The continued decline of the United Kingdom
Real gross domestic product per head was 28 percent below what it would have been if the rate of economic growth before the 2008 financial cries had continued. As living standards have stagnated in the UK, public services have grown ever-more dilapidated even as taxes have risen to historic highs. It is a grim picture. The UK the first country in world to have an industrial revolution is now in its worst economic decline since the industrial revolution of 250 years ago.
Maybe the UK should reverse austerity, re-progressivize taxes, and rejoin the European Union? Brexit seems to have been an arrogant and economically idiotic move. The new Labour government has had a tough start of governing and they seem confused about what their next actions should be. They don’t seem to have a strategy.
Economic historians look at Britain’s dismal performance and say that the UK has seen nothing like it since the industrial revolution. The UK is not merely in relative economic decline against our competitors, but in a period of stagnation of such length and severity that the UK is risking decoupling from the rich world.
Unless current trends are reversed, the UK will become like Argentina and Italy: a country that was once was prosperous, and might have been more prosperous still, but lost its way. This is the long-term prediction, and it is a combination of factors such as fewer trade partners and agreements like the EU, cultural decline due to immigration, lack of natural resources, internal conflicts such as potential Scottish independence and Northern Ireland joining Ireland and an outdated arrogant class society.
You do not need to be an economist to feel the decline. You see it in the shabbiness on the streets, the worn faces and clothes of passers-by, the frustration and disappointment of the young, the ambulances unable to discharge the sick and the dying, the pound shops and charity stores, the befouled rivers and beaches, the creaking criminal justice system, the inability to build anything from homes to a railway line, and above all in the decline in living standards.
Instead of formulating a strategy to reverse the course and to deal with the economic problems, the new Labour government has focused on attacking free speech, in particular as it relates to comments about immigration. The UK used to be a white country, in 1951 the population was 99.9% white, but due to immigration, the current ratio whites is about 75% and it is estimated that around 2056, whites will be a minority in the UK. Diversity often leads to segregation, higher crime rates and public tension. U.K. authorities have arrested citizens for online activity, for example, a 55-year-old woman was arrested for publishing written material to stir up racial hatred and false communication.
Two other British men were also arrested for similar social media posts. Jordan Parlour, 28, was jailed for 20 months after pleading guilty to inciting racial hatred with Facebook posts in which he advocated an attack on a hotel in Leeds as part of the violent public disorder that swept England last week. In Northampton, Tyler Kay, 26, was given three years and two months in prison for posts on X that called for mass deportation and for people to set fire to hotels housing asylum seekers.
London’s Metropolitan Police chief warned that officials will not only be cracking down on British citizens for commentary on the riots in the UK, but on American citizens as well. “We will throw the full force of the law at people. And whether you’re in this country committing crimes on the streets or committing crimes from further afield online, we will come after you,” Metropolitan Police Commissioner Sir Mark Rowley told Sky News.
By any criteria, the UK faces a serious economic and social crisis, one that will deepen without big shifts in policy by the Labour government. Yet there is little sense of this crisis among the country’s elite, not least its politicians.
The power of narratives helps explain this disconnect. The gap between the U.K.’s reality as portrayed by the dominant narrative of its economy’s performance and real life as experienced by its average citizen has widened to the breaking point. The resulting political distortions are now making the underlying problems even worse.
The 1970s in the U.K. are widely portrayed as a decade of economic stagnation and political strife, which only came to an end with a paradigm shift in economic policymaking at the end of the decade under Margaret Thatcher. This opened the way for a successful drive to curb the power of special interest groups, such as organized labor, sound macroeconomic policies, and much improved economic performance. The 1970s are seen as a failed decade and the 1980s as one of renaissance, the benefits of which last until today.
Although the U.K. was a relative growth laggard during the 1970s, this was nothing in comparison to today’s current collapse in living standards. Average U.K. real wages are now lower than 18 years ago, which is unprecedented in the country’s peacetime economic history.
On most measures, the country has the most limited welfare state of any developed country, including the U.S., with the result being that working households are shouldering more risk than their peers and today’s young Britons face paying far more in tax than they will ever receive back in terms of pensions and other benefits.
There is also an unprecedented housing crisis, with young people increasingly excluded from home ownership if they cannot access family wealth. Public services are under pressure, especially health care. Excess deaths have risen while Britain is the only country in Europe suffering from declining life expectancy.
The U.K. is also running a large, structural trade deficit. Were its economy growing rapidly, driven by high rates of capital investment, this would be less of a concern. However, it is not. Britain faces a deepening economic growth crisis, not least because business investment is running at the lowest level in the G-7. The trajectory is unsustainable, implying as it does a rapid increase in liabilities to the rest of the world.
The policy shifts in the late 1970s and early 1980s benefited particular groups within society, the better off, primarily, leading to a steep rise in inequality. The UK remains one of the most unequal developed countries to this day, according to the Equality Trust.
In a very unequal class society, people with the influence to sustain narratives tend to be insulated from what is happening to most of the population. Many individuals genuinely think the country’s economic situation is better than it is because their personal circumstances are strong. They are among the higher earners and have wealth to cushion themselves against risk. In the U.K., they also tend to have generous private pensions and usually bought their houses before prices rose dramatically relative to earnings.
Another reason for concerns is that the UKs political class is loath to admit the scale of the problem because to do so would mean calling into question Brexit, which neither of the main political parties is willing to do. A government needs to be honest about the challenges a country faces and put in place long-term strategies to address them. Voters do not expect miracles, but they need to feel confident that things are moving in the right direction. If not, the way is open for social unrest, a loss of respect for political institutions, and growing ungovernability. This is the likely road for the UK. There is also an existing arrogance among the leaders, and they don’t seem to realize that the UK is a small country with limited powers about the get even smaller. The UK is truly a country in continued decline.