Why I don’t live in the United States

The legendary music producer Rick Rubin once asked me why I had never moved to the United States. The answer, I think, comes down to an important trade-off: quantity of earnings versus quality of consumption.

Historically, once you had a job, there was a limit to the lifestyle choices you could make

Whereas the United States is certainly a better place to earn and accumulate money, Europe is, on balance, still a better place to spend it. (Which may explain why Rick asked me that question at his summer home in Italy.)

This imbalance partly arises from a fundamental asymmetry in the transmission of ideas. Whenever anything good or interesting arises in the New World — freedom of religion, Breaking Bad, drive-through KFCs, nachos, Amazon, stem-cell therapy or cupholders — these things rapidly make their way eastwards across the Atlantic.

Yet the same process does not happen in reverse. If you want great Indian restaurants, medieval cathedrals, M&S food, free healthcare, border castles, sausage rolls, country pubs, four weeks’ holiday, tea made with boiling water and drinking outdoors, then you’re stuck living here. Standard economics does not understand this distinction at all, since it assumes that quantity of money translates directly into quality of life.

Until recently, freshman economics students were sometimes asked whether they would prefer to earn $60,000 a year in a world where everyone else averages $40,000, or to earn $80,000 a year in a world where everyone else averages $120,000. When a sizable majority picked the former, they were told they were “wrong” to do so. This kind of nonsensical assertion suggests that modern economics should be considered as little more than a mathematicised religion, rather than a serious attempt to model human reality.

People are now increasingly discovering that, beyond a certain threshold, you can improve your life far more easily by optimizing your consumption than by maximizing your earnings. The reason this is a recent discovery is that, historically, once you had a job, there was a limit to the lifestyle changes you could make. Not least because you couldn’t move anywhere else. If you earned money in London you lived in London, spent money in London and paid tax in the UK. (If you were under forty, the worst part was probably not the tax but the ruinous cost of accommodation.)

Government has always pandered to the super-wealthy because it was accepted that such people could leave the country in pursuit of lower taxes and sunshine. The rest of us, it was assumed, couldn’t move anywhere else. But that is no longer true of the talented young, for whom the opportunity to work from anywhere may soon be the single most important factor in their career decisions.

A banking salary in London is inarguably better than a publishing salary in London. But what happens when the choice is between £120,000 in London and £80,000 in Portugal? Not quite so easy now, is it? After all, whose social media feed do you really envy? The talented coder hanging out with tanned kite-surfers, or the person in a suit in a Canary Wharf All Bar One drinking with the Fixed-Income Trading Desk before heading home to Muswell Hill in the dark?

There have always been cities which have cunningly exploited the super-rich and their mobility. The Riviera and now Dubai are purpose-built for this. But what the Portuguese are doing is ingenious. They are trying to attract the talented and mobile young. Not only with visas, but with proposals to dramatically cut tax rates for people under thirty-five. It is inevitable that a few other countries will follow this route. We need to consider the risk that Britain will soon face a new kind of migration crisis — this time in the opposite direction.

This article was originally published in The Spectator’s UK magazine. Subscribe to the World edition here.