[HN Gopher] How the U.K. broke its own economy
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How the U.K. broke its own economy
Author : speckx
Score : 42 points
Date : 2025-03-03 18:45 UTC (4 hours ago)
(HTM) web link (www.theatlantic.com)
(TXT) w3m dump (www.theatlantic.com)
| bell-cot wrote:
| British economic dysfunction is an old, old story. My favorite
| quip:
|
| "This island is made mainly of coal and surrounded by fish. Only
| an organizing genius could produce a shortage of coal and fish at
| the same time."
|
| - Aneurin Bevan, British Labour politician, in a speech at
| Blackpool, 24 May 1945
| reverendsteveii wrote:
| Everyone who bought into neoliberalism in the 80s is now
| experiencing economies that are mysteriously failing to thrive.
| Correlation isn't cause, except when it is.
| pipes wrote:
| So what was the alternative? Continue with the disaster of
| central planning. Which is the actual thing that destroyed
| British industry.
| sjducb wrote:
| Go back to what the western world was doing in the 50's. High
| tax and high public spending. In 1950 the US had a top
| marginal tax rate of 91%. The 50s were great, let's do that
| again.
|
| https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing.
| ..
| twoodfin wrote:
| Federal receipts as a % of GDP has gone up and down by a
| few % but is basically unchanged from the 1950's:
|
| https://fred.stlouisfed.org/graph/?g=ockN
|
| Meanwhile the income tax burden, specifically, has gotten
| considerably more progressive:
|
| https://www.ntu.org/foundation/tax-page/who-pays-income-
| taxe...
| raoulj wrote:
| Is figure 4's legend correct from the NTU link? It would
| seem that the grey is the top 1%, not bottom 50%.
| yndoendo wrote:
| The NTU only goes back to the 1980s and does not actually
| include any analysis of the 1950s.
|
| Looks like NTU also is positing their stance on the
| ideology that the 1% are the only ones that create jobs
| but they are the ones to most likely invest in large
| corporations. There seems no prospect to help the mom and
| pop shops or small companies that have stronger solutions
| beyond what large corporate tunnel vision provides.
|
| My personal taxes keep going up with these "Tax Cuts". I
| don't expect them to come down with the push for tax cuts
| for the wealthy. Nor has my income gone up.
|
| Wouldn't buying more local would reduce energy used for
| transportation of goods and services?
|
| I see less Amazon purchases and deliveries as a net
| benefit for the majority and a net deficit for the
| wealthy investors. Wealth that stays more in the
| community versus being shipped to Wall Street.
| pipes wrote:
| And then what happened to those nationalised industries?
|
| https://m.youtube.com/watch?v=O7PVEaPh6Fw&pp=ygUUYWRhbSBzbW
| l...
| teamonkey wrote:
| (Link from the Adam Smith Institute, a neoliberal
| thinktank)
| tick_tock_tick wrote:
| I mean I think most billionaires would welcome the 1950s
| tax code. The reduction in their bills would be amazing!
| The only people paying those number would be our new
| "middle" class doctors, lawyers, etc people who make a lot
| of income but limited investments.
| bojan wrote:
| I have a lot of issues with the work of Yanis Varoufakis, but
| he has one idea that I'd like to see tried out - and that is
| that the workers own 10% of their companies, obviously
| getting 10% of the profit, etc. At least in Europe it's
| uncommon to get shares as part of the compensation package,
| so I'm curious how the Varoufakis' idea would end up working.
| It's worth giving it a shot.
| pipes wrote:
| It doesn't sound like a bad idea. And I really wish the UK
| was more like the USA with stock options etc
| nradov wrote:
| I'm not opposed to employee ownership but there's no reason
| to think that mandating a certain minimum level will
| produce better outcomes. The equity dilution will increase
| the cost of capital, making it harder to start or expand
| businesses. Most workers have virtually zero ability to
| impact shareholder returns. And low skilled workers really
| need cash _today_ , not the possibility of dividends or
| capital gains _tomorrow_.
| Aromasin wrote:
| Turns out Thatcherism only works as long as the state still has
| assets to sell off. The delusion that assets would stay in the
| hands of the working and middle class, and not end up with the
| wealthy inheriting class, has to be one of the biggest
| political failures of our government on the modern era. It's
| lead to the possible death of the Conservative Party if they
| fail to fight off Reform and the Liberal Democrats.
| robertlagrant wrote:
| You're surely joking. The IMF isn't bailing out the UK, and
| there aren't 3 day week debates because of the failing power
| supply. What's led to the death of the Conservative party is
| them doing exactly the opposite what a lot of Conservative
| voters want: bigger economy, and slower immigration.
| bojan wrote:
| Didn't they get more independence with Brexit?
|
| Regarding the immigration, sure, the Conservative voters
| maybe want less of it, but rich and influential Tories
| actually like immigration as it allows their businesses to
| thrive (even more). The UK has more capital going around
| than her own people.
