Really should read the article if you choose to comment on it. Especially given they joke about how "It’s a cliché that every other policy problem in Britain resolves to a housing problem,"
I'd say he does bring pretty convincing arguments to the table and his logic does make sense.
if you take all the wealth and give it one group of people who don't put it back into the circulation but rather just invest it, it makes sense that there's no resources left for anyone else and "everyone" else is comparatively poor.
You know that when the public media and the elites start attacking him personally by attacking his credentials or his background or work history he's onto something. And this will happen because they cannot refute what he's saying with facts so they must try to silence by undermining his credibility.
Most forma of investing is putting the money back into circulation: After all, you are handing the money out to someone ao they use it. Just like giving out a business loan.
There is "investment" that doesn't cause more activity, like having a second home for speculation purposes that you keep empty. But in general, investment leads to more production, and ends up creating employment.
Putting aside his made-up backstory, which is admittedly ad hominem, I've listened to his arguments, notably his video on debt and mortgages. It falls into the same trap as a lot of broadly populist economics - demonization of morally neutral economic concepts and focusing only on one side of the equation. This[1] entire video is him focusing on the bank side of a mortgage transaction, while never once considering the value given to the mortgage owner in being able to purchase an asset they never would be able to otherwise and gaining equity. Investment isn't just a hole rich people dump money into that prints stuff out for them and no one else.
Call it biased, but I'm also a priori skeptical of any public intellectual that points to their one pet theory as the cause of society's ills.
> HS2 Chair Sir Jon Thompson said: “To build a railway between Euston and Curzon Street in Birmingham, I need 8,276 consents from other public bodies, planning, transport, the Environment Agency or Natural England. They don’t care whether parliament did or didn’t approve building a railway.”
I dunno, that strategy worked fine for Americans. Am I supposed to believe that liberal use of eminent domain will turn Britain into an overnight utopia?
The US is, infamously, nearly incapable of quickly completing major public works projects at any cost, and when they eventually do get done they cost double or more what they would have in other developed countries.
It's, among other things, part of the body of evidence that Civil Law may be notably more efficient than Common Law. Britain's also unusually bad in this department, though not as much as the US (the Civil vs Common thing probably isn't the whole story anyway—it's rarely that simple)
British elites essentially gave up trying to rule after the Suez Crisis, when Britain's ejection from the superpower club was confirmed. The country has been aimlessly bobbing around since under a general policy of "managed decline", and matters have now come to a head.
"How did you go bankrupt?" "Two ways. Gradually, then suddenly."
Lee Kuan Yew commented upon it in From Third World to First: "As Britain’s worldwide influence shrank, so did the worldview of its younger parliamentarians and ministers. Some old friends, British commanders who had fought in the last world war and had served in Singapore defending us against Sukarno’s Confrontation, compared the old generation British leaders to oak trees with wide-spreading branches and deep roots. They described their younger leaders as “bonsai oak”, recognisably oak trees, but miniaturised, because their root area had shrunk."
Seems like one of the dangers of empire is that losing it, which is inevitable, leads to a hard-to-shake condition of feeling like a has-been society. It makes it hard to just be a good nation, a good place to live.
I fear the same thing is coming for the USA as it, inevitably, loses its standing as the world's sole great superpower (which it only had for maybe 20 years at most!). We could easily get stuck in a permanent cycle of demagogue after demagogue promising to, well, make us "great again."
You see it in individuals too. The root of the word celebrity is celebrate. Make someone a celebrity and put them on a pedestal, and it often ruins them forever. It's a fickle thing. When they inevitably go back to being just a regular person, the effect is often to leave the person permanently feeling like a has-been. They flail around for the rest of their lives trying to recapture something that is fleeting instead of enjoying the fact that (1) they achieved something few people achieve and (2) they have the rest of their lives ahead of them.
Success is more psychologically dangerous than failure.
There's a saying: "whom god wishes to destroy, he first makes mad." I think a better version is "whom god wishes to destroy, he first raises up."
Actually, that's not quite right. The root of both "celebrate" and "celebrity" is a Latin word whose original meaning is something to do with crowdedness. Celebrity (in the older sense of "being famous") means being someone that people crowd around. The original meaning of "celebrate" was to hold a religious service, attended by crowds of people. Later "celebrity" evolved to also mean a person who has the quality of celebrity-in-the-old-sense, and "celebrate" evolved to also mean to hold some other kind of event that attracts crowds. But "celebrity" didn't ever primarily mean "person who is admired", it was always "person who attracts attention".
(It is still true that people who are famous and then not famous can find it hard to adapt to the change, of course.)
> Seems like one of the dangers of empire is that losing it, which is inevitable, leads to a hard-to-shake condition of feeling like a has-been society. It makes it hard to just be a good nation, a good place to live.
I think you are right, but I also think it afflicts the ruling class a lot more. In particular, politicians, who are power seekers by nature, feel the loss more than ordinary people do. IN their minds, not being a super power equates to declined, even if life improves for ordinary people (which it did).
England is a has-been society because 1) they are old and have more vacation. You've got less people working less hours. REAL GDP per work hour is up >50% since the early 80s - what people seem to think of as some golden era - and is more than double since the 60s, another golden era according to others - even real GDP PPP adjusted, you're still >50% since the 60s.
2) They decided they wanted to punish hard workers and productive investment and aggressively reward capitalists that "park money" in non-productive assets (like real estate).
England could easily reverse these decisions and aggressively reward hard work and investment in productive assets, open the doors to intellectuals, and the hard, smart working people and investment would come pouring in.
But, they'll never do that, because boomers.
The problem with England is the problem elsewhere. The amount your society needs to improve to let ~1% more people not work every year for ~30 years is incredible. The entire west has done it. But the benefits are going almost exclusively to the retiree class.
In the not too far future, if trends continue <50% of adults will be working with very high standards of living. This is absolutely UNHEARD of. At the same time, you'll see basically no benefit at all for the people who actually do the work.
This doesn't seem like the best way to distribute productivity gains to society, but it's the way we've chosen, and as long as old people have a say, you better bet they're gonna vote for the status quo or even bigger pension payouts in the future.
The empire was almost always a waste of money. Very few, if any, colonies created enough money for the treasury to justify the cost of maintaining them.
Like with every colonial power, the empire wasn't there to enrich the entire country or the average people, it was enriching the crown and wealthy business magnates involved in the trade, basically the top 1%, the rest were left to wallow in poverty and hard labor.
I definitely agree there were some individuals who made money from the imperial project, but it wasn't rational at the level of the British state/monarch.
> Like with every colonial power...
Some colonial powers may have genuinely increased the wealth of the imperial state. The Spanish and Mongol empires stand out in my mind here, although I don't have a precise source of accounting.
It's frankly sickening that some people think the empire was an exercise in us helping the third world develop purely out of the goodness of our hearts.
The British people certainly didn't make a lot of money from that. One person did.
But blaming whole countries for the actions of single entrepreneurs has been the MO for a very long time now, so I can see how you feel correct making that statement
What benefit did the British people - or the British state - get out of this at any point? Jardine Matheson didn't exactly pay many taxes at the time or employ many people in the UK.
Maybe if China was willing to buy anything else but opium, that never would have happened. China's exports were in hot demand and they would only transact in silver but wouldn't buy anything to return that silver supply to global markets. It was causing massive problems in the silver market with over 40% of the yearly global supply going directly to purchasing Chinese exports.
Trade imbalances like that always lead to war. historically.
It's frankly sickening that some people heap scorn upon the Britain of their ancestors, especially considering they're the only ones that actually you know, abolished slavery and had the seeds of thought in its WEIRD Protestantism that evolved into the strain of progressivism that you masochistic westerners hold dear.
Unless you can explain Frank feodalism, Chinese legalism or frankly, any system before colonialism and cheptel slavery, and explain how cheptel slavery was somehow better, I will take your comment with a chunk of salt.
Do you mean chattel slavery? "Cheptel" is a word I'm not familiar with and apparently refers to livestock. "Cheptel slavery" doesn't appear in any search results.
The number 1 (and super easy to debunk) BS narrative that the English (mainly) say on the topic of "we never stole from others" or "it was a trade-off for modernizing them", etc. is how about you give back _all_ the things you 'didn't steal'. All Gemstones from all crowns/staves/etc, everything in the "British" (cough-stolen-cough) Museum. And _then_ your argument will have half a leg to stand on.
So until you return what is stolen from every country around the planet, keep the BS to yourselves because it only angers the rest of us, you pathetic thieves. Totally deserving what is going on in the UK. And I fear it is too late to turn that ship around in the next couple of decades. Especially with the politicians that are running the show and the younger ones in the pipeline.
And it is a great pity because I have lived and worked in the UK and I loved the people and the place. But hold your tongues and stop biting your own tails (you snakes) and perhaps you will have a better life in 20-30 years. :)
I think people are downvoting you because, on a surface level reading of your comment, it could sound to an ungenerous reader like you're saying colonialism was a good thing. I read you as making an economic argument against it, which does not preclude (and indeed complements) the moral one your downvoters are so coupled to.
Yes a bunch of individuals got rich, but my position is that their tax payments (and wider economic contributions) never justified the cost of maintaining the colonies.
It would have probably been better if the government just gave the upper class money directly, rather than indirectly by paying for navies to acquire land for them.
There was a TV show made in the 1980s called The End of Empire [0] which is (mostly) available on YouTube. It chronicles what happened in India, Palestine, Iran, Egypt, Cyprus, Ghana, Kenya, South Africa, Singapore etc. and may be of interest to those musing about Britain's decline.
You don't have to be a superpower to be a prosperous society. This loss of superpower status means you need to refocus your efforts on the tractable instead of wallowing in has-been fantasy.
The scary thing about 21st century Britain is the extent to which they now wallow in the never-happened fantasy of the Harry Potter universe to compensate for it. That has changed absolutely everything, not all bad to be sure.
Of course that is true but it undeniably helps. I wonder if postwar Britain watching its hegemony decline will be anything like the current decline of the US.
Getting so tired of HN, every thread has these kinds of vague, ignorant, semi-political comments. Just a throwaway opinion with some unrelated quote to appear smart, not related to the posted link, nothing added to the discussion.
The Suez Crisis happened 70(!) years ago, the article is talking about where modern day UK spends its money. It's literally right there in the opening sentence, if you only bothered to open it:
>Britain is a rich country with the world’s 6th largest economy and the highest tax income for decades, which raises a simple question - why do we seem so broke?
Aside from strictly technical topics, this community is now worse than Reddit.
I read the article. My comment was prompted by this:
> One reason for this is that parts of the British state are fundamentally misaligned with goals like ‘improving living standards’ or ‘increasing wealth’, whether that’s through hand-wringingly incompetent procurement processes, long-term failure to invest in the infrastructure and management required to support ‘moar frontline staff!!’, acute treasury brain, or endless cohorts of committees and quangos.
> The current level of ambition, of vision, just doesn’t match up to the situation we’re in.
It’s about a failure of state capacity. The article’s entire argument hinges on why British institutions can no longer turn wealth into functioning systems. The post-imperial loss of strategic vision among British elites is not a distraction: it’s the historical foundation of the current malaise.
Suez was the moment Britain exited the world stage and never figured out what it stood for domestically in the vacuum that followed.
You can’t talk about the failure to invest, coordinate, or reform over decades without asking why the ruling class stopped trying.
I think far too much effort was spent building critical frameworks in social sciences without the lesson sticking that it is a two way street. You build the critical framework to frame specific criticisms. By doing that, you can highlight influences that may be missed in another framing.
Which isn't a bad thing. But the key there is in building frameworks. Instead, we seem to have built large portions of the public into thinking these are the only frameworks that matter. And so everything has to be tied back to them.
The cultural emphasis HN has on original commentary and not doing low-effort link posting has its costs. Sometimes an FAQ model is just a superior line of inquiry.
The most plausible models for UK decline that I've encountered come from a Youtuber named Britmonkey.
He talks about housing as _ongoing existential crisis_, contra widespread apathy on the subject, and about how since Thatcher, the political rule has tended to integrate the worst aspects of center-left and center-right governments.
Ezra Klein's _Abundance_ has been in the news lately, and there are some very similar arguments made there, focused on the US context.
Yeah, Founders don't post here anymore, they are busy chatting on some secret message boards and group chats the riff-raff don't have access to. This site is now for bitter tech workers and wannabes and the comments reflect it. I'm guilty of being a member of that class I admit, and I'm not doing much to elevate things but the discourse has become incredibly uninteresting as a result.
TLDR: "it is difficult to build almost anything, anywhere. This prevents investment, increases energy costs, and makes it harder for productive economic clusters to expand. This, in turn, lowers our productivity, incomes, and tax revenues."
Housing is probably the biggest culprit. More on that here.
Funny, because the high costs of energy and transport are .. due to lack of investment. A vicious circle.
Blocking green energy investment is the biggest area of frustration. You cannot demand to never see a pylon and then turn round and complain about your electricity bills. The press/public are fundamentally unserious about this. I got mildly radicalized when I read that someone was trying to block an offshore connection using the presence of "grade 2 listed concrete anti-tank cubes" on the beach.
IMO the way Britain deals with listed buildings is excessively over-protective in general; sometimes it seems like every other building is a listed building. That alone wouldn't be so bad, but the number of restrictions that are placed are then often too much: preventing things like double glazing or other common sense modern improvements.
I'm not against protecting historical heritage, of course, but society should serve the people currently living there. Just because something is over a few decades old doesn't mean it's worth bending over backwards to protect 100% intact without any changes. Would it really be so bad if a building from 1910 gets some double glazing, changing the appearance slightly? I'd say it's not.
My pet crank proposal for this would be that listed buildings should require somebody from the public to pay to keep them on the list. Nowhere near the full cost, something in the region of £100.
Add a crowdfunding frontend. Put the sponsor's name on the website next to the building. Have a little thing promoting all the unsponsored buildings. Run a lottery which pays back some of the collected fees to privately-held listed building owners to help pay for upkeep.
But if nobody cares enough to reach into their pocket and spend the equivalent of a mildly expensive restaurant dinner on keeping this building listed? Maybe it's not actually important or significant at all. Fewer, better-maintained historic buildings, rather than just having them with the owner quietly waiting for them to burn down so something useful can be built.
These high costs are attractive to investors in those fields though. The question is, WHY is there still a lack of investment despite those attractive high returns?
