hostile to.
And it’s likely that a fair chunk of Edinburgh’s financial sector will relocate to London in the event of independence as the SNP will want to tax the life out of it.