Chuka Umunna's disastrous embrace of Varoufakis's Vanity Politics.

A British politician- Chuka Umunna-  has praised a speech by Varoufakis in which he says-

– allow me now to speak as a Marxist. In the Communist Manifesto, Marx says, “ The communists are being blamed or accused of wanting to take nationality, ethnicity, national pride away from the majority”. And he says, “Well, workers have no country. You cannot take away from them that which they do not have.”

Marx was writing at a time when German workers were subjects not citizens while most Russian workers were outright serfs. Even in England, most workers did not have the vote and Trade Unions were considered to be criminal 'conspiracies against trade'.

By 1870, some things had changed. The 'iron law of wages' (i.e. that they can't rise above a bare subsistence for Malthusian reasons) had relaxed.

Thus Marx wrote-
“But the English bourgeoisie has also much more important interests in the present economy of Ireland. Owing to the constantly increasing concentration of leaseholds, Ireland constantly sends her own surplus to the English labour market, and thus forces down wages and lowers the material and moral position of the English working class.

And most important of all! Every industrial and commercial centre in England now possesses a working class divided into two hostile camps, English proletarians and Irish proletarians. The ordinary English worker hates the Irish worker as a competitor who lowers his standard of life. In relation to the Irish worker he regards himself as a member of the ruling nation and consequently he becomes a tool of the English aristocrats and capitalists against Ireland, thus strengthening their domination over himself. He cherishes religious, social, and national prejudices against the Irish worker. His attitude towards him is much the same as that of the “poor whites” to the Negroes in the former slave states of the U.S.A.. The Irishman pays him back with interest in his own money. He sees in the English worker both the accomplice and the stupid tool of the English rulers in Ireland.

This antagonism is artificially kept alive and intensified by the press, the pulpit, the comic papers, in short, by all the means at the disposal of the ruling classes. This antagonism is the secret of the impotence of the English working class, despite its organisation. It is the secret by which the capitalist class maintains its power. And the latter is quite aware of this.

But the evil does not stop here. It continues across the ocean. The antagonism between Englishmen and Irishmen is the hidden basis of the conflict between the United States and England. It makes any honest and serious co-operation between the working classes of the two countries impossible. It enables the governments of both countries, whenever they think fit, to break the edge off the social conflict by their mutual bullying, and, in case of need, by war between the two countries.

England, the metropolis of capital, the power which has up to now ruled the world market, is at present the most important country for the workers’ revolution, and moreover the only country in which the material conditions for this revolution have reached a certain degree of maturity. It is consequently the most important object of the International Working Men’s Association to hasten the social revolution in England. The sole means of hastening it is to make Ireland independent. Hence it is the task of the International everywhere to put the conflict between England and Ireland in the foreground, and everywhere to side openly with Ireland. It is the special task of the Central Council in London to make the English workers realise that for them the national emancipation of Ireland is not a question of abstract justice or humanitarian sentiment but the first condition of their own social emancipation.”
Letter of Karl Marx to Sigfrid Meyer and August Vogt, 9 April 1870

Clearly Marx understood that free entry of migrants lowers wages and destroys solidarity such that the Labour movement has less countervailing pressure against monopsonistic Employer cartels . 

It also reduces pressure for reform or progressive politics in the country the migrants leave. Since the young Pole or Hungarian or Greek can migrate in search of higher wages, the regimes in these countries, whether 'Left wing' or 'Right wing' are more sclerotic and chauvinistic than ever before.

Marxists may have been Internationalist in their politics but it was only in the sense that the Labour movement of each country would support the working class of every other to gain more power so as to improve the lives of the workers of their own country.

It is true that some Warsaw pact countries had 'guest workers' from poorer Communist countries. Thus Vietnamese workers could earn some money in East German factories and send this money home to help out their own people. However, East Germany did not give citizenship to these Vietnamese or Mozambicans or what have you. Many were unceremoniously thrown out when no longer needed. This was perfectly in line with Marxist thinking.

The E.U never meant for free movement of factors of production to undercut wages or reduce democratic pressure on National Governments for sensible and progressive policies. It was believed that capital was inherently more mobile than labour and thus the more technologically advanced or market oriented countries would be exporting capital goods and financial, managerial and entrepreneurial services to the former Warsaw Pact countries which they would pay for with cheap manufactured goods.

Thus the Labour Party under Tony Blair threw open the doors to unrestricted East European immigration (which Germany, more cautiously, did not do) in the belief that the numbers involved would be relatively small and thus pose no threat to British wages or the provision of Social Housing, Public Health etc. 

Brexit has lowered the value of the pound- which deters migrants who need to send money home to help their families- and is likely to reduce British standards of living- more especially in relation to the public provision of Housing, Health, Education etc.  This by itself will reduce all but the most desperate European migrants. This is what Corbyn is banking on. Once migration is perceived as a Tory, not Labour, blunder (more particularly if a Norway type Brexit occurs such that free movement stays in place) the working class will return in force to the Labour party so as to preserve the N.H.S and maintain a Social safety net.

This is not Varoufakis's view. He says-

There is a very good leftwing Marxist argument in favour of the transnationality that the single market and indeed the European Union is putting forward. Remember that Marx was in favour of Zollverein – the German customs union of 1834. Why? Because he said he thought that it would speed up the capitalist process, and that without this development, you would not have the technologies essential for socialism.

The Zollverein did not involve migration driving down wages. 'Technologies essential for socialism' developed in mercantilist England and, later on, in Protectionist America and Germany and Japan and so forth.
America and Germany had explicitly racist immigration or Nationality criteria. So did Sweden at its most Socialist. Britain clamped down on free Commonwealth migration despite having 'over-full' employment almost 60 years ago. By the Seventies it was clear that such migration put downward pressure on wages. The Left resiled from 'Internationalism' in this respect while the Tories- who had presided over unrestricted coloured immigration in the Fifties- pretended they would be even stricter in this regard.

