The UK has entered the institutional reform phase. Like Italy in the early 90s, it has become convinced that the country does not work because some random institutions need changing. In Italy it was `equal bicameralism`, the organisation of administrative divisions (regions and provinces), and other stuff not worth discussing here. In the UK, the institutional reform phase consists of Brexit, Scottish independence and, more recently, 'charter cities' and the abolition of the House of Lords. All this while taxes on productive activities (let it be labour or corporation tax) are increased, public investments are cut and the quality of public services is declining on a daily basis. The country is wondering why the NHS can't hire personnel, while a junior doctor in the UK has less purchasing power than a German janitor and nurses resort to food banks.
The fact that since 2010 this country has been ruled by people whose main qualification is being children or husbands of rich people, doesn't help. From this cold island, Ursula von der Leyen, a failed German politician, looks like a monumental stateswoman.
> the institutional reform phase consists of Brexit, Scottish independence and, more recently, 'charter cities' and the abolition of the House of Lords
It's just Brexit. The rest will not be allowed to be tried. And Brexit was popular precisely because it located the failed institutions outside the country where they could be a convenient scapegoat, without having to look at the big failing institution: the media-intelligensia-Tory circle of people.
Institutional failure reached the point of allowing Liz Truss to be PM, the UK's shortest PM term at 45 days. The sort of governmental turnover that you'd expect from Italy in the 90s.
(Where's the air disaster type writeup of "how did the Truss failure occur?" in the media? You won't see that because it implicates too many people. Yet it was the organisational equivalent of handing control to an untrained junior who immediately flew the plane into the ground.)
You don’t necessarily have to do anything, you just need to keep your mind busy to avoid introspection. Do you think Italy has abolished ‘equal bicameralism’?
Liz Truss can barely speak in her native language and in normal circumstances she wouldn’t have been allowed to become a member of Parliament, let alone a senior minister or the Prime Minister.
* If Scotland joins the EU then there must be customs checkpoints between England and Scotland. In the era of the modern nation state there has been no such formal border between the two countries. One can only imagine the number of business that rely on completely frictionless transfer of good across the border. At least in the case of Northern Ireland there is a recent historical precedent for border checkpoints (albeit one that's tied to painful memories). And yet look at how that's going.
* Scotland would be poorer. I can very much sympathize with Scots who don't like being ruled by English Tories (I'm English and I don't like it either!), but a lot more money flows from London to Scotland than in the other direction.
* The UK's nuclear deterrent would very likely be compromised. Some might say 'good riddance', but current world events are pretty nicely illustrating the strategic value of nuclear weapons. Scotland's GDP is about 6% of the UK's. It can't afford to fund its own defense. The SNP's plan for defense is either to pretend that it's not required, or just to assume that the remainder of the UK will continue to pay for it. On top of that, the armed forces employ a significant number of Scottish people (both directly and indirectly).
* The UK is already becoming a second-tier actor on the world stage. Split it up into smaller countries and the international influence of each will dwindle further.
Scottish independence is a stupid idea because it makes no sense and it is, from inception, a fantasy issue to attract the monomaniacal voter. Scotland, like the entirety of the UK, lives on fiscal transfers from London. Once you cut that lifeline, Scotland, and similarly any other region of the UK, will decompose in a matter of weeks.
The notion that the EU is just waiting for the next English speaking country to join and/or leave every other year is the root of Brexit ideology (as in a set of quasi-coherent beliefs that constitute a world view). It is based on a weird sense of superiority that is not justified in anything that happens in the material world.
I think Scottish independence is a good, if expensive, idea, but fundamentally the UK government can just veto it. See the recent section 35 nonsense. The Scottish parliament has no real leverage and no sovereignty of its own. It could be abolished tomorrow by ordinary legislation.
Whereas the UK government was perfectly capable of carrying out Brexit, it just had totally incoherent ideas of what it wanted and what other parties would agree to.
Cameron could also have vetoed Brexit, but didn't. Remember that the government of the day opposed Brexit but still honored the referendum result. There's similarly no reason to think that the UK government would have vetoed Scottish independence if the previous referendum had gone the other way [1][2]. There's a distinct possibility of a future referendum having a different result.
A more accurate statement would be that the media, intelligentsia, and New Labour are aligned in a way that benefits historically Tory business interests.
> The sort of governmental turnover that you'd expect from Italy in the 90s.
Government turnover in Italy has always been a nightmare since 1945. The difference between the First Republic and the Second Republic is the former basically had the same ruling party and the same electoral law, the latter has had coalitions with very different parties and a different electoral law in almost all the elections.
> Corbyn could have .... and IMHO could have had a decent chance of winning/ forming the government.
No.
I think its well accepted by most people with sensible minds that the reason Johnson got it was because of Corbyn.
Corbyn was basically a bit nuts, he effectively wanted to return the UK to the 1970s.
Corbyn was attractive to the young and politically naïve via his "Momentum" programme, but as we saw with the Red Wall votes, those who were around in the 70s didn't want a return to that, even if it meant lending their vote to the party of Thatcher.
The Blue Wall will highly likely prove to be a one-off, they held their nose and ticked the box because Johnson was the lesser of two evils.
I blame the fetish that the UK has for Oxbridge graduates. The evidence shows they are not very good, perhaps even worse than the Russell Group average. We need to find better indicators of ability; this cannot go on.
I've been interviewing graduates in the UK for many years now from a very broad range of universities, all focused on CS or stem degrees.
In my experience, I've yet to interview an oxbridge graduate who wasn't at least great academically, and this is speaking as someone who went to a lesser university. Clearly whatever standards they have for teaching and entry selection criteria really work.
That said, graduates from other universities are easily on par with oxbridge, just that there were some total morons amongst their peers as well.
In my opinion, the problem is not that the UK fetishes oxbridge candidates, the problem is politics is dominated by arts and ppe graduates which does not offer the problem solving skills stem degrees do. I genuinely think we'd be in a much better place if our leaders weren't trained just in communication, but instead on actually logically thinking through problems and resolving them.
> I genuinely think we'd be in a much better place if our leaders weren't trained just in communication, but instead on actually logically thinking through problems and resolving them.
The other half of the problem is that the archaic UK parliament needs to change, its not fit for the 21st century.
For example ...
MP's perks and expenses - why do MPs get HEAVILY subsidised food and drink ? why do they get such generous expenses ? why do they get Friday's off ? why do they get so many recess holidays ? why does the whole place shut down for party conference silly season ?
Prime Minister's Questions - Its a disgrace. The clue is in the word "Questions". Instead it's a farcical theatrical display where someone asks a question and then the Prime Minister doesn't answer it and/or the Prime Minister's backbenches ensure the answer gets drowned out in noise.
Planted Questons - All the planted questions from the Prime Minister's back benches. What's all that about ? Do they really think people are that stupid ?
Too many "gentleman's agreements" - For example, what's with the whole "you can 'unknowingly' lie, but you can't accuse others of lying" thing ?
Lack of independent scrutiny - Enquiries and investigations are all based on the "gentleman's agreement" that the Prime Minister can be trusted to be a "good man" and will therefore, of course, launch any necessary investigations into alleged acts of wrong doing. However as we saw with Johnson, well ....
Ministerial Code - The ultimate joke. A code with no teeth. Again, Johnson demonstrated how circles could be run round it.
Archaic "parliamentary protocol" - So many examples here, perhaps one of the most infamous is Christopher Chope MP shouting "object" and blocking progress of the Up-skirting bill. The perogueing of parliament by the Johnson government in relation to Brexit is another.
Because the bulk of the work of an MP is in being at home spending time talking to the bosses (i.e. the constituents) to ensure that the correct message is brought back to the central meeting place (i.e. parliament). After all, you, the constituent, are hiring the representative to carry your message to the central meeting place so you don't have to make the trip yourself. But you still have to make your message known. MPs are most definitely not mind readers who can simply be elected and then never spoken to again. It is a time consuming process to sit down with each and every constituent to hear their voice.
And, well, I guess if an MP really is a mind reader and doing such a great job that his bosses don't feel the need to talk during these recess periods, why not allow a nice vacation? An MP figuring out how to be more efficient than other MPs shouldn't be penalized. The recess will still be necessary for the poorly performing MPs to go home and get tuned in by their bosses.
> MP is in being at home spending time talking to the bosses (i.e. the constituents)
Its awfully cute when people think that's an acceptable answer, it goes awfully well with that other well known phrase "write to your MP about it".
I know sufficient people across the length and breadth of the UK to know that the reality is that MPs (perhaps especially those who fly the Conservative flag) will do their utmost to avoid and fob off their constituents.
If I had a penny for every person who told me they wrote to their MP and either received no reply or received two-pages of pre-prepared boilerplate that didn't answer the question ... I'd be rich.
As for MPs who have extraordinarily well-paid "advisor" jobs on the side, what's your reasoning for that ?
I interned briefly for an MP when I was a student. She got Sunday morning off, and spent the rest of the week in Parliament, in committee, in meetings, on the train (reading papers), in the constituency office, or attending political events. She worked extraordinary hours, which isn't unusual.
If you want to ignore your constituents and not bother (and are in a safe seat) you might do less than half of that. But MPs, as a group, are very hard working. I also think that the way we select MPs, incentivise them, and manage them is awful and that's one of the many reasons why the institution of parliament is fairly crap. Unjustified cynicism about individuals is unlikely to fix that.
I do apologise for the form letters, though. That's almost always staff work, with the MP signing the result after a brief skim. We got a lot of mail and much of it was repetitive or crankish so the replies weren't always artisanal...
Like with any organization, it is not unusual to hire bad employees. Of course, when you do hire a bad employee you don’t write them a friendly letter and call it a day. You hunt them down and talk to them face to face. Maybe you’ll even have to yell and scream until they cry to get your point across. Hopefully you will choose better next time.
It’s never fun being the boss, but given that you’ve accepted the role you can be a good boss and stand up to your workers, even as much as they try hard to avoid you, or accept your failings and let your organization fall apart. Your choice.
FPTP is perfectly fine for electing a representative. I might even argue that it is best electoral system for selecting a representative. It is how most organizations choose between a set of employees and it works well enough.
FPTP absolutely fails hard when parties get thrown into the mix. But that is when you should stop to ask yourself why are you hiring party members in the first place? You want to hire someone who is there to represent you, not some other allegiance. The Westminster system really isn't well suited to having parties in the first place, even if it has grown to accept them.
A computer scientist would see all that as technical debt that needs to be resolved to streamline due process. PPE graduates see it as a grandiose theatre which adds gravitas to the process.
I think my point still stands, the whole system could be transformed if some real problem solvers involved. Alas, I don't see it happening any time soon.