- Austerity measures that do nothing but destroy government services; and
- Housing prices.
You see this kind of disconnect all the time. For example, in the Biden administration, people would point to how well the NASDAQ is doing to say "the economy is doing great", which says nothing about the job market or living standards.
These economic measures really tell you nothing about wealth and income distribution.
House prices all over the developed world have to come down. This is arguably the biggest problem. But voters will resist that because it's their nest egg. At this point, this only goes one of two ways: fascist police state or socialist revolution.
> This is because average tax rates rise more quickly with income in the UK, and are already higher at the top relative to the median, than in most of the European countries that raise more revenue overall.
> Austerity
Tories spent more on government than 2000s labour as % gdp
Not only that. By increasing income taxes so steeply the State is incurring in perverse incentives or negative incentives, so people decide to not work a 20% more time to earn 20% more if that extra money is going to be taxed at a 50% rate.
Perverse incentives are an absolute disaster for the economy of our countries. Recently the socialist party approved in Germany an income limit for parents to receive income replacement benefits when being on parental leave. What was the result? From my group of friends in all cases the lesser earner from the marriage (the woman most of the time) has stopped working in order to not reach the income limit. This results in less income tax collection for the State, a poorer family and a less productive company. No one wins.
The wealthy are likely paying more taxes than anyone else in absolute terms.
But more taxes alone won’t fix the problems outlined in the article—namely, the misaligned incentives across different branches of the State and the shockingly low return on each pound spent. That inefficiency is probably also a symptom of poor alignment among the individuals involved in procurement, as well as broader societal incentives.
Over the past few decades, States have grown so large that the original incentive structures they were built on are now being challenged by competing incentives emerging from individuals and various sub-organizations within the State itself.
These kinds of conflicts are far less common in the private sector. There, the company’s goal—profit—is usually well aligned with the customer’s goal—getting the best product at the lowest price. And that alignment tends to cascade through every level of management, all the way down to the last employee.
I am a walker and walk around most of my city, Belfast. The affluence I encounter does not seem to match the news narrative. I am concerned that I have become hard-hearted. Alternatively, I wonder if I just see the world differently to others. I have not determined how to come to a conclusion on the matter.I have lived and worked in some of the poorest regions and housing estates of the UK. If anyone has insight I would love to hear it.
How deeply your asshole puckers at dusk when you hear a loud noise is one sign. Artists, musicians, survivors of trauma are clued into such things. Also parents with children, merchants carrying sacks of cash to the bank. You know, humans.
Sure, but I'm going to put it to you that on encountering poor people the proper response isn't for your asshole to pucker and then to start reliving old traumas. That seems like a pretty wild response.
It is a reasonable response to high-crime areas, and it is unusual for the wealthiest parts of a city to be high-crime areas. But an area being less affluent doesn't make an area high-crime.
There's a reason your original post is a very light shade of gray. If you want to continue pumping words into the ether I suggest you typeset them in TeX and submit to arxiv. A paper entitled "Walking around an area doesn't give you any information about the area" may help you find people who can commission a study. Perhaps with you as the subject.
Those studies have been done, although not by me. People are really, really bad at working out how affluent other people are by inspection. That is one of the reasons I brought the topic up - the research I've seen suggests this sort of "I looked at it and it seemed ok" approach is very misleading. What people actually look at aren't things that indicate affluence.
If you look at the other comments you can see people are actually keying off how much of a sense of community and civic pride there is in an area, as well as commercial activity. Which is going to probably distinguish between upper and lower class - even that isn't certain - but that isn't actually relevant to the topic because there is always going to be an upper and lower class. It isn't going to get a great read on how affluent they are at any given moment.
> There's a reason your original post is a very light shade of gray.
In an academic sense, yes. But no-one knows what it is - some people might be in your shoes where they read "affluent", misinterpreted it and had a fear response. Or they might have other opinions as some of the other comments lay out. Or there could have been other reasons.
One of the philosophical underpinnings of HN is that downvotes don't contain a lot of information and are a poor tool for promoting discussion - it is a wonderfully mature approach to moderation.
I don't think everyone is trying to be polite, I've developed a distinct impression that you're trying to be hurtful. Which, I might add, appears to be a response to running out of substantive points.
You'll notice my response to the thread going long was more arguments. It keeps the discussion more respectful when people only push on when they have arguments to make. Not the only option, but insinuation specifically is a weak long term strategy. As are insults, for that matter.
There's a lot of ways to get at least a surface level understanding of the general affluence of an area.
How well upkept are the buildings? Are they clean and well maintained or are they dingy and broken with overgrowth? Are there a lot of open shops around? Do people seem to be buying things? What kind of clothes are the people wearing? Does it seem like many people are homeless? How is the state of the transit (both public and private?) Do people feel the need to have bars on their windows and security stationed around to prevent theft, or do storefronts feel safe enough to even have merchandise sitting out? Are people eating in restaurants? Are those expensive or cheap restaurants? Do people seem to be comfortable spending a night out on the town, going to bars and shows or are the streets empty because people can't afford outside entertainment?
You're describing a scene that I have seen in a fairly un-affluent country (namy, Thailand back in the day) that looked fairly affluent (central Bangkok, the place was thriving). There were a lot of beggers, I grant you. But homelessness beggars are famously common in some of the most affluent places in the world, like San Francisco. It is probably more linked to outdoor min & max temperatures than anything else.
You can find relative class status of an area by the number of beggars, I grant you that. But you aren't going to get a bead on the actual affluence of the high-class people. Are they thousandairs or billionairs? All we really know is they aren't beggars.
I don't live in the UK so I don't know if this is relevant, but you could possibly argue that Belfast has been in an upward trend since the end of the Troubles, and therefore it might feel different to people living there as opposed to old mining towns like Birmingham or industrial areas like Liverpool/Manchester.
I think the pessimism of the British is part of it, and as I have said before, the British have a rosy tinted view of the rest of the world. They compare to UK to the nice bits of other developed countries that they visit on holidays and business.
Northern Ireland has done much better over the past decade IIRC, with more government spending and investment per head than the rest of the UK. I visited last year and felt the difference was immediately noticeable.
It's not so bad. Yes HS2 is a disaster, yes military procurement is beyond a joke (those daft aircraft carriers, and the horrible US F35s!) and other stuff. But pretty much what nonsense happens compared with other places.
I still like living here more than other countries I've lived in - friendly people, lovely countryside, NHS. But I must admit housing is, and always has been, an issue.
I think a key part of the 'poor' feeling in day to day experience comes from councils' inability to do maintenance, things like pot holes, children's play equipment, public toilet, general upkeep on public spaces and services like libraries. In the grand scheme of things this isn't too expensive but it's been cut to the bone due to way local government funding works. This is explored in the article:
> in large part because they’re mandated to write blank cheques for social care with no support or strategy from central government. Individual cases in Central Bedfordshire are now costing up to £750,000 per year, a quarter of the entire libraries and leisure budget and an amount that is rising rapidly with no apparent ceiling. As I wrote previously, “In a single year, residential care costs for children have increased by £2,000 per child… per week,” taking the average cost for a single case from ~£200,000 to ~£300,000 per child per year, again with little explanation as to where the money is going or how this is even possible.
> Similarly, “school transport costs have increased by over 100% - from £9m to £20m - in just 4 years” - that’s driven by an unexplained rise in the number of SEND pupils eligible for support and it amounts to roughly the same as - deep breath - the transport, roads, parking, libraries, leisure, housing benefit, public protection and safety budgets combined. Central Bedfordshire Council is not an outlier here - collectively, council overspends on SEND services are set to hit £2bn in the next year, risking further bankruptcies. Again this is not about pitting children against libraries, but asking if we seriously believe we’re addressing either of these things well?
Local councils have to pay the very large bills for social care and supporting SEND children but have basically little control over how it's spent or levers to help control the bills.
Fixing this so councils can once again spend relative minor amounts of money improving the public realm could go a long way to improving day to day experience. Definitely some other large structural problems (see the huge costs of HS2) but it would provide a noticeable improvement in people's lives and potentially isn't too hard for a government willing to make some bold changes around taxation, local government funding and providing proper national strategy and funding on social care.
The unfunded mandate system for councils is extremely stupid. Local democracy has long been bad in the UK, but mandating policy centrally and then letting that destroy any connection between local taxation and local budgeting is even worse.
It's even worse when paired with the ability for a local authority to go bankrupt when it can't cover the bills and be forced to sell off major capital assets (e.g. buildings, sometimes of significant public interest like concerts halls, leisure centres and other community venues).
Of course the actual place continues to exist so the local authority will continue to exist in another form, this time with fewer major capital assets and they're paying rents to the people who now own them instead.
As pointed out in the article you could see this happen when something entirely out of the authorities control (e.g. spending on SEND children due to the massive increase in eligible children in Central Bedfordshire's case) causes it too.
>It's even worse when paired with the ability for a local authority to go bankrupt when it can't cover the bills and be forced to sell off major capital assets (e.g. buildings, sometimes of significant public interest like concerts halls, leisure centres and other community venues).
Which may be perceived as a actual goal of this mandate if you have enough of tinfoil in your hat.
Given that the UK is promoting corporate-owned no-democracy "enterprise zones" it's not tinfoil hat at all.
It's the standard neoliberal playbook - defund and cripple public services, complain they're not working, then insist the only solution is for-profit privatisation because it's "more efficient".
The result is that all utilities and much of the infrastructure are being run down for profit, and have to be regularly bailed out by central government at vast expense.
Which is fine, because this creates a transfer of wealth from tax payers to the already wealthy.
The aristocracy literally cannot imagine a country which isn't run for their personal benefit. And the consequence is that many of the areas in the UK are now poorer than anywhere in Europe, or even the US deep south.
> poorer than anywhere in Europe, or even the US deep south.
By far the poorest state in the US, Mississippi (the deepest south you can get) has a GDP per capita just $1,500 less than Germany.
The 2nd and 3rd and 4th poorest states (all southern), West Virginia, Arkansas, and Alabama, have GDPs per capita $6k higher than Germany.
Georgia and Tennessee, 2 other states in the Deep South have GDPs per capita higher than all European countries except Luxembourg, Switzerland, Ireland, Norway and Iceland.
That it’s ridiculous to say “poorer than anywhere in Europe or even the US Deep South”. The poorest parts of Europe are so much more impoverished than anywhere in the Deep South that that is an absurd statement.
It’s a skewed European attitude to look down on the southern US as the poorest place they can think of outside of Africa or Asia. When in fact the vast majority of the South is better off than economically than 90% of European countries.
I once talked to someone traveling to Atlanta ask “do you get CNN down there?” CNN is based in Atlanta.
But what you are saying is only true if your measure of poverty is GDP per capita, which is not very good when comparing different levels of inequality or different public policies. Are you sure your claim stands up when you look at things like food insecurity, access to health services and education, percentage of unhoused or under houser...
You are not thinking clearly about the post you're responding to and you're not thinking clearly about the problems faced by the places you're describing. The person you're responding to probably thinks having a lot of deeply impoverished people makes a place "poor." You: some bullshit about GDP.
Look at any other objective measurement. Percent of people living below the global poverty line adjusted for PPP. Median income, 25th percentile income.
By all of those measures, the poorest states in the Deep South rank higher than many European countries.
So saying "poorer than anywhere Europe, or even the US Deep South", implies that you think the Deep South is poorer than anywhere in Europe. This is an absurd statement because the poorest places in Europe are much poorer than the poorest places in the US.
If you take the poorest zip code in the United States and look at the median income, 1st quartile income, (or even percent of people under the global poverty line adjusted for PPP), it's not even close to last place among European countries.
People have a very skewed view of the Deep South. Because parts of it are poorer than average for the rest of the country doesn't mean it's objectively poor when compared to the rest of the world.
>Look at any other objective measurement. Percent of people living below the global poverty line adjusted for PPP. Median income, 25th percentile income.
HDI and Inequality adjusted HDI are not an objective measurement?
If you’re looking at HDI, Mississippi (the lowest scoring state in the US), would rank 25 out of 41 European countries.
I can’t find IHDI by state, but given that the US only drops a few spots between HDI and IHDI, Mississippi isn’t likely to be anywhere near the bottom.
All southern states except Mississippi rank in the top 50% of European counties by HDI btw.
> "In a single year, residential care costs for children have increased by £2,000 per child… per week"
and child is being looked after by barely qualified minimum wage worker (often actually paid below minimum wage if you add unpaid overtime and foreign workers not knowing the laws), meanwhile owners of care services live opulent lifestyles in places like Dubai. UK services market is not free, which is part of the problem.
> general upkeep on public spaces and services like libraries
This is also a cultural issue. In large cities, people often don't feel as being part of the community and they don't take pride in their surroundings.
They put rubbish everywhere, vandalise. There is little done to change that. They see neighbour has nice flowers in the garden? Instead of admiring, they will cut them off.
In the cities I have been to this is not my experience, at least in South America and the Nordics. The wear and tear of lots of people means you need to design things differently in well visisted areas, but there a square meter sees more people in a day than you get in a year in small villages.
Nonsense. I was there around a year ago, and while I didn't like it (locals were very pushy and scammy with tourists), there is nothing dangerous other than the classic potential theft/getting bitten by a monkey/snake stufd.
>This is also a cultural issue. In large cities, people often don't feel as being part of the community and they don't take pride in their surroundings. They put rubbish everywhere, vandalise. There is little done to change that. They see neighbour has nice flowers in the garden? Instead of admiring, they will cut them off.
I don't think this aligns with the lived-experience of most Britons. The big cities are mostly litter-free areas, and people can have well tended gardens go unmolested by neighbours.
London is not representative of the rest of the UK. It’s about 11% of the population, consisting of numerous councils and boroughs with different demographics and “upkeep”.
"In large cities" is very much a sweeping generalisation. What you're describing sounds a lot like it's caused by broken window syndrome; people put rubbish everywhere because there's no good trash collection system (I know in the UK people have to pay for it, so they just dump it in nature instead. Collect it from people's doorsteps for free and fly tipping wouldn't be nearly as big an issue anymore.
Vandalism is a difficult one. But it's likely because the people doing it don't have anything better to do, no hobbies, jobs, families, responsibilities, etc. And also, broken window syndrome.
