After a year of political turmoil and financial embarrassment, Britain ends 2022 shaken. There is a new spate of talk about national decline. Once again the UK is falling behind. The outlook is uncertain. It is symptomatic that Perry Anderson chose already in 2020, to author yet another gigantic essay for the
This article reminds me of the book "the moral consequences of growth" by Ben Friedman. Its thesis is that when growth stops societies become harder crueler (and crazier ) as people start to scramble for piece of the stagnant economic pie. The silent economic collapse of Britain described in this piece helps me understand how what I have always thought of as a fundamentally sensible people have turned into a morass of political nut cases
I was lucky to have for quite a few years the opportunity to work with David Godfrey, the British physicist that discovered the hexagonal big spot on Saturn's North Pole (https://en.wikipedia.org/wiki/Saturn%27s_hexagon). He did his PhD in the meteorology of Saturn. However, when I met him, he didn't work in the field any longer.
But one of the reasons why he emigrated to Canada, besides family ones (maybe that was an opportunity), was the appalling stratification of British society, stratification that had no base on merit. (he did work for some years for the Home Office on the Statistics realm) but seem to rely entirely of the ability of turds from certain gene pools to come floating on top.
That, and the destruction of the Grammar Schools in Britain, which Godfrey said were able to give a nobody like him an opportunity and a solid education (solid enough to make astrophysical discoveries and study Saturn meteorology).
I do not think the surface has even been touched here in what is an unusually rambling and unfocused essay (except perhaps on the topic of how Britain sees itself in decline, which is not that interesting). The classic productivity graph that shows the anaemic ongoing productivity growth in the uk that started after the financial crisis never get’s properly explained by economists - and is not explained here either…. Is it because the city no longer generated super profits after the financial crisis and the North Sea dividends started waning and the high employment of this period was low quality and simply due to there being lots of coffee shops for people to work in? It would be good to see beneath this chart and look at productivity by sector perhaps, to get a further understanding of why has Britain completely lost its dynamism
Interesting article, thanks. I agree that the UK is in a dire position, but I don’t think you’ve identified why. Personally, I consider that tax and redistribution created Hunt’s “doom loop” decades ago.
I was a Guardian-reading lefties throughout my 20s, until experience working in the criminal justice system exposed me to the “bottom third” of society. Gradually I realised that many of these people were irredeemable: we were throwing good money after bad. Later, I changed career and began working in the City. It only took one year of paying taxes at the 45% Additional Rate (then £150k+) before I emigrated. Many of my colleagues have done the same. Others have simply gone part-time, taken lower paying jobs, or for the more senior ones, retired early.
Curious if you considered the decline in British education standards as a cause or effect. I lived in London around the inflection point in most graphs (2004/5) and was shocked at the numeracy of retail workers (was always clear a migrant was at the till when they could manage cash without a calculator). My wife taught in the education system, which had moved in recent years from clear, high standards towards vague, uncritical evaluation in the public system (not to mention the entire "English dept in an English school was populated by Canadians and Americans). We could sense something akin to stagnation/decline was happening around us...
I wonder if there's a cultural component here. I've heard that being an engineer is a much less cool profession in the UK relative to other countries like Germany or USA. ICT work seems particularly low status. I was talking to a software engineer who escaped from the UK to the US. He told stories of a woman backing away from him in the bar as soon as she learned about his job, and companies desperate for ICT workers who still wouldn't raise wages because it wasn't a respected career. I'm sure that these cultural factors affect the career choices that young people make. It'd be fascinating if "The IT Crowd" (2006 premier) put a measurable dent in Britain's GDP.
Fascinating article. Thank you. The Burn-Murdoch chart suggests that not much has changed for the capitalist-conservative alliance since the 1920's: austerity/financial repression is a primary weapon to control labor and accumulate a larger share of GDP. It just seems that in the UK case, it is backfiring a bit. By the way, Professor Mattei's book, The Capital Order, was fascinating (if a bit repetitive).
What I love is that despite every graph in this article showing that every economic problem we face today clearly proceeds Brexit, the author cannot help repeat unsubstantiated claims about the 'damage' Brexit has supposedly done to this economy. Brexit-brain is clearly a terminal illness.
A very interesting article. Let me go a little bit meta here. I'm going to talk about commies. Back until about the first half of the 1970's there was a strong intimation among western leaderships that the Soviet Union and the European countries associated with it all had dynamically growing economies; Krushchev's "We will bury you (pass you by)" was still a real fear. But by the second half of the Seventies, the economic growth of all these countries appeared to have shrunk to match their low population growth numbers. In other words, per capita incomes in those countries had stagnated. Famously, the Communist systems in those countries were within a decade-and-a-half of complete collapse.
Now I read here that per capita stagnation or worse is happening to two key western economies, those of the UK and Italy. What's most troubling about what's happening in the UK and Italy is it could be the start of a trend. Japan of course has been undergoing per capita stagnation for close to three decades now.
The point here is, the Eastern Europe/USSR example shows that the political results of system-wide stagnation can be (from the point of view of established ruling elites) quite dire, and can come to fruition rather quickly.
