Home Economics Oliver Kamm's Economics Is Always Something Of A Wonder, Isn't It?

Oliver Kamm’s Economics Is Always Something Of A Wonder, Isn’t It?

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Oliver Kamm takes to the pages of The Times occasionally to tells us something about economics and the economy. The interest in these pieces is spotting the times when he trots out the establishment mistake. Or, if we prefer to think of it this way, which establishment mistake is he going to treat us to this time?

For example, here he’s telling us that Brexit is going to make food more expensive. Because, well, because EU food prices are above world food prices and so by being outside the European Union – in contrast to our former position within it – this will make food prices higher as we pay world not EU prices.

Yes, I know, it takes decades of groupthink within that establishment to be able to reach such a position but that is the one he’s putting forward:

Third, the weakness of sterling in an environment of near-zero interest rates has pushed up the price of imported food.

And fourth, Britain’s reliance on food imports means that Brexit, for which the timetable has not been put back by the government, will probably push prices higher.

There are big divergences in EU and global prices for meat and poultry, for example, largely because of EU production standards. In the absence of a deep free trade agreement, British households would pay more for imported meat from the EU.

Note that he’s already put the exchange rate question to bed. He’s now talking about something on top of that again. And, amazingly, getting the effect the wrong way around. For of course if we’re now able to buy that cheaper world food production why are food prices going to rise? We can even go further, for he says that EU food prices in Britain will rise. Why?

This being something dealt with before when Nick Clegg – see, establishment thinking – was saying much the same:

That is, being outside the EU means we do not have to charge the EU external tariff rates upon anything and can insist that we pay ourselves nothing on all sources of food from everywhere. Economists are reasonably certain this is going to lead to lower food prices in Britain.

It’s drivelling idiocy to continue to claim that British food prices will rise as a result of Brexit. But since that’s the establishment view that’s what we get trotted out to us again. It’s almost as if those who would run the economy for us don’t understand either the economy or economics.

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