Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds.
https://en.m.wikipedia.org/wiki/Dutch_disease
This is the biggest reason. The pound has been over-valued for entire generation, making hard to export.
The second biggest problem - my opinion - is the class / education system in the UK suppressed the possibility of the type of talent you need in upper and middle management to enable companies to scale. You need professionals that worked their way up on the basis of merit and ability and are used to self-learning and growth. Unfortunately a degree from Oxford or Cambridge was (is still?) pre-requisite for many forms of success in the UK, from business to entertainment. For UK manufacturing this led to a situation of “amateur entrepreneurs” at the top of companies and could get a company off the ground but would eventually fail to make the business sustainable, as they lacked professional support to guide them.
It's not always easy in the US, either. Michael Dell famously got his start by selling PCs out of his dorm room at the University of Texas. As could be expected, as his business gained momentum his grades took a dive, and eventually he dropped out. Later, when he realized he had a real business on his hands, he tried to go back and take some additional business courses, and the university told him to get lost.
Ultimately he ended up with George Kosmetzky, the dean of the business school, as a board member, so I guess there were no long-term hard feelings. But still, this episode showed where the school's priorities really were.
I don't get it. Either they didn't have enough space in the classes or his grades weren't good enough that they thought he would do well in the classes. Should the business school give preference to applicants who say they have a real business in their hands?
There are a lot of weaknesses in this admittedly-apocryphal story -- why didn't he just audit the classes, for instance? -- but the core elements are true enough.
Should the business school give preference to applicants who say they have a real business in their hands?
Yes, when the student's business grosses $73 million in its first year of operation and he come backs to you, hat in hand, asking for more training, that should count for something.
The business school, like the rest of UT, is there to serve the public interest. If a former student needs help with a fast-growing company that would eventually spend 25 years on the Fortune 500 list, the matter of his previous grades could have been overlooked, and should have been. Finding a way to accommodate him would have been the right thing to do.
It's not that they are Oxbridge but that they are PPE graduates. Oxford and Cambridge both produce plenty of innovative people, ideas, and technologies. Unfortunately the also do a lively trade in PPE (https://en.wikipedia.org/wiki/Philosophy,_politics_and_econo...).
Is that still the case though, GBP being over valued? I remember the pound at its height was closing in to $2 USD. Now it is mostly ~$1.3ish and currently closing in to $1.2 ( In the long term I would not be surprised if it was levelled with EUR at $1.1 )
I still remember all the trade shows with vendors on Food Export. Is not that we don't want to buy British Food, it is simply the Pound make it uncompetitive, ( Not to mention their inexperience with export makes things 10x more difficult ). But ever since the pound drop ( after the announcement of Brexit ), the British brand and flag makes suddenly makes things interesting, at least it had a fighting chance on the International Market. Cheddar Cheese were constantly sold out, and Diary are now a possibility. ( Still a some way off from NZ and Australian though ).
I asked if Brexit had any impact on them and if they would rise price in the near future, and all the answer I had is that they don't see any part of the business being dependent on import, unless there is a huge spike in salary they could even sign a contract for two years, so to speak.
But doesn’t this also mean that as a country, Britain or the US can “tax” the economic growth in an arbitrary country which uses its currency as reserve?
As Botswanna’s economy expands, it needs to print more money to conduct all the transactions and take advantage of the increased resources provided by an increasingly-skilled workforce. As that country’s central bank prints more money, it tries to acquire more GBP or UK treasury bills to hold in reserve. In order to do that, Botswana spends its own currency in Britain. Britons can trade this Botswanan currency in exchange for the right to receive some amount of goods/services from the people of Botswana. So britons have gained some goods as a result of Botswana’s economic expansion.
... in exchange for the possibility of needing to give someone goods whenever GBP stops being a reserve currency.
Or have I completely misunderstood international monetary policy interactions?