But then you look at e.g. east or southeast asia and they have things like neat closed off bus stops with heating and you're like, "Why can't we have nice things?". We're stuck with glass booths with a beam for leaning against at best. Glass so that people in there are visible and don't use it as a public toilet, uncomfortable seating so people don't use it as a hang-out or sleeping spot. But the design adapts to a problem, one which the government has little interest in fixing - or which would infringe on people's rights.
We don't have to pay for it, it's just part of the general council tax [1], so if you're exempt from that, you get free rubbish collections.
We also have free bulky waste collection, so again, we actually already have that. You just have to arrange for it. You are very poorly informed.
There are also free council run recycling centres (previously known as tips), where you can take stuff yourself. Some have a charge for hardcore, that's about it. Businesses cannot use them though and must pay for waste disposal themselves.
Fly tipping is fairly rare in the UK, I saw an armchair fly tipped on a train journey yesterday and it was notable because you rarely see that sort of thing.
There are areas with fly tipping problems, but usually because those people are lazy, not because of cost. And the council will clear it up (at least eventually depending on the area).
We are having a problem with councils struggling to perform their usual role at the moment. Running out of money. Potholes are a hot topic.
This is actually because our councils are mandated to provide care for old people, and the cost has sky rocketed in the last 2 decades, while they've been capped on how much they can raise their tax. So now almost 90% of my council tax gets spent on old person care instead of what most people might think it was for, bins, schools, parks, etc..
[1] It's not worth going into different taxes here, think of it as a state tax instead of a federal tax. In fact the UK government have a large degree of control in that they force the councils to spend most of it on mandated services and can dictate how much the councils are allowed to raise it by
> I know in the UK people have to pay for it, so they just dump it in nature instead. Collect it from people's doorsteps for free and fly tipping wouldn't be nearly as big an issue anymore.
This just isn't true. The council takes taxes at pain of going to jail to eventually pay for this service. Saying "make it free and the behaviour will change" is just nonsense. Things can't all be free. People need to make an effort to keep their neighbourhoods nice.
If they don't feel that a neighbourhood is "theirs" - that's more likely to be a problem.
To make matters worse, there's also litte evidence that the increases in spending on SEND provision have led to better outcomes.
I can't help feeling like this is a vicious cycle - the lack of community facilities is causing greater isolation, causing a rise in health needs and so on.
For some reason Britain's migrant population is disproportionately reliant on government services. This is a common talking point in American politics, but doesn't seem a common one in English politics, but in England the data is pretty incontrivertible, whereas in America it's a bit harder to ascertain.
This is because America's alleged welfare queens are undocumented, whereas Britain's are there legally and the government actually has very good data on which groups are a net boon and which are a net draw on the economy.
I'm not a Brit and I could care less at the end of the day, but it does seem kind of bonkers to me to be importing people while your own country suffers.
Fair enough. I don't see it on BBC or any of the british sources I read, and you'd think it'd be a pretty neutral topic, since the data is published by the central govt.
Well the BBC mostly are reporting and have to be very careful what they say due to neutrality laws governing them. However, tune in to Question Time and you will hear these voices.
It’s probably the main reason Tories got obliterated the last election. After it came out we had 1m net immigration (up from prior 500k which had already 2x’d the normal 250k net).
This is part of the problem. The venues that mention this are labeled "far right". The other ones try to ignore the issue because they want to pretend it isn't happening. But it shouldn't be a "far right" discussion. Everyone should be in on it because the consequences are so significant.
Venues claiming immigrants in the UK disproportionately consume resources often exhibit far-right traits. They rely on nationalist framing, selectively citing NHS or welfare burdens while omitting immigrant tax contributions and economic value (e.g., ONS data shows net fiscal positivity). The pattern: exaggeration, scapegoating, and "us vs. them" rhetoric—mirrors far-right strategies, prioritizing ideology over evidence. It’s less about resource analysis, more about exclusionary politics.
There's bad policy in other areas. Councils are going bankrupt due to court cases and equity laws that say any gender pay gap is the result of discrimination. Therefore they were found guilty because they are paying e.g. bin men or sewage workers more than mostly female jobs like nurses and librarians. They obviously have to do this because those jobs are dangerous and unpleasant so if you paid the same as other jobs nobody would want to do them. But the courts disagreed and now the councils have to pay huge sums out in equal pay lawsuits that they can't afford.
All this is a direct result of bad, ideological law making combined with a biased judiciary that interprets it in bad, ideological ways. Unfortunately it's the ideology Labour is in thrall too and they're in power for several years at minimum and maybe much longer if the right stays split, so the state of Britain's infrastructure will continue to sharply decline.
Although Grok thinks the problem lies in "deep rooted inequalities", whereas I'd say it's pretty normal for jobs like bin men to be paid more than cleaners. It's one of the most dangerous jobs you can do, due to the frequency with which they get hit by cars.
The summary did not support your claim court cases and equity laws said any gender pay gap was the result of discrimination. It said the plaintiffs argued successfully they were paid less for work of equal value. It was not clear cleaning and refuse collection were determined equal value. The summary mentioned also contract clauses.
It sounds like the real issue is you disagree with the value of work calculated for some jobs.
It only mentions councils in passing and doesn't cover them going bankrupt over it, but it covers the issue at hand, which affects the private sector as well.
The claim was court cases and equity laws say any gender pay gap is the result of discrimination. Including different pay for different jobs. The article highlighted detailed consideration of value of work. The article did not support the claim. But it was informative. Thank you.
Article misses crucial and always overlooked point. Working class have lost stake in the economy, by government changing IR35 legislation to prevent worker owned businesses from making profit. This was lobbied by big corporations who were losing talent (it was easy to start own company and offer services directly to clients) and contracts (small business could undercut them and offer better quality) and was falsely sold to the public as "anti-tax avoidance" measure.
In an environment where working class became a captive workforce, they no longer have interest in getting better at what they do, because it will only benefit corporation they work for. They can't use their talent in their own business, because they can't run it. Add wage compression and the fact the government allowed big corporations to import even cheaper workforce from overseas, compounded the problem.
Same with public sector - we had an ecosystem of small businesses delivering services and that was destroyed. Any public sector body buying these services got fined and "nudged" to buy from more expensive big corporations.
So you get no productivity, brain drain and big corporations taking massive profits overseas, where small business would spent the money locally stimulating the economy.
It's a slow car crash, nobody is paying attention to.
IR35 is not really about the working class though is it? It's about the professional class of contractors, tv presenters etc, who at various times were doing things that looked suspiciously like regular jobs, but somehow were paying a lot less tax.
I agree the implementation of IR35 is an absolute, grade-A clusterfuck, and leaves workers having to do things like buy IR35 insurance, and make in/out determinations themselves, only for HMRC to come up with new ways to try and classify them as 'managed service companies', or a myriad other ways to undermine the entire sector, such that financial ruin can be dangled over people's heads like the sword of damocles...
It's a common misconception that IR35 only affects a narrow group of high-earning professionals - TV presenters, consultants, and the like. But that framing misses the wider picture and, frankly, suits the narrative that was used to sell the legislation to the public.
In reality, IR35 has had a broad and damaging impact on a much wider group of skilled workers - IT contractors, engineers, healthcare professionals, tradespeople - many of whom built small, legitimate limited companies as a way to work flexibly, compete fairly, and build some financial security. It was one of the few viable paths to independence left, and IR35 has made it effectively unworkable for many.
Large corporations didn't like losing contracts and talent to smaller, more agile competitors. IR35 conveniently removed that competition by making small operators too much of a compliance risk to hire. Meanwhile, public sector bodies were discouraged—sometimes even penalised—for engaging small suppliers, further consolidating the power of the big consultancies.
The media focus on celebrity cases wasn't accidental. HMRC gained free publicity and public support by targeting high-profile individuals - knowing it would reinforce the idea that IR35 was closing tax loopholes rather than quietly dismantling a thriving small business ecosystem. The result is a workforce with less autonomy, less incentive to go above and beyond, and fewer opportunities to build something for themselves.
This isn't just about tax - it's about economic structure, incentives, and who gets to participate in the rewards of their own labour. And when those opportunities disappear, so does productivity, innovation, and local economic resilience.
> IT contractors, engineers, healthcare professionals
You're not disagreeing with me, other than that I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class.
> tradespeople
Still do run small limited companies AFAICT. Certainly the ones I used to interact with. Mostly because they have multiple clients and are a lot harder to point at and say "that's not a real business!"
Unlike the US, UK is closer to EU in that IT contractors, engineers, tech work is paid and perceived closer to skilled labour than professional-managerial class.
Upper-middle class is mostly bankers, barristers, surgeons, some politicans and so forth.
While permanent IT staff are often regarded as generic office workers, usually in poorly performing small to medium enterprises in backwaters around the country, in London and in Finance this is not really the case.
Consultant IT people can make out like bandits, IR35 or no, and even those perm people in the backwaters are middle class in earning and habits. It’s absolutely not a working class occupation.
Incidentally this attitude from middle management in (mostly) non-London SMEs is a big part of why they are doomed to fail - they value middle-management above skilled workers and end up in a doom spiral of low pay, low productivity and low expectations. If you’re in one of those situations - get out, opportunity is out there. But you won’t find it in a shabby office at the back-end of an industrial estate in Basingstoke.
There's a common mistake in equating class with job title or postcode. Being a consultant doesn't automatically make someone middle class—especially when they don't own the means of production, don't control their work, and can't build anything lasting from it. That's the real distinction. Class is about power and autonomy, not just how polished your CV looks or how many screens are on your desk.
Many skilled workers set up limited companies not to "make out like bandits" but to gain a small degree of control in a system that otherwise offers very little. IR35 took that away, not from boardrooms or multinational firms, but from individuals trying to carve out their own space. It wasn't just a policy shift—it was a signal: you're not allowed to operate outside the machine.
This has little to do with London versus the rest. It's about how the economy is increasingly structured to funnel all meaningful work through large gatekeepers, whether private or public. The destruction of small-scale service businesses - especially in the public sector - didn't just hurt livelihoods. It erased entire layers of local innovation, independence, and pride in craft.
The result is exactly what we see now: a drained workforce with no stake in the outcome, no reason to go above and beyond, and no path to build something of their own. That's not a London problem or a Basingstoke problem. That's a systemic one.
IR35 didn’t take it away at all, it still thrives unless you’re skirting too close to employment. Contract software is still a huge thing in the UK.
It certainly needs reform, but it hasn’t killed the contracting sector. Far from it. It’s still massively lucrative.
Yes, the public sector restrictions a few years ago changed some things, but from friends in the public sector AFAICT what it changed was that it cut down on a culture of people who were for all intents and purposes employees, who had often been in positions of managerial responsibility in councils and other bodies for years, pretending they were independent businesses and avoiding tax while (comparatively) charging the earth.
However you want to paint it class -wise, when someone is acting as an officer in a company or council for half a decade, they’re not an independent creative struggling to have some control, they’re working a job like any other schmuck.
Honestly, I think the UK tax laws need to be reformed so that it doesn’t matter for income - you make money in a company structure as a contractor, or make it as an employee, tax is the same. Dividend or income, tax is the same. It would sort the unholy mess out and take away the incentives to use contracting as a tax dodge and for HMRC to retroactively fuck up someone’s life.
It’s how it works here in Australia. No IR35 required, for the most part income is income is income and it all counts towards your taxable total. Then you work how it best suits you.
The idea that IR35 only affected people "skirting too close to employment" is the exact narrative big consultancies wanted the public to believe. It reframes trust-based, long-term client relationships - the lifeblood of any good business - as suspicious when delivered by individuals, but completely acceptable when delivered by large firms.
Here's the reality: a one-person limited company providing services to a council for several years is treated as "dodgy" or "cheating the tax system." But if a big consultancy sends in a contractor to sit at the same desk for the same duration, it's completely exempt from IR35 scrutiny. The only difference? Ownership. The first is worker-owned, the second is not.
IR35 doesn't prevent "disguised employment." It just channels it through structures that protect and enrich corporate intermediaries. And those same intermediaries are often billing 2–3x the rate a direct contractor would charge—while extracting value from someone else's labour, then exporting the profits.
You also dismiss repeat clients as a sign of disguised employment - but by that logic, any successful small business with loyal customers should be disqualified from existing. Long-term client relationships are the goal of any serious enterprise. It's only when those relationships threaten the margins of large incumbents that they suddenly become suspect.
IR35 wasn't about fairness or tax efficiency. It was about reclaiming market share - removing small, independent operators who were too competitive, too flexible, and too accountable to clients, and replacing them with firms who could play the compliance game and charge more for less.
So no—IR35 didn’t just "clean up abuse." It entrenched it. It created a two-tier system where actual independence is punished, and corporate dependency is rewarded. That's not reform - that's capture.
> I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class.
IT has been one of the only modern trades where working-class people could genuinely break through - without inherited privilege, connections, or expensive qualifications. All it took was a computer, determination, and skill. For decades, it offered an alternative route to upward mobility that wasn't gatekept by traditional class boundaries.
To say those people aren't "working class" anymore simply because they found success in a high-paid field is to misunderstand how class mobility works - and to dismiss the significance of what's been lost. IR35 didn't just hit a few middle-class professionals - it cut off a rare path to independence that was uniquely accessible to people from working-class backgrounds.
That's what makes it so damaging. It's not just about tax or regulation - it's about who's allowed to build something for themselves, and who gets pushed back into being a compliant employee for a large organisation.
> Still do run small limited companies AFAICT
You're absolutely right—tradespeople doing B2C work are largely unaffected, because IR35 targets B2B relationships, especially when the client is a medium or large company. But that actually reinforces the concern: it's access to the broader market - especially corporate and public sector clients - that’s been cut off.
For working-class professionals who moved into areas like IT, healthcare, or consulting, IR35 has closed the door to operating as a small business in those spaces. They can still work - but now only as employees or through intermediaries, with fewer rights and no control. They’re denied the same freedom tradespeople still have in B2C, despite offering equally legitimate, client-driven services.
So yes, plumbers and electricians can run limited companies - but if someone from a similar background wanted to build a small IT consultancy or contract directly with the NHS, that’s now a legal minefield. The playing field isn’t level - it’s skewed in favour of large firms, and that restriction disproportionately hurts those without generational wealth or corporate safety nets.
There is no such thing as a working class professional!
It’s clear we’re talking past each other. I disagree that IR35 has had a specific effect on social mobility, but am happy to leave the conversation here!
Fair enough. Though saying there's no such thing as a working-class professional is a deeply classist take - and kind of proves my point. All the best!