Obviously, the economic and political dynamics in the Western Europe/USA complex are quite different from those in the USSR and Eastern Europe during the 1970's through '80's. Nevertheless there are harbingers of quite adverse political possibilities in all the major Western Europe/USA complex of countries. The matter may be quite urgent indeed.
The picture does indeed appear bleak. What would a bull case look like? The UK's Venture Capital industry is the biggest in Europe by miles - there are clearly assets worth investing in (though not on the public market). Unsurprisingly this money is concentrated around the Golden Triangle due to the UK's research excellence, but there are some good emerging regional hubs too. Creative industries are almost always overlooked by economic pundits (and the public) who prefer the solidity of manufacturing - but the UK's creative sector is genuinely world leading and big business too. A final issue is around immigration. Most of these articles also tend to look at Brexit and its associated politics and assume the UK is shooting itself in the foot by not being more open to foreign labour - but despite the rhetoric immigration into the UK has been at unprecedentedly high levels for 20-25+ years now. The UK is clearly still a country worth coming to, economically, for many around the world. And so on...
The Economist's graph in Hix's tweet appears to show that US median income per person, after taxes and transfers, was falling for roughly 13 years between 2003 to 2014, then increased by 30% under the late Obama-Trump years between 2015 to 2020.
Did this actually happen? It seems odd that this hasn't been commented on elsewhere, as it seems like a major feature of 2015-2020, if so.
Median household income after taxes and transfers seems like a somewhat strange choice to index fundamental economic growth, as large scope for this to be impacted by income transfers to the middle, while neither income transfers to the bottom, or overall growth seen everywhere but the middle would show up.
I would be interested in seeing an analysis of the causes and effects over the past 20 years in this article with the Israeli economy over the same period and commonalities and differences. Certainly the results are quite different.
I am literally on the other side of the world but the housing theory of everything seems like a good explanation. The fact that skilled workers in the nation’s largest city can’t actually afford to live in nice accommodation in the city proper is surely a red flag. https://www.worksinprogress.co/issue/the-housing-theory-of-everything/
Ok. The UK has suffered lower growth but what is the consequence? The employment remains consistent. The pound is weaker but what are the consequences that would kead to a change in policy?
Someone or some group must have benefitted from the austerity. For example did the national debt or deficit go down? Did land owners or the City benefit from austerity? Manufacturing and farming do not seem to have benefitted, but then who or what *did* benefit from austerity?
If no one benefitted, why was it done and more importantly why has it not been changed or any course correction?
Reality: The importation of third world races and cultures is creating a third world UK, not really going to miss them though, they always were self righteous trouble makers.
This article reminds me of the book "the moral consequences of growth" by Ben Friedman. Its thesis is that when growth stops societies become harder crueler (and crazier ) as people start to scramble for piece of the stagnant economic pie. The silent economic collapse of Britain described in this piece helps me understand how what I have always thought of as a fundamentally sensible people have turned into a morass of political nut cases
I was lucky to have for quite a few years the opportunity to work with David Godfrey, the British physicist that discovered the hexagonal big spot on Saturn's North Pole (https://en.wikipedia.org/wiki/Saturn%27s_hexagon). He did his PhD in the meteorology of Saturn. However, when I met him, he didn't work in the field any longer.
But one of the reasons why he emigrated to Canada, besides family ones (maybe that was an opportunity), was the appalling stratification of British society, stratification that had no base on merit. (he did work for some years for the Home Office on the Statistics realm) but seem to rely entirely of the ability of turds from certain gene pools to come floating on top.
That, and the destruction of the Grammar Schools in Britain, which Godfrey said were able to give a nobody like him an opportunity and a solid education (solid enough to make astrophysical discoveries and study Saturn meteorology).
I do not think the surface has even been touched here in what is an unusually rambling and unfocused essay (except perhaps on the topic of how Britain sees itself in decline, which is not that interesting). The classic productivity graph that shows the anaemic ongoing productivity growth in the uk that started after the financial crisis never get’s properly explained by economists - and is not explained here either…. Is it because the city no longer generated super profits after the financial crisis and the North Sea dividends started waning and the high employment of this period was low quality and simply due to there being lots of coffee shops for people to work in? It would be good to see beneath this chart and look at productivity by sector perhaps, to get a further understanding of why has Britain completely lost its dynamism
Interesting article, thanks. I agree that the UK is in a dire position, but I don’t think you’ve identified why. Personally, I consider that tax and redistribution created Hunt’s “doom loop” decades ago.
I was a Guardian-reading lefties throughout my 20s, until experience working in the criminal justice system exposed me to the “bottom third” of society. Gradually I realised that many of these people were irredeemable: we were throwing good money after bad. Later, I changed career and began working in the City. It only took one year of paying taxes at the 45% Additional Rate (then £150k+) before I emigrated. Many of my colleagues have done the same. Others have simply gone part-time, taken lower paying jobs, or for the more senior ones, retired early.
I think the UK is on an irreversible decline towards being a European version of Argentina. I compiled my thoughts here: https://london2050.wixsite.com/miscellaneous-musing/post/uk-prognosis
Very happy to read any constructive criticism.
