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Comment by HL33tibCe7 | Hacker News Reader

The UK is declining, and people are starting to notice it. People are blaming the government, and clamouring for more support and money, but unfortunately I suspect it’s not that simple. The elephant in the room, in my opinion, is that we simply don’t have the money to maintain the standard of living we once enjoyed. Almost all political conversations here are contingent on this fact, but this underlying problem is rarely discussed.

It’s not clear to me _why_ this has happened, I’m not an economist, but it’s clear to me that this is the case. We’ve seen what happens when the government tries to go on a spending spree. Even Labour agree that we need to go into a period of (effective) austerity at this point.

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From the time when I used to live in UK - You guys have almost no manufacturing and no tech sector. You are importing everything from abroad, yet there is nothing interesting in UK, no reason why I should ever want to get a work visa into the UK. Only thing which works is finance services, but you completely forget on that one during Brexit and you were concentrated on fishing which has almost comically low fraction of UK's GDP. So even the financial sector is slowly pouring away into USA and EU.

Despite your dire situation, you are keeping to make things even worse - See UKCA mark, return of imperial units, endless squabble with EU over Northern Ireland Protocol and threating a trade war, which would finish you off.

Thing is that you used to be interesting for investors (and for me personally) because you were country speaking English and connected to EU. So if somebody from abroad (USA, Asia) wanted to do a bossiness in EU, he would start in UK. That's gone thanks to Brexit and Estonia + Netherland took this role from you. Now you just become a hollow English speaking island which really has nothing to offer.

The role has been taken over by Ireland, I would argue, over Netherlands and Estonia. As much affection as I have for Estonia.

I just moved to UK from Sweden just 6 months ago. I was guessing, there would be a strong will to UnBrexit at this point with all the empirical evidence that Brexit failed

But quite surprisingly, this is not the case. I don't have enough information to say why, but I am definitely shocked on the lack of discourse on the matter.

There are some small movements, but it goes largely unreported by the mainstream media. There was a 10.000 people march recently in Westminster to UnBrexit and BBC didn't even report it.

Brexit was arranged by the monied elite after the EU announced it was coming after the various tax havens (BVI, Caymens, etc), so is the media blackout of the debrexit effort.

Maybe because all economic surplus is absorbed by landlords [1] government contracts go to Tory party donors with no relevant experience, and public services are run by contractors and "consultants" who cost 10x of what maintaining in house talent would.

1. https://www.worksinprogress.co/issue/the-housing-theory-of-e...

A phenomena I noticed is a lot of young hard working types came in from Europe to work / set up businesses here. On the whole they rented not really being settled here and the Brits who tend to own property made a fair bit of money without working through property income and appreciation. Now thanks to Brexit the young hard working Europeans have partly gone, while the older Brits who were used to not really having to work are not really taking up the slack. I'm not quite sure where it all ends up.

2008 "should" have been a severe global depression for 2 years, hitting the UK very hard. It was an extremely drawn out, perhaps decade-long, recession masked by zero/negative interest rates.

The UK's performance wrt the growing west became uncorrelated in 2008, and negatively correlated since Brexit came into effect 2020ish+.

The UK was, in many ways, ground-zero for one of the most severe financial crises in modern history. It has never really addressed that, nor does it have an answer for a version of the UK which can exist "in the shadow of that event".

The UK's "best future" from 2008 was an significant pivot to "boring tech", a pivot to the EU, and a rationalised financial system which could support both goals. Instead, it redoubled on relatively pathological elements of the financial industry and away from the EU.

This happened due to Brexit, voting in Tory's again and again, a broken media, a starved educational system.

But voting to put trade barriers on oneself.. to stop immigration... Is going to lead to pain, no matter what way you cut it.

Well, it is just because the middle class in China, mainly in Shanghai and nearby, has almost replaced the middle class in the west. It has been like this for the past +15 years or so. Money is a relative term. Every government can print and use money. I think the more important one is purchasing power for goods and services. In other words, someone needs to produce goods and services, and then you buy with your money and start to feel happy after all. I think there are two critical things to say on the production side.

1-) China is not producing goods as before the pandemic. Another one is China's zero-covid policy, like bringing down the entire city for just one covid case.

2-) Europe's energy problem. I'm not an expert on this, but Europe's reliance on Russia's cheap gas could be Europe's competitive advantage in the markets. So, when it is gone, I might expect purchasing power could drop significantly for Europeans.

I think it's housing, but then again I think everything in the post-globalization west is housing.