If someone is a professional, they are engaged in a middle class job on a middle class income. Unless you consider “working class” to be something that is indelibly stamped on someone’s soul at birth…
The issue is that you're treating class as a static category based purely on occupation or income - effectively saying that once someone earns a decent wage or becomes "a professional", they're no longer working class. That's a very narrow, top-down view, and ironically, it erases one of the few success stories of social mobility.
Many working-class people entered fields like IT, engineering, or contracting not because they were "born middle class", but because those were accessible paths that didn't require elite credentials, family connections, or private education. They built businesses, gained skills, and carved out independence - often still without the security, assets, or cultural capital traditionally associated with the middle class.
By your definition, the moment they succeed, they're no longer working class - which conveniently absolves the system of any responsibility for making life harder for them. It's circular: "If you’re struggling, you're working class. If you succeed, you were never working class." That's what's classist—defining people's identity by a fixed socioeconomic role and then erasing their background the moment they transcend it.
Social class isn't just about job title - it's about access to capital, power, mobility, and resilience in the face of economic shocks. IR35 disproportionately affected people who were just starting to get a foothold in those areas - often without the safety net others take for granted.
And yes, we may be using different definitions - but mine accounts for lived experience and systemic barriers, not just an abstract Wikipedia definition from a table written decades ago.
It's a critique of the logic embedded in the definition you're using. You said earlier that being a professional or in management is "pretty much the definition of middle class." That is treating class as a static category tied to job role and income, not history, autonomy, or access to power.
My point is: when you define class that narrowly, it becomes easy to dismiss systemic barriers people face once they gain a bit of success. It makes it seem like they've escaped and no longer face structural disadvantages, which just isn't true for many. Especially when policies like IR35 are designed to push them out of ownership and back into dependency.
Don't most countries have similar policies to IR35?
Devil's advocate as I, too, dislike how it was basically lobbied by big corps but really it seems unsustainable for high tax Euro countries to allow their people too much working freedoms?
Yes, many countries have rules affecting contractors, but the UK's IR35 is unusually aggressive and damaging. It wasn't designed to stop "abuse" - it was designed to limit economic independence for individuals running small service
- based businesses.
The idea that "too much working freedom" is unsustainable in high-tax countries reflects a deeply top-down, corporatist mindset. It assumes that ordinary people being in control of how they work is somehow a problem to be fixed - especially if they start competing with entrenched players.
In reality, IR35 wasn't about tax fairness. It was a response to small businesses becoming too competitive - delivering the same services as large consultancies, but with more agility and less overhead. The legislation didn't level the playing field - it tilted it to protect big corporations from small rivals, using misleading narratives to justify it.
Other countries may have similar pressures, but few have responded by attacking independent economic agency as directly as the UK has.
Because it is. Something I heard on BBC Radio 4 recently is that everywhere in Britain that's outside of London is now poorer than any given state in the US.
Partly this is because of the myopic policies of the coalition and then conservative governments, which didn't invest in growth and what seems like a blindingly obvious consequence of this is that there was then no growth.
> Britain’s houses are cramped, ancient and in the wrong places
Ain't that the truth. And actually you're better off getting the ancient ones because they're less cramped.
I think I agree quite a lot with this article, as someone now watching from overseas - something needs to be done as the state just seems to soak up ever more money for ever less benefit to the average person. Things are getting worse and more expensive over there. Time to change tack and at least have them get better if it's going to cost more!
> everywhere in Britain that's outside of London is now poorer than any given state in the US.
This is true of Europe in general vs the US because economic growth in Europe has been low compared to the US since at least the financial crisis. At the time GDP of the Eurozone was comparable to the US' now the US is almost twice as big. As a consequence every European country ranks low compared to US states on GDP per capita:
"Italy is just ahead of Mississippi, the poorest of the 50 states, while France is between Idaho and Arkansas, respectively 48th and 49th. Germany doesn't save face: It lies between Oklahoma and Maine (38th and 39th)." (2023) [1]
> At the time GDP of the Eurozone was comparable to the US' now the US is almost twice as big
No, You're just comparing change in the EUR/USD exchange rate here. In 2007, the euro was at a high point of 1.48, and in 2024 it's at a low of 1.02. Inflation has not been higher in Europe than in the USA over that period.
If we look at GDP at purchasing power parity from 2007 to 2023 we have this:
The US are leaving Europe behind in term of growth (and thus ultimately GDP and GDP per capita) in any case [1] [2].
"Between 2010 and 2023, the cumulative growth rate of GDP reached 34% in the United States, compared with just 21% in the European Union and 18% in the eurozone. This measure of GDP in volume does not depend on changes in exchange rates." [2]
1. Yes, some of them. Spent a little time in New Mexico. I've travelled through the gulf states and Alabama. Particularly outside of Albequrque and Santa Fe, the general level of deprivation in NM was quite clear.
2. I'm glad that people in the UK have access to healthcare. I'd be very happy if that went to the US. That doesn't change the raw GDP figures though.
I agree it may change the experience they have of being poor if you aren't also deprived of medical care. But here's another thing - people in the UK are less satisfied than ever with the NHS as well - it appears to be floundering.
UK citizens have ALWAYS been "less satisfied than ever with the NHS". It's a service - no one likes services. But it still goes on looking after us, pretty well.
That's assuming they're relevant, and spoiler, they aren't for the topic at hand.
How is any individual's life better because they work at a café selling $20 coffee vs £5 coffee? Because if you measure GDP, person one is drastically more productive, but in reality, it doesn't matter, really. If both are earning minimum wage, the person in the UK with the cheaper coffee has higher income (outside of a few US states). But what is their quality of life? That's highly dependent on where they live, what are their housing costs (which are quite high in the UK in most desirable locations), etc. In any case, GDP doesn't evaluate that, and it's probably the main thing people care about and what they mean by "poor".
I don't agree with everything on this channel but Gary's Economics does a good job articulating a perspective that the lowered quality of life is directly related to growing wealth inequality.
Gary's angle is mostly based on wealth being a zero sum game. I think new wealth does get created but I agree that the vast majority of wealth is existing assets and their growth probably dwarfs any net new wealth creation.
New wealth "creation" is a lie. It only looks that way because of devaluing currency and population growth.
No conspiracy theory beliefs required to see this one. At the end of the day, what we are buying and selling is compute time on our brain CPU cluster. We can reshuffle what gets our attention, and the relative cost of things can change, but ultimately the only way to increase "wealth" is to get more underlying resource: human brainpower.
I see the counter argument coming from a mile away: yeah, but your poor is not your grandfathers poor. You have an iPhone, gramps did not. My counter is again simple: relative value. Electronics were a frontier at the time, and are a commodity now. They are now cheap, and this is compensated by a huge increase in the cost of basics like housing.
Perhaps the bigger issue is old wealth destruction. We live in a world of effectively infinite low cost electronics, clothes and food, but the things which used to be abundant are now actually quite scarce.
Housing is most obvious example here - but the costs of driving (excluding vehicle purchase), childcare, wedding, and energy are now radically higher than ever before. In these areas it feels like we've gone backwards in productivity.
I take some silicon from high-purity quartz in North Carolina. I make CPU chips out of them. Have I not created wealth? Is not the CPU chip more valuable than raw, high-purity quartz?
I planted $10 worth of potato seed this year, and I'll be harvesting at least $100 worth of potatoes in a few months. It would take a lot of economics books to convince me I haven't created wealth. Unless they've redefined "wealth" to the point of uselessness as a concept.
Wealth is created by taking less valuable inputs and producing something new of greater value. For the HN crowd, that might mean using a little energy and a cheap computer to produce software that provides something even more value than the sum of its parts. Clearly you can create wealth out of "thin air".
Perhaps you mean in the net? Where new wealth is created, equal old wealth must be destroyed? But wherein that aforementioned software was additional value destroyed in order for the net wealth to remain the same?
> It only looks that way because of devaluing currency and population growth.
Not really. While we often measure wealth in currency, which is subject to fluctuations over time, wealth is not the measurement itself. In the same vein, the physical distance you currently know as a kilometre will still be the same distance even if we redefine the kilometre.
It feels perverse to say, but I feel like the UK doesn't have enough income inequality.
The effective pay of a person making £80k per year in London isn't really all that different from a minimum wage worker in social housing. Especially when things like child benefit, student loans, and potential council tax reductions are involved.
I think it's better to be at the top of the working class than the bottom of the middle class.
£80k a year works out at £4,166.14 per month (assuming plan 2 student loan and 0 pension contributions).
Full time minimum wage works out at £25,397.00 per year or £1,819.48 per month (assuming no student loan or pension contributions).
That works out as a difference of £2,346.66 per month. It's plausible the cost difference between social housing and private rent for a 3 bed in Westminster could make up that difference alone.
Westminister social housing is obviously a favourable case, but we also have to consider benefits:
In the scenario of 2 kids on that min wage salary it seems like you'd get £34.15 per month in universal credit.
Whilst small on its own, the universal credit status unlocks many other benefits and perks. Potential discounts of up to 100% of council tax could be possible depending on local authority (avg council tax in London is £157.75 per month). The NHS low income scheme can be accessed: getting free prescriptions and support with health travel. Another big thing would be getting access to social tariffs on energies and utilities. Together these could add up to hundreds of pounds per month.
The min wage worker would also child benefit at £187.17 monthly.
Firstly, if you earned £80k and needed a 3-bed flat, you would categorically not try to live in Westminster. The rent alone would come out well over £3k per month [0]. It's one of the most expensive places to rent in the country. Looking at the disposable income from £80k for a 3-bed flat is highly selective.
Secondly, money isn't the only factor when it comes to social housing. Consider that social housing is notoriously ill-maintained and has characteristics in line with the poorest 40% households [1]. And if you do live somewhere unsatisfactory, the waiting time for a 3-bed is around 3 years for non-high-priority applicants [2].
I'm neither an economist or mathematician. But I'm smart enough to observe my surroundings. I observe that the middle class is shrinking rapidly. Wealth concentration is increasing rapidly. Income has not kept up with the price of goods. And it's increasingly difficult for working people to accumulate wealth.
Can you point me to other theories which articulate the cause of my observations?
He doesn't suggest that the economy is a zero sum game, but that the distribution of that wealth matters and in our societies we're increasingly distributing wealth unevenly so that tiny minority of people increasingly control and own all the wealth, assets and means of production thus depriving other people of economic opportunities and crippling the economies.
In your example of building more, in order to a new building get erected someone owns the land, someone owns the materials, someone owns all the assets and the capital required to build. The people who invest to this will of course want to turn a profit on it.
In England, only the King owns the land, and Parliament can deploy any resources in the UK it wishes by simple Act of Parliament.
The only other thing there is is human labour, and that can similarly be deployed if we choose to.
As we discover every time we go to war.
So no there is no cabal of hoarders preventing anything, and no shortage of stuff or money. All that is preventing regeneration is the political will to do so.
In reality Gary is a member of the Outer Party, and he wants to take money off the Inner Party and give it to his mates so they can all play at looking after the Proles while value signalling to one another.
New wealth can be created, but it seems like at least since the 90s, we've been in a pattern where the people with most of the wealth would prefer a sort of stasis, because that way their chunk of the pie doesn't get smaller by comparison to the rest. They'd rather have slow, managed, inflation-swallowed "growth" than the ups and downs that accompany leaps forward but sometimes change who is on top.
So we've gone from "everyone will have flying cars" to "the rest of you will eat bugs." Castles and jets for the few; austerity for the rest of us. Which certainly isn't new, but it's not what was promised, or what seemed possible within living memory.
I live outside of London (I did previously live there for 30 years or so), in Lincoln about a 100 miles or so away to the north. It's OK. Got two universities and all sorts of other stuff. Certainly not "poor".
Yes, but tax and other stuff? And which comparable ones? The UK is paying more than most EU nations into NATO (I think Poland the only other one), for example.
I'm other side of Nottingham and have to say that things aren't that bad either.
I made my peace with not earning London salaries but being able to comfortably live in a nice area and pay off my mortgage early a long time ago.
My parents weren't of the University generation, so I'm ~better off than they were at the same point in our lives. On the other hand, we're worse off than my in-laws would have been at the same time, because of housing. But housing is a fixable problem. The government just needs to legislate to allow the building of more of it. Even in London, the real answer, whether politicians want to say it or not, is the densification of suburbs - allow redevelopment of suburban areas into higher density developments, and prices will come down.
You could say that about many other European countries though. Outside of the capitals life is different. Wealth always centralises around capitals. It’s literally called a capital city.
I wonder how many of these check and balance systems that were created once but have grown so big they're now more of a ball and chain than the problem they were intended to mitigate.
Environmental impact assessments, engineer stamps, etc, etc, for minor projects that wind up prescribing some petty stormwater solution which adds up to more cost than if the Taj Mahal of stormwater solutions had just been fired from the hip in the general direction of the problem. Graft reducing procurement processes that have grown over time to cost more to run on an annualized basis than the graft they were intended to prevent.
At least if we took best guesses when implementing solutions to ancillary problems and awarded contracts based on favor trading at least we'd have the solutions and the stuff to show for it even if the solutions and stuff aren't perfect.
Everyone appears to agree that Britain is broken. The author recognizes that the issue is not a lack of taxes, but lack of care at where the money goes.
Sadly the author I think is getting distracted by specific issues. Focusing on school or social costs. Or specific large project over runs.
You need to read through a ton, but it paints a picture of a government chasing newspaper headlines. And an overall ineffective method of running a country from the top down.
How could it be that an act of parliament is being held up by local councils? Parliament's orders used to be the law of the land. Now it is but one of many.
Often treatments of British decline read as if the authors wished Britain had been fire bombed to smithereens, and benefited from the Marshel Plan. Yet this undersells the British people. They know how to build new houses. They know how to build trains. Yet Britain as a whole is still searching for that win-win. The path to fixing problems without compromises.
Meanwhile Britain's managerial and governing class is so incompetent, it is hard to imagine replacements who would perform worse.
Dominic Cummings got to be inside Number 10 and entirely blew it with Brexit and everything else. He belongs in the "discredited" pile with the Trussnomics lot.
No, actually his plan for Brexit was the most coherent, and Truss/Kwarteng were on the right track but executed appallingly badly.
If you go for Brexit the "hard way" as the country did then your way forward to compensate and to create growth is to find new competitive advantages and there are not many options apart from going low tax low regulations.