Oxford and Cambridge are undeniably very good universities, I think "fetish" for their grads is going too far. I think it's that there is an expectation in some sectors that an Oxbridge grad is capable of working in wider areas than they are necessarily qualified. To much weight is place on the oxbridge "brand".
The unfortunate thing is that we have been governed by a party which takes that unhealthy attitude towards senior party members, they have always been more about who you know than what you know. You don't see the same proportion of Oxbridge grads in the current opposition.
Slightly anecdotal, my first job after graduating (from former polytechnic Loughborough) was in Cambridge for a company formed by a couple of Cambridge grads. There was a higher proportion of non Oxbridge grads at the company, I think we tended to have more practical experience.
The British political system isn't hiring Scientists, Engineers or MBA graduates out of Cambridge. It's also about Eton. Look at the last 3 that won elections:
David Cameron - Eton, Philosophy, Politics and Economics at Oxford, went straight into politics.
Theresa May studied Geography at Oxford, worked at Bank of England and a few other institutions for a while.
Boris Johnson - Eton, study of the Classics, ancient literature and classical philosophy. Worked as a journalist, was fired for lying, then became a politician.
Eton is more important. Children go to Eton. They dont chose to go. Their wealthy parents send them. Eton is where elite families form the bonds that are the backbone of the UK elite. Oxbridge is just the finishing school.
How many politicians are hired or promoted by prime ministers not because of quality or background but social debts between families? Nobody really tracks those relationships.
No, it isn't. People outside the UK have this fascination with Eton. And don't seem to realise that there are hundreds of other independent schools, grammar schools (which are often as good or better than many independent schools), and (if we are talking about history) grant-maintained schools.
Eton isn't regarded as a particularly good school. It is relatively expensive, and preferred by people outside the UK. Their academic results aren't that strong.
And social connections are an aspect of almost every political party. Blair hired almost everyone in Derry Irvine's chambers. Most of the SNP are not only friends, they are actually related to each other. The Tories are possibly the least incestuous because Cameron made a concerted effort to widen the reach of the party in the mid-2000s (this is why the current Cabinet is so diverse).
The reason why there is a concentration of Oxbridge is because, when most of these people went to uni, they were far and away the best. In Scotland, you see the exact same thing with Edinburgh (and strangely, no-one talks about the fact that almost of Sturgeon's clique went to Glasgow...which is, generally, an inferior university). And what you are actually seeing now is that more and more politicians are going to other universities reflecting the fact that non-Oxbridge unis caught up in the 90/00s (and recently, they have dropped off far more...Imperial is ahead in sciences, Oxford PPE is still very good though).
> In a post-industrial society knowledge is the resource.
Err, no.
Don't get me wrong, the Oxbridge system accepts, fosters and matriculates some very bright, very smart people.
But that is not at all what the core of the "Elite University" system is about, it's about connections and maintaining a single degree of freedom between the families that collectively hold > 90% of the wealth, resources, and influence within UK society.
I think we are mostly on the same page. Elite universities are fine in an industrial society because you are more limited by physical resources. South Korea does relatively well being run by relatively few rich families. Because it only takes so many executive, managers or engineers to run factories refining natural resource. An elite university can produce the people necessary to fill those slots.
In a post-industrial society, or beyond that, you aren't tied to physical resource in the same way. Instead you are limited by the amount of people with relevant knowledge. The existence of elite universities in such a society is really more saying that you can't produce enough people and opportunities.
Arriving at a village finding there is only one person with a car you don't say "wow, this guy is successful" you say "ouch, this is a poor village" even if that is the most successful person in the village. Because these days we expect cars and if everyone had cars he wouldn't stand out as successful.
NB, in current UK English "matriculation" describes the process whereby the student is formally enrolled by the university. It is a formality and happens after they arrive at the university but before they are taught anything. A matriculation photo is taken by the college at the beginning of the first term. That is all there is to it.
It makes more sense to call it the Eton system. Oxbridge is accessible for many smart young people, but in itself that does not invite you to the political elite. It's Eton and a couple of other schools.
Pretty much any male politician whose official actions could be described as inhuman or sociopathic has been through boarding school trauma.
Oxbridge selects for upper / upper-middle class polish and above average - but probably not exceptional and definitely not neurodivergent - intelligence.
Having been to both institutions, I can assure you that the comp sci and STEM programmes are dominated by neurodivergent types. Those aren't the people going into politics though.
The hiring is not being driven by ability, it's being driven by connections. Oxford PPE graduates are being hired .. by other Oxford PPE graduates. And then promoted in the newspapers by the same.
I think it would be reasonable to claim the two main parties come from very similar backgrounds. Both seem to be happy continuing with maintaining their status quo.
Without their consent, is it likely or possible to see a third option rise?
It's remarkable how the SNP have taken over and dominated Scottish politics by having exactly one radical policy and otherwise being a sort of Merkelist centre-right government. But that's undoubtedly linked to the use of AMS at the Scottish Parliament.
I don't know how true that bit is about the German janitor, junior doctors earn around 40k GBP in the UK, which is more than enough to buy a good lifestyle. I assume most janitors in Germany would be earning minimum wage (around 15k GBP, converted).
Is that junior doctor fully credentialed, or wrapping up specialization?
In the US, a resident will earn somewhere in the $50k-$80k range, depending on specialty.
Once out of residency, the average junior salary jumps up to somewhere north of $150k. Although by that point, the doctor is likely almost 30 and possibly carrying $100k+ in student loans. They’re well paid, no question, but makes for non-optimal (for society) choices - harder than it should be for them to enter poor areas or lower salary specialties.
Depends, that's across the UK, but housing prices differ greatly. I've seen new built houses for 170k around Newcastle. Most of the "north" is affordable, even towns near Manchester etc. It's nowhere nearly as bad as Ireland, the Netherlands and other parts of Europe.
When you think about taxation, in principle if the taxation strategy were perfectly optimal then the government would never have a spiraling debt problem.
The explanation is quite simple. If you subscribe to MMT, the government issues legal tender currency and creates it and today that happens via debt. This means debt just represents untaxed money in the private sector. In other words, the government didn't bother to collect all the money that is in the private sector.
When you understand this, then having a single tax like income tax be the primary source of tax revenue is a bad thing.
Let's assume that we have an economy where all income exists in the form of wages and therefore is taxed at the income tax rate of 50% (I can't do this math on the phone, sorry). This means the half the income is taxed once every year. This money has a half life of exactly one year if the government were to use all of it to pay off debt. This means that in this example the government can never really go bankrupt as long as it doesn't do some inherently backwards things that break the economy in the long run.
But what if there are two types of incomes that are taxed at different rates and at different frequency?
What if you have wages and offshore companies where income tax can be delayed indefinitely until you bring the money back home where it is taxed at the usual income tax rate? Then suddenly it is possible for money to be stuck abroad and never taxed for long periods of time. As we know, this is money the government simply didn't bother to collect. It actively lets people keep the money abroad untaxed, so it shouldn't be surprising that the problem cannot be solved by hiking income taxes. The debt has to be extended not because the government is living beyond its means but because it is simply not collecting the money necessary to pay off its debts.
This is supposed to be an illustration, not a perfect description of the real world.
I didn't talk about low capital gains taxes. Which also means money could be stuck domestically inside the financial systems.
The lower the tax rate and the lower the frequency of the taxable event, the more time money gets to spend away from the government and the longer the government will spend its time being in debt and I am still assuming that debts are eventually paid off. In principle there is no rule that money can't be stuck in a non productive sector indefinitely which then means the government must constantly intervene by spraying money at the productive sectors so they don't dry out like plants in a desert.
Taxation and spending is a means to an end. The end is reallocating the productive resources of the state to political rather than "free" market ends. Money locked up offshore is not relevant to this, only money being spent in the country on labour and resources.
Money locked up offshore doesn't sit there doing nothing. It has a complex relationship with the labour, resources and political system of the nation that currency comes from.
One of those relationships is the corruption feedback loop it creates, with offshore money buying political power which is used to aquire more offshore money.
Alternatively you stop talking about 'debt' because there is no such things.
What there is is people with financial savings, and a balancing item in the national accounts because of that. That balancing item occurs naturally, costlessly and without concern as a consequence of the way double entry bookkeeping works.
Money is never stuck because it isn't a thing. It's really just an accounting record.
If you have £50 in your wallet or purse you are 'causing' the balancing item to come about because you have spent it yet.
Tax isn't there to raise money. Tax is there to stop the private sector hiring everybody - so there is somebody left for the public sector to hire to do the jobs the government needs doing to fulfil its democratic mandate.
i don't think this argument actually makes sense. The rate at which money arrives in people's pockets via income such as wages and becomes available for them to spend - what you call the half life of money - is effectively what people think of as money. What money means to most people is the amount available for them to buy stuff with, and while the money may recirculate when they buy something for personal consumption the actual goods and services do not. This means that money recirculating back around faster through wages has the same effect on inflation as just printing and handing out more money: both result in more money chasing the same limited supply of goods and services. When looking at the economy as a whole, it's the rate of flow that matters.
This is especially true if you follow MMT. Remember, the whole underlying premise of MMT is that the government's ability to pay for goods and services is not in any way limited by a need to collect money first, that they cannot ever be forced to default on debt denominated in their own currency, that the only actual limiting factor is the actual real resources like labour, raw materials, and so on, and that the purpose of taxation is to keep inflation under control by reducing private demand for those things. From that point of view, money sittting in offshore accounts is a red herring because it doesn't represent consumption of real resources, and wages and money being brought into the country to buy things with are exactly what does need to be taxed because they do represent actual demand which will cause consumption of those resources.
When you think about taxation, look at the UK's tax code. Arguably one of the longest and most complex in the world.
Walk into a firm of UK accountants and ask to be shown their copy of Tolly's Tax Handbook....
You'll be led to a room with a bookshelf full of books with Orange and Yellow spines.
The "handbook" is 23,000 pages long.
Tax Avoidance is an artform in the UK.
Tax Evasion is illegal, of course, but avoidance tends to be sufficient for the majority - sufficient legal loopholes and grey-areas are provided in the tax code !
Some sectors aren't "productive" on their own but still necessary. Railways basically never pay for themselves by fares paid by (mostly) workers out of post-tax income, but the value they bring to the economy by enabling economic activity is worth it.
Roads, education, healthcare, much of these things would either be unprofitable or unaffordable if they have to be self-funding. But they bring social value even if they don't make their own shareholders rich.
I’ve never understood why this argument wasn’t the first thing economists bring out as a counterpoint to MMT. The entire thing hinges on a central planner knowing where to spend money. Gee… we’ve seen that work out so well in the past.
I can’t nor I want to deploy any grand theory, such as MMT. But if the triple lock were applied to nurses and doctors’ pay, instead of pensions, we would have one less problem. Or if instead of increasing NI to pay for social care (??), they had increased income tax, the burden would have been shared more evenly and wouldn’t be only on workers. Maybe introducing a property tax would have been even better, given that a pensioner owning his home outright is significantly richer than a young professional paying half his salary in rent. Then we have cuts in in-work benefits, such as child benefits.