| mattlondon wrote:
| Legal immigrants from the EU were not the only source of
| migrants to the UK. Many come from elsewhere, legally and
| otherwise. Guess what: we have Brexit but we still have
| immigrants - impossible?! </sarcasm>
|
| Plus it was never about immigration, it was always - I
| think - a classic case of misinformation and greed from
| many places. Sadly many people fell for it.
| EndShell wrote:
| > Plus it was never about immigration,
|
| It was partly about immigration. According to these
| surveys 43% of people that voted leave think immigration
| should be reduced.
|
| https://public.tableau.com/views/Publicopinion2023/FIGURE
| 9?:...
|
| > it was always - I think - a classic case of
| misinformation and greed from many places. Sadly many
| people fell for it.
|
| Why do many people assume that if someone thinks
| differently about a particular political issue they must
| have fooled somehow? Considering there is data that
| partially contradicts your belief that it wasn't about
| immigration, maybe your assessment about their level of
| understanding of the issues involved is also incorrect.
| youngtaff wrote:
| > It was partly about immigration
|
| My view is it's actually about people being racist
| EndShell wrote:
| Well there is no evidence to back that up. In fact there
| is plenty that indicates the opposite.
|
| https://migrationobservatory.ox.ac.uk/resources/briefings
| /uk...
|
| There is in the section entitled "Preferences for
| different types of migrant: origin, similarity, skill
| level". (There doesn't seem to be a way to directly
| reference it in a document).
|
| > Country of origin is not the only factor that people
| take into account when considering preferences on
| immigration. In the European Social Survey 2014, British
| respondents reported how many immigrants should be
| allowed based on a question that specified both the
| country of origin (Poland or India) and the skill level
| (professional or unskilled labourer). The results
| revealed that when migrants are professionals, opposition
| is low, and when migrants are unskilled, opposition is
| high (Figure 5). _Research has shown that people's
| general preference for high-skilled over low-skilled
| migrants is mainly driven by perceptions of their higher
| economic contribution_
|
| > The preference among the British public for highly
| skilled migrants aligns with previous research indicating
| that, when questioned about the criteria for incoming
| migrants, skills are considered more important than other
| factors such as race/ethnicity and religion.
|
| Direct link to the stats:
|
| https://public.tableau.com/views/Publicopinion2023/FIGURE
| 5?:...
| EndShell wrote:
| > Didn't they get more independence with Brexit?
|
| We didn't leave the EHCR. So there is an argument that we
| don't have full control of our laws. IANAL and won't
| pretend to know the specifics.
|
| > Regarding the immigration, sure, the Conservative
| voters maybe want less of it, but rich and influential
| Tories actually like immigration as it allows their
| businesses to thrive (even more).
|
| Not just Conservative voters. Almost 1 in 5 Labour and
| Lib Dem voters want to see it reduced.
|
| https://public.tableau.com/views/Publicopinion2023/FIGURE
| 9?:...
|
| Generally 52% of the UK want to see it immigration
| reduced in some capacity according to the migration
| observatory. This was roughly the Vote Leave percentage.
|
| https://migrationobservatory.ox.ac.uk/resources/briefings
| /uk...
| reverendsteveii wrote:
| >has to be one of the biggest political failures of our
| government on the modern era
|
| Thatcher/Reagan neoliberalism only has to be a failure if you
| assume the goal was to best serve the general population.
| This is a POSIWID moment.
| aftbit wrote:
| Aren't higher energy prices exactly what we need to combat
| climate change though?
| _aavaa_ wrote:
| Not really. We need polluting energy sources to be charged for
| their pollution, ie stop using the atmosphere and land as a
| free sewer, which in turn will put renewables on an equal
| footing.
|
| Though even without that, solar, wind, and batteries are
| already cheaper.
| robertlagrant wrote:
| Isn't that the same? You want to raise the price of energy to
| make wind etc competitive?
| rawgabbit wrote:
| Sound bites drives political discussion.
|
| When a polluting industry poisons the air and the water and
| people go to the hospital because they are coughing or they
| have dysentery, who will pay to cleanup the mess? If you
| frame the discussion as about "price" it is a non-starter.
|
| I would argue it is better to talk about workers and their
| families. As in let us not shit in the river so our
| children don't get sick and can go to school. Let us not
| poison the air so workers can do their jobs and not go to
| hospital.
| robertlagrant wrote:
| This seems disingenuous twice:
|
| 1. You're welcome to argue that, but you haven't here.
| You've just stated it.
|
| 2. You shouldn't supplant one topic with another. High
| energy prices kill people, because energy drives the cost
| of everything, and people can direct less value into
| things that keep them healthy if they're spending a
| greater proportion of their income on survival. You can
| say "also air should be clean", fine, but not "Don't
| think about prices! Look over here instead!"
| Tade0 wrote:
| 1. Air pollution kills more.
|
| 2. You can have your cake and eat it, if you drop the
| requirement to buy electricity at the price of the most
| expensive component in the mix. Spain did just that and
| they're currently experiencing an industrial revival
| thanks to comparatively low energy prices.
| smackeyacky wrote:
| No, you just need fossil fuel energy to be relatively more
| expensive, not for energy to be more expensive overall.