This never happened. Truss/Kwarteng made a bad and short-lived attempt and that was it.
I am not saying Brexit was a good idea but this is one of those massive changes of course that require "going big or going home" instead of trying to keep things as they were when that's impossible, and slowly fail (it does not mean that it would necessarily succeed but at least you're going for it).
No, it was a massive failure in the market, because it was made of unfunded tax cuts to the well off, and we're watching how the "destroy all the regulatory stuff you don't understand" approach is working out in the US right now.
The lasting effect of Truss was to make the national debt problem much worse by pushing up interest rates.
It's worth keeping in mind that the same week the government cut £5B from supporting the sick and disabled they also started selling bonds bought during QE for £100B less than they paid for them.
Swings and roundabouts: life expectancy for the poor will fall, but we will have another handful of billionaires.
TL;DR: It's not by accident that Britain feels poor.
American here, relatively well-read. My sense is that post-1945 Britain took a sharp turn - from "let's all work together for the common good" to "let's pretend that our country has a decent future...while quietly looting its not-dead-yet body for our own individual benefit".
Well, not quite that simplistic. And WWI was also pretty brutal for both Britain's situation and outlook.
IIR, Adam Smith was very clear about the differences between healthy, virtuous capitalism, and the evils of maximize-how-much-the-self-serving-rich-can-squeeze-out-of-the-little-people feudalism.
Not quite immediately post-45. That was when the modern welfare state was being put together. Winning a war was the peak of state capacity. Things were still going OK around 63 and the "white heat of technology" speech (why can I not easily find a full transcript of this?). Wheels came off in the inflation era leading to the "winter of discontent", followed by a massive and explicit backlash against socialism and in favor of individual profit. Thatcherism. North Sea oil solved the money problems, but papered over the more structural problems. Blairism managed a second financial services boom, but then .. 2008. And we've never recovered.
If it already hasn't been said I'd really recommend anyone interested in this topic to checkout "Gary's Economics" on YouTube.
Even if you don't agree with him (and I know many don't for various reasons..) You have to admit that he does bring a new perspective to the table and (as a layman economist) it just makes logical sense.
Regardless, the main stream economists have not been able to either predict the economy or improve it (for the general majority of people) and it seems that every western economy is following the same trajectory where
- governments are broke and pulling back on their services to the public (health care, education etc.)
- working class is broke, living pay check to paycheck barely scraping by
- middle class is shrinking and financing their lives with ever increasing amounts of debt (mortgages)
All the above then begs the question, who has all the money? Who has all the wealth?
Classic grifter - 95% of his backstory is made up.
You can achieve far greater enlightenment by simply droping your preconceptions about rich and poor people and understanding the very basic day to day things happening around you than you will achieve listening to him.
He has addressed this numerous times. His statement was that he was Citi Bank's best trader in 2011, which is true. The dispute is an attempt to discredit him by suggesting that him not being the best trader in other years debunks his 2011 figure.
> His statement was that he was Citi Bank's best trader in 2011, which is true
Is it? Nothing in the FT articles indicates that, and they clearly state that 2 years prior a trader got a $100 million personal bonus (so on profits much higher than that). There can be good and bad years, but I seriously doubt $35 million would be the best worldwide, and all of his colleagues who agreed to speak seem to agree with that.
> I was the best f*king trader in the f*king world and I am the bloke that called it right every f*king year
He possibly had the highest p&l on his desk ($35mil) in 2011 - was not top in 2011 in the bank, and certainly not in the world. $35mil - rookie numbers in this game, and in a seat at Citibank, middling at best.
I listened to him being asked a question on UK / US trade and his answer was very generic - something something Amazon.
To be a forex trader, you would live and breathe detail on stuff like this. To be in the top 1% of forex traders you would be far beyond that.
yes he isn't in that position now, but I expected some novel insight that you could only get from a specialist, not something that anyone could come up with.
This isn't the only example.
I don't disagree with most of what he is saying, and I'm very happy for him that he has managed to break through in a small way to get his message out.
I don't really think that matters at all, it's just an old tenuous bragging point, he's just a guy with a tough looking face and maybe has an elementary understanding of economics that relies less on being accurate and more on the viewer agreeing with him about why everything feels broken. (not that everything isn't broken, or that those reasons aren't ever accurate, but it's just a classic grifter move to pull on the thread of truth till it unravels, like asmongold)
Crashcourse economics likely provides much more value to anyone really looking to learn.
I think he massively misses the mark. If you look at Britain’s actual problems they’re not due to a lack of tax revenue or “the rich”. People aren’t able to save because their money is spent on housing and energy - both of those are due to poor policy.
The purpose of tax is not to raise money to government, but to redistribute wealth. The government prints money to cover the bill of its expenditure. If it issued no taxes, then that burden would fall on all people through inflation, affecting the poor moreso than the rich. Taxes are an issue separate from spending that allows the government to move money down from rich to poor, and in doing so offset the inflationary effects of spending. This is why tax is a solution to rent. Rent is poor people giving money to rich people, and tax allows you to reverse that flow.
That’s just wrong on so many levels. If I look at just one error, inflation doesn’t affect everyone it is a tax on savers ie the rich. Wages and prices go up with inflation (prices by definition), but cash and savings go down in real terms.
Look around, bro. Hard assets get more expensive and return on those assets don’t decline. Thats why studio apartments are $1200/mo in Buffalo, NY. Lol
People with money pretty readily deploy that money into investments that beat inflation.
Sure but rich people also have lots of cash and bonds, at least more than the poor. Poor people don’t have either, their best inflation hedge is borrowing.
You could do floating rate notes too. But fixed rate bonds are by far the largest portion of the bond market and cash on hand is always a big component.
rich normally are rich enough to protect their savings from inflation.
e.g. by putting it in an effective monopoly - land or housing (housing is a monopoly if you also are rich enough to have some influence on what / where houses are built / not built)
The purpose of tax is to free resources from the private sector so it can be purchased at non-inflationary prices (as well as driving the currency). The actual financial operations of the UK make it clear that taxes at the national government level are not used for paying for anything, as you rightly point out:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4890683
Housing and energy could both be dirt cheap and the money would still go to rich people. The problem from a living standards point of view is the cost which is due to a lack of supply. Get the cost down and poor people would be able to save and buy assets and become wealthy.
> People aren’t able to save because their money is spent on housing and energy
----
> Housing and energy could both be dirt cheap and the money would still go to rich people.
----
So the working class is being forced to give the wealthy all of their money. On prices set by the wealthy and coupled with policies encouraged by the wealth. And if the wealthy just stopped being so greedy and took a small hit, everything would be fine. And the wealthy aren't the problem?
My problem with “it’s the wealthy” is it is just nebulous and not thought through - typical populist rubbish. Whereas the stuff I’m talking about like the planning and energy infrastructure are very direct and would actually make a difference. We could revisit the green belt, upzone areas in London, set much larger minimum house sizes. We’re miles behind on energy infrastructure and infrastructure is just more expensive here because we allow the cost paperwork to get into the hundreds of millions. If you look at France they have cheaper energy, cheaper homes and more housing supply and much much more people owning second homes. So again it’s not the rich it is our crappy policies.
A fair chunk of the energy spend goes to multinationals and ultimately sovereign wealth funds. The housing goes to rentiers: banks for the most part, but also landlords and other investment entities that are living nicely off the income without having to do very much - parasites in other words.
Ding ding ding. Western governments have spent years on housing and energy policy driven by ideoogical concerns, when a technocratic approach would have been much more productive. Yes, this includes things people may not like, especially environmental or 'social justice' groups.
Nonsense. When the gas crisis hit, a lot of people with badly insulated houses (Britain fares quite badly here) were hit very hard and whining while the ones with insulation and solar panels were laughing away.
House price is mostly related to taxation and land availability. Local politicians like to constrain land availability to keep their own houses priced up.
> All the above then begs the question, who has all the money? Who has all the wealth?
The "I.T. Revolution" was supposed to bring a vast payoff from improved productivity. Did the benefits of society-wide process improvement get snarfed up by... vastly more inequality ?
I think he understands that but when you have a situation where the real economy is growing only around 1% per year but rich people grow their wealth somewhere around 4-10% that can only come at someone else's expense.
In other words while the real economy might be growing as a "non-zero sum game" the growth of the elite and the rich far exceeds that and outpaces it. Net effect is that their wealth is wealth away from everyone else.
His examples of “feeling poor” are nothing to do with being poor and are in fact mostly signs of largesse or affluence.
Councils expanded the number of SEND pupils eligible for free school transport, increasing spending from £9m to £20m - how is that being poor? It’s an improvement in quality of life…? Ok, it might be a waste of money (or might not be) but it’s not a cut is it.
Being poor is like your country sends 10 athletes to the Olympics and they all get eliminated in the heats. No Western nation is actually poor. All Western nations are roughly the same, there’s nothing notable about the UK other than it is towards the richer end and is a cultural superpower.
> Councils expanded the number of SEND pupils eligible for free school transport, increasing spending from £9m to £20m - how is that being poor?
Because the money is sucked out of the council coffers and they then can't provide a lot of the basics. It's not an improvement in quality for people who are, for instance, not SEND pupils. The point being that more and more expenses like this appear each year and then the budget is gone when it comes to looking after the library, fixing potholes etc, Small every day things that make the country look and feel like it's functioning are ignored until everywhere just feels a bit grim and broken.
I'm interested to see what Labour have in store for local government reform overall. Where I live will be affected since I'm just into Derbyshire and they're consolidating all boroughs into unitary authorities, which I'm in favour of since I have four tiers of local government where I live.
Intuitively, the richer and more productive a country becomes, the better care they can take of the populace. Education, transport, welfare etc... . Yet it feels like the opposite is happening. We're seeing transport costs and tuition fees endlessly rising, cuts to disability payments, and broken promises to lift caps on welfare. All in the name of "stimulating the economy".
From what I've seen, it's because the last 20 years (at least -- I wasn't politically conscious before then) of policy have only focused on London. The rest of the country has mostly been left to fend for itself, but have the additional burden of dealing with nation-wide policies that really only apply to single metropolis. And because Parliament over-allocates funds to London, that leaves most other municipalities to fight over funding scraps left on the table.
isn't London still paying more taxes than what's spent there?
though of course it's not surprising, productivity is vastly higher in cities. but that's an argument for allowing and helping them to grow more.
urbanization started many hundreds of years ago, it's nothing new.
in fact, instead of committing to economically (and ecologically) sustainable high-density cities (and withdrawing from the crazy American Dream/Nightmare suburbs)
letting people piss away their lives in shitty none of the above places
... the birthplace of the railways cannot seem to build railways anymore, unfortunately.
Growth requires economic/business opportunities, infrastructure that can serve said growth, like-minded people to help manifest said growth, and ... that silly corporate thing, what was it, ah, synergies! Spreading all these things out leads to kick-ass local music scenes, but otherwise helps no one.
400 comments
[ 2.8 ms ] story [ 233 ms ] threadI'd say he does bring pretty convincing arguments to the table and his logic does make sense.
if you take all the wealth and give it one group of people who don't put it back into the circulation but rather just invest it, it makes sense that there's no resources left for anyone else and "everyone" else is comparatively poor.
That's a typically successful but dangerous social media recipe.
There is "investment" that doesn't cause more activity, like having a second home for speculation purposes that you keep empty. But in general, investment leads to more production, and ends up creating employment.
https://birchlermuesli.substack.com/p/copy-garys-badeconomic...
Call it biased, but I'm also a priori skeptical of any public intellectual that points to their one pet theory as the cause of society's ills.
[1] https://www.youtube.com/watch?v=kidX8prVIgY
Managed to get on Question Time because he's very good at telling people what they want to hear.
I dunno, that strategy worked fine for Americans. Am I supposed to believe that liberal use of eminent domain will turn Britain into an overnight utopia?
It's, among other things, part of the body of evidence that Civil Law may be notably more efficient than Common Law. Britain's also unusually bad in this department, though not as much as the US (the Civil vs Common thing probably isn't the whole story anyway—it's rarely that simple)
Unless it's roads
"How did you go bankrupt?" "Two ways. Gradually, then suddenly."
Lee Kuan Yew commented upon it in From Third World to First: "As Britain’s worldwide influence shrank, so did the worldview of its younger parliamentarians and ministers. Some old friends, British commanders who had fought in the last world war and had served in Singapore defending us against Sukarno’s Confrontation, compared the old generation British leaders to oak trees with wide-spreading branches and deep roots. They described their younger leaders as “bonsai oak”, recognisably oak trees, but miniaturised, because their root area had shrunk."
I fear the same thing is coming for the USA as it, inevitably, loses its standing as the world's sole great superpower (which it only had for maybe 20 years at most!). We could easily get stuck in a permanent cycle of demagogue after demagogue promising to, well, make us "great again."
You see it in individuals too. The root of the word celebrity is celebrate. Make someone a celebrity and put them on a pedestal, and it often ruins them forever. It's a fickle thing. When they inevitably go back to being just a regular person, the effect is often to leave the person permanently feeling like a has-been. They flail around for the rest of their lives trying to recapture something that is fleeting instead of enjoying the fact that (1) they achieved something few people achieve and (2) they have the rest of their lives ahead of them.
Success is more psychologically dangerous than failure.
There's a saying: "whom god wishes to destroy, he first makes mad." I think a better version is "whom god wishes to destroy, he first raises up."
Actually, that's not quite right. The root of both "celebrate" and "celebrity" is a Latin word whose original meaning is something to do with crowdedness. Celebrity (in the older sense of "being famous") means being someone that people crowd around. The original meaning of "celebrate" was to hold a religious service, attended by crowds of people. Later "celebrity" evolved to also mean a person who has the quality of celebrity-in-the-old-sense, and "celebrate" evolved to also mean to hold some other kind of event that attracts crowds. But "celebrity" didn't ever primarily mean "person who is admired", it was always "person who attracts attention".
(It is still true that people who are famous and then not famous can find it hard to adapt to the change, of course.)
I think you are right, but I also think it afflicts the ruling class a lot more. In particular, politicians, who are power seekers by nature, feel the loss more than ordinary people do. IN their minds, not being a super power equates to declined, even if life improves for ordinary people (which it did).
2) They decided they wanted to punish hard workers and productive investment and aggressively reward capitalists that "park money" in non-productive assets (like real estate).
England could easily reverse these decisions and aggressively reward hard work and investment in productive assets, open the doors to intellectuals, and the hard, smart working people and investment would come pouring in.