Since 2010, the UK has declared war on work and now everybody is wondering where productivity is. In the meanwhile everybody is busy talking about grand reforms, such as Scottish secession and leaving the EU.
> given that a pensioner owning his home outright is significantly richer than a young professional paying half his salary in rent.
The young professional can upskill, or work harder, to cover increased income taxes. The pensioner is often unable to work; they're less likely to be fit, and their alertness may be fading.
I'm 66, out of employment for 5 years, and I can't imagine enduring a 9-5 shift. I don't always sleep well, I often need a siesta, and I'm certain I'm much less sharp since I quit employment. My work-rate has fallen a lot.
I don't have a pension as such; I live on the rent on my property. I worked for the money to buy that property; it's not inherited wealth that fell into my lap. My finances are planned around the rental income. If you start taxing my property, how am I supposed to pay? My only choice is to sell the property, reducing my rental income to zero, and rendering me a burden on the taxpayer.
Fact is poverty among the elderly is at the lowest since records began. If somebody is left behind, we can think of ad-hoc measures. It is insane to increase pensions by 11% and offer a 4% pay rise to nurses.
The young professional worked hard to acquire his human capital, that is taxed way more than rental income. Also, salaries in the UK have increased much less than rents.
Besides, properties are taxed everywhere in the world, especially if they are rented out, bar the UK.
I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5.
BTW: the term "human capital" is usually a euphemism for staff, isn't it? I'm not sure what it is that you think is taxed way more than rental income; my rental income is taxed as income, just as if it was salary from employment. So what is this heavily-taxed "human capital"?
> I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5.
Can you get a reverse mortgage to sell back some of your equity to pay your taxes? Maybe this isn't a think in the UK but it very well could be. I mean if I held market equities and no cash and owed taxes, I don't think I'd get much sympathy not selling some to pay the taxes I owe. I'm not sure why real estate should be treated differently.
It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate).
I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that.
Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state.
> It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate).
In the US it's commonly called a reverse mortgage.
> I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that.
> Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state.
Sure I agree that you ideally don't want to draw down on your capital, but ideally you'd have the cash to pay the taxes. Going back to the case of equities, if your only income was in the form of dividends and you didn't have enough to pay taxes you owe, you'd need to sell stocks which would decrease future cash flow from dividends.
I don't really see this as fundamentally different than other cases where you don't have enough income to grow your wealth after costs. E.g. when you go in to retirement. I mean it's nice if you have enough capital that you can fully live of off cash you derive from it (rentals, dividends, pensions, etc.), but if you can't then you gotta dip into your capital.
von der Leyen was a housewife. Sunak was a partner at one of the most successful hedge funds of all-time (in his late 20s), and founded his own multi-billion hedge fund. His Chancellor started his own business and sold it for $20m before going into politics. Leader of the Opposition was a barrister in one of the top chambers, head of CPS. Shadow Chancellor worked at the BoE. Britain has no shortage of extremely competent politicians, and a strong political system.
There is no comparison possible with German politics. German politicians wouldn't be councillors in the UK, and their system is totally cooked (Russia appears to have purchased almost all of the SPD, the media is non-existent, the farce around the Merkel transition was incredible).
Junior doctors do not have less purchasing power than a German janitor. One of the main issues with the NHS is doctors going part-time because the pay is so high. The BMA have actually mooted the idea of tax cuts for doctors only between the band of £100-125k in order to get more of them into work (and btw, part of the issue with pay is regional inequality, doctors in London can work two days a week and earn £300k/year...London is distinct). One of the negative aspects of the UK political system is that the BMA has massive political/media/PR influence so people will say things like doctors are underpaid, without connecting to this any other information that they have.
Nurses are generally overpaid too. One of the problems in the NHS has been low productivity, and part of that has been significant growth in nurse numbers. But there is a hard cap on their productivity (and a result pay). Starting pay is £27k/year...for reference, this is as much as engineering grads make (generally speaking, almost all grads are underpaid in the UK apart from those going into tech/finance/medicine...relatively low-skill work is almost always overpaid).
I actually agree with your point in part, a lot of it is naval-gazing but there is a need for more local powers (if you look at what is happening around Manchester, it is clear that this can work). Thankfully, leading politicians of both parties today are largely past it.
Also, public investment isn't being cut whilst taxes are rising...taxes are significantly below the level required to fund public investment. One of the main political issues is that voters don't understand this.
I have no sympathy for Ursula von der Leyen, I would not have referred to her as a failed politician otherwise. But she does indeed look like a monumental stateswoman compared to Cameron, Osborne, Johnson, Sunak, Gove, Farage, May, Corbyn, Truss, Sunak, etc…
Germany works much better than the UK. Just look at salary growth or at the number of strikes that the past 12 years of idiocy unleashed on the UK.
Sunak as a chancellor is responsible for idiocies like Eat Out to Help Out, the stamp duty holiday and losing billions of pound of taxpayers’ money to fraudsters during the pandemic. As a prime minister he can’t manage the strikes and half his cabinet is under investigation (by HMRC or for violations of the ministerial code or bullying). He’s clearly not fit for the role and doesn’t know what he’s doing. And at this point I’m not even expecting a strategic vision, I’d just like somebody that doesn’t increase my tax bill by 10 % every year and loses half of the money like a toddler sent to buy milk and bread.
An NHS consultant makes 70K, that in London is not enough to send a child to nursery and pay the rent (that is: they are poor). A junior doctor makes a fraction of that. For those unaware, depending on the specialty, a junior doctor may be even 35-40 year old. A private doctor may make a lot of money, but I wrote specifically that the NHS can’t hire, not that I can’t find a doctor in Harley Street.
Finally, taxes have gone up (I would have payed £800 less a month in 2009). Sunak alone increased my tax bill by £2-300 a month, while inflation reduced my real income by more than 10%. I don’t have time to find the data, but last time I checked public capital investment as a share of GDP was lower than in 2007.
"Looks like" is very much the right way of describing it - it's largely a matter of appearances. Especially since Brexit, a lot of the British media pushes only the downsides of any option the government chooses and only the upsides of the alternatives, whilst at the same time spinning everything other countries do as a success. For example, Germany's rail infrastructure has been having real problems actually running trains as a result of massive underinvestment (about a third of what the UK spends if I remember ightly) but our media makes it sounds like they're the ones with a better rail system due to actually investing.
Or take Covid - our press pushed this tale about South Korea having such effective contact tracing they could lift restrictions and reopen society, whereas our incompetent government failed to do so, but in reality they were actually less successful at doing so and even had their own equivalent of Eat Out to Help Out planned that they completely failed to launch in 2020 because they couldn't keep restrictions lifted for long enough. It's just that the British press only reported on them attempting to lift restrictions as proof they succeeded and ignored the part where it kept on failingg and they were almost immediately reimposed, whilst their UK coverage only focused on failures and not on the country being largely out of lockdown for most of summer 2020.
Also, the only zero-fraud option for something like furlough or business support is to deny everyone - every real-world set of anti-fraud checks inevitably blocks some genuine people and permits some fraudsters, I'm sure HN must be familiar with this concept by now, and of course the media attacked the government as incompetent for both. (For example, complaining that businesses couldn't just add people to payroll and immediately claim furlough for them - which would enable massive, trivial fraud - and also that they had no way of detecting if employers were making people come into work whilst claming they were furloughed.) Most of the publications pushing that story even spin normal benefit fraud as something that's not a big deal and right-wing Tory attempts to crack down on it as damaging and counterproductive using essentially this argument. On the other hand, Germany's financial regulator actually opened a criminal investigation into the journalists who investigated the Wirecard fraud, and Germany's own press and politicians failed so hard at investigating that it fell to journalists from outside the country working for the Financial Times to finally prove it. Those are, qualititively, very different kinds of fraud problems and not in a way that makes Germany look good.
Are you really trying to convince me that 10 years of wage growth in Germany are bad and 10 years of stagnation in the UK are good by listing random factoids on German trains (that work way better than the British) and mentioning the Wirecard fraud?
Should we start with the Libor fixing scandal and continue all the way through to the recent PPE scandal? Is this how it works?
PPE scandal was covered by the Auditor General. Libor fixing has, subsequently, been discovered not to be a crime (to the great embarrassment of the SFO who seem to have botched everything recently).
The significance of Wirecard may be the fact that one of the biggest German frauds of all time was uncovered by a British newspaper. And after it was discovered, top politicians continued to lobby aggressively for the country for over a year.
The level of corruption is unimaginable to Brits (imagine if Cameron was working directly for Putin...that is what Schroder is doing, indeed most of the SPD male parliamentarians have, one hears, been compromised in Moscow) precisely because of our open institutions. These do not exist in Germany (as has been widely acknowledged even within Germany after Wirecard).
The reason cases do not play out the same way here is because of the Auditor General, because of the FT...this kind of scrutiny is unimaginable to most countries in the EU (why would voters even have such a puerile interest in their representatives? They vote, we lead).
> His Chancellor started his own business and sold it for $20m before going into politics
Would this be the same Chancellor who's just resigned in disgrace over ordering HMRC not to investigate him for not paying tax, then threatening any journalist who mentioned it with a libel lawsuit?
> Britain has no shortage of extremely competent politicians
We have a massive shortage of competent politicians at delivering benefits to the country. They're only competent at delivering benefits to themselves. If there wasn't a shortage, Truss would never have been put in charge.
Anyone trying to defend the Tory record has to defend Truss without just memory-holing that whole 45 day period. Not just herself - a hapless, content-free cipher, now discarded - but everyone who voted for her should be regarded as grossly incompetent. As should people who published positive press about her. Just as SBF got so many glowing reviews before stealing/losing several billions of dollars of customer money.
> Would this be the same Chancellor who's just resigned in disgrace over ordering HMRC not to investigate him for not paying tax, then threatening any journalist who mentioned it with a libel lawsuit?
No.
> Anyone trying to defend the Tory record has to defend Truss without just memory-holing that whole 45 day period.
And anyone criticizing the system has to explain how someone incompetent was removed so quickly. In any other country, she would have been in power for years.
And the shortage theory would only follow logically if the Tories had then elected someone who was at least as bad...which didn't happen. Truss was bad, but that is all you can really say.
> And anyone criticizing the system has to explain how someone incompetent was removed so quickly. In any other country, she would have been in power for years.
She was polling so badly it was seen as the equivalent of her party coming fourth, behind not only Labour, but also the SNP and the LibDems:
> And the shortage theory would only follow logically if the Tories had then elected someone who was at least as bad...which didn't happen.
Not so; while competence and popularity aren't the same things, none of the candidates for leadership of the Tory party have been of a high standard at least since Cameron left.