I got a graduate degree in Edinburgh, and the one thing I kept noticing about the entire country is how difficult and expensive it is to acquire housing. People literally ooh'd and ahh'd when they learned that a friend had inherited a small home in Norwich, saying she was effectively set for life. It's like California's NIMBY-fuel housing apocalypse, but on steroids due to the greenbelts.

The problem with a housing crisis, is that it's zero-sum wealth consolidation slow-motion event that takes place over a multi-generational period. A country's personal disposable income would generally pumped back into the economy constructively by/via entrepreneurs, but in a rent-seeking housing environment, that disposable income is lost to consolidated entities, who generally pump the excess rents back into further housing consolidation, or in international markets.

The reason it sneaks up on you is that once the housing freeze happens, you slowly fill in the excess housing capacity exponentially, until almost overnight, rents skyrocket. Suddenly, the nation becomes dramatically poorer within a decade or so.

The only good news to this theory is that it's trivially fixable with massive housing construction plans, the bad news is that it will be politically unlikely for people to suddenly vote to allow "ugly" new construction in the most historic and important cities in the country.

Just imagine how much capital Londoners could put to work if they had housing taken care of. As of 2017 they have been spending 50% of their income on rent: https://www.bbc.com/news/business-42179119

> It’s not clear to me _why_ this has happened

I always assumed it was a combination of WW II, collapse of the Empire and then a series of terrible governments since the 1960s.

Single common thread has to be poor governance. Certainly in politics and the civil service and also, from what I hear, amongst business leaders. They are mostly selected from a very small pool, ie public schools via the class system, so it makes intuitive sense that those chosen would on average be less talented / capable (and even motivated) than other countries. Certainly many of those I know who went to private school were not as competent as their grades or standing would suggest. Add to that a lack of life experience (career politicians, sheltered lives, oxbridge bubble) then it’s hard for them to even know what the real problems are, never mind caring or have a vision for fixing them. Simple examples: the productivity gap, the state of infrastructure, chronic underinvestment in the north at the expense of where the upper class live, etc Fallback has been decades of “managed decline”, which is actually - kicking the can down the road to maintain the status quo for as long as possible before people realise the state of things. Thatcher saw the city and selling off national assets as a quick fix, Blair pumped student debt into the regions to borrow from the future. Combine that with infighting and the Tories’ destruction of industry and local government for class war purposes. I don’t see a way out beyond a revolution, but that will take surely many more decades of decline. Best hope is break up of U.K. perturbs the political sufficiently to open it up to the rest of the country. Things are realistically ok for most people (but not for millions living in poverty and literally relying on food handouts to live), but far more worrying is the trend. It’s plain to see things will get very very bad without wholesale reform and long term vision.

>Single common thread has to be poor governance.

I think a structural issue is aging demographics. Lots of welfare policies were enacted when the ratio of workers to non workers was much higher. For decades now, this ratio has been getting smaller and smaller, hence the constant political dilemma of which benefits to cut and how much and for who.

The UK seems like it will especially struggle with delivering universal healthcare promises, as well as pension benefits. Not only are fault lines along rich and poor, but they will be more and more along old and young.

An ageing population and a pensioner class that vote solely for their interests are definitely problems. Notice that pensioners were, once again, the only group protected in the recent statement. They don’t even seem to be aware/grateful for this.

We could avoided a lot of the economic cost of Covid by asking the over-65s to shield and kept the wider economy more or less going, but that was unacceptable to them and instead we shut down everything for their benefit and now they aren’t even willing to contribute to the cost.

> Single common thread has to be poor governance. Certainly in politics and the civil service and also, from what I hear, amongst business leaders.

Strongly agree. I used to work in the civil service and there are many good individuals but the management structure is poor (though I think generally very effective at line management) and plenty of duffers get promoted. Many ministers are really very mediocre.

Good ideas and techniques are very slowly adopted, but then things like Agile are cargo-culted in an inappropriate way. To be fair, plenty of tech firms do this.

Dominic Cummings has lots of interesting ideas on this on his Substack. When Truss’ mini budget nearly broke pension funds, he pointed out that not only No 10 not know how leveraged they were, but nobody seems to care that they didn’t know. Surely central government should be able to pull together all the data it gathers?

Unfortunately he turned out to be not very good at governing.

Happen to know a couple of people who have worked with Cummings and Boris.

Cummings seems like a reasonably intelligent guy, if ethically dubious and difficult to work with (putting it mildly). What is shocking is that he looks like a genius when compared to those around him. He has basically read around a bit, thinks for himself, and is open to contrarian ideas. He’s just a reminder of how poor our governance is.