But, they'll never do that, because boomers.
The problem with England is the problem elsewhere. The amount your society needs to improve to let ~1% more people not work every year for ~30 years is incredible. The entire west has done it. But the benefits are going almost exclusively to the retiree class.
In the not too far future, if trends continue <50% of adults will be working with very high standards of living. This is absolutely UNHEARD of. At the same time, you'll see basically no benefit at all for the people who actually do the work.
This doesn't seem like the best way to distribute productivity gains to society, but it's the way we've chosen, and as long as old people have a say, you better bet they're gonna vote for the status quo or even bigger pension payouts in the future.
> Like with every colonial power...
Some colonial powers may have genuinely increased the wealth of the imperial state. The Spanish and Mongol empires stand out in my mind here, although I don't have a precise source of accounting.
But blaming whole countries for the actions of single entrepreneurs has been the MO for a very long time now, so I can see how you feel correct making that statement
Trade imbalances like that always lead to war. historically.
Ego, corruption, etc are explanatory. The statewide economics just never quite worked.
Happy to engage, just need to understand :-)
Yeah and why didn't people praise me when I released all the puppies from my puppy kicking factory?
So until you return what is stolen from every country around the planet, keep the BS to yourselves because it only angers the rest of us, you pathetic thieves. Totally deserving what is going on in the UK. And I fear it is too late to turn that ship around in the next couple of decades. Especially with the politicians that are running the show and the younger ones in the pipeline.
And it is a great pity because I have lived and worked in the UK and I loved the people and the place. But hold your tongues and stop biting your own tails (you snakes) and perhaps you will have a better life in 20-30 years. :)
Yes a bunch of individuals got rich, but my position is that their tax payments (and wider economic contributions) never justified the cost of maintaining the colonies.
It would have probably been better if the government just gave the upper class money directly, rather than indirectly by paying for navies to acquire land for them.
I learned about it from watching Coup 53 [1].
[0] https://www.youtube.com/watch?v=D2WaMdGl0uw&list=PLanJEt7jLo...
[1] https://www.imdb.com/title/tt1984135
But they provide a very good standard of living for their citizens.
The Suez Crisis happened 70(!) years ago, the article is talking about where modern day UK spends its money. It's literally right there in the opening sentence, if you only bothered to open it:
>Britain is a rich country with the world’s 6th largest economy and the highest tax income for decades, which raises a simple question - why do we seem so broke?
Aside from strictly technical topics, this community is now worse than Reddit.
Power != Prosperity
> One reason for this is that parts of the British state are fundamentally misaligned with goals like ‘improving living standards’ or ‘increasing wealth’, whether that’s through hand-wringingly incompetent procurement processes, long-term failure to invest in the infrastructure and management required to support ‘moar frontline staff!!’, acute treasury brain, or endless cohorts of committees and quangos.
> The current level of ambition, of vision, just doesn’t match up to the situation we’re in.
It’s about a failure of state capacity. The article’s entire argument hinges on why British institutions can no longer turn wealth into functioning systems. The post-imperial loss of strategic vision among British elites is not a distraction: it’s the historical foundation of the current malaise.
Suez was the moment Britain exited the world stage and never figured out what it stood for domestically in the vacuum that followed.
You can’t talk about the failure to invest, coordinate, or reform over decades without asking why the ruling class stopped trying.
Which isn't a bad thing. But the key there is in building frameworks. Instead, we seem to have built large portions of the public into thinking these are the only frameworks that matter. And so everything has to be tied back to them.
The most plausible models for UK decline that I've encountered come from a Youtuber named Britmonkey.
https://www.youtube.com/watch?v=4ZxzBcxB7Zc
https://www.youtube.com/watch?v=b5aJ-57_YsQ
He talks about housing as _ongoing existential crisis_, contra widespread apathy on the subject, and about how since Thatcher, the political rule has tended to integrate the worst aspects of center-left and center-right governments.
Ezra Klein's _Abundance_ has been in the news lately, and there are some very similar arguments made there, focused on the US context.
High costs of
1. Energy 2. Transport 3. Housing
Are the cause of low private and public investment.
The author treats the lack of public productivity growth as separate from the lack of public investment but the latter causes the former
Excellent piece about it here.
https://ukfoundations.co/
TLDR: "it is difficult to build almost anything, anywhere. This prevents investment, increases energy costs, and makes it harder for productive economic clusters to expand. This, in turn, lowers our productivity, incomes, and tax revenues."
Housing is probably the biggest culprit. More on that here.
https://worksinprogress.co/issue/the-housing-theory-of-every...
Blocking green energy investment is the biggest area of frustration. You cannot demand to never see a pylon and then turn round and complain about your electricity bills. The press/public are fundamentally unserious about this. I got mildly radicalized when I read that someone was trying to block an offshore connection using the presence of "grade 2 listed concrete anti-tank cubes" on the beach.
Edit: example of listed cubes https://historicengland.org.uk/listing/the-list/list-entry/1...
I'm not against protecting historical heritage, of course, but society should serve the people currently living there. Just because something is over a few decades old doesn't mean it's worth bending over backwards to protect 100% intact without any changes. Would it really be so bad if a building from 1910 gets some double glazing, changing the appearance slightly? I'd say it's not.
Add a crowdfunding frontend. Put the sponsor's name on the website next to the building. Have a little thing promoting all the unsponsored buildings. Run a lottery which pays back some of the collected fees to privately-held listed building owners to help pay for upkeep.
But if nobody cares enough to reach into their pocket and spend the equivalent of a mildly expensive restaurant dinner on keeping this building listed? Maybe it's not actually important or significant at all. Fewer, better-maintained historic buildings, rather than just having them with the owner quietly waiting for them to burn down so something useful can be built.
- Not taxing the wealthy;
- Austerity measures that do nothing but destroy government services; and
- Housing prices.
You see this kind of disconnect all the time. For example, in the Biden administration, people would point to how well the NASDAQ is doing to say "the economy is doing great", which says nothing about the job market or living standards.
These economic measures really tell you nothing about wealth and income distribution.
House prices all over the developed world have to come down. This is arguably the biggest problem. But voters will resist that because it's their nest egg. At this point, this only goes one of two ways: fascist police state or socialist revolution.
Hoarding or denying shelter or food is violence.
There aren't enough wealthy to cover the shortfall. Doing this is a moral issue, not a national economy issue.
But yea, the rest I think I agree with.
> This is because average tax rates rise more quickly with income in the UK, and are already higher at the top relative to the median, than in most of the European countries that raise more revenue overall.
> Austerity
Tories spent more on government than 2000s labour as % gdp
Perverse incentives are an absolute disaster for the economy of our countries. Recently the socialist party approved in Germany an income limit for parents to receive income replacement benefits when being on parental leave. What was the result? From my group of friends in all cases the lesser earner from the marriage (the woman most of the time) has stopped working in order to not reach the income limit. This results in less income tax collection for the State, a poorer family and a less productive company. No one wins.
But more taxes alone won’t fix the problems outlined in the article—namely, the misaligned incentives across different branches of the State and the shockingly low return on each pound spent. That inefficiency is probably also a symptom of poor alignment among the individuals involved in procurement, as well as broader societal incentives.
Over the past few decades, States have grown so large that the original incentive structures they were built on are now being challenged by competing incentives emerging from individuals and various sub-organizations within the State itself.
These kinds of conflicts are far less common in the private sector. There, the company’s goal—profit—is usually well aligned with the customer’s goal—getting the best product at the lowest price. And that alignment tends to cascade through every level of management, all the way down to the last employee.
Probably seeing a lot of new/upper segment cars and well maintained houses.
It is a reasonable response to high-crime areas, and it is unusual for the wealthiest parts of a city to be high-crime areas. But an area being less affluent doesn't make an area high-crime.
If you look at the other comments you can see people are actually keying off how much of a sense of community and civic pride there is in an area, as well as commercial activity. Which is going to probably distinguish between upper and lower class - even that isn't certain - but that isn't actually relevant to the topic because there is always going to be an upper and lower class. It isn't going to get a great read on how affluent they are at any given moment.
> There's a reason your original post is a very light shade of gray.
In an academic sense, yes. But no-one knows what it is - some people might be in your shoes where they read "affluent", misinterpreted it and had a fear response. Or they might have other opinions as some of the other comments lay out. Or there could have been other reasons.
One of the philosophical underpinnings of HN is that downvotes don't contain a lot of information and are a poor tool for promoting discussion - it is a wonderfully mature approach to moderation.
You'll notice my response to the thread going long was more arguments. It keeps the discussion more respectful when people only push on when they have arguments to make. Not the only option, but insinuation specifically is a weak long term strategy. As are insults, for that matter.
How well upkept are the buildings? Are they clean and well maintained or are they dingy and broken with overgrowth? Are there a lot of open shops around? Do people seem to be buying things? What kind of clothes are the people wearing? Does it seem like many people are homeless? How is the state of the transit (both public and private?) Do people feel the need to have bars on their windows and security stationed around to prevent theft, or do storefronts feel safe enough to even have merchandise sitting out? Are people eating in restaurants? Are those expensive or cheap restaurants? Do people seem to be comfortable spending a night out on the town, going to bars and shows or are the streets empty because people can't afford outside entertainment?
You can find relative class status of an area by the number of beggars, I grant you that. But you aren't going to get a bead on the actual affluence of the high-class people. Are they thousandairs or billionairs? All we really know is they aren't beggars.
I still like living here more than other countries I've lived in - friendly people, lovely countryside, NHS. But I must admit housing is, and always has been, an issue.
> in large part because they’re mandated to write blank cheques for social care with no support or strategy from central government. Individual cases in Central Bedfordshire are now costing up to £750,000 per year, a quarter of the entire libraries and leisure budget and an amount that is rising rapidly with no apparent ceiling. As I wrote previously, “In a single year, residential care costs for children have increased by £2,000 per child… per week,” taking the average cost for a single case from ~£200,000 to ~£300,000 per child per year, again with little explanation as to where the money is going or how this is even possible.
> Similarly, “school transport costs have increased by over 100% - from £9m to £20m - in just 4 years” - that’s driven by an unexplained rise in the number of SEND pupils eligible for support and it amounts to roughly the same as - deep breath - the transport, roads, parking, libraries, leisure, housing benefit, public protection and safety budgets combined. Central Bedfordshire Council is not an outlier here - collectively, council overspends on SEND services are set to hit £2bn in the next year, risking further bankruptcies. Again this is not about pitting children against libraries, but asking if we seriously believe we’re addressing either of these things well?
Local councils have to pay the very large bills for social care and supporting SEND children but have basically little control over how it's spent or levers to help control the bills.
Fixing this so councils can once again spend relative minor amounts of money improving the public realm could go a long way to improving day to day experience. Definitely some other large structural problems (see the huge costs of HS2) but it would provide a noticeable improvement in people's lives and potentially isn't too hard for a government willing to make some bold changes around taxation, local government funding and providing proper national strategy and funding on social care.
Of course the actual place continues to exist so the local authority will continue to exist in another form, this time with fewer major capital assets and they're paying rents to the people who now own them instead.
As pointed out in the article you could see this happen when something entirely out of the authorities control (e.g. spending on SEND children due to the massive increase in eligible children in Central Bedfordshire's case) causes it too.
Which may be perceived as a actual goal of this mandate if you have enough of tinfoil in your hat.
It's the standard neoliberal playbook - defund and cripple public services, complain they're not working, then insist the only solution is for-profit privatisation because it's "more efficient".
The result is that all utilities and much of the infrastructure are being run down for profit, and have to be regularly bailed out by central government at vast expense.
Which is fine, because this creates a transfer of wealth from tax payers to the already wealthy.
The aristocracy literally cannot imagine a country which isn't run for their personal benefit. And the consequence is that many of the areas in the UK are now poorer than anywhere in Europe, or even the US deep south.
By far the poorest state in the US, Mississippi (the deepest south you can get) has a GDP per capita just $1,500 less than Germany.
The 2nd and 3rd and 4th poorest states (all southern), West Virginia, Arkansas, and Alabama, have GDPs per capita $6k higher than Germany.
Georgia and Tennessee, 2 other states in the Deep South have GDPs per capita higher than all European countries except Luxembourg, Switzerland, Ireland, Norway and Iceland.
https://www.euronews.com/business/2025/01/03/the-poorest-us-...
It’s a skewed European attitude to look down on the southern US as the poorest place they can think of outside of Africa or Asia. When in fact the vast majority of the South is better off than economically than 90% of European countries.
I once talked to someone traveling to Atlanta ask “do you get CNN down there?” CNN is based in Atlanta.
By all of those measures, the poorest states in the Deep South rank higher than many European countries.
So saying "poorer than anywhere Europe, or even the US Deep South", implies that you think the Deep South is poorer than anywhere in Europe. This is an absurd statement because the poorest places in Europe are much poorer than the poorest places in the US.
If you take the poorest zip code in the United States and look at the median income, 1st quartile income, (or even percent of people under the global poverty line adjusted for PPP), it's not even close to last place among European countries.
People have a very skewed view of the Deep South. Because parts of it are poorer than average for the rest of the country doesn't mean it's objectively poor when compared to the rest of the world.
HDI and Inequality adjusted HDI are not an objective measurement?
I can’t find IHDI by state, but given that the US only drops a few spots between HDI and IHDI, Mississippi isn’t likely to be anywhere near the bottom.
All southern states except Mississippi rank in the top 50% of European counties by HDI btw.
My point stands.
> My point stands.
Funny stuff.
and child is being looked after by barely qualified minimum wage worker (often actually paid below minimum wage if you add unpaid overtime and foreign workers not knowing the laws), meanwhile owners of care services live opulent lifestyles in places like Dubai. UK services market is not free, which is part of the problem.
This is also a cultural issue. In large cities, people often don't feel as being part of the community and they don't take pride in their surroundings. They put rubbish everywhere, vandalise. There is little done to change that. They see neighbour has nice flowers in the garden? Instead of admiring, they will cut them off.
The common denominator is education and poverty, not skin colour or religion or whatever you imagine it to be.
Is everyone in Japan wealthy and educated?
I don't think this aligns with the lived-experience of most Britons. The big cities are mostly litter-free areas, and people can have well tended gardens go unmolested by neighbours.
Vandalism is a difficult one. But it's likely because the people doing it don't have anything better to do, no hobbies, jobs, families, responsibilities, etc. And also, broken window syndrome.