And? She was removed. In most other political systems, it is not possible to remove someone in her position because we have a parliamentary, not presidential, system. Some countries, like Italy, do not even have an elected President.
Cameron said Sunak was going to lead the party. He is leagues above Cameron (who, for a British politician, was quite average). If you look in the Cabinet, you see the same thing. It is more obvious once you compare the Tories to Labour, the gulf is huge (Labour really only has Reeves and Starmer, and the latter is, seemingly by his own admission, not strong opposition...btw, I am a Labour supporter, the reason I know this is because I know people in the party, it is embarrassing and all stemmed from the problems with Brown).
Truss was one of the weakest members of the Cabinet (alongside her stooges). But Johnson, for all his faults, was the right man at the right time, and left when he was supposed to. Again, another one of the strengths of our system. And we didn't get a Brown situation (you may have forgotten that Brown also polled under the Lib Dems in the run-up to 2010, Corbyn was leader for how long...and he actually polled under the Lib Dems too in 2019).
> And? She was removed. In most other political systems, it is not possible to remove someone in her position because we have a parliamentary, not presidential, system.
Still allowed to criticise the system for allowing her to gain power. No brownie points for the fact that her party recognised she was such a disaster they would cease to be a meaningful political force at the next election, and therefore made it clear that she should resign. This can easily be replicated in other systems. They don't need to have an official way to force leaders out: she, officially, resigned.
> But Johnson, for all his faults, was the right man at the right time, and left when he was supposed to.
Oh god no, he was a walking disaster area well before he became the uncontested replacement for May. He was fundamentally unfit for office and shouldn't have even been allowed to stand as a Tory candidate MP given his pathological incomprehension of the concept of truth as something deeper than an ad hominem attack. Allowing him to be PM has almost certainly undermined UK national security given his complete lack of restraint or self control in either lust or money.
Only reason he won the election is because Corbyn was so unappealing that even the parliamentary Labour party overwhelming rejected him (what was it, all MPs not in the shadow cabinet?), which is exactly him sticking around for years in the way that you're saying doesn't happen in the UK.
But why did he stick around when the Tory MPs could kick out their leaders? Because Labour's leadership contest allowed candidates rejected by the party to be on the ballot, while the Tories (do they still change their method with each leader or was that just the Blair years?) don't.
> And we didn't get a Brown situation (you may have forgotten that Brown also polled under the Lib Dems in the run-up to 2010, Corbyn was leader for how long...and he actually polled under the Lib Dems too in 2019).
That was unusually high LibDem support of 29% instead of the usual 10-15%, not a spectacular catastrophic nose-dive by Brown.
Corbyn should've gone after the first election or the leadership contest. That he didn't proves the UK being parliamentary didn't help.
>Would this be the same Chancellor who's just resigned in disgrace over ordering HMRC not to investigate him for not paying tax, then threatening any journalist who mentioned it with a libel lawsuit?
Von der Leyen was a medical doctor. She was only a few years in the 90s a housewife when she and her husband (who have seven children) moved to the US. But 1998 she taught again at university before she moved into politics.
Maybe not as impressive as billionaires, but still impressive. And certainly as a family more valuable than hedge funds.
The hedge fund that Sunak worked for runs one of the largest charities in the world (25th largest, 2nd or largest in the UK). They have also created tens of billions for pension funds.
Whether this is the case or not, Von der Leyen is a visibly average politician. Juncker-tier. You actually wonder if there was some kind of competition to elect the biggest idiot.
And that’s my point, she had to be removed from the ministry of defence because of her incompetence. Still she didn’t even get close to the damage caused by the Eat Out to Help Out thing.
This is a very misleading statement. Here’s a Wikipedia summary of her career, which you could easily have checked:
> In 1980, she switched to studying medicine and enrolled at the Hannover Medical School, where she graduated in 1987 and acquired her medical license.[33] From 1988 to 1992, she worked as an assistant physician at the Women's Clinic of the Hannover Medical School. Upon completing her doctoral studies, she graduated as a Doctor of Medicine in 1991. Following the birth of twins, she was a housewife in Stanford, California, from 1992 to 1996, while her husband was a faculty member of Stanford University.[34]
> From 1998 to 2002, she taught at the Department of Epidemiology, Social Medicine and Health System Research at the Hannover Medical School.[citation needed] In 2001 she earned a Master of Public Health degree at the institution.[35][36][37]
> von der Leyen was a housewife. Sunak was a partner at one of the most successful hedge funds of all-time (in his late 20s), and founded his own multi-billion hedge fund.
Bizarre. A long reply chain has disappeared from under my comment.
It mostly consisted of me pointing out the salary bands for Junior doctors and the person I was replying too angrily denying reality and substituting in their own.
You broke the site guidelines badly in this thread. We ban accounts that do that, so please don't do it again, and please especially avoid this sort of tit-for-tat flamewar in the future!
Because, as I have told you repeatedly and you can verify by reading any story about the NHS written over the last month, they are working part-time and locum (which is usually 3x FT rates). So your range given is not accurate, you can Google for yourself, but this also does not reflect the actual rate paid anyway.
I don't imply at any point that junior doctors have the same wage as senior consultants. I have no idea how poor your comprehension has to be to think this.
Okay, then why are we arguing? How many PT per shift? How many locums per shift? This is all stuff that isn't disputed by any side in this debate. You are arguing about stuff that is obvious and self-evident.
You broke the site guidelines badly in this thread. We ban accounts that do that, so please don't do it again, and please especially avoid this sort of tit-for-tat flamewar in the future!
An aging population means you need more money to provide the same level of pensions, healthcare, etc. And you have less working people to tax income from.
The problem is mostly the welfare state. But the Leftists and their media cronies will never admit it, of course.
They drive the narrative. This continued decay is on them. They like to pretend the Truss debacle was something entirely of her own making which they merely observed and reported, but it was an engineered political takedown. The Tories of course are pathetic and spineless so they put up little resistance.
I’m fine with German taxation and the German welfare state, I’m also fine with a minimal state where I have to pay for healthcare.
What I don’t like is the current situation in the UK, where I pay more income tax than I would pay in Germany and I also have to pay for healthcare and childcare and education.
You can’t understand the UK’s political mess without looking at how regions and cities have basically no power and how it is one of the most centralised countries in the world (exc. Scotland because of Devolution).
In some parts of the country like we have 3 or 4 tiers of local government (parish council, borough council, county council, regional elected mayor) whose powers effectively are to regulate building work, run social care (mostly outsourced), and collect waste (mostly outsourced). They don’t even have power for running public transport except in a few areas like London and Greater Manchester. As a result, local politicians are of low calibre as there is no real benefit to being a local politician - decisions are made nationally and so
As an example of how little control local areas have compared to other countries, local government in the U.K. in general:
* Can’t set the amount for annual property taxes (other than small percentage increases)
* Set and collect property taxes on sales
* Run public utilities like water or sewage
* Tell public transport operators that they must run along certain routes or regulate fares or run public transport themselves (legacy of Thatcher in the 80s deregulating buses)
* Regulate taxi drivers in their own areas (any taxi driver can register anywhere in the country and some areas have lower standards)
* Regulate roadworks along major roads which are within their boundaries (only smaller roads)
* Schools in their areas are now independent “academy trusts” and are regulated nationally.
* Commission and run healthcare in their area which is run by different organisations (most areas have two NHS trusts covering them - one for Acute care and one for Mental Health), even though this links in heavily with the social care they do have to provide.
The borders between administrative areas are also often absurd and in place for historical or political reasons.
Where I live is a good example, Stamford in south Lincolnshire. It is part of Lincolnshire but on this tiny little outcrop at the very bottom of the county, surrounded on three side by other counties. Like most town in the UK there is a demand for housing, the only way for the town to grow is into other counties. These other counties then control services, education, and development plans. It results in a situation where there is no plan for how to develop the town, housing developers are getting away with building without having to put into place transport, health or education facilities.
I live in New Jersey where every little town has its own government, its own taxes, its own police force, its own school system. Its super inefficient and expensive, and heterogeneous. American systems like this are the main driver for inequality as wealthy areas have much better public services. Please dont go this route.
England(+) copied the US system of having too many elected roles with the "Police And Crime Commissioners". They are highly paid, elected on tiny turnouts of 10-20%, get no media coverage, and seemingly do nothing.
Not everything is about the US. The UK has a long tradition of local government, and devolution proposals in circulation don’t blindly ape foreign models, whether from NJ or elsewhere, whatever their overall merits. Obviously there are advantages to centralisation, but even if you’re right that NJ is too decentralised, that has no bearing on whether the UK is instead too centralised.
Centralised, but also split up into disfunctioning parts with own rules and procedures, no centralization in many practical matters (own traffic, health, housing, etc. rules, come one!), own parliament and offices here and there randomly with above random excemptions of local vs. central roles. Scottland even have their own weird bank note system. UK, Great Britain, British Isles, England, Scotland, Wales, this is not a country, this is a random bunch of regions in random composition, different composition in different matters. A big mess, a big mess, with little will to have unity.
The bank note issue is because, surprise, bank notes are unregulated and not part of monetary union of UK.
So you have 4-5 banks that emit bank notes, and the only money that is actually mandated by law to be respected is coins. (England has an extra law that makes you take Bank of England notes, but it's not a law that covers all of UK).
Imagine landing in a different country, only to find out that all ATMs and card terminals are dead at the airport (network failure), and the only money you have in your wallet is from one of the scottish banks.
Whoever the teller at ABN AMRO at Schiphol that day was, they have my thanks till dying day for taking the scottish notes and exchanging for euro :D
The problems in the article for a start. The "levelling up" funds were distributed centrally based on local councils competing with each other. This encourages zero-sum thinking, and the people responsible for the decisions literally know the least. How does someone in Whitehall really know that a particular project 200 miles away is better than another project equally distant from the centre? We know that they didn't know - they allocated a large proportion to London and the South East, and the rest to Tory constituencies.
If history has told us anything, we can be sure that privileged people will rationalize wealth inequality or just completely deny it all the way to revolution.
"It's complex", "It's just natural", "It's actually going better for poor folks today than before", "Yes, there were no homeless here 20 years ago, but here's the reason why it's actually a sign that it's good thing"
This is not true. Northern European countries are completely and unreservedly dedicated to minimizing inequality.
Vast resources are spent on subsidised housing and a social safety net.
That's pretty much my point. Those concessions was fought and won by the labour movement under the threat of revolution. Before that workers was just as dirt poor and exploited as in any other class-based society. Now that the threat of revolution has been largely removed, in addition to a general decline for the labour movements (in more ways than just membership numbers), they are being promptly reversed - Sweden being one of the more obvious example of this trend: https://www.lemonde.fr/en/europe/article/2022/12/21/the-swed...