If you are a net exporter, you are essentially giving away your own output to a foreign nation in exchange for bits of paper. The reason you can't spend that paper is that it would destroy your exports (your own currency would go sky high as the system tried to eliminate the imbalance) and you'd have to find something else for the people working in exports to do, or you'd get a Dutch Disease problem internally (and likely end up in a situation like Venezuela)
So Botswana sells its natural assets to the US in exchange for US dollars. Those US dollars find their way into the bowels of the financial system and are discounted into the local currency. Either directly - like the Chinese do, or indirectly via some fancy financial system (normally a Sovereign Wealth fund, or Pension schemes with compulsory contributions). They then sit there (the Norwegian fund for example cannot spend anything - ever) - largely to avoid a Dutch disease in the country and to stop the local currency appreciating against the export target.
The result is that the rich countries get stuff essentially for free from the poorer countries so that the poorer countries can issue their own money without people getting agitated.
The whole thing is a conjuring trick. The poorer country would be better putting people to work creating domestic infrastructure straight away and only exporting what is necessary to get needed goods and services required to create that infrastructure. But to do that requires you to operate the central bank in a way that appears 'wrong'. You have to issue liabilities against 'Other Assets' rather than 'US Treasuries' and that upsets people who don't understand how banks actually work.
The GBP/USD gets 'locked' in the financial system. Because it is being used to discount to the scrip used locally you can never get rid of it. To do so would reveal the central bank illusion and explain how the trick is done. Then people might start asking question like: why don't we use our own money in our own circulation to ensure everybody has a job and solve unemployment permanently and forever? And that would never do ;-)
The poor countries more or less have to spend the dollars because they need to buy fuel and high tech. It's the rare exceptions that stockpile it, China and Norway, and they can afford to do that because they're oil-producing.
> The poorer country would be better putting people to work creating domestic infrastructure straight away and only exporting what is necessary to get needed goods and services required to create that infrastructure
Generally true, but harder to achieve than it sounds. Worked in east Asian countries, but not in Africa, largely due to corruption. And the amount that has to be imported is high.
> You have to issue liabilities against 'Other Assets' rather than 'US Treasuries'
It means you'd have to issue local currency against local infrastructure. Or otherwise anything local. I guess that doesn't make much sense either.
You have to GIVE a currency value. What that means is that you must give people a reason to use that currency. Now internally in a country this is done through taxes and the bank system. Externally however this has to be done differently. It must be "guaranteed" to be exchangeable ... to the global reserve currency (so that anyone can buy what they want with it). How do you guarantee that exchange rate ? By having an instrument that's guaranteed to be exchangeable for the reserve currency. A lot of US treasuries, a little gold, a little EU sovereign bonds, ...
So instead you'd have to issue currency and make it exchangeable for local assets. So you'd loan that to local people to build roads, harbors, bridges, buildings, ... That doesn't work, because sovereignty means that you can't exchange those things for the global reserve currency anywhere near as well as you can US treasuries. Because investors are acutely aware that the government could just immediately impound their money (and there's lot of historical precedent of that actually happening), whether it's local currency or local assets. Investors would have to accept that they can bring money in, but not take it out. And good luck with that one.
1. The US never has to produce anything to buy oil. They can just print dollars and import oil. Another country, say Bostwana, has to produce something else, sell it to another country in exchange for USD and then they can buy oil. This is a significant crutch
2. The US will never have a shortage of oil before other countries do
3. The US can import anything it wants, whenever it wants. Say a year with bad weather caused low corn production. That will not take down companies dependent on corn. US can always print USD and buy corn from somewhere. Compare that to Brazil, who would just have to suck it up since they don't have enough USD in reserves to go import corn.
If the US priced oil in gold, it would hurt the US economy in a big way, you are correct. This is part of the reason Saddam and Gaddafi were put in the ground, they wanted to do just that.
Not only does the US get to print the currency that oil is traded in willy-nilly. US also gets to export the resulting inflation (from excessive printing) to the rest of the world.
...if only that currency was controllable by Britain's government according to Britain's needs, instead of being run according to some other country's interests to propel its own economy (using a number of satellite states to vote in its favor) -- and causing the exact same problem the grandparent described in the periphery countries...
The facts show that GB had way more rights and power to decide than Germany (exlusions from certain EU rules everyone else accepted etc.)