But then you look at e.g. east or southeast asia and they have things like neat closed off bus stops with heating and you're like, "Why can't we have nice things?". We're stuck with glass booths with a beam for leaning against at best. Glass so that people in there are visible and don't use it as a public toilet, uncomfortable seating so people don't use it as a hang-out or sleeping spot. But the design adapts to a problem, one which the government has little interest in fixing - or which would infringe on people's rights.
We also have free bulky waste collection, so again, we actually already have that. You just have to arrange for it. You are very poorly informed.
There are also free council run recycling centres (previously known as tips), where you can take stuff yourself. Some have a charge for hardcore, that's about it. Businesses cannot use them though and must pay for waste disposal themselves.
Fly tipping is fairly rare in the UK, I saw an armchair fly tipped on a train journey yesterday and it was notable because you rarely see that sort of thing.
There are areas with fly tipping problems, but usually because those people are lazy, not because of cost. And the council will clear it up (at least eventually depending on the area).
We are having a problem with councils struggling to perform their usual role at the moment. Running out of money. Potholes are a hot topic.
This is actually because our councils are mandated to provide care for old people, and the cost has sky rocketed in the last 2 decades, while they've been capped on how much they can raise their tax. So now almost 90% of my council tax gets spent on old person care instead of what most people might think it was for, bins, schools, parks, etc..
[1] It's not worth going into different taxes here, think of it as a state tax instead of a federal tax. In fact the UK government have a large degree of control in that they force the councils to spend most of it on mandated services and can dictate how much the councils are allowed to raise it by
This just isn't true. The council takes taxes at pain of going to jail to eventually pay for this service. Saying "make it free and the behaviour will change" is just nonsense. Things can't all be free. People need to make an effort to keep their neighbourhoods nice.
If they don't feel that a neighbourhood is "theirs" - that's more likely to be a problem.
SEND = "Special educational needs and disabilities"
I can't help feeling like this is a vicious cycle - the lack of community facilities is causing greater isolation, causing a rise in health needs and so on.
This is because America's alleged welfare queens are undocumented, whereas Britain's are there legally and the government actually has very good data on which groups are a net boon and which are a net draw on the economy.
I'm not a Brit and I could care less at the end of the day, but it does seem kind of bonkers to me to be importing people while your own country suffers.
All this is a direct result of bad, ideological law making combined with a biased judiciary that interprets it in bad, ideological ways. Unfortunately it's the ideology Labour is in thrall too and they're in power for several years at minimum and maybe much longer if the right stays split, so the state of Britain's infrastructure will continue to sharply decline.
Where can I read about this?
https://grok.com/share/bGVnYWN5_d7ff3a8f-9cf7-4ff3-837a-0bbb...
Although Grok thinks the problem lies in "deep rooted inequalities", whereas I'd say it's pretty normal for jobs like bin men to be paid more than cleaners. It's one of the most dangerous jobs you can do, due to the frequency with which they get hit by cars.
The summary did not support your claim court cases and equity laws said any gender pay gap was the result of discrimination. It said the plaintiffs argued successfully they were paid less for work of equal value. It was not clear cleaning and refuse collection were determined equal value. The summary mentioned also contract clauses.
It sounds like the real issue is you disagree with the value of work calculated for some jobs.
paywall bypass: https://archive.is/MLC49
It only mentions councils in passing and doesn't cover them going bankrupt over it, but it covers the issue at hand, which affects the private sector as well.
Same with public sector - we had an ecosystem of small businesses delivering services and that was destroyed. Any public sector body buying these services got fined and "nudged" to buy from more expensive big corporations.
So you get no productivity, brain drain and big corporations taking massive profits overseas, where small business would spent the money locally stimulating the economy.
It's a slow car crash, nobody is paying attention to.
I agree the implementation of IR35 is an absolute, grade-A clusterfuck, and leaves workers having to do things like buy IR35 insurance, and make in/out determinations themselves, only for HMRC to come up with new ways to try and classify them as 'managed service companies', or a myriad other ways to undermine the entire sector, such that financial ruin can be dangled over people's heads like the sword of damocles...
But working class? Pull the other one!
In reality, IR35 has had a broad and damaging impact on a much wider group of skilled workers - IT contractors, engineers, healthcare professionals, tradespeople - many of whom built small, legitimate limited companies as a way to work flexibly, compete fairly, and build some financial security. It was one of the few viable paths to independence left, and IR35 has made it effectively unworkable for many.
Large corporations didn't like losing contracts and talent to smaller, more agile competitors. IR35 conveniently removed that competition by making small operators too much of a compliance risk to hire. Meanwhile, public sector bodies were discouraged—sometimes even penalised—for engaging small suppliers, further consolidating the power of the big consultancies.
The media focus on celebrity cases wasn't accidental. HMRC gained free publicity and public support by targeting high-profile individuals - knowing it would reinforce the idea that IR35 was closing tax loopholes rather than quietly dismantling a thriving small business ecosystem. The result is a workforce with less autonomy, less incentive to go above and beyond, and fewer opportunities to build something for themselves.
This isn't just about tax - it's about economic structure, incentives, and who gets to participate in the rewards of their own labour. And when those opportunities disappear, so does productivity, innovation, and local economic resilience.
You're not disagreeing with me, other than that I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class.
> tradespeople
Still do run small limited companies AFAICT. Certainly the ones I used to interact with. Mostly because they have multiple clients and are a lot harder to point at and say "that's not a real business!"
Upper-middle class is mostly bankers, barristers, surgeons, some politicans and so forth.
While permanent IT staff are often regarded as generic office workers, usually in poorly performing small to medium enterprises in backwaters around the country, in London and in Finance this is not really the case.
Consultant IT people can make out like bandits, IR35 or no, and even those perm people in the backwaters are middle class in earning and habits. It’s absolutely not a working class occupation.
Incidentally this attitude from middle management in (mostly) non-London SMEs is a big part of why they are doomed to fail - they value middle-management above skilled workers and end up in a doom spiral of low pay, low productivity and low expectations. If you’re in one of those situations - get out, opportunity is out there. But you won’t find it in a shabby office at the back-end of an industrial estate in Basingstoke.
Many skilled workers set up limited companies not to "make out like bandits" but to gain a small degree of control in a system that otherwise offers very little. IR35 took that away, not from boardrooms or multinational firms, but from individuals trying to carve out their own space. It wasn't just a policy shift—it was a signal: you're not allowed to operate outside the machine.
This has little to do with London versus the rest. It's about how the economy is increasingly structured to funnel all meaningful work through large gatekeepers, whether private or public. The destruction of small-scale service businesses - especially in the public sector - didn't just hurt livelihoods. It erased entire layers of local innovation, independence, and pride in craft.
The result is exactly what we see now: a drained workforce with no stake in the outcome, no reason to go above and beyond, and no path to build something of their own. That's not a London problem or a Basingstoke problem. That's a systemic one.
It certainly needs reform, but it hasn’t killed the contracting sector. Far from it. It’s still massively lucrative.
Yes, the public sector restrictions a few years ago changed some things, but from friends in the public sector AFAICT what it changed was that it cut down on a culture of people who were for all intents and purposes employees, who had often been in positions of managerial responsibility in councils and other bodies for years, pretending they were independent businesses and avoiding tax while (comparatively) charging the earth.
However you want to paint it class -wise, when someone is acting as an officer in a company or council for half a decade, they’re not an independent creative struggling to have some control, they’re working a job like any other schmuck.
Honestly, I think the UK tax laws need to be reformed so that it doesn’t matter for income - you make money in a company structure as a contractor, or make it as an employee, tax is the same. Dividend or income, tax is the same. It would sort the unholy mess out and take away the incentives to use contracting as a tax dodge and for HMRC to retroactively fuck up someone’s life.
It’s how it works here in Australia. No IR35 required, for the most part income is income is income and it all counts towards your taxable total. Then you work how it best suits you.
Here's the reality: a one-person limited company providing services to a council for several years is treated as "dodgy" or "cheating the tax system." But if a big consultancy sends in a contractor to sit at the same desk for the same duration, it's completely exempt from IR35 scrutiny. The only difference? Ownership. The first is worker-owned, the second is not.
IR35 doesn't prevent "disguised employment." It just channels it through structures that protect and enrich corporate intermediaries. And those same intermediaries are often billing 2–3x the rate a direct contractor would charge—while extracting value from someone else's labour, then exporting the profits.
You also dismiss repeat clients as a sign of disguised employment - but by that logic, any successful small business with loyal customers should be disqualified from existing. Long-term client relationships are the goal of any serious enterprise. It's only when those relationships threaten the margins of large incumbents that they suddenly become suspect.
IR35 wasn't about fairness or tax efficiency. It was about reclaiming market share - removing small, independent operators who were too competitive, too flexible, and too accountable to clients, and replacing them with firms who could play the compliance game and charge more for less.
So no—IR35 didn’t just "clean up abuse." It entrenched it. It created a two-tier system where actual independence is punished, and corporate dependency is rewarded. That's not reform - that's capture.
IT has been one of the only modern trades where working-class people could genuinely break through - without inherited privilege, connections, or expensive qualifications. All it took was a computer, determination, and skill. For decades, it offered an alternative route to upward mobility that wasn't gatekept by traditional class boundaries.
To say those people aren't "working class" anymore simply because they found success in a high-paid field is to misunderstand how class mobility works - and to dismiss the significance of what's been lost. IR35 didn't just hit a few middle-class professionals - it cut off a rare path to independence that was uniquely accessible to people from working-class backgrounds.
That's what makes it so damaging. It's not just about tax or regulation - it's about who's allowed to build something for themselves, and who gets pushed back into being a compliant employee for a large organisation.
> Still do run small limited companies AFAICT
You're absolutely right—tradespeople doing B2C work are largely unaffected, because IR35 targets B2B relationships, especially when the client is a medium or large company. But that actually reinforces the concern: it's access to the broader market - especially corporate and public sector clients - that’s been cut off.
For working-class professionals who moved into areas like IT, healthcare, or consulting, IR35 has closed the door to operating as a small business in those spaces. They can still work - but now only as employees or through intermediaries, with fewer rights and no control. They’re denied the same freedom tradespeople still have in B2C, despite offering equally legitimate, client-driven services.
So yes, plumbers and electricians can run limited companies - but if someone from a similar background wanted to build a small IT consultancy or contract directly with the NHS, that’s now a legal minefield. The playing field isn’t level - it’s skewed in favour of large firms, and that restriction disproportionately hurts those without generational wealth or corporate safety nets.
It’s clear we’re talking past each other. I disagree that IR35 has had a specific effect on social mobility, but am happy to leave the conversation here!
If someone is a professional, they are engaged in a middle class job on a middle class income. Unless you consider “working class” to be something that is indelibly stamped on someone’s soul at birth…
Being a professional or in management is pretty much the definition of middle class - https://en.m.wikipedia.org/wiki/Social_class_in_the_United_K...
This is what I mean by talking past each other - I don’t think we’re working from the same dictionary.
Many working-class people entered fields like IT, engineering, or contracting not because they were "born middle class", but because those were accessible paths that didn't require elite credentials, family connections, or private education. They built businesses, gained skills, and carved out independence - often still without the security, assets, or cultural capital traditionally associated with the middle class.
By your definition, the moment they succeed, they're no longer working class - which conveniently absolves the system of any responsibility for making life harder for them. It's circular: "If you’re struggling, you're working class. If you succeed, you were never working class." That's what's classist—defining people's identity by a fixed socioeconomic role and then erasing their background the moment they transcend it.
Social class isn't just about job title - it's about access to capital, power, mobility, and resilience in the face of economic shocks. IR35 disproportionately affected people who were just starting to get a foothold in those areas - often without the safety net others take for granted.
And yes, we may be using different definitions - but mine accounts for lived experience and systemic barriers, not just an abstract Wikipedia definition from a table written decades ago.
That's not what I've been saying at all, and IMHO that's pretty disingenuous. It doesn't absolve anyone of anything, it's a definition.
You do you though I guess.
My point is: when you define class that narrowly, it becomes easy to dismiss systemic barriers people face once they gain a bit of success. It makes it seem like they've escaped and no longer face structural disadvantages, which just isn't true for many. Especially when policies like IR35 are designed to push them out of ownership and back into dependency.
Because IR35 is not the major issue facing the UK that you seem to think it is...
Devil's advocate as I, too, dislike how it was basically lobbied by big corps but really it seems unsustainable for high tax Euro countries to allow their people too much working freedoms?
The idea that "too much working freedom" is unsustainable in high-tax countries reflects a deeply top-down, corporatist mindset. It assumes that ordinary people being in control of how they work is somehow a problem to be fixed - especially if they start competing with entrenched players.
In reality, IR35 wasn't about tax fairness. It was a response to small businesses becoming too competitive - delivering the same services as large consultancies, but with more agility and less overhead. The legislation didn't level the playing field - it tilted it to protect big corporations from small rivals, using misleading narratives to justify it.
Other countries may have similar pressures, but few have responded by attacking independent economic agency as directly as the UK has.
Partly this is because of the myopic policies of the coalition and then conservative governments, which didn't invest in growth and what seems like a blindingly obvious consequence of this is that there was then no growth.
> Britain’s houses are cramped, ancient and in the wrong places
Ain't that the truth. And actually you're better off getting the ancient ones because they're less cramped.
I think I agree quite a lot with this article, as someone now watching from overseas - something needs to be done as the state just seems to soak up ever more money for ever less benefit to the average person. Things are getting worse and more expensive over there. Time to change tack and at least have them get better if it's going to cost more!
Yup. https://en.wikipedia.org/wiki/Parker_Morris_Committee
This is true of Europe in general vs the US because economic growth in Europe has been low compared to the US since at least the financial crisis. At the time GDP of the Eurozone was comparable to the US' now the US is almost twice as big. As a consequence every European country ranks low compared to US states on GDP per capita:
"Italy is just ahead of Mississippi, the poorest of the 50 states, while France is between Idaho and Arkansas, respectively 48th and 49th. Germany doesn't save face: It lies between Oklahoma and Maine (38th and 39th)." (2023) [1]
[1] https://www.lemonde.fr/en/opinion/article/2023/09/04/the-gdp...
No, You're just comparing change in the EUR/USD exchange rate here. In 2007, the euro was at a high point of 1.48, and in 2024 it's at a low of 1.02. Inflation has not been higher in Europe than in the USA over that period.