If current experience has told me anything, they will whine endlessly about inequality. Of course I mean the inequality between themselves and the super rich. They will completely ignore the inequality that actually matters. That between themselves and the working class.
That's reasonable, but on the flip side maybe it is complex and natural, and maybe a degree of inequality is inevitable for a well functioning economy. However I do believe there is such a thing as too much inequality. I think the aim should be to ensure that the resources in society are well managed towards the common good, whoever is managing them whether it's private individuals or government bureaucrats. And inevitably it's going to be some combination of both.
I think there is a reasonable argument that the balance has shifted too many resources into the hands of too few. That bad because even if those few are good at managing resources (managing investments, running companies, etc) you want to make sure that up and coming talent has a chance. You don't want incumbent economic power to be able to block competition too much.
I have no problem with successful entrepreneurs building valuable companies that provide useful goods and services, employing lots of people. Having wealth in the form of a controlling interest in a company you are running well is fine by me. I have worked for such companies much of my life, doing work I'm proud of while clothing and feeding my family. It's rent seeking activities and inherited or politically captured wealth gained through no personal merit that are problematic and I think there's too much of that going on at the moment. But having worked for a billionaire that worked his arse off doing fantastic work that benefited millions of people, I think the current trend that billionaire = bad is too simplistic.
We see these people buying news outlets, bribing politicians, outright owning politicians, owning judges, attacking organizations that protect the environment or help reduce inequality.
We see them getting away with rape and murder. We see them creating and exploiting tax loopholes. We see them running monopolies and then bribing institutions that were supposed to hold them accountable in full sight.
I'm glad you're alright Jack. That's super for you that your company is run well - though I bet if you named the company, we could all point to some skeletons. Even so - best to peek outside your bubble before defending the class that's been waging war on the planet.
That billionaire you're defending probably pays a lower tax rate than you do. That's because his class paid to make things that way, with concerted effort, over years. Not much natural about it.
I don't care about class, I care about individual people. If you're going to advocate punishing a class because of the actions of a few individuals you happen to categorise them with, I'm out. I see banks fined billions for money laundering, VW execs going to jail for fraudulent emissions cheating, an investment banker and his girlfriend going to jail for sex trafficking, a bunch of EU politicians being rounded up for corruption. Is the system perfect? No, but I don't expect any system to be. How are you going to make sure the system you want is immune from human faults. What's the secret?
The billionaire I was talking about Mo Ibrahim. He wrote a program for planning cellular radio networks and built a company around it starting from his dining room called MSI, which is where I worked for him. He then went on to found Celtel. He saw what was happening in Europe and realised that cellular radio could be a transformative technology, that could help Africa jump forward technically much more cheaply than traditional wired telecoms of the time. He runs a charity focused on promoting responsible leadership and democratic values in Africa.
Genuinely one of the nicest guys I have ever met, and if you gave me a billion pounds and said I could give it to a government bureaucracy or Mo Inrahim, I'd give it to Mo. I trust him to know how it could do the most good, whether that's helping people in need, or building companies that employ people and provide valuable services, or develop great technology the world needs.
Some degree of inequality is. You’re talking about gross inequality.
The whole capitalist system requires the existence of some inequality; you are incentivized to work hard to better your lot. If your lot is not allowed to get better (perfect equality), why bother?
I don't follow this reasoning. Your lot can get better with perfect equality, the benefit/effort ratio is just different than a system with inequality. The real problem is it's just easier to benefit at the cost of your neighbor, and hence people prefer inequality when it benefits them.
> It's rent seeking activities and inherited wealth gained through no personal merit that are problematic and I think there's too much of that going on at the moment. But having worked for a billionaire that worked his arse off doing fantastic work that benefited millions of people, I think the current trend that billionaire = bad is too simplistic.
This. Unfortunately the atmosphere in Europe (or at least Sweden where I live) seems to be the exact opposite: nobody's upset about our own hereditary oligarchs (which put the Russian ones to shame), but they are screaming about Elon Musk...
The first is just a fact, you can check it out on his Wikipedia page. The second is a somewhat cynical take on Musk's Hyperloop idea which he didn't pursue but ironically would have been a form of public transport.
Musk doesn't seem to have a problem with public transport in principle, he just thinks that currently it sucks and there are ways to make transport generally cheaper and better. Many of the projects his Boring Company is involved in are public transport.
The Wikipedia page mentions Zambia, which was not under Apartheid to my knowledge. That’s an important distinction, and the original claim is factually incorrect.
Wikipedia’s source also seems to be an interview with Errol, who claims to have had a part-stake in a mine. We don’t know how big. If someone owns some shares in Apple, saying they’re the company’s “owner” would be misleading, even if they made a good profit.
>The Wikipedia page mentions Zambia, which was not under Apartheid to my knowledge. That’s an important distinction, and the original claim is factually incorrect.
Would you say that the fact it was in Zambia is actually material to the point the poster was making about him coming from a wealthy background, or was it an incidental detail?
I doubt it was incidental, because they were referring to “hereditary oligarchy”, which is different from merely having wealthy parents. It implies wielding political power and using oppressive or tyrannical tactics, as well as amassing wealth in unfair and unethical ways. That’s why the Apartheid angle seems to be the key aspect of this argument whenever I see it raised online. It’s never just, “his father made money from investments”.
The whole "wealth gap" framing is a bit dubious. A big chunk of the UK's wealth is high house prices, and this has substantial downsides - obviously people don't get much direct benefit from the fact that their own home is worth more on paper, and it makes it harder for people to buy homes and increases people's cost of living. This article (arguably correctly) frames the fact that the housing affordability advantage of Sheffield is narrowing as them falling behind, but of course by the janky logic of the British mainstream media less affordable housing is actually an increase in wealth.
I suspect that if you remove borrowing (by which I mean mortgages, bank loans, credit card debt, and hire-purchase/lease hire agreements), there is very little post WW2 prosperity in the UK. I suspect that most of what most people think of as wealth is merely borrowed money. Either personal debt or government debt or one of the more creative shell-games that are now played with regard to funding (for example) infrastructure like hospitals, schools, or rail.
When people usually talk about wealth, they mean net worth. If you have a £2 million home in London and a £2 million mortgage to go along with it, your net worth is 0 (ignoring all other potential assets and liabilities). On the other hand, if you've paid it off then you have a net worth of £2 million. So when they talk about the wealth gap increasing, they mean real wealth as in net worth. Some people have ballooning net worth, others don't. Taking mortgages out of the equation doesn't change that.
Unless you're talking about going back in time and arranging things so that no one can ever borrow money from anyone. Sure, without access to credit people would have a hard time buying homes. But that's such a radically different society, from a finance perspective, that it's pretty much meaningless to contemplate. I'm sure people would find other ways to access capital in the absence of credit.
Given how house prices and access to cheap credit are so well correlated, this may not be a bad thing. Before the financialisation boom, housing closely tracked inflation.
It’s a really weird take you see on occasion. Like, over a third of households in England own their house (or flat) outright, and millions of people are on very generous final salary pensions (closed to new entries of course).
What would that indicate? The government hadn't paid off the payments from the 1837 Abolition of Slavery Act until 2015, but that was based on the way they structured repayments. To say that from 1837 to 1946 that Britain wasn't a superpower, that would seem a tad absurd to me.
When I consider how well I'm doing (or not) I drily consider my net worth as one would on a balance sheet. But I don't think this is quite what the average member of the public thinks when they think about wealth and prosperity. By which I mean the visible portion of wealth (not net wealth). I think there is a perception in the UK that we are a far more wealthy country than we really are, both in terms of visible wealth among individuals and the finances of the country. I think many would be surprised at the median level of true wealth (net wealth) in the UK. Interesting figures here:
So the median wealth going into retirement in the UK, that is the wealth for someone bang slap in the middle where half of households are more wealthy than them and half are less wealthy, is about £600,000 pounds. That's actually a lot higher than I was expecting. I would have guessed it would be well under half a mill.
They do a mark to market sure but the ops point is that all of it is a debt bubble and if the debt is called back it collapses. So there is an implicit agreement between all the "developed" countries to keep the sham going as long as possible. When it hits... your house will be worth billions.
I remember people saying this back when I was a student in the 80s. Sure we've had booms and busts, and over leveraging is a thing, but I see "the 95% collapse is already happening" videos on youtube occasionally and, yeah, no, it's been already happening for like 10 years now.
The mistake this sort of analysis makes is assuming nobody will do anything to stop things getting worse, and underestimating the extent to which other things in the economy and society are going well. The same is true in booms, most analysts under value the risks building up in the system. It's the old extrapolating the down trend to infinity in a bust, and extrapolating the upswing to infinity in a boom.
This is why Ukraine didn't collapse under bombing, Russia didn't collapse under sanctions, the Chinese property market is now rallying. It's why the Fed made a profit out of TARP. When things go to crap, the people who can do something don't throw their hands in the air and give up. They get to work.
There are decades where nothing happens and there are weeks where decades happen.
That's the idea. When bad happens, it is uncontrolled. Eventually, bad will happen and no attempt to control it will succeed. But sure, until then, you are right. And there is nothing anyone can really do to prepare except have a "go bag" and have assets and residence in multiple countries.
You're partially correct, but if your home becomes more expensive, you can:
- Use it as collateral to get bigger loans at better interest rates
- Rent it out at higher rates (a 5% rental yield for a $1M house looks very different from the same for a $500k house)
- Give yourself (and your dependants) the ability to invest more or take on riskier ventures since there's the "insurance" of an expensive piece of property to fall back on.
Unfortunately, your dependants are likely going to be paying some of those higher rents and will have a very difficult time trying to buy their own house as wages are not keeping pace with the increase in property prices. I would consider that higher property prices means that people are far more likely to be stuck in jobs and unable to take risks as otherwise they have no way to pay their rent.
A little off topic but I don't see how it makes any financial sense to have children. In fact, I'd say it ought to be recognized as downright criminal to have too many children (I'd say more than two biological children over a lifetime is too many for anyone born in the late eighties or later) for people like me who are t worth millions of dollars.
Boomers will say oh children don't cost a lot of money. They just need your love. They think I don't want children. Nothing could be farther from the truth and yet it makes no sense to have children for the vast majority of millennials and beyond.
Having children has always an expression of optimistic faith. People had kids during War time, during cold war, during various periods of prosecution, post 9-11, etc. I had my kids during COVID (2020, 2023) and I would love to have more.
You can always point to something as a cause for "no, people shouldn't have kids" and that has always been true but the world belongs to people whose parents didn't think that way :)
The financial thing is a ridiculous premise anyway. There are plenty of people for example in the religious communities who have 5+ or even 10+ kids and those kids are raised healthy, good and educated - all on modest incomes.