Germany is also by far the single biggest financial contributer to the EU.
The GB politicians used to blame the EU for all their own problems. There will be a hard awakening coming at the end of the year, but I‘m sure the EU will still be their scapegoat somehow.
The general point that the Euro will be controlled by the ECB, which must balance the priorities of all member states, is true. It’s also true that this generates some well-known public goods problems. And it is widely accepted among economists that ECB policy has been better suited to Germany than to e.g. the PIIGS countries of the Mediterranean. Hence the anger about European austerity in Italy, Greece....
Seriously, nobody in Britain, Remainer or Brexiteer, is arguing for us to join the Euro. That argument is not currently live.
The ECB does not have to balance interests. It‘s independent and it‘s job is monetary stability, not economic interests.
It‘s also not widely accepted that it‘s in Germanys interest. In fact it is against it. Germans hold most of their wealth in cash. They received interest for it. That‘s hundereds of billions now gone. Germans are poorer than most other Europeans (even than Spaniards and Italians)
At the same time the southern countries have so high debt loads that they would be bankrupt without QE.
The Euro is too weak for North Europe and to strong for the South.
>The ECB does not have to balance interests. It‘s independent and it‘s job is monetary stability, not economic interests.
That's the version one would teach to high schoolers, not the real political/historical truth by any margin. In fact it's so naive I don't even know where to start addressing it.
You can follow the power plays in the ECB in all kinds of outlets, if leftist ones are not your thing, even Le Monde, Die Zeit, Frankfurter Allgemeine Zeitung, Corriere della sera, The Economist and co will do.
>It‘s also not widely accepted that it‘s in Germanys interest. In fact it is against it. Germans hold most of their wealth in cash. They received interest for it. That‘s hundereds of billions now gone.
When Germany has control over EU/ECB policies, it could not give less ducks about the German people. It's about German banks and elites doing good.
That may be a part of it, but it's mostly due to homeownership. Germany is a super risk-averse country, thus few people invest their money. Most people hold everything in cash, thus they get very low returns. It's also the reason why they are hit so hard in a low-interest environment.
"When dividing the Eurozone into a group of countries often labeled as ‘core’11and a group of Southern-European12countries, it turns out that Southern-European households are more capable of keeping up their standard of living compared with those living in the core countries (see figure 18)"
"It is striking that German households have fewer assets than Eurozone households have on average. They not only own relatively little real estate(see figure 20)but also hold less financial assets than is common in the Eurozone(see figure 21)."
Wealth is useless. I bet Spaniards have more wealth because they own houses instead of renting. But that's some wealth they can't touch. What are they going to do, live under a bridge?
"poor" is simply a generic term, personally I think it's income what defines if you live a poor's life or a rich's life.
>Where this narrative of German driving the EU comes from?
Historical experience, including recent historical experience. Naively, most discussions of EU power balances resolve in the nominal voting system, and the vote count allotted to each country. Germany uses its economic and political might to push around smaller nation states, secure satellite votes, and do as it pleases within the EU, far more than its allotted voting power (besides a lot of the serious decisions are taken in backroom deals, and informal bodies like the "Eurogroup", through raw power, bypassing voting altogether).
Even this Spiegel article simultaneously downplays and confirms that Germany runs Europe:
"When Angela Merkel travels to Brussels, she does so as the leader of by far the strongest economy in the euro zone. Policies she doesn't agree with don't get passed. Power as such isn't a bad thing when those that have it use it wisely. But do they? There is a new tone in Germany. It is one that no longer abides by the noble customs of diplomacy. Whispering, suggesting and hinting have been replaced by ranting and blustering. (...) The economically powerful Germany got its way. In order to put the struggling countries on the right track -- on the German track, that is -- Merkel brought in the International Monetary Fund so as to free Germany from having to play the strict overseer. Still, it has not escaped notice that Berlin is in charge. (...) German sociologist Ulrich Beck, who has since passed away, referred to the pressure being exerted on Europe from Berlin as "Merkiavellismus." [2]
As a matter of fact, one of the stated goals of the bureaucrats that created EEC was (and remains) to contain Germany.