Varoufakis- who was the President of the 'Black Student's Alliance' at an English University almost 40 years ago- may genuinely want unrestricted coloured migration. He says-

where borders have come down, even if they have come down for neoliberal reasons, for reasons that fit the agenda of big business, we should maintain the absence of those borders. We do not put them up. And we try to extend freedom of movement beyond the European Union to Pakistan, to South Africa." 

There you have it. Varoufakis thinks, firstly that the English worker isn't English at all because Marx said so in 1848, and secondly that England should 'extend freedom of movement to the Muslim world and sub Saharan Africa.

The handsome British M.P, Chuka Umunna- at one time considered a possible future Prime Minister- has praised Varoufakis's speech.

One begins to understand why, for the Labour party, it was a case of Corbyn or Never Win. No working class- however enlightened and unprejudiced- will vote for its own immeserisation through unrestricted immigration.

Varoufakis explicitly states That there is going to be a significant, substantial diminution of the living standards of the working class and Britain in general there is no doubt. 
He does not believe post-Brexit Britain will allocate resources more efficiently and thus make productivity gains which can translate into higher real wages.
In this context, it makes sense to restrict immigration to only those who will contribute much more in taxes than they would cost the exchequer in terms of Health care and Housing and so on. So, Britain has no choice but to impose highly selective migration controls and do away with 'Universalist' or Human Rights based entitlements. Previously the argument was that Britain was rich and could afford to be generous. But, Varoufakis says, now there is no doubt that Britain will be much poorer. Generosity is off the table.

Varoufakis does not understand that it is enough to say- 'Britain will be a lot poorer'- without putting a precise number to how much poorer it will be. 'Significantly and Substantially' poorer is enough for people to get the message and put away their cheque books and harden their hearts.

But put no numbers to that process, because those numbers of statistical or econometric prediction are absolutely scientifically irrelevant without a large sample.

This is not the case. Sample size does not matter. What matters is if the prediction of a model is correct or not. Science is about predictive power.

If you have a small sample, you can’t make any predictions worth their salt, and here we have a zero sample.

We always have a zero sample about future data. Yet Scientific theories stand or fall on the basis of how well their predictions correlate with data sets which will come into existence only in the future.

Previously, there has never been a case of a country coming out of the single market, out of the European Union. Logic may indicate that there is likely to be a substantial cost. But let us not attempt to turn around the debate in Britain on the basis of scare-mongering and estimates of costs that are not worth the paper they are written on.

Why not? Either Varoufakis has some reason for asserting Britain will be 'significantly and substantially' poorer or he no reason for it. If his reason is Economic and he isn't lazy, he can quantify his assertion. If his prediction is proved right, his reputation as an Economist will rise and his model will be more widely adopted. It could become the basis of a Muth Rational policy solution- i.e. one which everybody could accept as based on 'objective reality'.

What is Varoufakis's reason for believing Britain will be poorer? He doesn't say. We can only assume it is because he thinks Britain will get stuck with a 'Norway solution'- i.e. free entry of E.U workers will continue. But, unlike Norway, Britain doesn't have a huge Sovereign Wealth fund to cushion living standards. Furthermore, learning Norwegian carries little advantage. Spending some time in an English speaking country, however, is a valuable work skill. Ceteris paribus, Britain is more attractive to migrants than Norway.

Varoufakis isn't satisfied that a Britain which keeps getting poorer nevertheless should have unrestricted migration. He wants more.

'When I say Norway + – what is the plus? Well, people including some of my comrades in this country and in this party, say to me that the problem with the Norway solution and the difficulty the Labour Party has in supporting it, is because it turns Britain into an EU rules-taker.This of course is correct – this is the price you have to pay for being inside a transnational market. But it doesn’t have to be that way. Britain does not have to be an EU rule-taker if it strikes a Norway-style agreement.
Allow me to be very specific in three areas here. One is labour market standards and protections for wage labour. Secondly, environmental standards and the protection of the environment. Thirdly, financial regulation. Nothing stops Britain in a Norway-style agreement from setting for itself and for any company working within the United Kingdom, higher regulatory standards for the City of London, higher environmental standards, higher minimum wages and higher standards for defending wage labour.
So instead of thinking of the EU single market rules as the ceilings: think of them as the floors! And think of Labour as the party that will campaign out there for improving the environmental standards, labour standards and financial regulation standards of Brussels and Frankfurt.'

Wonderful! Britain can impose stricter rules than Europe! But rules are costly to enforce and comply with. Who will pay those costs? A 'significantly and substantially' poorer Britain. 

Varoufakis's 'Norway plus' solution is that the great mass of the British people should accept significantly lower standards of living so as to benefit the better off- including migrants whose families have made no fiscal contribution to the capital costs of setting up this Utopian rule-set. High minimum wages with unrestricted entry means, at the margin, that locals lose out to more talented or better educated migrants. Higher environmental standards means lower living standards and life chances for the indigenous though, no doubt, an amenity is provided to the visiting foreigner- not to mention, the plutocrat with his shooting Estate and Country Mansion and so forth. Tighter financial regulation means lower returns for British savers while a less risky class of assets is created for foreign portfolios without any associated cost.

Varoufakis isn't satisfied with 'Norway plus'. He wants unrestricted entry for not just Europeans but everybody else. Why has Chuka Umuna endorsed this nutjob? What is the point of a Labour party which tells working people- who are barely getting by as it is- that they must reconcile themselves not just to being much poorer as time goes by but also to shouldering, in perpetuity, the burden of creating a Society where only migrants get a free ride?