> The financial thing is a ridiculous premise anyway. There are plenty of people for example in the religious communities who have 5+ or even 10+ kids and those kids are raised healthy, good and educated - all on modest incomes.
Some people have to have children.
I'm not opposed to other people having some children.
What I am saying is there is not enough community support for everyone to have children.
It is unhealthy for our society that some people have ten plus children and some have none.
There should be an upper bound to how many biological children someone can have (my suggestion is two, maybe three but no more).
There should be more support for all parents and children (no income/wealth cap or risk eligibility).
You can still choose to not have children or have fewer than the upper bound.
// What I am saying is there is not enough community support for everyone to have children. It is unhealthy for our society that some people have ten plus children and some have none.
This is crazy. If you want to have more kids, have more kids. I support you. If you don't have the community, invest in community. I support you.
What is ridiculous is to limit others who have arranged their life for family based on limitations of those who haven't.
The UK's value-add economy is overwhelmingly based in capital-intensive, highly skilled industries, think stuff like finance, tech, high-end engineering and manufacturing. These all strongly favour places like London and the South East with high concentrations of highly-educated (if expensive) people and capital. Outside of localised service jobs (think retail, education, trades, that kind of thing) we don't really have competitive mass employment industries. That economic reality is gonna keep holding back regional UK until we find something suiting their situation. Government spending can paper over some of it, but it's not a permanent solution.
It's reasonable to say we need to focus on export industries, but I don't think it's as automatic as you assume that they should be concentrated in the south east. Manufacturing and engineering have traditionally been more of a Midlands thing.
_Higher_ education is actually an export industry in the sense that foreigners spend lots of money on it, but the government hates it for various reasons and it's currently on strike as a result.
I went to a great museum in Coventry about all the things they used to be build in the West Midlands. Some really cool cars, including that crazy six wheel Jag F1 car, but left feeling sad, it was like an obituary to their manufacturing industries.
Notice how the UK tends to have "high value low volume" car industries, and/or car industries with foreign management? I have a theory that this is the legacy of the industrial relations disaster of the past decades. British management + British workers = far more class strife than an overseas owner that just want to make cars and not conduct class warfare against its own staff. Less prevalent in small companies (under Dunbar's number) because people can know one another as people.
I don’t think it’s class strife that caused it, most management on site is British. In reality it’s just about where the money is globally and where conglomerates who are willing to buy car companies are in the world.
Calling JLR low volume seems odd given they produce over 500,000 cars a year. I also never said that it was the largest automotive manufacturer in the world, just that it was a large sector in the UK, which it measurably is.
Aston isn’t owned by an international firm, they have heavy Daimler investment but for all intents and purposes they are independent (although I can’t see it staying that way for long they desperately need the weight of a larger firm backing them - like Lotus has)
> Not really, Mexico made three times as many cars as the UK in 2021.
I completely agree the UK focuses more on low-volume, high-value automotive, bit looking at that table UK car production has more than halved since the Brexit referendum went through. The hollowing out of the UK car industry is a very recent phenomena.
Given that world wide production is down but 15 million vehicles (nearly 20%) I wouldn’t read too much into it. JLR have had enormous supply chain issues and Nissan is in a model transition on Qashqai (which alone has previously accounted for over 400k vehicles per year)
Traditionally, sure, but even while places like the Midlands and the North West have more manufacturing than the Southeast, the Southeast kept the more valuable stuff. The reshoring we're seeing as globalisation retreats is an opportunity, but I don't trust this government to make the best of it.
And education is awesome, which of course is why we strictly limit building around our top university towns and cities.
Ironically the North voted leave, one of the reasons was to “stick” it to London and drive investment in the North. I say ironically because it was plainly obvious that when the tories got what they wanted, the rest of the country, except for London, was in for a hard time.
The "Northern Powerhouse Rail" seems like a good start ... if they actually bother to implement it. It's looking quite unlikely though, hell even HS2 might get further cuts.
You realise this makes you look about 5x worse than the fictional, abstract "moaning" Geordie or Yorkshireman or Scot or whatever you described? Honestly, "taking all the good jobs" what nonsense.
It's not especially new that Tory politicians funnel money away from urban constituencies that aren't going to vote for them, and that their voters hate. What does seem to be new is the extent of blatant and direct corruption at the top; Mone, Zahawi, et al.
Just as cluster theory is widely accepted, so is its dark twin. When the industries in an area enter a period of decline, it can become a spiral into which governments shovel “good money after bad”. In the 1930s Liverpool’s population was almost 900K. Today, in spite of endless sums invested by more governments than you can count (of every stripe), it has declined to about half that. Why? Because people do not wish to remain. Managed decline attempts to soften the hard edge of decline, while not “trying to push water uphill”.
The last feasible plan for Liverpool would have seen it turned into a sort of Vegas (casinos, hotels, etc). I’ve seen nothing feasible since offered by any party.
Right, and Thatcher also setup a development corporation that invested heavily in Liverpool. Of all places in the UK, Liverpool has to be the best example of self-inflicted problems.
Also, it is strange to point out about corruption and Liverpool. Liverpool's mayor is widely regarded as one of the most corrupt people in British politics. If you look at other deprived areas in inner London or other parts of the UK, they recovered. The problem in places like Liverpool is a deep antipathy to enterprise, and a culture of relying heavily on the govt.
Mone: she lied to a civil servant about owning a company, ministers have no role in procurement decisions, and the contracts given were audited ex-post by a third-party govt body (that ministers do not control and which exists to examine value for money, Auditor General). Zahawai: didn't pay the correct amount in taxes and also lied about it to a civil servant...what corruption?
Like people have this weird off switch in their brain where they just read the BBC, their awful journalists tell them what they want to hear, and the bot brain activates: well, it is Tory corruption innit, investment, fraud...just no content at all.
I have always wondered if the 'big productive urban center' (like London, or Paris, or Warsaw) is a boon or a curse for the 300 miles around it. Does it soak up young talent and capital from the surrounding areas, leaving the latter behind and exposed to deindustrialization, demographic problems and poverty? Or - through network effects in science, technology and productivity, does the metropolis create excess wealth that indirectly finds its way back into the rural areas, negating negative effects of the pull-effect? What are some good books on this topic?
It’s a curse even for the urban center itself. How many middle class people who grew up in London (or San Francisco or New York City) can afford to buy a house and raise their kids there?
Mid-sized cities with stable local industries are much better for the average person. We have no tech, banking, etc., in Annapolis where I live. We have the Navy, farming, and tourism. The city is full of people who grew up here. Low level retail jobs are staffed by teenagers, not immigrants or some other underclass. Housing is affordable. Similarly in adds Moines Iowa. The unemployment rate is 2.7%. The average house price is less than 4x the median household income, compared to over 10x in San Francisco.
How easily could it be, considering that “large productive cities” all over the world—in diverse political and cultural contexts—are suffering from this same problem?
Surly demand (and lots of wealth sloshing around for the top 10%) is part of the problem too. The DC/NOVA area had pretty reasonable housing prices 20-30 years ago. It seems like they’ve been building housing pretty aggressively in that area. But prices used to be capped by what a GS-scale worker could afford. Now those same folks are competing with Google engineers and kids of rich foreigners.
I've been contemplating the idea that over the 20th century, human civilization's essential constraints that defined our working environment and dictated essentially everything we were capable has changed. The human species in fundamentally in a new context, one which we collectively have no experience, and due to the new scale of our civilization and the new communications capabilities within that scale - we're flying blind in a spaceship filled with dangerous weapons and personalities all far too immature for this journey. We're about to hit the Fermi Paradox Wall at damning full speed.
For the immediate area it looks great, the counties surrounding London are generally the wealthier parts of the country. It's the regions further away that can't link-in to a megacity that suffer, they get the same brain-drain without tapping into the wealth generated.
People who work in the city may live outside the city, so I think the way the city is planned (or not planned) would make a difference. So you might look for books on urban planning.
This will probably not be a popular comment, but it comes from a pragmatist. When budgets contract or costs spiral, governments tend to water-down each of the 500 projects they have on their list. Rather than axing half of them, or 80% of them, and focussing on a tiny handful of “beachheads” or “lighthouses”. Feel free to insert your own analogue. Having seen several cycles of this over the last few decades, I am now of the opinion that the better strategy would be to 1 city at a time, demonstrate progress, and by that demonstration win more funding. This will not (at least initially) have the same impact at the ballot box.
I would argue that completion needs to be factored in - the UK has a terrible record of funding things in a way that leads to almost all the money being spent and then cancelling them before receiving the benefits. The Black Arrow rocket programme is possibly the worst example. There's a risk that this may happen to HS2.
Very true. The thing is that for each one of these 500 projects, the project leader, the people working on it and the guy who is pushing it in the senior levels of government will all endlessly tell you that it is THE THING that will improve the life of the citizens.
I don't think that it is avoidable though, if out of the 500 projects you cut out 475 of them and then work on the remaining 25 and really make something cool out of them then, then the people running the 25 projects will get a lot of credit and promotions, which will anger the people whose projects got cut. Pretty sure they would all rather suffer from mediocrity together.
The UK society and policies are very strongly property oriented. Additionally the traditional phyche looks at people in classes, upper and lower class (the middle class is negligible compared to wealthy European countries and is neglected, no help and not enough power for them, it is a transient space between lower and upper classes). Those who have something they worth something and they must be protected. Regardless if they have so much they have trouble knowing what to do with it. Social care is kept on a level that it could be pointed at by policy makers 'see, we have some!', being an excuse, kept on a bare minimum (unemployment and all other social benefits are a joke), keeping the lower classes content enough to operate the country, but no more! (they should know their place anyway) Private matters have much higher priority than common matters (e.g. in building infrastructure), public policies are the manifestation of many private interests. No social housing and all housing matters are submissive to the need of investors and developers (including housing standards and regulations), not for those who use it. Basically the country still formed of the important people and those who work for them. Kingdom all along, this democracy thing, and all collaborations, are mostly in the way, still something to get a grasp on for all.
> the middle class is negligible compared to wealthy European countries
Really? Most britons are middle-class. The people who used to be peasants are now farmer-landowners, and machinery enables them to work their land with very few workers. There are no more huge crowds of factory workers.
People use the term "upper class" in different ways. Sometimes it just means "rich", but I don't think class is about money. If you describe someone as "classy", you're saying they're educated, mannered and refined. You're not saying they're rich.
To be clear, I think of the upper class as the aristocracy and their offspring. The rich guys are probably in the class known as "nouveau riche". Increasingly, the nouveau riche seem to be immigrants, such as the recently-dismissed Tory chairman.
The UK has for decades been penalizing the middle class, which is the majority of the population. They aren't unionized, and they don't even have much solidarity: politicians can easily set the middle classes at one-another's throats. And yet most of us are middle-class.