"The German question produced the Europe of today, as well as the
transatlantic relationship of the past seven-plus decades. Germany’s
unification in 1871 created a new nation in the heart of Europe that was
too large, too populous, too rich, and too powerful to be effectively
balanced by the other European powers, including the United Kingdom. The
breakdown of the European balance of power helped produce two world wars
and brought more than ten million U.S. soldiers across the Atlantic to
fight and die in those wars. Americans and Europeans established NATO
after World War II at least as much to settle the German problem as to
meet the Soviet challenge, a fact now forgotten by today’s realists—to
“keep the Soviet Union out, the Americans in, and the Germans down,” as
Lord Ismay, the alliance’s first secretary-general, put it. This was also
the purpose of the series of integrative European institutions, beginning
with the European Steel and Coal Community, that eventually became the
European Union. As the diplomat George Kennan put it, some form of
European unification was “the only conceivable solution for the problem of
Germany’s relation to the rest of Europe,”
First, I didn't say it would be better if Britain was in control of Euro. Obviously it would be better if the Euro was controlled to the interests of all the Eurozone, not particular to the interests of some top-dog states. Which might even need a "two/three zone" currency.
Second, if you ask whether it be better for Britain to control its own currency, that's a given. EU aside, that's what any economist will tell you: a country is better off when it controls its own currency. Denying that is as kooky as being an anti-vaxxer.
I could make the argument that London domination of the pound has had the same effect on peripheral counties of the UK. The forces are the same - money flows in to the capital, but the peripheral areas need to keep buying globally produced goods, so money flows out.
That's not a correct description, but it's true in some way.
1) QE did not transfer money with any caveat to pay bondholders. QE is not like giving cash to a country. The ECB buys up bonds on the open market (thus mostly from banks, which supports your point).
2) The buying up of bonds drastically reduces interest rates, because artifical demand is created.
3) The South can now borrow money for pretty low interest rates on high debt-loads. Italy wouldn't be able to afford high interest rates very long.
4) Northern banks holding higher paying bonds in their portfolio profited because the high-coupon bonds values increase.
> Pearson Engineering's Tom Clark has a good story about how the firm's previous owners used to handle industrial relations. Every time the workforce went on strike, which was often, one of the Pearsons would buy a new Rolls-Royce Silver Cloud and drive through the picket line, waving two fingers at his own staff.
That does rather sum up 1970s industrial relations. Can you imagine managers like that implementing the Toyota Production System? Or anything else where the workers have an individual autonomous contribution? Of course not. So that's why the remaining large car factories are foreign-owned.
What has survived and flourished is the small high tech manufacturing industry - McLaren, satellites, etc.
I remember one discussion around the Nissan car plant in Sunderland (North East England).
After the Economist Intelligence Unit described it as the most productive car plant in Europe it was pointed out that what had changed compared to other UK plants was not workforce but the management.
> Can you imagine managers like that implementing the Toyota Production System? Or anything else where the workers have an individual autonomous contribution? Of course not. So that's why the remaining large car factories are foreign-owned.
I'm not convinced that what you apparently feel is a fair outcome, is an actual logical consequence. Where did manufacturing go? To SE Asia. What is the industrial relations and individual autonomous contribution like in a SE Asian sweatshop?
I mentioned Toyota for a reason. Car manufacturing did not go to China. And the whole basis of Japanese manufacturing style after W Edwards Deming's influence is very different from sweatshops.
I don't know about "fair", but Nissan Sunderland being Japanese-run is not a bad outcome compared with the other possibilities of the 60s and 70s labour relations problem which included fears of both left and right wing coups. In the end we got moderate state violence and mass unemployment. That does need to be put right, but we can't go back to the 70s.
Much of what we now import from China did not exist in the 1950s and was developed as a technology in America, so it's not so much "went to China" as "failed to develop here". And there we do need to have a discussion about business and tech development in the UK.
(Textiles also worth considering, but that was always a sweatshop from industrialisation onwards. The brief attempt to run it with SE Asian (Bangladeshi largely) workers in Britain didn't stave off the flight to cheapest.)