Curious if you considered the decline in British education standards as a cause or effect. I lived in London around the inflection point in most graphs (2004/5) and was shocked at the numeracy of retail workers (was always clear a migrant was at the till when they could manage cash without a calculator). My wife taught in the education system, which had moved in recent years from clear, high standards towards vague, uncritical evaluation in the public system (not to mention the entire "English dept in an English school was populated by Canadians and Americans). We could sense something akin to stagnation/decline was happening around us...
I wonder if there's a cultural component here. I've heard that being an engineer is a much less cool profession in the UK relative to other countries like Germany or USA. ICT work seems particularly low status. I was talking to a software engineer who escaped from the UK to the US. He told stories of a woman backing away from him in the bar as soon as she learned about his job, and companies desperate for ICT workers who still wouldn't raise wages because it wasn't a respected career. I'm sure that these cultural factors affect the career choices that young people make. It'd be fascinating if "The IT Crowd" (2006 premier) put a measurable dent in Britain's GDP.
Fascinating article. Thank you. The Burn-Murdoch chart suggests that not much has changed for the capitalist-conservative alliance since the 1920's: austerity/financial repression is a primary weapon to control labor and accumulate a larger share of GDP. It just seems that in the UK case, it is backfiring a bit. By the way, Professor Mattei's book, The Capital Order, was fascinating (if a bit repetitive).
What I love is that despite every graph in this article showing that every economic problem we face today clearly proceeds Brexit, the author cannot help repeat unsubstantiated claims about the 'damage' Brexit has supposedly done to this economy. Brexit-brain is clearly a terminal illness.
A very interesting article. Let me go a little bit meta here. I'm going to talk about commies. Back until about the first half of the 1970's there was a strong intimation among western leaderships that the Soviet Union and the European countries associated with it all had dynamically growing economies; Krushchev's "We will bury you (pass you by)" was still a real fear. But by the second half of the Seventies, the economic growth of all these countries appeared to have shrunk to match their low population growth numbers. In other words, per capita incomes in those countries had stagnated. Famously, the Communist systems in those countries were within a decade-and-a-half of complete collapse.
Now I read here that per capita stagnation or worse is happening to two key western economies, those of the UK and Italy. What's most troubling about what's happening in the UK and Italy is it could be the start of a trend. Japan of course has been undergoing per capita stagnation for close to three decades now.
The point here is, the Eastern Europe/USSR example shows that the political results of system-wide stagnation can be (from the point of view of established ruling elites) quite dire, and can come to fruition rather quickly.
Obviously, the economic and political dynamics in the Western Europe/USA complex are quite different from those in the USSR and Eastern Europe during the 1970's through '80's. Nevertheless there are harbingers of quite adverse political possibilities in all the major Western Europe/USA complex of countries. The matter may be quite urgent indeed.
Could the UK simply be exhibit A of Mark Blyth's "Austerity: The History of a Dangerous Idea"?
The picture does indeed appear bleak. What would a bull case look like? The UK's Venture Capital industry is the biggest in Europe by miles - there are clearly assets worth investing in (though not on the public market). Unsurprisingly this money is concentrated around the Golden Triangle due to the UK's research excellence, but there are some good emerging regional hubs too. Creative industries are almost always overlooked by economic pundits (and the public) who prefer the solidity of manufacturing - but the UK's creative sector is genuinely world leading and big business too. A final issue is around immigration. Most of these articles also tend to look at Brexit and its associated politics and assume the UK is shooting itself in the foot by not being more open to foreign labour - but despite the rhetoric immigration into the UK has been at unprecedentedly high levels for 20-25+ years now. The UK is clearly still a country worth coming to, economically, for many around the world. And so on...
The Economist's graph in Hix's tweet appears to show that US median income per person, after taxes and transfers, was falling for roughly 13 years between 2003 to 2014, then increased by 30% under the late Obama-Trump years between 2015 to 2020.
Did this actually happen? It seems odd that this hasn't been commented on elsewhere, as it seems like a major feature of 2015-2020, if so.
Median household income after taxes and transfers seems like a somewhat strange choice to index fundamental economic growth, as large scope for this to be impacted by income transfers to the middle, while neither income transfers to the bottom, or overall growth seen everywhere but the middle would show up.
I would be interested in seeing an analysis of the causes and effects over the past 20 years in this article with the Israeli economy over the same period and commonalities and differences. Certainly the results are quite different.
I am literally on the other side of the world but the housing theory of everything seems like a good explanation. The fact that skilled workers in the nation’s largest city can’t actually afford to live in nice accommodation in the city proper is surely a red flag. https://www.worksinprogress.co/issue/the-housing-theory-of-everything/
Ok. The UK has suffered lower growth but what is the consequence? The employment remains consistent. The pound is weaker but what are the consequences that would kead to a change in policy?
Someone or some group must have benefitted from the austerity. For example did the national debt or deficit go down? Did land owners or the City benefit from austerity? Manufacturing and farming do not seem to have benefitted, but then who or what *did* benefit from austerity?
If no one benefitted, why was it done and more importantly why has it not been changed or any course correction?
Reality: The importation of third world races and cultures is creating a third world UK, not really going to miss them though, they always were self righteous trouble makers.