It's more like Germany that is formed of stable middle class. UK has wealthy and poorer (worker?) people, these are the stable classes. Others in between sooner or later slide down if not hanging on tirelessly to the supposedly middle class status with small mistakes/misfurtune fail that, or need to push pretty hard (still no guarantee) to raise to a self sustaining wealthy class. The middle is an unstable place. Unlike in other countries where the middle is the stable bulk, given for average (not the extreme).
The UK middle class is large and stable. It’s not a particularly wealthy middle class compared to other nations but it’s easily over 50% of the country. Perhaps we have a different definition of middle class but if you do it based soley on income then it would be a household salary (pre tax) if between £50k and £200k I would say.
A household with 50k is middle? Come on, don't joke with me man! Why don't you start from 20k instead, then the middle class is huge then! :DD
Try being 'stable' on 50k, or even 70-80k without having a sum to start with from others (e.g. parents) and want to get ahead with decent housing that you can rely on well before you get retired, rely on even when interim hardship comes, without fear of loosing any of you your jobs just temporarily (beacuse naturally you both must work, no choice in that!), try it! Preferably in a medium expensive area. .... stable ... you are funny!
I have many friends at the lower end of that range as a household income (£60k) without family help and I myself fall well within the range I gave and all are comfortably and stably in the middle. Would we like more money? Sure. Are we fearful of sliding into the oblivion you describe? Not at all. Outside London this range is very much the middle.
I’m not saying life can’t be better and that wages should climb (in fact I whole heartedly agree) but the picture of a non-existent middle class and those that are there are unstable and days from sliding into poverty just isn’t true.
This is demonstrably untrue. Social housing is run by housing associations which are ALMOs (arms length management orgs) rather than central government but they are still large and numerous (Clarion appears to be the largest now with over 100,000 properties and there are over 1,500 HAs in the UK). All new housing projects must have a portion for social housing along with (and I may get this number wrong) 106 money which is an investment in local services that must be built first/early so they don’t do the old “whoops we ran out of money just after we sold the last house and now can’t build that parade of shops and community Center we said we would”
Sorry, misspoke. I ment community housing. Owned and maintained by the community for anyone, like in Sweden.
Did not mean the subsidised basic housing for the use of the most miserable to conserve their status, taking their money with market rates when they start to earn above low miserable level, prohibiting a raise in living standard or savings. Whenever you'd get a glance at breaking out of the 30k-40k kind of household income level you'd be hit with market rent which will push you right back to social housing. This serves more like an other kind of of inadequate social benefits, something to point at: 'see, we have social something!' while it's just conserving the situation for the poor, no real chance getting into a non-existent middle class. More like a life raft for those having no other choice than a community centric housing approach for the population.
The 100,000 is both inadequate number - not enought because there are more who'd need it, so it is mandated on the private sector to build more - and also too high: showing how big the poor class is...
I've lived in London and it felt very much like that: Well off people walking around next to people struggling with homelessness: It's depressing, and I can't even begin to imagine what the people without a home must struggle with.
The way the council try to help is by installing anti-homeless spikes under bridges and "upgrading" benches so they have handrails midway through so you can't lie down on them.
"The most obvious common factor in explaining the UK’s miserable trajectory is that it represents the accumulated consequences of a sustained failure to invest."
That is an amazing article and thanks for sharing. I agree on investment failure and "cutting back" has resulted in a very divided and poor society in the UK.
The country is now an inheritocracy (as written in the FT yesterday). Working to get ahead only applies to Finance, opportunity is vanishing for most other white-collar jobs.
People are quitting teaching, medicine, and police work as they can make more stacking shelves in TESCO.
Will take radical changes to change all this but I don't see anything novel on the horizon.
It is worth knowing that Tooze is a ultra-Marxist historian. So he sees every problem as simply applying enough capital, and the output will magically rise.
If you consider the chart for two seconds, you realise that it also shows very high investment in Europe...and did Europe have a huge investment boom like the US over the past ten years? No.
It is substantially more nuanced than this. You need to look at the structure of financial markets, how research is converted into revenue, and how this gets balanced politically.
Investment is just capital balance + domestic savings, and the latter is just your trade balance. Investment in the US has held up despite running a huge deficit because they are importing capital. Comparing that situation with Europe, which cannot import capital on a large scale because of their banking situation, is misleading.
Just generally, the UK has more than enough basic research and has always done so. The problem has been that we have no institution like Stanford that excels in applying this research, and we lack the financial structure to enable this even if we did. More public investment won't make the slightest difference, it didn't in the 60/70s and it won't now.
Also, the productivity charts are classic. Everyone knows they are misleading, Richard Jones has said the chart is misleading (he also, suspiciously, uses 2009 as the break). Productivity growth has slowed globally, and (ironically as Tooze says later but doesn't connect to the above) we made the decision to destroy our own banking sector. There is no world in which productivity growth continued to be 2+%. It is all so silly.
Incubators, from what I have seen, do not work. At a fundamental level, the people we have producing basic research are disinterested in the application. It is cultural (the exception is Manchester/Sheffield, the uni near me was doing NLP in the 60s, they recently tried to get professors into business...all of them were laughable, stuff that the sixth-formers are cooking up in the common room after too many Dibdabs).
It cannot be a function of central govt (although the level of govt support for early-stage businesses is overwhelming). Ironically, the UK has actually tried this several times: one after WW2, then again in the 60/70s...didn't work either time.
Again, the fundamental thing is: do you want to start a business? Or are you happy to sit in your university tithing the rest of the population? You see this in the private sector too, the default position of most execs is to maximise the options package and check out.
OK, so I don't really don't know what an incubator is; what I mean is that there should be a public institution or agency whose job is to remove the obstacles between invention and exploitation.
I'm not talking about throwing money at start-ups at all. Such an agency could run on a shoestring, if it could influence other government agencies like the Patent Office, drafters of bills, committee members and so on.
I don't care much for the idea that inventors must also be entrepreneurs, or be doomed to failure. Ideally, inventors and entrepreneurs partner-up; but entrepreneurs are pirates, and inventors partner-up at their peril. I guess that's the benefit of having both roles in the same person.
Yes, there are multiple institutions like this. The incubators were started by universities but they often get public funds. There is now ARPA (or whatever it is called). And there is now far more early-stage funding. The level of funding and support on offer is effectively unlimited.
None of anything relating to the Patent Office or Parliament is relevant. You do need to throw money at it...that is how you convince academics not to do other things with their time. All of them have the option of just teaching, taking three months holiday a year, and collecting a decent salary.
Right, that is the problem, you need both sides in one person. In the UK, there is no comprehensive education. When you are 15, you get put into maths/sciences or english/arts. So no-one who becomes an academic is interested in anything else at all (and PHd/assistant work is usually extremely underpaid, as in £17k/year...so almost everyone who has any other potential leaves before then). Where they have tried to bring someone else in, the academic will almost always assume that it is all a capitalist hoax/trick, and they are being swindled...it is an insurmountable psychological barrier for most people, so it does have to be both sides in one person (the UK is not like the US, you think academics in the US are left-wing, in the US they would be called communists...the culture of enterprise is non-existent).
Again, the only places that I am aware of that have gotten over this are Manchester and Sheffield. Both second-tier institutions but they gathered academics who were able to understand the commercial application of inventions, and got large companies involved in working closely with these people so they could get on the right path (Manchester with graphene, Sheffield with an manufacturing process institute). You also see the same thing in Oxford/Cambridge but it is far more diffuse (and has far more people from outside the UK) and limited to pharma, some kinds of tech (i.e. ARM).
Yes it does fit. You may not understand that historical Marxism and political Marxism are not the same thing.
Tooze is one of the most famous Marxist historians in the world. Iirc, he used to go to all the Marxist historian conferences (Historical Materialism, he writes for New Left Review, etc.)
Wages of Destruction is one of the best economic history books of the 20th century. Everything after that isn't good. I would read more about what historical Marxists believe. If you actually read what he is saying very carefully, you would realise that his view of how economic growth occurs is significantly different to the one that exists in reality. Part of that is empiricism (Marxists were the arch empiricists, they viewed their theories as grounded in a deep understanding of statistics and data...this is obviously ridiculous in retrospect but this view of "scientific Marxism" was pervasive at the time).
If you don't know much about economic history, I would read Mokyr/McCloskey, anything that has a vaguely coherent account of how economic growth actually occurs.
Lately Adam Tooze has been writing too much, his Javelin Chartbook post on Substack for example is ridiculous. But probably everyone has bad days.
I lived in West Berlin before and after the fall of the Wall and picked up quite a bit about Marxism / Historical Materialism. As far as I see, Tooze is miles away from orthodox Marxism.
Tooze knows both Europe and the US well and he has the historical knowledge, so I take his analyses seriously, e.g. (1).
But here I do not see a marxist anti-imperialist either.
On the contrary, he seems to be enthusiastic about the war of the good West, however many human lives it may cost.
Yes, he is one of the most well-known historical materialists out there...I am not sure what to tell you, I studied economic history, I have read all of his books inc. his PHd thesis, I know what conferences he attended because I know people who know him...and you are telling me I am wrong because you lived in Berlin? Only on HN.
Btw, I strongly suspect you still do not understand the difference between historical and political Marxism (nothing to do with "the war of the good West"...just read about historiography) but if you just consider the theme of Wages of Destruction, it should be extremely obvious to you that Tooze is a historical materialist (again though, I would consider whether you know enough about historiography and economics to understand the nuances of these points i.e. if you didn't study economic history to postgrad level, then you likely do not).
Thanks for your patience. This is new information for me and it didn't fit my priors.
(I do not claim understanding marxism, it's a vast field und marxists enjoy fighting each other. I actually took a marxism course in university - it mainly convinced me that Marx' economic theory is wrong (labour theory of value) and that this smart guy Sraffa in Cambridge could not fix it (or fixed it to death))
All UK-related articles should include an energy-per-capita graph [0]. They are now being outdone by China.
That is a major change in energy availability (down 25% from 2005!). Without easily available energy they're probably going to struggle on all sorts of things. That is a huge threat (more than a threat, really) to living standards.
What are you talking about? That's energy use not availability. Usage in all developed countries is going down (see chart below). China's has gone up because its moved to being a developed country in the past 20 years.
The reduction in power production due to demand in the UK has been by moth-balling coal plants (which produced 30-40% of power in 2000 to 0-4% now). Turning them on when needed.
vs 2005 - my lightbulbs use 1/10th the electricity, my boiler is 2x efficient, my house has insulation where none was before, and my car gets 4x the mpg.
My tv might have gone from a 23 inch CRT to a 65inch lcd, but I would hazard a guess that the old CRT might have burnt a few watts in its day.
It is technically possible to have more energy officient home (many cannot afford to replace an old boiler by a more efficient or to retrofit thermal insulation) but industrial processes still use huge amount of energy and with energy prices higher than in the rest of the world UK will not become an industrial country again.