All of the main parties in the UK keep skirting around the start of the solution to "rebalancing" the economy: massively increased taxes on the rich to pay for the required investment. This is not a new idea; low taxes for the wealthy are a relatively modern phenomenon yet the social mobility gap has been getting wider. There is surely enough support for it among a properly informed plebiscite, but they are never given the option or they are lied to or given the idea that this tax might affect them when they get super wealthy.
That’s one possible approach. The one I favour is a total moratorium on new building work in the South East. That’s the only way to force both workers and companies to look to the North.
The problem with “tax the rich” is that the numbers of truly rich are tiny and you could swallow their entire fortunes and they’ll be gone in a week. Exercise for the reader, how long would Richard Branson’s entire wealth run the NHS for?
All together, UK billionaires have 156 billion pounds [1]. Put a 4% wealth tax on that, and you'll get 6.25 billion pounds. You won't even be making their fortunes smaller, so you could take that amount for forever.
The NHS spent 140 billion pounds in 2017 [2], so you would cover 4.5% of the NHS budget just with this wealth tax. That's not insignificant, and we're just looking at billionaires here.
UK millionaires own 6.5 trillion pounds [3]. With just a 3% wealth tax, we raise 195 billion pounds, which is a lot more than the NHS budget.
So yes, since Richard Branson is not the only rich person, you can tax the rich, let their fortunes still increase by 1% per year, and fund the entire NHS and more.
> All together, UK billionaires have 156 billion pounds [1]. Put a 4% wealth tax on that, and you'll get 6.25 billion pounds. You won't even be making their fortunes smaller, so you could take that amount for forever.
What a smart and novel idea. Taxing wealthy business owners has worked so well all over the world for years. Let's hope they will never find out about ways to move/split their assets and tax residence.
Billionaires and multi-millionaires can just up and leave to more tax friendly destinations.
There are actually tax advantaged schemes (EIS and VCT) in the UK to try and funnel money into emerging tech and new businesses. However you would only invest in them if you were extremely wealthy do too the risks involved.
Capital flight is easily challenged if you have the cojones.
Paper assets require a supportive legal framework to transfer them usefully. Imagine creating a blacklist of tax evaders with the sort of teeth we see with, say, the sanctions on Iran/Venezuela/the DPRK. Shut down their economic life until they'll yield a useful cut.
Physical assets can't easily be schlepped across national borders without anyone noticing.
If you take 4% of somebody’s wealth, of course you are making their fortune smaller. Perhaps what you mean is that their fortunes would normally be growing at 4% per year, so overall, they would not decrease. Maybe. I suspect that billionaire’s capital is rather mobile, though.
Why not tax the merely rich too? I'm probably going to be one of them in a few years. I want to pay more tax to help benefit the society that let me get to where I'm going, but I absolutely want everyone else in my position to pay too.
Anyway, I agree with your idea about the south east. As the article points out, Thatcher's policies focused on the south east and ignored the "North" (part of the problem being no one can agree where the North starts or ends). Ideas like HS2 pushed by the new Tories are also just making it possible to live in the north and yet still work in London, not solving any problem.
Ideas like HS2 pushed by the new Tories are also just making it possible to live in the north and yet still work in London . . .
I would also argue that it allows businesses and industry to operate in the north without the location penalty. In other words, it effectively brings the areas served closer together. I won't argue whether it is the best solution, but it isn't as harebrained as some of the detractors try to imply.
I don't get this "location penalty" idea. We have the internet. Businesses already operate globally without the need to constantly fly upper management around the world. The problem is that the talent live in the south east because that's where the jobs are. It's not about the transport links between the south and the north, it's the lack of well compensated jobs in the north to attract business there because of all the other reasons.
Why does ycombinator want applicants to move to the Bay area? Whether it makes sense or not, the location effect is real. Improving transport links increases the size of the "local" area allowing the network effects to reach farther.
Like the parent, I'm also in favour of proper taxation. And as they said, it needs to be a policy. Nobody is striving to place themselves alone in disadvantaged position, as you surely understand. The rhetoric of it being possible to donate one's money is utterly unhelpful.