If we look at GDP at purchasing power parity from 2007 to 2023 we have this:
- European Union: 31,162 → 61,217, +96% (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...)
- USA: 48,050 → 82,769, +72% (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...)
Which shows a slight catching-up by the European Union over the period.
"Between 2010 and 2023, the cumulative growth rate of GDP reached 34% in the United States, compared with just 21% in the European Union and 18% in the eurozone. This measure of GDP in volume does not depend on changes in exchange rates." [2]
[1] https://www.futuribles.com/en/sur-le-decrochage-economique-e... [2] https://www.polytechnique-insights.com/en/columns/economy/ec...
2. I'm glad that people in the UK have access to healthcare. I'd be very happy if that went to the US. That doesn't change the raw GDP figures though.
I agree it may change the experience they have of being poor if you aren't also deprived of medical care. But here's another thing - people in the UK are less satisfied than ever with the NHS as well - it appears to be floundering.
(In answer to the below "people have always been less satisfied with the NHS" - perhaps so, but this time it's serious, they haven't been this less satisfied before - https://www.theguardian.com/society/2025/apr/02/patient-sati... )
That's assuming they're relevant, and spoiler, they aren't for the topic at hand.
How is any individual's life better because they work at a café selling $20 coffee vs £5 coffee? Because if you measure GDP, person one is drastically more productive, but in reality, it doesn't matter, really. If both are earning minimum wage, the person in the UK with the cheaper coffee has higher income (outside of a few US states). But what is their quality of life? That's highly dependent on where they live, what are their housing costs (which are quite high in the UK in most desirable locations), etc. In any case, GDP doesn't evaluate that, and it's probably the main thing people care about and what they mean by "poor".
I agree, GDP is an incomplete measure, but it does provide a comparison point.
Gary's angle is mostly based on wealth being a zero sum game. I think new wealth does get created but I agree that the vast majority of wealth is existing assets and their growth probably dwarfs any net new wealth creation.
Some links:
Gary's Economics on Youtube - whether or not you agree, he articulates his economic view: https://www.youtube.com/@garyseconomics
This podcast where Gary debates with Daniel Priestly who has opposing views. https://www.youtube.com/watch?v=4yohVh4qcas
No conspiracy theory beliefs required to see this one. At the end of the day, what we are buying and selling is compute time on our brain CPU cluster. We can reshuffle what gets our attention, and the relative cost of things can change, but ultimately the only way to increase "wealth" is to get more underlying resource: human brainpower.
I see the counter argument coming from a mile away: yeah, but your poor is not your grandfathers poor. You have an iPhone, gramps did not. My counter is again simple: relative value. Electronics were a frontier at the time, and are a commodity now. They are now cheap, and this is compensated by a huge increase in the cost of basics like housing.
Perhaps the bigger issue is old wealth destruction. We live in a world of effectively infinite low cost electronics, clothes and food, but the things which used to be abundant are now actually quite scarce.
Housing is most obvious example here - but the costs of driving (excluding vehicle purchase), childcare, wedding, and energy are now radically higher than ever before. In these areas it feels like we've gone backwards in productivity.
Wealth is created by taking less valuable inputs and producing something new of greater value. For the HN crowd, that might mean using a little energy and a cheap computer to produce software that provides something even more value than the sum of its parts. Clearly you can create wealth out of "thin air".
Perhaps you mean in the net? Where new wealth is created, equal old wealth must be destroyed? But wherein that aforementioned software was additional value destroyed in order for the net wealth to remain the same?
> It only looks that way because of devaluing currency and population growth.
Not really. While we often measure wealth in currency, which is subject to fluctuations over time, wealth is not the measurement itself. In the same vein, the physical distance you currently know as a kilometre will still be the same distance even if we redefine the kilometre.
The effective pay of a person making £80k per year in London isn't really all that different from a minimum wage worker in social housing. Especially when things like child benefit, student loans, and potential council tax reductions are involved.
I think it's better to be at the top of the working class than the bottom of the middle class.
£80k a year works out at £4,166.14 per month (assuming plan 2 student loan and 0 pension contributions).
Full time minimum wage works out at £25,397.00 per year or £1,819.48 per month (assuming no student loan or pension contributions).
That works out as a difference of £2,346.66 per month. It's plausible the cost difference between social housing and private rent for a 3 bed in Westminster could make up that difference alone.
Westminister social housing is obviously a favourable case, but we also have to consider benefits:
In the scenario of 2 kids on that min wage salary it seems like you'd get £34.15 per month in universal credit.
Whilst small on its own, the universal credit status unlocks many other benefits and perks. Potential discounts of up to 100% of council tax could be possible depending on local authority (avg council tax in London is £157.75 per month). The NHS low income scheme can be accessed: getting free prescriptions and support with health travel. Another big thing would be getting access to social tariffs on energies and utilities. Together these could add up to hundreds of pounds per month.
The min wage worker would also child benefit at £187.17 monthly.
Firstly, if you earned £80k and needed a 3-bed flat, you would categorically not try to live in Westminster. The rent alone would come out well over £3k per month [0]. It's one of the most expensive places to rent in the country. Looking at the disposable income from £80k for a 3-bed flat is highly selective.
Secondly, money isn't the only factor when it comes to social housing. Consider that social housing is notoriously ill-maintained and has characteristics in line with the poorest 40% households [1]. And if you do live somewhere unsatisfactory, the waiting time for a 3-bed is around 3 years for non-high-priority applicants [2].
[0] https://committees.westminster.gov.uk/documents/s9851/Afford...
[1] https://ifs.org.uk/sites/default/files/2023-06/Housing-quali..., p12
[2] https://www.ukpropertymarketnews.co.uk/how-long-does-it-take...
It's crystal clear we can build new houses and new businesses, so suggesting 'wealth' is a zero sum game is ideological folly.
As to his thesis, here's the demolition of mathematics within it: https://birchlermuesli.substack.com/p/copy-garys-badeconomic...
Can you point me to other theories which articulate the cause of my observations?
In your example of building more, in order to a new building get erected someone owns the land, someone owns the materials, someone owns all the assets and the capital required to build. The people who invest to this will of course want to turn a profit on it.
In England, only the King owns the land, and Parliament can deploy any resources in the UK it wishes by simple Act of Parliament.
The only other thing there is is human labour, and that can similarly be deployed if we choose to.
As we discover every time we go to war.
So no there is no cabal of hoarders preventing anything, and no shortage of stuff or money. All that is preventing regeneration is the political will to do so.
In reality Gary is a member of the Outer Party, and he wants to take money off the Inner Party and give it to his mates so they can all play at looking after the Proles while value signalling to one another.
So we've gone from "everyone will have flying cars" to "the rest of you will eat bugs." Castles and jets for the few; austerity for the rest of us. Which certainly isn't new, but it's not what was promised, or what seemed possible within living memory.
data for 2024
https://ichef.bbci.co.uk/news/1536/cpsprodpb/7EF2/production...
I made my peace with not earning London salaries but being able to comfortably live in a nice area and pay off my mortgage early a long time ago.
My parents weren't of the University generation, so I'm ~better off than they were at the same point in our lives. On the other hand, we're worse off than my in-laws would have been at the same time, because of housing. But housing is a fixable problem. The government just needs to legislate to allow the building of more of it. Even in London, the real answer, whether politicians want to say it or not, is the densification of suburbs - allow redevelopment of suburban areas into higher density developments, and prices will come down.
Environmental impact assessments, engineer stamps, etc, etc, for minor projects that wind up prescribing some petty stormwater solution which adds up to more cost than if the Taj Mahal of stormwater solutions had just been fired from the hip in the general direction of the problem. Graft reducing procurement processes that have grown over time to cost more to run on an annualized basis than the graft they were intended to prevent.
At least if we took best guesses when implementing solutions to ancillary problems and awarded contracts based on favor trading at least we'd have the solutions and the stuff to show for it even if the solutions and stuff aren't perfect.
Sadly the author I think is getting distracted by specific issues. Focusing on school or social costs. Or specific large project over runs.
While I do not agree with him on many things, I think Dominic Cummings's treatment of the subject digs deeper: https://dominiccummings.substack.com/p/q-and-a
You need to read through a ton, but it paints a picture of a government chasing newspaper headlines. And an overall ineffective method of running a country from the top down.
How could it be that an act of parliament is being held up by local councils? Parliament's orders used to be the law of the land. Now it is but one of many.
Often treatments of British decline read as if the authors wished Britain had been fire bombed to smithereens, and benefited from the Marshel Plan. Yet this undersells the British people. They know how to build new houses. They know how to build trains. Yet Britain as a whole is still searching for that win-win. The path to fixing problems without compromises.
Meanwhile Britain's managerial and governing class is so incompetent, it is hard to imagine replacements who would perform worse.
If you go for Brexit the "hard way" as the country did then your way forward to compensate and to create growth is to find new competitive advantages and there are not many options apart from going low tax low regulations.
This never happened. Truss/Kwarteng made a bad and short-lived attempt and that was it.
I am not saying Brexit was a good idea but this is one of those massive changes of course that require "going big or going home" instead of trying to keep things as they were when that's impossible, and slowly fail (it does not mean that it would necessarily succeed but at least you're going for it).
The lasting effect of Truss was to make the national debt problem much worse by pushing up interest rates.
Swings and roundabouts: life expectancy for the poor will fall, but we will have another handful of billionaires.
TL;DR: It's not by accident that Britain feels poor.
Well, not quite that simplistic. And WWI was also pretty brutal for both Britain's situation and outlook.
IIR, Adam Smith was very clear about the differences between healthy, virtuous capitalism, and the evils of maximize-how-much-the-self-serving-rich-can-squeeze-out-of-the-little-people feudalism.
I agree it's concerning that major speeches like this are so hard to find.
Even if you don't agree with him (and I know many don't for various reasons..) You have to admit that he does bring a new perspective to the table and (as a layman economist) it just makes logical sense.
Regardless, the main stream economists have not been able to either predict the economy or improve it (for the general majority of people) and it seems that every western economy is following the same trajectory where
All the above then begs the question, who has all the money? Who has all the wealth?You can achieve far greater enlightenment by simply droping your preconceptions about rich and poor people and understanding the very basic day to day things happening around you than you will achieve listening to him.
Is it? Nothing in the FT articles indicates that, and they clearly state that 2 years prior a trader got a $100 million personal bonus (so on profits much higher than that). There can be good and bad years, but I seriously doubt $35 million would be the best worldwide, and all of his colleagues who agreed to speak seem to agree with that.
He possibly had the highest p&l on his desk ($35mil) in 2011 - was not top in 2011 in the bank, and certainly not in the world. $35mil - rookie numbers in this game, and in a seat at Citibank, middling at best.
I listened to him being asked a question on UK / US trade and his answer was very generic - something something Amazon.
To be a forex trader, you would live and breathe detail on stuff like this. To be in the top 1% of forex traders you would be far beyond that.
yes he isn't in that position now, but I expected some novel insight that you could only get from a specialist, not something that anyone could come up with.
This isn't the only example.
I don't disagree with most of what he is saying, and I'm very happy for him that he has managed to break through in a small way to get his message out.
but still something iffy.
Crashcourse economics likely provides much more value to anyone really looking to learn.
People with money pretty readily deploy that money into investments that beat inflation.
but "tax on savers ie the rich"
rich normally are rich enough to protect their savings from inflation. e.g. by putting it in an effective monopoly - land or housing (housing is a monopoly if you also are rich enough to have some influence on what / where houses are built / not built)
The deadlock today comes from people needing to sell for much since they are bound up by massive loans, but that could have been avoided.
----
> Housing and energy could both be dirt cheap and the money would still go to rich people.
----
So the working class is being forced to give the wealthy all of their money. On prices set by the wealthy and coupled with policies encouraged by the wealth. And if the wealthy just stopped being so greedy and took a small hit, everything would be fine. And the wealthy aren't the problem?
They tried that before and got The Aberfan disaster, Newgate Prison, and child labor.
"Trust me baby, I've changed!"
I feel more optimistic that the energy issue will be solved with a shift to nuclear and renewables.
Housing just seems so hard to fix as so many people have a vested interest in not fixing it.
The "I.T. Revolution" was supposed to bring a vast payoff from improved productivity. Did the benefits of society-wide process improvement get snarfed up by... vastly more inequality ?
Stock market/trading is a kind of zero sum game. For him to gain, someone else has to lose.
However, real economy is not a zero sum game and I dont think he understands that. AFAIK never was an entrepreneur, or created a business.
He advocates for a wealth tax, ie a tax on unrealised gains.
For realised gains, we already do wealth tax and thats called capital gains tax.
In other words while the real economy might be growing as a "non-zero sum game" the growth of the elite and the rich far exceeds that and outpaces it. Net effect is that their wealth is wealth away from everyone else.
Why Britain doesn’t build (worksinprogress.co) https://news.ycombinator.com/item?id=36477481
Councils expanded the number of SEND pupils eligible for free school transport, increasing spending from £9m to £20m - how is that being poor? It’s an improvement in quality of life…? Ok, it might be a waste of money (or might not be) but it’s not a cut is it.
Being poor is like your country sends 10 athletes to the Olympics and they all get eliminated in the heats. No Western nation is actually poor. All Western nations are roughly the same, there’s nothing notable about the UK other than it is towards the richer end and is a cultural superpower.
Because the money is sucked out of the council coffers and they then can't provide a lot of the basics. It's not an improvement in quality for people who are, for instance, not SEND pupils. The point being that more and more expenses like this appear each year and then the budget is gone when it comes to looking after the library, fixing potholes etc, Small every day things that make the country look and feel like it's functioning are ignored until everywhere just feels a bit grim and broken.
I hope this will just be the first step.
though of course it's not surprising, productivity is vastly higher in cities. but that's an argument for allowing and helping them to grow more.
urbanization started many hundreds of years ago, it's nothing new.
in fact, instead of committing to economically (and ecologically) sustainable high-density cities (and withdrawing from the crazy American Dream/Nightmare suburbs)
letting people piss away their lives in shitty none of the above places
The government could and should make an effort to spread growth around more.
Growth requires economic/business opportunities, infrastructure that can serve said growth, like-minded people to help manifest said growth, and ... that silly corporate thing, what was it, ah, synergies! Spreading all these things out leads to kick-ass local music scenes, but otherwise helps no one.