Unsurprising: Migrants give back to new communities (often more so than natives)

Migrants in high-income economies are more inclined to give to charity than native-born citizens, this Gallup poll finds.

[High-income economies are referred to as "the North"/ middle- to low-income economies are referred to as "the South".]

From 2009-2011, 51% of migrants who moved to developed countries from other developed countries said they donated money to charity, whereas only 44% of native-born citizens claimed to donate. Even long-term immigrants (who had been in their country of residence for over five years) gave more money to charity than natives–an estimated 49%.

Even 34% of migrants moving from low-income countries to high-income countries said they gave money to charity in their new community – a lower percentage than long-term migrants and native-born citizens, but still a significant turn-out, given that most of these migrants will not have an immediate opportunity to earn large, disposable incomes. The poll also found that once migrants get settled, their giving only goes up.

Migrants seem to donate their time and money less when moving from one low-income country to another; though as Gallup points out, the traditional definitions of ‘charity’ cannot always be applied to developing countries, where aid and volunteerism often take place outside formal structures and appear as informal arrangements within communities instead.

It’s no surprise either that the Gallup concludes this:

Migrants' proclivity toward giving back to their communities can benefit their adopted communities. Policymakers would be wise to find out ways to maintain this inclination to give as long as migrants remain in the country.

This is yet another piece of evidence that illustrates the benefits of immigration for society as a whole. (It also highlights the insanity of Cameron's recent proposal to curb the number of Eurozone migrants coming to the UK). Not only does the UK need more immigrants “to avoid a massive debt crisis by 2050,” but apparently it needs them for a community morale boost as well.

Why gamergate will lose

Gamergate is one of the most interesting cultural issues that has appeared in years. It is a rare time that the losing side of the culture war has put up a good fight. But the anti-gamergate side will win, because Progress always wins. I'll try and give a concise guide to gamergate, what's at stake, where it came from, and why exactly it is that it will lose.

Corruption and abuse

Pro-gamergate is used to refer to the gamers' side (i.e. those who either think there is a conspiracy in games journalism; that they have been unfairly stigmatised and bullied; those who dislike Zoe Quinn; and/or those who oppose social justice activism being a major part of games journalism); anti-gamergate to the games journalists' side (i.e. those who think gaming culture is misogynist and/or racist and/or transphobic and/or homophobic; and those who think that the conspiracy claim is just a veil for trying to make gaming an unsafe space for women).

Most gamergaters don't want the issue to be about Zoe Quinn, or women in gaming at all, if you look at their forum postings and discussions. They want it to be about supposed corruption in video games journalism. But the movement is full of apparent contradictions: they are against what they view as extreme social justice inroads in their beloved medium, but at the same time they don't think themselves discriminatory to gay, trans, female, non-white gamers.

However, I think the issue of Zoe Quinn is crucial, just as the issue of Michael Brown was crucial in Ferguson (if the police narrative is a lie, then it looks like a very serious case of police brutality/racism). Internet abuse is a terrible thing, yet scarcely anyone complains about the voluminous abuse directed at George Osborne or David Cameron on Twitter. Perhaps this is because they don't read it—but equally Zoe Quinn could avoid her mentions from those she doesn't follow, as I have done under pressure at times.

It is, outside of some philosophical thought experiments, always morally unacceptable to threaten violence, especially sexual violence, against people, but again violent threats are fairly routine across the internet and almost never actual threats. I could leave my house because an anti-immigration campaigner threatened me with death, but I'm not sure it would not be accurate to describe me as having been 'forced' to leave my house.

Zoe Quinn

Gamergate is a movement that arose when Zoe Quinn, who wrote a text adventure called Depression Quest with a tool called Twine, was accused by her boyfriend of having repeatedly lied to him, cheated on him (with five men in his own industry—Quinn confirmed she had sex with at least three out of five) and generally treated him in a way consistent with abuse. Her interactive fiction got rave reviews by video games journalists (who very rarely review interactive fiction). Many gamers took this to mean she had 'slept her way to the top' (she has not been accused of having sex with any of the people under whose bylines the reviews appeared, but she did have a relationship with a judge who awarded her an Indiecade prize).