| It's happened already but we're currently being held
| hostage by the coal burners while they scramble to extract
| the last bit of rent they can.
| youngtaff wrote:
| Wind is competitive already... the price of electricity in
| the UK is set by the gas fired power generators
| legitster wrote:
| Only high oil and gas prices specifically. And honestly, low
| gas prices is good if it helps move away from coal.
|
| But unfortunately, even the most liberal political groups have
| walked back any interest in solving climate change at the
| margin. You see this with the endless life of the "100
| companies cause climate change" misinformation.
| laughingcurve wrote:
| That 100 companies canard is really terrible. It's seeking a
| villain to blame instead of addressing the system problems
| and it's second or third order effects such as climate
| change. I understand it probably motivates some folks but I
| can't help but roll my eyes.
| SmartyPants700 wrote:
| I see that you would like to screw the poor............
| Pet_Ant wrote:
| Because climate change will somehow not effect the poor?
|
| 1) we need hire energy prices to match the externalities
|
| 2) we need subsidies to make the poor more efficient at using
| the power they can afford. I heard in England they don't have
| proper insulation in most homes. Building to passive house
| standards can completely transform an energy bill.
| nradov wrote:
| If the IPCC global climate change projections are accurate
| then poor UK residents will probably experience smaller
| effects than poor people in many other countries. So they
| may see it as less of a concern than short-term energy
| costs.
|
| https://www.ipcc.ch/report/ar4/wg1/global-climate-
| projection...
| EndShell wrote:
| > we need subsidies to make the poor more efficient at
| using the power they can afford.
|
| They already have grants and subsidies that people can
| apply for.
|
| https://www.gov.uk/government/collections/find-energy-
| grants...
|
| > I heard in England they don't have proper insulation in
| most homes.
|
| Almost every house and apartment I've lived in had had some
| sort of insulation and double/triple glazing fitted on the
| windows. So I found this quite hard to believe so I looked
| it up.
|
| https://assets.publishing.service.gov.uk/media/5a7c19d040f0
| b...
|
| Official stats from 12 years ago say that ~70% of
| properties do have cavity wall and loft insulation as of
| 2013.
|
| > Building to passive house standards can completely
| transform an energy bill.
|
| They are plenty of regulations on how new houses are built
| on how energy efficient they are. However we cannot build
| enough housing for a number of numerous reasons to meet
| current demand.
| ben_w wrote:
| Poor people tend to rent, don't have money to invest in
| better insulation or higher quality housing.
|
| Good news is the UK government has been increasing, and
| wants to further increase*, the legal minimum energy
| efficiency of rental properties.
|
| The bad news is the current* UK requirement is still so low
| that the 39 m^2 apartment I let out in the UK costs more to
| heat * _badly_ *, than my 100-ish m^2 new passiv-ish house
| in Germany costs to be T-shirt temperature inside while
| watching the snow fall outside. (And that UK apartment is
| one of the better ones in the building; I used to live in
| it, one of my requirements when buying was double glazing,
| not all the apartments in that building had double
| glazing).
|
| Also bad news is that my agency is telling me to not do
| anything more than the legal minimum to upgrade it, that I
| should instead wait for the requirements to get stricter
| before actually doing anything more.
|
| Of course they absolutely do actually get things upgraded
| when rules change. In the UK, changing the rules does work.
|
| * https://www.gov.uk/government/consultations/improving-
| the-en...
| mitthrowaway2 wrote:
| We can also give money to the poor, if that's the problem,
| while still maintaining an incentive landscape that prices in
| externalities of pollution and rewards conserving energy.
| datavirtue wrote:
| Energy costs should probably be progressive. If you need more
| than the poor your cost starts shooting through the roof.
|
| This reminds me of that popular "reality" show where they
| remodel a family's home and surprise them with what is
| basically a palace. Afterward the families are shattered by
| energy costs, and eventually exorbitant property taxes. Off
| camera they are forced into forclosure and end up in debt.
|
| After the first month or so they are forced to seal off most of
| the house as they desperately try to stay afloat. Lacking
| financial savvy, most end up mortgaging the home.
| david-gpu wrote:
| A carbon dividend solves that problem. Put a price on each
| ton of carbon released in the atmosphere, then redistribute
| an equal dividend to each citizen.
|
| The wealthiest people will end up paying more than they
| receive back, while the poorest will receive a boost. All
| while incentivizing low carbon alternatives in every sector
| of the economy.
| mattlondon wrote:
| It's higher energy prices yes, but that means higher
| _everything_ prices. Even if your energy tariff is a 100%
| renewable one you still pay the dirty gas price because of the
| way the market is set up.
|
| Combine that with high costs of housing (both to purchase but
| also to rent) and people are, generally speaking, fucked and
| living paycheck to paycheck. Renters especially live a
| precarious life where prices regularly go up 10% per year and
| you might be legally told to leave with not much more than a
| month's notice leading to much upheaval and associated costs.
| mitchbob wrote:
| https://archive.ph/2025.03.03-161011/https://www.theatlantic...
| tester89 wrote:
| Very derivative of https://ukfoundations.co/ , which is
| mentioned.
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