LED lights is a blessing and a curse- instead saving energy people emit more light for the same money. Outdoor spaces are well lit throughout the night creating light pollution.
That's consumption, rather than availability, and as others have pointed out is due to efficiency initiatives and the offshoring of very energy intensive industry.
The metric we need is probably price, which has been disastrous over the past year.
Surely we're in agreement that if demand has dropped and price has risen, then supply must have dropped faster than demand? It is quite hard to get price increases otherwise.
If the UK has managed to free up 25% of their energy consumption there really shouldn't be articles complaining about things not being levelled up. The country would be in a near utopian era of excess. We should be seeing articles talking about how quality of life for the poor has suddenly jumped by a massive amount.
The issue here is more that you're obviously wrong. There is no way that the statistics out of the UK are because of efficiency initiatives.
1. The UK is obviously struggling to replace coal. They've run out of the stuff and their energy access has collapsed. They managed to keep going for a few years with exports [0] then it completely conked out around 2015.
2. The BBC is running headlines under 'World Energy Crisis' where as far as I can tell "World" translates into UK and France [1]. It isn't China and India, certainly not over the last decade. This makes absolutely no sense if it was a country that just shrugged off a quarter of its energy use because it was just that gosh-darned good. Someone thinks the UK is really struggling for ergs.
3. You're trying to argue that the story here is efficiency despite the fact that basic supply-demand logic suggests it is supply that is the problem. If it was efficiency ... well, energy markets don't work that way, efficiency causes use to go up. But more importantly we'd be seeing the UK entering in an age of luxury and excess and that really isn't the political vibe coming out of the country. They don't look like they have massive surpluses, they look stressed. Happy people don't Brexit.
You can try to insult me all you like, but you're avoiding a rather large elephant in the room here. If there are standard-of-living problems in the UK, it is probably linked to energy availability. Energy correlates really well to almost everything good.
I don't see there is much of a discussion to be had here without going into politics. The situation is a lot more complex than is being put across in the article.
Absolutely. For example, take this quote from the article: "The opposition Labour Party estimated in November that at least £576 million had been lost nationally in levelling up funds due to inflation. A frustration to those on the front-line of projects is that the Conservative government isn’t providing extra funding to cover these costs." That inflation is just the big, publicly-visible aspect of the whole world becoming poorer in real terms; inadequate energy supplies, shutting down large parts of the world's economies over the last three years, and worker shortages throughout the developed world have all sapped away at the UK and other countries' actual capacity to carry out big projects like the ones talked about in the article. This can't just be fixed by the government giving out more funding, there ultimately have to be cuts somewhere - and the decisions in the UK specificially that lead here had bipartisan support with the opposition generally calling for the government to go even further.
> That inflation is just the big, publicly-visible aspect of the whole world becoming poorer in real terms
Partly, but the UK has higher inflation than many other European countries facing the same global situation. Brexit and broader economic mismanagement are also factors.
Cuts also have a tendency to be a false economy. For example, underfunding the NHS ‘saves’ money on the balance sheet, but the long term costs to the economy of a less healthy population very likely outweigh those savings. Many of the budget items on the chopping block are really investments, not mere costs.
What does this say about future global economics? Will there be a selected few areas where everybody lives and the rest is left to automated machines for farming?
>annual funding from the national government to local councils in England fell from £41 billion to £26 billion adjusted
With 45M citizens in England without London, that was £1000 per person. Who would start a company with that amount of funding?
The article doesn't explain why the population is incapable of creating value creating processes on their own. Every third world country is supposed to reform their economy and offer goods on the global market. With all their access to knowledge and production processes, why does Manchester need the help of the national government?
why does Manchester need the help of the national government
Because Manchester cannot set their own policies. Only Scotland, Wales, Northern Ireland and London can (to a degree) define their own policies (aka devolution [1]). The rest of England cannot set their own tax or social policies nor control their own budgets.
It's quite exhausting to have London called the UK's "wealthiest" region: it's also its poorest. It's also one required to fund itself in many areas, and contribute to the national purse.
The poor are not as poor elsewhere, this should be borne in mind when discussing where funds are allocated.
And, perhaps more pertinently, the economic structure of the UK viz London/Regions has been the same for the last 1000 years. This has little to do with anything any government can fix.
>And, perhaps more pertinently, the economic structure of the UK viz London/Regions has been the same for the last 1000 years. This has little to do with anything any government can fix.
That's not what I understood - I thought that during the industrial revolution the north of England (also the belt of Scotland) was the powerhouse of the economy? I also understood that in medieval times East Anglia was the center of wealth in the UK?
It's been "preferential" to "attach" to London since Roman times, ie., if your ROI is proportional to your output, then london has been "the place to spend" for 2000 years.
The industrial revolution "levelled up" parts of the north which had advantageous geography and resources, but that was a period of "growth redistribution" which acted against the tidal forces of preferential attachment.
Absent something outside the basic logic of ROI-tomorrow prop-to ROI-today (eg., ports, coal, etc.), that is what dominates.
Gov. policy here is pretty hopeless; you can make marginal improvements, but it is strictly, and quite literally, a waste of money.
Both for each £1 of gov spending, and each £1 of private spending, more impact on your goals are achieved in London (et al.).
Eg., one has to argue £10mil on some local transport for a <few hundred to use a week is worthwhile, whilst £10mil in london would enable 1000s/week.
It isnt, and in any case, makes little difference to the overall picture. "Levelling up" then means that the gov redistributes money from economically productive areas, to unproductive ones, to make marginal improvements.
There's a limited amount any gov can actually do that; too much and there's nothing left to redistribute.
FWIW I think that the large towns in the north of England are a huge opportunity for the UK; they have extensive infrastructures and could provide excellent standards of living for their inhabitants. Many friends have relocated there as soon as they have secured a solid remote role - or on retirement. Access to countryside, a better local infrastructure and cheaper housing are very attractive. If economic activity could be boosted there I think it would create a lot of hidden value.
>> The poor are not as poor elsewhere, this should be borne in mind when discussing where funds are allocated.
For reference, London does not have the poorest towns/area in the UK. They tend to be seaside towns or towns in the northeast.
Of course, London is most poor when factoring in housing costs, but it is also massive compared to any other town [1]. The poorest area in the UK are the poorest in Europe [2].
The word Europe does not appear in your second link.
I agree with your general point. There are some very poor areas in London but the index of multiple deprivation lowest ranked places are elsewhere. And if you are able to work, you have more options in London than in a small town with limited public transport.
My mistake. I wanted to link a pdf (EU report) and thought this guardian link was similar as it appeared in the same list of search results. The original link when copied on phone was long and didn't look "clean". Google got me again, damn!
The infographic that I wanted to link [1] also has a link to the original data.
Yeah, they should have been tables. Even better, just one table for all locations, to encourage comparisons. Because each area currently shows different statistics, the article could be giving a distorted view, by showing just the most negative news and hiding positive news.
Aside from that, I think the graphs should be rotated 90 degrees so decline is down and time progresses to the right.
I dislike the ugly color choice, but that's at least somewhat defensible on a11y grounds.
What's not mentioned in this article is that capital investment in the UK is governed mostly by an 'equation' that calculates where the largest return on investment is, followed by political lobbying to get investment in places where that ROI is low.
I read somewhere (can't find the link, sorry) that ROI on every £1 invested, is about £5-7 in the South East (Elizabeth Line, tube extensions, DLR extensions, roads etc.), versus slightly more than parity for other regions i.e. £1 -> £1-2.
Blaming the current Government for doing nothing (arguably in power for 13 years including a coalition, a 'European event' and COVID), versus not blaming the previous Government (also in power for 13 years, Gulf War, and the Olympics) largely voted for by the very regions that are complaining about not being levelled up seems, a bit disingenuous. I really don't know why journalism (and popular opinion) is so simplistic that it expects "results now!". Tories approved the Jubilee Line extension, completed under Labour, Labour approved the Elizabeth Line, completed under the Tories, etc. etc.
A major part of the problem, if not the problem, in this country is the adversarial politics we now have. No matter who is in charge, and what they propose, the default position of the opposition (no matter who it is), is either "no!", or "you're not doing that!".
So we have the absurd situation that, for example, the HS2 rail project was supposed to have a North East spur. "Too much!" "Ok we'll cancel it!" "Not enough!" "Where's our spur gone!". Rinse repeat.
"Levelling up" involves getting physical goods and services quickly from point A to point B. If we don't improve transport infrastructure at the national level, and local level, in all regions, there's never going to be any improvement.
Next up for London in the next decade will be (in progress, and proposed): the new Blackwall Tunnel, a new Thames Crossing in Kent/Essex, Crossrail 2, a DLR extension, a Bakerloo line extension, and finally a bridge or tunnel across the Thames (possibly for the DLR) around the Dagenham area.
Rest of the country? A new Mersey tunnel? Nope. A new Tyne tunnel nope?
Every free society eventually moves into wealth protection phase and drives out the productive. Additionally, constant cash flow is always considered superior to everything else.
The ideal, once you are no longer productive, is to extract rent from the next generation. It's sheer greed from the old, usually reset by disease, famine, or war. We've conquered all of these and now suffer at the hands of unproductive eternals who shackle the young.
Societies which burden their youth like this will suffer in the future.
It's always collectively the people. Like they say, the scum rises to the top.
Blaming politicians/govt does does help. Often cumulatively people voluntarily give away their autonomy to the scums over decades, until a stalemate is reached.
The only way out of that stalemate, as some people have pointed out here, a violent revolution, and then the whole cycle is repeated. This is human nature, no degree of hyper analyzing is going to solve the situation in the long run.
The fallout from decades of gutting of anti-monopoly legislation and the failure to enforce what's left is creating a cost of living crisis so bad that we've almost forgotten the housing crisis caused by decades of policy designed to drive up house values combining with decades of policy to suppress wages.
Interesting that Northern Ireland has the second highest economic growth after London. N.I. has no functioning government and can still trade with the EU via the protocol. With the exception of London, N.I. is an excellent A/B test for brexit,etc.
It's really difficult to understand the scorecards in this article. What's the difference between "Behind in 2019 and falling" and "Ahead in 2019 but falling"? Are there any explanations of these that I missed?
Right but the party currently in power in the UK made a big deal about "levelling up", hence the "levelling down" in the title. So to see that there's been little to no positive results (quite the opposite) suggests that they didn't actually care or do much about it.
No it does not. I'm saying the problem is much bigger than one country. And it's horrifying to observe how people don't realize what it means for them, for everything actually.
The fact that since 2010 this country has been ruled by people whose main qualification is being children or husbands of rich people, doesn't help. From this cold island, Ursula von der Leyen, a failed German politician, looks like a monumental stateswoman.