Quinn had already been controversial in the games industry. When she first released Depression Quest, at least two members of a forum called Wizardchan ('an image board for male virgins') posted rude things about her. They were accused of raiding and doxxing her (releasing personal information about her) but others have claimed the phone numbers and addresses provided were false. I couldn't find any evidence of either being true. There was a media storm whose narrative ran that women can't even get a game out without facing massive abuse.

Perhaps most controversially, she single-handedly torpedoed The Fine Young Capitalists, a 4chan-supported 'radical feminist' scheme to try and get more women into gaming by crowdfunding their video games. Eight percent of the profits of the game would go to the main developer, and the rest would be used to fund future contests. She organised a campaign against TFYC because she judged it 'transphobic'—because it required entrants to have previously identified as being female to stop men from gaming the system. She also claimed it was exploitative of women because the lion's share of the profits went to future contests. Quinn later set up her own version of TFYC's game jam.

When the aforementioned sex scandal came to the fore, the whole issue blew up, and the accusations of ethics breaches (sexual and monetary) melded with general approbation of Zoe Quinn, pent-up irritation over the anti-gamer culture and (what gamers saw as) extreme social justice activism. Gamergaters congregated initially on 4chan, and eventually on 8chan when even notoriously uncensorious owner Moot banned them from discussing the issue. As I mention below, this eventually developed to a point where some people (probably, but not definitely) gamergaters made threats against Quinn and others.

Death threats

The issue had ticked along until it took a turn for the worse recently, with reports of sexual and violent threats against Quinn, another developer Brianna Wu, and Anita Sarkeesian, a feminist critic of gaming and gamer culture. At times, all three felt threatened enough to leave their house. One threat, of a mass shooting at Utah State University, led to Sarkeesian cancelling a talk she was planning there. The threats were unverified and there is no suggestion that anything physical has happened so far (as with, e.g., threats that I and my colleagues have received).

Though the pro-gg forces won one battle (a letter writing campaign convinced Intel to drop adverts from anti-gg Gamasutra) the death threats have shifted the debate, and suggest they will lose the war. Most gamergaters seem to condemn the death threats on moral and/or tactical grounds, but of course this is not seen as exculpating the overall movement. The movement is described across all major media as being about misogyny and racism and transphobia (often female or trans or non-white pro-gg people are dismissed as unrepresentative tokens) rather than the alleged conspiracies its members want to focus on.

The real story

But really it seems to me that these conspiracies are much less interesting than the gamer vs. games journalist angle. Games journalists are mainly young, white, smart, literate, college-educated, city-dwellers, and all four of those make you not just likely to lean Left, but lean towards the modern 'social justice' movement. Consider, the US is about fifty-fifty in Republican to Democratic voters (if not registered members), but about four times as many journalists are Democrats as are Republicans.

Bear in mind that although social justice advocates do care about wealth disparities, this is far from their main concern, at least in terms of how they allocate their time. For example, insufficiently pro-transgender feminists will arouse large campaigns stopping them from giving lectures at many universities, but libertarian capitalists are able to speak freely. This is why I have argued that social justice is (a) a facet of neoliberalism, and (b) an artefact of the cognitive elite's takeover of society. This is what makes the modern social justice movement so different.

How can it be that social justice is a facet of neoliberalism when most social justice advocates are deeply opposed to neoliberalism? Neoliberalism is a centre-right ideology that, unlike most previous centre-right ideologies, fits very well with social progress even though it favours markets (though substantially regulated and taxed markets) to distribute resources. I suspect that neoliberalism is successful because it has a large portion of the left vanguard agitating for one of its planks and a large portion of the stronger elements of the right agitating for another of them. The media tends to have neoliberal views relative to the population at large—more free market economically but more socially liberal.