I think the reality is most of our govts are not just incompetent but actively harmful in terms of national interest. Obviously a hard Brexit, which Cameron and Johnson created as a byproduct of their own political schemes, is the greatest symbol of this.

Things are going pretty well in other parts of the western world so I dunno if the UK's government should be absolved of their agency so quickly.

From my POV seems like the UK's government is tanking the country by pursuing an idiological agenda that obviously isn't working, and is obviously lowering the standard of living in the country, and yet despite all evidence they continue to double down.

The sad thing we're seeing with Labour is that they're doing the classic thing that happens when parties stay in the wilderness of opposition too long, they start to doubt themselves and instead align with what the government of the day is doing.

Labour under their new leadership is clearly now hoping that if they're timid enough and don't rock the boat at all when the Conservatives inevitably implode they'll be thrust into power because they're sitting there as the next default alternative.

It's sadly terribly uninspiring.

I don’t agree with this, the UK has a huge potential but very right wing governments keep redistributing the wealth such that the rich after COVID ended up with the £600bn of printed money. If you ended up with £2000 more in COVID and the ultra wealthy ended up with £300,000 then you’re going to get huge inflation and record corporate profits which will wipe out your £2000. Apparently we’re running out of Moët in the shops. We should find a way to redistribute a bit of wealth to the poor again… like council houses or some kind of wealth tax but instead we are disproportionately taxing income not wealth again.

You need to earn £45k a year in order to pay in more Income Tax than you take out. You need a household income of £60k a year to make a net contribution in VAT.

Only around 20% of people in Britain earn these amounts, which means 80% of people are taking out more than they contribute. I don't know how this compares to other countries but it is clearly unsustainable and I think that now the era of generous Government handouts and cheap borrowing have come to an end, it is starting to bite.

Have you got some links how does this is calculated?

if we are heading into a recession, then a public sector spending spree is exactly what we do need.

Households won't spend, private sector won't invest as households are not spending, so if the public sector also stops spending then you go into a much longer and deeper recession.

Money itself for a government with a central bank is just a unit of account. There can't not be enough of it. It's just a way to measure resource distribution.

Wealth on the other hand. There's plenty of that in the UK, but it's increasingly in the hands of a few.

40 years of financilising public services and nearly every aspect of our lives means that household and public spending eventually ends up being concentrated even more in the hands of a few. That's the actual issue with public spending into such an economy, that without an effective tax system (which we don't have), then it makes inequality worse.

Both Tory and Labour are pushing a false narrative, because ultimately they represent those who are doing pretty well out of this deal.

What does UK produce? Finance, money laundering and real estate come to mind. All are in decline, for various reasons.

It's happening all over the western world. 50 years ago everything of value happened in the west. Currently there are alot of block on the economy and they only grow.

- people work less hours - education is slipping - lots of imports because we don't have it anymore (outsourced because of lack of cheap labour or environment laws) ...

> It's happening all over the western world.

It's not really happening in the US. The US economy remains strong and may not even go into a significant recession in the next year.

The US dollar remains the world reserve currency and allows unparalleled monetary and fiscal policy freedom. No-one is losing confidence in the dollar the same way they did in the pound.

Inflation is coming down in the US and it's in a fantastic place in terms of energy and food security.

The decline of "the West" you refer to is really the decline of Europe.

True, but how long will the rest of the world accept the USD as universal currency. When they don't the US can't keep printing, so the US will do everything to keep its current position. The 'switch' will be the problem of our generation.

I have been in finance industry for more than 20 years. People have been talking about replacing USD as reserve currency for as long as I can remember. The problem is nothing else is better. EUR? JPY? GBP? CNY? Gold? All of them have more issues compared to USD.

There's currencies now you can trade online that aren't controlled by any one country.

yeah lets back the real world economy with giant ponzi schemes, good thinking chief.

We don't work as hard as we used to, we don't produce like we used to.

Our society has gone from one of growth to one of decay.

You can't do as much when you want to work a few hours a day a few days a week with seasons of time off.

You can't do as much when the supply of energy is falling over time.

You can't do as much when regulations grow and grow, making building anything less and less worthwhile and less and less possible.

Here's a graph of UK labor productivity per worker since the 1950s:

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor...

There is no point where the workforce, assisted by technology, was dramatically more productive than it is now. Given the rise in productivitiy, shouldn't we expect the standard of living to at least remain constant?

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