I specifically said I want to pay more as long as everyone else in my position also pays more. I also don't want hospitals to have to rely on altruism, they should rely on tax.
Those wanting to "tax the rich", what is their definition of rich? I would hazard a guess it's much less than Richard Branson, and therefore the numbers would be much higher
Much of the problem is that so much of the problem-causing wealth sloshing around the country is from overseas, and often from questionably lawless petro-states like Russia and Saudi Arabia.
The most basic start would be to have a proper non-capped property tax. Let's copy socialist New Jersey and charge people 1.89% of their property value a year.
I can't speak for the American system, but as I would propose for the UK it would work like council tax, assessed on the value that you own - which is the full value of the property. We kind of gave up on tax subsidies for mortgage borrowers with MIRAS.
"Despite Joseph's assertions, the middle-aged engineers who were laid off didn't go away and become software engineers – they largely landed up in worse jobs or on the scrapheap."
Reminds me of something a popular 2020 candidate says regularly about retraining failures as automation arrives to suck up jobs.
UK might need a Yang like $1000 pound/month citizen's dividend.
These minimum guaranteed income ideas are really interesting to me. It would remove a lot of the ritual humiliation we put benefit claimants through when they are desperate and often feeling worthless before we push them to sell themselves into a job. Not to mention the reduction in the cost to administrate the welfare system. Some might choose to use their income to take a stress break from work or write a novel or paint something; there may be untold benefits to such a system to society.
Britain makes the best cars in the world, the problem is they only make a few dozen a year. All that hard work, just for Lewis Hamilton to lead a parade.
He's talking about the Formula 1 cars. I think except of two teams all current teams are based in Britain (Ferrari and Toro Rosso). Even more, most of them are in a 50 Kilometer radius in the Midlands. And that has historical precedence. Since the beginning of the F1 World Cup, there has been only a single year when the Championship-Winning car was not either from GB or Ferrari.
This article provides no evidence that deindustrialization is the cause of any of the ills it reports on, it just lays out facts about the economy with a few sentimental appeals to serve as tentposts.
I personally think that the UK has outsourced manufacturing without investing sufficiently into STEM to make up for it.
A loss of political support for manufacturing has caused a loss of manufacturing in the US too - we wanted nice clean information jobs, no dirty factory jobs spewing chemicals all over
I recall an article (or blog post) from a couple years ago- it made the case that US productivity had been grossly mis-indexed since the 80s, in part due to assumptions about CPU power relating to economic productivity where Moore's Law essentially inflated the numbers. Does anyone happen to remember this same article, and have a link?
EDIT: here it is, from 2012. I saw it again in 2016 when it was brought up to explain Trump's election, by way of reminding American elites just how bad "deindustrialization" and globalization really had been for the heartland:
"Moreover, at least some of the productivity gains shown in U.S. computer manufacturing reflect the increasing power and decreasing prices that come with innovation. When a computer chip doubles in efficiency, that can turn up in a doubling of output and productivity in computer manufacturing. But that is not what is ordinarily thought of as manufacturing efficiency.
“It is innovation that makes it look like they’re manufacturing a whole lot more in the U.S. than they really are,” Atkinson said."
> The extraordinary real GDP growth in these sub-industries, in turn, is a result of the adjustment of price indexes used to deflate computers and semiconductors for improvements in quality.
The only reason China dropped out of super power status was tremendous sabotage/criminality by the top 5 economies of the world.
There rise is not a fluke, this is an inevitability of the planet we live on, India is next and it will outperform China by the end of this century (like it did in the past, pre-British invasion).
General ignorance of world history in the West will make this transition harder than it needs to be for Western populations.
Bit more perspective. At the end of 1800’s and start of 1900’s China was still almost feudal agrarian society that didn’t modernise due to internal reasons. Neighbouring Japan had their Meiji restoration that made it a powerful modern country, that happily joined others in bashing China.
So at that point China was already decades behind Japan. After this came the Chinese civil war between Kuomingtang and the Communists, interrupted by Japan attacking again.
After the Communists won it spent the next 40 years shooting itself in the foot, again delaying its rise.