Gamers look to games journalism to tell them which games are cool and fun and engaging and interesting and, crucially, worth dropping £50 on. Games journalists see their profession partly as a calling to purge the incompletely right-on memes that still exist in gaming. They might not put it exactly this way, but if you see insufficiently feminist games as harmful then why wouldn't you use the power you had to wipe them out. But gamers don't care nearly as much about their games including sufficiently diverse characters in sufficiently fleshed-out roles, they just want to know which are good games. Given the divide, it's understandable why games writers think them worryingly unreconstructed reactionaries.

Why they'll lose

Because gamers are a late hold-out in the culture war that is raging. Like it has won almost every major political battle since the Glorious Revolution (if slowly, sometimes) the left is going to win this one because it controls the commanding heights of the media, allowing it to bring the mass public on side, and because its adherents follow their faith with a religious zeal. Consider how marginal an issue gay marriage was in the 90s, even (or perhaps especially) among gay people. In 2008 a liberal Democrat didn't feel comfortable not declaring their opposition to it in their presidential campaign. By 2014 it is effectively impossible to hold a prominent job and be an opponent of gay marriage, even if you invented Javascript! By 2014 film adaptations of your books will be boycotted if you oppose gay marriage.

The point is not necessarily that a particular set of policies is actually a bad thing—I'd bet many gamergate activists are in favour of gay marriage—but the way the victories come about. Gay marriage won not because it convinced the public with arguments and evidence, but because a zealous group of elites shamed, bullied and stigmatised anyone who publicly stated anti-gay marriage views as 'homophobic', particularly people otherwise close to them in political views. Lord Freud's discussion of labour market reforms intended to help disabled people was almost shut down because of an out-of-context sequence of words that sounds bad. Banksy's (inane and boring) satire on UKIP in Clacton was removed for fear of being interpreted as racist. Books mainly about the causes of inequality cause a giant storm if they also mention possible genetic differences between races (even if they are judged by academics in the field to be accurately representing the science). Indeed, it is considered enough to claim that something is dated or racist to dismiss its findings.

Gamers are too disparate and disorganised to defeat the most powerful memeplex of modern times. 'Gamergate', the term itself, is already acquiring a slightly dirty taste in a lot of people's mouths, as a byword for misogyny, abusing women, or apologising for either. In general, these mental shortcuts (gamergate = misogynist) are typical of the social justice movement, and are an extremely powerful conversation-ending weapon. 'Wait a second, you support gamergate? So you're a misogynist?' Gamergate was interesting, but its advocates' zeal will run out, while the articles in the press aiming for a balance between pro- and anti- perspectives are dwindling (and are subjective themselves to attacks from more virulently anti- media). Gamergate is one of the most interesting things to happen in years, but I don't think it will win.

How to fix the Eurozone

It's rare that an economic question is clear cut. Nearly all issues are two sided, with substantial costs and benefits to all approaches. But the reason the Eurozone crisis has resumed is pretty obvious—'bad' disinflation and deflation almost universally across the bloc, and a failure of the European Central Bank to provide even the most basic monetary stability. The solution is equally obvious: meet the inflation target and commit to a level target to prevent future cock-ups. Household, firms and sovereigns take out (nearly all of) their debts in nominal terms, i.e. not adjusted for inflation. They are likely to build in expected inflation. However, if inflation is higher than expected, debtors incomes should rise faster than they expected, while their debt is still fixed, making the burden lighter. Of course, this means creditors receive less than they expected. It's the same on the other side.

If the central bank promises 2% inflation per year over the next ten years, and the markets believe it, then the yield of a gilt that matures in 10 years will take this into account. This goes (approximately) for all other assets in the economy, like mortgages, consumer credit, business loans and so on. If inflation departs from target it enriches one side at the expense of the other, contrary to what they all could have reasonably expected when they signed these contracts.

There is a complication: there is a difference between the inflation and deflation caused by supply shocks and that caused by demand shocks. When prices rise because everything really has become more costly to produce (a supply shock like an OPEC oil price hike) then this makes debts harder to pay, but worth no more. When prices fall because everything has become cheaper to produce (a supply shock like Chinese labour coming onto the world market) this makes debts easier to pay, but worth no less. But central bank expansions and contractions are demand shocks, not supply shocks.

This means that the national debt will be harder to pay if inflation comes in lower than target for monetary reasons. Inflation has been below the European Central Bank's target for nearly two years, and is falling further below it. Twelve countries have either zero inflation or deflation. Unless there were massive supply-side improvements across the Eurozone—which we would see in the form of impressive real GDP growth or productivity improvements—this would usually mean that firms will find it hard to make good on their investments, and governments will find their national debts increasingly hard to manage. This is exactly what we are seeing.

As I said above the weird thing about this situation is we actually have an easy-ish solution. Commit to meeting the inflation target, making up the deficit of the past few years and targeting a level path of inflation (or total income) in the future. That means that if the ECB makes a mistake and 'undershoots' its target, it doesn't allow this to distort the economy but does a little extra inflation in the next few months; if the ECB 'overshoots' it does a little less. This is not baleful central bank 'intervention' or 'disortion'—the distortion was letting the rules of the game depart so far from those they signed all of their contracts expecting.

The alternative is a 'lost quarter century' of stagnation while everyone slowly adjusts to the new monetary arrangements they have been hit with.

George Monbiot doesn't quite get this competition thing

We've George Monbiot telling us all that this market thing, this rampant individualism, means that we all no longer cooperate with each other. Sadly, this shows a terrible misunderstanding of what markets actually are. They are, of course, a method by which humans cooperate with other humans. Competition is simply the method by which we decide who to cooperate with:

Yes, factories have closed, people travel by car instead of buses, use YouTube rather than the cinema. But these shifts alone fail to explain the speed of our social collapse. These structural changes have been accompanied by a life-denying ideology, which enforces and celebrates our social isolation. The war of every man against every man – competition and individualism, in other words – is the religion of our time, justified by a mythology of lone rangers, sole traders, self-starters, self-made men and women, going it alone. For the most social of creatures, who cannot prosper without love, there is no such thing as society, only heroic individualism. What counts is to win. The rest is collateral damage.

If I grow the pears, you grow the apples, then Bob and Jim make the cider and perry from them, then we sell some and drink the rest, are we competing against each other here? Or are we cooperating over the specialisation and division of labour and then trading in the resultant production? It is the latter of course: competition only comes in when we're deciding whether it's you growing the apples for this enterprise or Charlie in the next orchard over. The same with Bob and Jim: there might be competition to see whether it should be Bill and Johnny making that alcoholic nectar, but the end result is still that competition is how we decide who to cooperate with, the actual activities in the market, in the production cycle, being cooperation.

This same is true if it's Danny in Taiwan making the chips, Yue in China assembling them and Rupert in Cambridge writing the operating system that makes the smartphone work. The market is still the method by which we coordinate cooperation among human beings.

Over and above that misunderstanding there is also this from George:

This is the Age of Loneliness.

Well, yes, intellectual who lives in the depths of rural Wales thinks loneliness is an important phenomenon. There is a reason why the intelligentsia of every society tends to cluster in the cities. We might even identify a little bit of excessive projection from the personal to the general in this screed.

Seumas Milne's dodgy statistics on African poverty

Seumas Milne's column last week blamed globalisation for migrant deaths in the Mediterranean. The column isn't that important, but this bit jumped out at me:

As the catechism of “free market” deregulation has been imposed across the world under “free trade” and “partnership” agreements and the destructive discipline of the IMF, World Bank and WTO, capital and resources have been sucked out of the developing world and tens of millions of people have been driven into urban poverty by corporate land grabs.

That is why the number living on less than $2 a day in sub-Saharan Africa has doubled since 1981 under the sway of rich world globalisation. Africa’s boom has been in resource exploitation, not in most people’s living standards. So it is hardly surprising that migration from the global south to high and middle-income countries has more or less tripled over the past half century.

Actually, the percentage of people living on less than $2 a day in sub-Saharan African has fallen from 72.2 percent to 69.2 percent since 1981. The total number of people on $2 a day has doubled because sub-Saharan Africa’s population has doubled (p. 96). "Free market deregulation" has nothing to do with it, except for the fact that infant mortality has fallen substantially.

I know this because it is in the same paper that Mr Milne's figure comes from, on the same page, in the same table. It's a pity that he did not think to mention the data that directly disproves his claim.

I wrote a letter to the Guardian pointing this out but they didn't print it. It's also worth pointing out that African poverty fell by 38% between 1990 and 2011. (h/t Anonymous Mugwump.)

Silicon Ovaries

It's only apt that Silicon Valley's new plan to tackle gender imbalance involves cutting-edge technology, a dose of futurism and flash-freezing things in sub-zero temperatures:

Apple and Facebook are offering to freeze eggs for female employees in an effort to attract more women on to their staff, according to US media reports.

Apple, the world’s most valuable brand, said it would offer the perk to US-based staff from January. “We want to empower women at Apple to do the best work of their lives as they care for loved ones and raise their families,” the company said in a statement to ABC News. “We continue to expand our benefits for women, with a new extended maternity leave policy, along with cryopreservation and egg storage as part of our extensive support for infertility treatments.”

Facebook offers up to $20,000 (£13,000) for egg freezing for female employees. The company also offers adoption and surrogacy assistance and “a host of other fertility services for male and female employees”, the company said. (The Guardian)

Even though the schemes are unlikely to have huge take up, it's an idea with a commendable sentiment behind it. The tech world is notorious for its lack of female representation and lingering sexism, and women make up only 30% of Apple and Facebook's workforce. Their support of 'cryopreservation' will benefit both the firms and their employees.

It's damn inconvenient that the years in which women are able to best forge a career are often also those of peak fertility. This not only creates huge opportunity costs when selecting a career/family/income combination, but restricts the pool of talent available to employees. Being able to keep young eggs on ice (and being aided financially to do so) expands the range of work/child  options women have, and makes some of the tradeoffs a little less binary and severe.

 There are a number of ways we try to reduce the 'costs' of raising a child, from statutory maternity pay and free childcare to paternity leave and work crèche schemes. All of these actions shift part of the cost of child-rearing from one figure (usually the mother) to another actor, such as the state, an employer or a partner. It's usually a good thing that these costs are shared out amongst others, but it would be even better if the costs were simply reduced. Something like fertility preservation does that— it uses technology to augment the options available to women and reduces the opportunity cost of pursuing a career— without the need for state intervention, relying on a partner, or for social behaviours and cultural shifts to occur. If a woman voluntarily choses to use her 29-year old self's eggs at the age of 39, everybody wins.

Of course, Apple and Facebook have chosen to foot the bill here, and no firm should be forced to provide such procedures for their employees. But these leading companies clearly think that $20k is a small price to pay to attract and retain top female talent. Certainly, a firm which signals that it is prepared to help employees overcome obstacles to their life choices (amongst many other generous perks) will be a draw for many, and can help women to achieve the success they've always been capable of.

Naturally, there will be those who recoil in horror at the idea of Facebook laying a frosty, calculating hand on their employees' ovaries. Some consider it a neanderthalic and clumsy way of improving women's standing in the workplace, whilst others worry that supporting such technology gives a strong and unpleasant message to women that forging a career whilst raising a family is a faux pas.

Cryopreservation's hardly going to become a mainstream phenomenon any time soon, and for now is only really an option for a small number of women. Were employers to start actively encouraging the treatment or making employment decisions based upon it, then we would need to have a serious conversation about the way in which it was used. Egg freezing's also in no way a panacea. If Silicon Valley really wants to boost the women in its ranks, there's plenty of other things which they can do, like offer more schemes for current parents, and foster a more female-friendly everyday culture.

Ultimately, egg storage is another medical innovation which — like the pill— affords women a greater range of life choices. And far from establishing expectations of what a female employee should do with her womb, Facebook and Apple's support of the proceedure indicates a commitment to heterogeneity and flexibility. It is smart of them to support such a range of lifestyle and career choices, and with luck initiatives like these will help to enrich the lives and bolster the careers of the women who've chosen to work there.

In praise of subprime auto loans

We've another one of those laments, over at the Guardian, for the way in which the financial markets deliver financing to people who are poor. Apparently this is very bad, allowing poor people to finance capital expenditures in the same manner that we richer people are able to. You know, how nefarious Wall Street must be if it lets the poor, we mean really, poor people!, buy a car.

Many people are buying those cars with they help of Wall Street banks, which are lending money to people with bad credit again – just as they did prior to the financial crisis of 2007. In the last crisis, it was houses.

The $26bn worth of subprime car loans is far short of the $500bn of subprime real estate securitization in 2006, at the top of the housing bubble, partly because cars are a lot cheaper than houses.

This time, like last time, Wall Street isn’t directly lending poor people money. That part is done by an array of smaller financial companies in strip malls and office parks.

The smaller financial companies sell the loans to Wall Street. Wall Street puts them into big piles, sorts them from weakest to strongest credit scores, and then sells the pieces and parts of them to their customers. The customers can be hedge funds in Greenwich, Connecticut, or other banks. No part of the loan goes unsold: from the highest rates to the lowest-rated, buyers are always there.

This process is called subprime securitization, and about $26bn of it will be done this year in auto loans to poor people.

This is, according to the author, just terrible. And of course the reality is that it's just wonderful.People who would not be able to afford a car can now do so: this enables them to get to work, to the shops, and thus makes them less poor. And the miracle here is that securitisation, the securitisation that distributes the risk.

Now it is possible, of course, to associate this subprime securitisation with what happened with subprime mortgage securitisation and thus wonder whether there's going to be a replay of 2008. But there won't be for two reasons. The first being that there's just not enough of these auto loans to cause anything like a systemic crisis.

The second is that it wasn't securitisation, nor subprime, that caused the problem last time around. It was fractional reserve banking: more specifically, that the slices and dices of these loans were on the books of banks who were leveraged in their holdings of them. So, when the value of the loans slid the banks became illiquid and possibly insolvent. If those same slices and dices had been in non-leveraged hands, pension and or insurance funds for example, then there wouldn't actually have been those runs on those banks.

So, all we're left with here with these subprime auto loans and their securitisation is that poor people get to buy cars more cheaply than they would without that spreading of the risk. And maybe The Guardian thinks that's terrible but the rest of us should regard it as a pretty good idea. We are, after all, the people who are pro-poor, aren't we?

Being economically worth less does not mean you are worthless

I’ve just been on Channel 4 News discussing Lord Freud’s comments about letting people with disabilities choose to work for below the minimum wage. I haven’t watched it back but I gather from Twitter that I fluffed it a bit – unfortunately the producers put me up against two people without telling me, so I got flustered. 

The thing I said that upset people the most was that some people with severe disabilities or learning difficulties may be economically worth less than people without. (One of the people I was debating apparently thought I said ‘economically worthless’.) 

Lots of people have taken this to be a comment on the moral value of people with severe disabilities or learning difficulties. This is an error. The value of a person’s labour is equivalent to what others will pay them for a given amount of time, also known as their productivity. When Lord Freud talked about people not being ‘worth’ the minimum wage, this is what he meant.

It has absolutely nothing to do with how important they are as a person. Some very good people are unproductive because they are inexperienced, they don’t have economically-valuable talents, or they are disabled. Some very bad people are very productive because they did well in the lottery of life. Indeed this is something I care about very strongly, and it has led me to abandon beliefs I once held quite strongly in favour of mechanisms that would redress some of this imbalance.

Perhaps it was a bad choice of words to say ‘economic worth’ because many people are unaware of the above. I can understand that if you heard me say someone was ‘economically worth less’ (let alone ‘economically worthless’!) that you might think I was making some comment about that person’s value as a human being. I’m pleased, at least, that many people who disagree with me nonetheless give me the benefit of the doubt, and I hope I’d do the same.

I think Freud’s comments were motivated by a sincere desire to make disabled people’s lives better off by allowing those that want to work to do so, with their wages topped up by the taxpayer. Whether or not you agree that this is a wise move it does nobody any favours to suggest that anybody in this debate thinks people with disabilities are not valuable as human beings.

It ain't what you don't know that gets you into trouble

It's what you know for sure than ain't so that does. And Mark Twain's observation has a great deal to tell us about how and why economic policy is so often so bad. For it's not just the politicians who are deeply misguided as to what the facts of the situation are: we the citizenry can be alarmingly inaccurate in the things we believe about the economy. As Tim Taylor points out:

There's an old saying often attributed to Daniel Patrick Moynihan that "Everyone is entitled to their own opinions, but not to their own facts." In public opinion surveys, of course, people are offered a chance to assert facts that reflect their own frame of mind. For example, Social Security is popular, while foreign aid is not, and therefore people (wishfully) hold the opinion that we must not be spending too much on Social Security, but are spending a lot on foreign aid that could cut with little domestic pain. But it's obviously tricky to have a productive social discussion about economic issues when there is little agreement on central facts.

Very much the same holds true in the UK: people overestimate the unemployment rate, how much is spent on overseas aid, underestimate how much pensions cost and so on. And then of course there's the very slightly more tricky things that we should be able to agree upon but generally don't: a higher minimum wage reduces the number of jobs, rent control is the best way of destroying urban housing short of aerial bombardment and so on. We even have our own version of that Moynihan quote, comment is free but facts are sacred.

Would that public discourse, the setting of public policy, took place within the boundaries of those facts rather than being misinformed by what people are sure is true but just ain't so.

Tired of London?

Samuel Johnson famously pronounced: “when a man is tired of London, he is tired of life”. This isn’t the end of his statement though, he added: “for there is in London all that life can afford.” But what if you can’t afford life in London? Surely then it is time to up sticks and move to a cheaper city.

According to a poll from the Supper Club, the network for entrepreneurs turning over £1m or more, 40pc of London-based business owners have considered moving their operations.

More than a third claimed that the cost and inefficiency of London’s public transport system is holding back businesses, while 40pc said that the cost of housing is driving away the best talent. With house prices in London reaching an all-time peak, business owners have warned of a “brain drain”.

The Supper Club, which represents 330 entrepreneurs from a range of sectors, found that 79pc of respondents fear a skills crisis within five years.

Of course, for as long as London remains a leading world city – at the cutting edge of finance, business and culture – it will remain a pricey place to live. After all, there is a flipside of the economies of amalgamation – some stuff, like housing becomes more expensive. And yet, there can be no doubting that house prices are hitting crisis point. For Generation Y, many can’t foresee how they will ever be able to own property in the capital. London’s big divide is between the owners and the renters and successive governments’ failure in allowing more houses to be built is squarely to blame.

To give you a sense of the crisis, Shelter’s model predicts that fewer than 1 in 5 of London families will be able to become owners by the age of 65 if prices inflate as they have done in the past.

As the LSE’s Paul Cheshire points out, politicians haven’t stepped up to the plate. The coalitions’ Help to Buy policies are doing little (except pushing up prices), while Labour’s suggestion for partial controls on rents, increased security of tenure, and elimination of agent’s fees for finding housing for renters, will probably just decrease rental supply as fewer people want to become landlords.

Cheshire believes “nothing short of radical reform will improve housing affordability. But radical reform, like intelligently loosening restrictions on Greenbelt building, is frightening.” Affordable, more stable house prices should be the policy goals of all political parties. This requires a more liberalised system, whereby the demand for housing would impact its supply.

This generation of successful entrepreneurs may be able to live in London but their employees increasingly can’t. And crucially, for the wealth of this nation, the next generation of entrepreneurs may have already moved to a city where the cost of living isn’t prohibitively expensive – and my first pick wouldn’t be the UK.