Comparable places like ROC (Taiwan) and South Korea have taken off like rockets economically, and are now great places in relation to their populations. China will be the biggest superpower if it reaches same production per capita as their non communist counterparts in Taiwan.
tl;dr:
China mostly shot itself in the foot repeatedly. First Qing dynasty then commies, pushing them back over a hundred years.
>Bit more perspective. At the end of 1800’s and start of 1900’s China was still almost feudal agrarian society
Starting in the 20th century? Skipping the first 100 years of Western criminality in China is like talking about the Titanic sinking and ignoring the iceberg it hit.
Western powers collapsed Chinese/Indian/African trade routes. An industrial revolution is great, but it works even better if you murder/colonize/enslave all the competition.
Western powers engaged in industrial espionage and stole trade secrets (Ex. Notice the countries with tea industries (the most consumed beverage on the planet)? Almost all didn't exist before this UK crime in the 1800s). In fact Chinese leadership even offered tons of free tea (one of the most valuable commodities at the time) to the UK if they could just stop producing poison (opium) around the world. The UK ended up stealing tea production secrets from China instead of accepting this offer.
Western power's "opium as a way to avoid trade deficits" policy not only led to countless murders and abuses but also led to 30% of the under 25 population being addicted to opium in China. Even worse, when this turned into an epidemic, Christian missionaries then started giving opium addicts morphine and promoting it as a cure (not a doctor but quite sure that is adding gas to a fire).
Western powers (primarily US) gave the Japanese authorization to expand West into Asia in 1905, after all the drugging they did for the better part of a century (Teddy Roosevelt was a douchebag and his wealth was mostly inherited drug money, unpopular historical fact). If you don't know why Pearl Harbor happened, it is because we reneged on this secret treaty with Japan and assisted China in the 2nd Sino-Japanese war.
The problem with popularized historical narratives (very true in the US especially) is they can be manipulated and mischaracterized for propagandizing effect. Economic history, on the other hand, cannot be played with the same way and what originally was characterized as exceptionalism now we can see is just criminality on an unprecedented scale. We can track most of the opium money, domestic and international trade flows, and economic outcomes of these countries during this period more accurately and thoroughly than using any other set of data points, like political speeches/rhetoric etc...
The UK’s big problem is low productivity, whether in industry or services, and it takes good management, worker training and the judicious application of capital to fix. The financial sector sucks up the best and brightest, leaving only the second-class going into industry, in a form of Dutch disease.
I've found that many workers in the UK are really not that bothered about work. They'll actually turn down work if they don't feel they'll get enough money for it. Just the other day I was in the garage and they were convincing me not to get work done on my car. At that time there were two mechanics just sitting in the shop doing nothing. My theory is these workers are relatively happy with what they get currently, but the next step up is just so far away that they don't even bother going for it.
I wouldn't say the financial industry sucks up the best. In my experience it sucks up the most qualified and pays them too much. But none of the smartest people I know stayed in finance for long.
The article is wrong. The UK manufactures more stuff than it ever has before. The Guardian reported this as a "decline" but is only a relative decline, and a decline in the numbers of people employed. Actual value of all stuff made added together has grown.
When you read The Guardian, you know that every question they ask about the current ills of the world, will have the blame directed toward "Thatcher and neoliberalism", except occasionally when it is the fault of "neoliberalism and Thatcher".
The Guardian has good journalism, but it is not a useful place to get interesting or insightful discussions of such topics. You are either already in the choir it is preaching to, or outside the church and completely bewildered that people can believe in such a strange world view.
As to whether Britain has been socialist, my preferred measure is the fraction of govt 'control' to GDP. The 'control' means normal govt spending plus the production of nationalized (hence often also unionized) industries. Just looking at govt spending to GDP shows the chaotic socialist 1970s, the Blair-Brown escalation early this century, and the inexorable growth of welfare spending:
Any country where the govt controls ~40% of national production is certainly socialist. Obviously countries like France are much worse, where direct govt spending is >55% plus all their ownership shares in industries, including railways, utilities, banks, engineering and newspapers:
