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PaperclipPerfector  9mo ago (text post)   31913 thread views

Culture War Roundup for the week of July 17, 2023

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Scott: Highlights from the comments on British economic decline.

Britain is suffering a decline in productivity and income which isn’t fully reflected in nominal GDP statistics.

This could be because it’s expressed in a declining pound, rather than in declining nominal wages/profits. I don’t know enough economics to feel like I have good intuitions about declining currency values.

It could also be partly because post-recession economic growth happened more in new employment than in higher wages for the already-employed.

Potential causes are Brexit, a dysfunctional real estate market, and underinvestment in R&D - but low confidence in all of these.

I’m interested particularly as a follow up to my discussion with @FirmWeird. Here we have an economy that struggles, where the citizens recognize it struggles, but the standard indicators look normal. I wanted to see if this would show up in the energy metrics we were discussing, but this data stops too early to say.

I really expect to see its energy per capita tank. Wealth getting swallowed up in housing has to push down energy consumption, at least compared to capital investment. I don’t think the UK has had anything like the shale boom distorting its cost per BTU, either.

So all the graphs and quantitative data show there's no UK economic decline... and the response is that people write articles wondering how the economic decline has managed to hide itself from statistics?

Hear hoofbeats, think horses not zebras. Maybe there's just no economic decline? Hell, if we're trying to be rationalists, the decline's absence from the statistics means that DEFINITIONALLY there is no decline.

As many of the commenters on Scott's site speculate: one gets the feeling that "UK Economic Decline" is something that europhilic economists want to be able to talk about (and blame on Brexit), therefore they assume it exists as an article of faith and spend their time conjuring up epicyclic reasons for how those dastardly Tories managed to hide it from every single graph in the world by gaming the metrics.

Hear hoofbeats, think horses not zebras.

This logic only holds true if you're NOT currently in Southern Africa, however.

Which is to say, surrounding context matters a lot.

It is possible for metrics to hide important factors. For example, there could be an increase in inequality, which means that most people are worse off while a few people are much better off. This seems to be the opposite of what has actually happened, though. One that seems more likely to me is an increase in prices swallowing more income, so people are worse off. Given what I've heard about housing costs, it rings true, although I can't seem to easily find great data. The US could easily be in a similar position, but being wealthier to begin with masks it.

So all the graphs and quantitative data show there's no UK economic decline

I wonder. I know the UK has put a lot of its eggs into the basket of having London be a major financial services centre, and I don't know how much that distorts statistics. I know for Ireland, the way we set up our economy, we need two metrics: the on paper one, and the real one. Because we put so much effort into luring in American multinationals who use Dublin as the convenient hub to move profits around, there's a lot of "Wow the GDP is so high, the Irish are so rich" which doesn't reflect reality:

Ireland's reliance on large multinational intellectual property has resulted in GDP for 2022 exceeding the EU average by over 130%.

Preliminary figures released by statistics agency, Eurostat reported Ireland as having the second-highest GDP in the EU last year, which, along with Luxembourg has far outpaced all other EU countries.

...Multinationals including Apple, Facebook, Pfizer, and Google, among others alone accounted for almost 56% of the so-called total value added to the economy, up from 53% in 2021, the CSO said. Sectors dominated by multinationals, including information and communications, expanded greatly.

However, the CSO found that an alternative measure of economic activity known as Modified Domestic Demand, or MDD, which more accurately reflects the activities for Irish households and businesses in the domestic economy, contracted a second time in Q4 of 2022 by 1.3%.

With MDD falling by 1.1% in Q3, its consecutive decline fulfilled the criteria for a technical recession.

There's even a name for this. I don't know if the UK has the same thing going on, but I do think it's fair to say that there are pockets of very thriving economy, and other swathes of what would be the rust-belt in the USA which have declined and never replaced their former activity with something new.

That might be overselling it a little.

Like everyone else, the UK really did decline in 2008 and 2020. Did they rebound more or less than the EU? Than comparable countries? Did they ever actually recover from 2008? Did anyone?

Economists and pundits like poking at questions like these. They’re just not necessarily answerable.

The real problem is that every economic metric is like reading tea leaves. Fifty different proxies for “can I afford my rock and roll lifestyle?” and/or “will that be true in X years?”

I don’t think no data is true. From the article I posted here.

https://twitter.com/Birdyword/status/1639536708059533313

I think it’s starting to be real.

https://www.sambowman.co/p/britain-is-a-developing-country

UK salaries are low but after discussing this on Reddit last week I learned that UK income statistics are often disposable income (after tax). That doesn't fully explain the gap but it does narrow a little apples to apples.

Yes, by household disposable income the UK is still much lower than the US (by far the world’s number one), but very close to peer countries like France, Denmark, Ireland, Canada, New Zealand and so on.

$125k is still an insane salary for someone working at a car wash in the US. Median personal income is just over $40k. Median household income is like $75k. In this case the Reddit thread about it when it was posted suggested this was a big place and the ‘manager’ was actually a relatively senior employee with a large staff.

Bucees are massive gas stations, they can be remote so it might be hard to find staff and they've been opening up a ton of new locations so they need to hire quickly. That said even the cashier is making $17/hr which is incredible to me, I made $6/hr as a cashier in 2005. A married couple working as cashiers at a gas station would have a household income of $68k which is not bad at all with rural Alabama COL.

That said even the cashier is making $17/hr which is incredible to me, I made $6/hr as a cashier in 2005.

I saw something on Twitter recently showing that the highest wage growth in recent years has been to people making under twenty dollars an hour. That matches my anecdotal evidence well enough. I saw a McDonalds offering $17.50 an hour a few days ago. Ten years ago that would have been a literal minimum wage job.

You have to understand the Bucee’s business model to make sense of that sign. Every point on a major interstate highway has thousands of people who pass by every day. Those people all need to stop for food, gas, and restrooms somewhere. The marginal return on reputation in a market like that is huge. The Bucee’s model is to earn and maintain a reputation for elite service, especially when expanding into new areas like Alabama, where people have heard the hype, but may not have personally experienced it before. You will never see an “out of order” sign at Bucee’s. You will never see shit stains on your toilet at Bucee’s. You will always have toilet paper in your stall at Bucee’s.

These signs themselves are part of the aura. They are displayed prominently at the entrance to the store. Everyone entering the store knows that the workers are professionals and that this is a quality establishment. They have to be to deal with this.

That's a very good point. I think their strategy is working because they do have a good reputation and get a lot of buzz which is weird for a gas station. I know people who have driven over an hour just to go to a newly opened Bucees.

Productivity is an issue - China has more industrial robots than the UK does, per worker in manufacturing: https://balloonone.com/blog/2021/01/15/industrial-robots-could-improve-uk-productivity/

That source was using the 2017 figures - China as of 2020 had a similar robot to worker ratio as the US, double what it was then. Britain's been falling behind on industrial development, they're not even in the top 20 anymore: https://www.therobotreport.com/10-most-automated-countries-wordlwide-in-2020/

High energy prices, uncompetitive regulations (take the horrendous legal farce on Clarkson's Farm for example) and high immigration keeping labour cheap is damaging to productivity growth. I suspect much of Britains wealth and GDP is in nebulous service-sector financial/legal shenanigans, concentrated around London. It's hard to name a novel British company apart from Deepmind and they got gobbled up by US tech.

Marginal Revolution linked to this on Britain today. Honestly felt like creating a post on it since I thought it added good points since UK failing is the current thing.

https://www.sambowman.co/p/britain-is-a-developing-country

Honestly a cheaper currency shouldn’t be causing their electricity and home building prices to blow out. Each would seem to have some influences from imports but they probably get a lot of their building products internally or from Europe which also has had its currency cheapen.

His thesis is England is no longer on the technology frontier. Looking at this data does make me thing England is sort of the poors now to be a little hot. They need a lot of reform.

The relative wages shown between England and low end US labor seems appalling. If I was English and rich and wanted to wake up my country I’d start running fake ads advertising cleaning labor jobs in America at relatively high wages. Could be a good political ad. “Come to America and be a janitor so you can send remittance home”.

The relative wages shown between England and low end US labor seems appalling.

The same is true for almost all Western Europe, it’s not a UK-specific problem.

And from the article you link:

This assumes that AI does not turn out to be a steam engine- or electricity-level invention.

Clearly this is not a smart man, as AI is vastly more significant than even either of the above.

Clearly this is not a smart man, as AI is vastly more significant than even either of the above.

Really? In one sense his statement is almost trivially true given that no steam engine, no AI.

AI is vastly more significant than even either of the above.

I want to use this as an opportunity to remember that Paul Krugman quote from the 90s about how the internet will be no more significant than the fax machine, which everyone routinely dunks on him for. Show me where in this chart of GDP growth that the internet was widely adopted.

/images/16899491071105075.webp

It's the part where the growth stays at the level it's at despite there being no other recent transformative breakthroughs in the past 20 years.

Zoom out to a scale of millennia, using human population as a proxy for wealth. Here's a representative chart (ignore the dotted projections for this exercise). We are on the insane upward spike at the very rightmost edge. What sustains that meteoric rise? The answer is periodic transformations, such as the steam engine, indoor plumbing, electricity, the washing machine, commercial air travel, the personal computer, the internet and the smartphone. Your question seems to assume that this rate of improvement is just background radiation, some sort of fundamental base rate against which innovations should provide additional upside, but in fact it is sustained by these breakthroughs.

Krugman deserves all the scorn that he gets for that quote; the fax machine was useful, but nowhere near on the scale of the internet, and not nearly the same economic engine.

In the first Industrial Revolution, economic historians now describe productivity as a gradual acceleration rather than a takeoff. It took decades for many new technologies to result in productivity growth. In the West, the internet has not eliminated vast amounts of lower paid labor (eg. unskilled labor, much clerical labor, hospitality sector labor, cleaners, day laborers, construction works), so it stands to reason that productivity effects are unimpressive. It makes existing workers somewhat more efficient, but these efficiency gains have often been redirected toward redundant or otherwise unproductive economic functions (eg. instead of a 10 slide powerpoint deck, we can now make a 50 slide powerpoint pitch deck).

Given the internet ultimately begat the huge training sets on which LLMs are built, I think that years from now it will be clear that it was a technology that allowed for other technologies which did yield large increases in productivity.

This assumes that AI does not turn out to be a steam engine- or electricity-level invention. If it is, then it probably trumps everything else. I think it is worth betting a lot on AI, but not assuming away our other problems.

Come on, he's an AI bull. And it's not like the UK is in a great place to get big growth from AI. US or China - there is no number 3.

AI is vastly more significant than even either of the above.

Other than tail-end optimists and pessimists, who actually believes this with such conviction?

After all, AI has yet to bring forth productivity gains of similar magnitude to electricity and steam engines. I do believe it will happen, but not with 100% confidence.

After all, AI has yet to bring forth productivity gains of similar magnitude to electricity and steam engines

It brings to me. Lately my job is just - I need this kind of sql for this type of db. I use it as typist that I just error check.

Really? As much as.. electricity? I don't know if you are underestimating electricity or overestimating llms. I too have not written much code in the recent past (gpt did), but I think electricity aids out productivity in a thousand other ways than just being a typist.

Electricity with information theory. Pure electricity is only good for making things spin and heat. It's when we harnessed it to move and process information that it became transformative. Also those kind of inventions are like a pyramid. Of course without the bottom layer the tops are impossible.

I am bullish on LLM - so far in humanity advancement the bottleneck was the human mind and energy. Right now there is possibility to be able to overcome the mind part.

I agree with your broader point, but... cheap indoor lighting and washing machines were transformative.

AI has yet to bring forth productivity gains of similar magnitude to electricity and steam engines

I think it could be about a decade before we see the full impact of even our current GPT-4-level models.

I think back to the usurpation of print media by the internet. It took roughly 5-10 years from the time (in the US) when broadband internet access first became widespread, to the time when print news was firmly seen as a relic of the past and digital news was the default.

The same is true for almost all Western Europe, it’s not a UK-specific problem.

The UK has the massive advantage of its entire population being native English speakers. They should be blowing places like France and Belgium out of the in the internet age.

If you think that's bad wait until you hear about Belize.

No they don't. The people that speak English poorly vastly outnumbers the people that speak it correctly worldwide which paradoxically puts the native speakers at disadvantage.

I doubt the difference between knowing English natively and as a second language is enough to grant you economic superpowers.

Clearly this is not a smart man, as AI is vastly more significant than even either of the above.

Without justification this is just booing. You can disagree with someone without saying they aren't smart.

I wouldn’t call it booing, but yeah.

Yeah fair enough, just insulting other users who believe totally normal things.

Looks like the mods don’t care though.

I wasn’t insulting another user, to be clear, I was insulting the author of a linked article.

You’re insulting anyone who thinks ai is not more significant than the steam engine or electricity.

Agree mostly. Part of UK’s problem is bad geography. Brexit I think had some merits but would never work because trade is heavily influenced by closeness so structural issues in Europe will effect them. If they could move their island to 100 miles off the coast of Maryland they would boom.

But building costs and power seems like some forced errors they should have ways to correct. I bet there are areas they could be better even if the trading union doesn’t produce as many benefits as being tied into NAFTA with related transportation costs and time zone benefits. But they can’t fully integrate into our supply chains due to geographic distance.

The best thing the UK could possibly do is become the 51st state of the US (more realistically, something that involves full economic union with the US in all but name). Liberals could approve because Brits are ‘more progressive’, Cons could approve because it’s another 65m white people or something. Sadly, the British are too proud.

Isn't it pretty much that already? The untouched problem of the UK is that they (let's be realistic, we really mean England here since it is the major part that anyone cares about) have been declining since the end of the Second World War. The collapse of steel*, shipbuilding, coalmining and the heavy industrial manufacturing sector damaged the traditional economy, leaving large parts of the country to fall behind, while growth was concentrated in the south around new services like the stock exchange and financial services.

They haven't been a world power for a long time, the Empire is long gone and the Commonwealth does its own thing. Whatever fond notions they have about the special relationship, they are the junior partner to the USA and if they entered into economic union as suggested, they would be swallowed up much worse than ever the EU did to them.

*British Steel being nationalised, re-privatised, sold, resold, bought out to be propped up, and finally becoming part of an Indian giant conglomerate before the remnants of the historic entity were shut down and a new group using the old name started up, to be taken over in its turn by a Chinese enterprise, is a case to study.

*British Steel being nationalised, re-privatised, sold, resold, bought out to be propped up, and finally becoming part of an Indian giant conglomerate before the remnants of the historic entity were shut down and a new group using the old name started up, to be taken over in its turn by a Chinese enterprise, is a case to study.

You missed out an additional cycle of nationalisation and privatisation under Attlee/Churchill in the 1950s.

The untouched problem of the UK is that they (let's be realistic, we really mean England here since it is the major part that anyone cares about) have been declining since the end of the Second World War. The collapse of steel*, shipbuilding, coalmining and the heavy industrial manufacturing sector damaged the traditional economy, leaving large parts of the country to fall behind, while growth was concentrated in the south around new services like the stock exchange and financial services.

I think a big part of this was the feeling that (thanks to a combination of empire & socialism) there was a feeling that

steel*, shipbuilding, coalmining and the heavy industrial manufacturing sector

was something that we'd grown out of as a civilisation. The future for us was meant to be easy, fun, profitable thought-work and not backbreaking, dirty, boring labour. Suggesting to people that they think seriously about getting into these sectors got the same instinctive revulsion that you'd get if you asked adults to go and do A-levels again.

(That said, I agree with @Butlerian that if the data doesn't show significant decline we should be careful about just throwing it away in favour of an emotional 'truth'. It doesn't feel like things are going well ATM though.)

Suggesting to people that they think seriously about getting into these sectors got the same instinctive revulsion that you'd get if you asked adults to go and do A-levels again.

I think it was as much the fact that by the 1980s these sectors were sucking up subsidies with little hope for the future, and those already employed in them were struggling to hang on to their jobs. The problem in these sectors was NOT a labour shortage!

40 years later, countries like China are still dumping cheap steel/coal as an international dick-waving contest. Young people were wise to stay away from these industries, assuming they'd even somehow get a chance to be hired.

Good point, thanks for the counter. You're correct that a lot of the misery from the 1980s was about a lack of jobs in the factories / mines, not the opposite.

I was thinking about the Blair years; the implicit promise behind the pledge that 50% of people would go to university was, "Someday everyone will go to university and work in creative / research industries. You and your children will never have to work in a factory again." The idea that, as a country, we might want to develop these industries post 1995 was mostly mocked when it occasionally reared its head.

There are a couple of other complicating factors IMO: one is dumping, as you say; the other is a long history of organised labour. The problem with having an industrial sector with expensive machinery in the UK specifically is that you know it will be taken hostage sooner or later. Take the current situation with the trains: the Conservatives are trying desperately to get drivers out of trains and ticket officers out of ticket offices. It's not because they'll save that much money, or because these people are useless (they're technically disposable but still very nice to have). It's to prevent strikes. Contrast with Japan, where they still have manned ticket offices at every (urban) station and train drivers with white gloves; employees will never seriously attempt to overthrow the system and can therefore be trusted with it.

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I’m picturing hundreds of airstrips on flattened hills in Scotland. The whole island vibrates as 10,000 jet engines roar to life at once. Tonight we attack Canada where they least expect it. From the North.

I definitely don’t approve of them becoming a state, the UK isn’t culturally compatible. I mean they don’t even have a first amendment like protections to say nothing of the royal family. I’d sooner annex Mexico.

I mean they don’t even have a first amendment like protections to say nothing of the royal family.

I think a comma would help in this sentence!

Yes, for all the ideas that the US is more "socially conservative" than the UK, the first amendment means that in many ways US is a lot less conservative, in the European sense of "conservative". On e.g. free speech, the UK is somewhere between e.g. Germany/Austria on the one hand and the US on the other.

That would boost Americas ego for UK to be the 51st essentially. But regardless I just don’t think it works trade wise to be a 6 hr flight and any trade goes thru cargo ships.

Alaska and Hawaii function as States but neither is dependent on a high amount of low value trade. Combined they have 2 million people. One runs a military base and tourism. And the other is crabs, oil, and some military. That is a lot different than plugging into automobile manufacturing or even pcm jobs of managing some interstate business.

The Brexxit promoters did sell linking more with US trade but I don’t think it’s realistic. There just aren’t enough trade connections for 65 million people.

The article Scott cites from Foreign Policy is one of the worst I've ever read on the UK, its argument is absurd and it's full of blatant untruths, and it's written by a hardcore pro-EU culture warrior who cheers every failure for the UK from abroad. In general, both the American and continental press have been very down on the UK since 2016 for culture war reasons, and

Some examples:

The UK is much wealthier than it was in the 1970s. The UK's tax rates on high incomes are high for the OECD, it's tax rates on low incomes that are particularly low, and which represent a central cause of the UK's deficit problem. The US, by far the wealthiest country in the world, has higher inequality than the UK. And in by far the most important measure of prosperity (household per capita disposable income), the UK is just below Denmark and Canada and just above Ireland and Japan. It is certainly poorer than America, but it has been poorer for a long, long time. From The Telegraph:

Apart from a brief period during the Great Depression in the early 1930s, the UK's GDP per head has consistently dragged behind the US since 1880

So this isn't a 'new' trend. The UK is fine, and because of the structure of its economy, it goes through comparative periods of outperformance and underperformance vs Europe. It was comparatively wealthier because of a struggling post-dotcom-bust dollar and a surging pound in the 2000-2008 period, and the effects of this make economic growth since 2008 look particularly anaemic in a way that allows people with a political grudge to bear (primarily against Brexit or the Conservative Party) to write narratives like those Scott cites.

Britain had a brief chance to become a more prosperous country after World War Two. But it was the socialist government of Clement Attlee that destroyed this possibility. His Town and County Planning Act destroyed growth in London and Birmingham to prop up failing northern industrial cities that in many cases had not existed for a century, instead of encouraging migration to the booming south (which had always been where the bulk of Britain's population was based). It also hamstrung new construction around those southern cities. Attlee's inheritance tax uniquely destroyed British family owned small-and-medium sized companies. In every continental country (most notably Germany, which obviously has a currently thriving manufacturing sector), postwar inheritance taxes allowed extensive exceptions for family businesses. In the UK, Labour explicitly chose to avoid these exceptions to attack capitalism, ramming through 60%+ tax rates on estates including businesses, and Britain's extraordinary legacy of skilled manufacturing - the legacy of the industrial revolution and its homeland itself - was destroyed as a result.

The UK is still paying the price for its six year folly with socialism (in part because Churchill and the conservatives who succeeded him after 1955 failed to turn back enough of the changes until Thatcher, and by then it was mostly too late). Britain's rare successes since 1945 are in spite of this burden, not because of it.

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Haha, I've corrected it to companies. The Isle of Man actually has a very interesting economic history, it was a hugely successful tourist destination until air travel to Southern Europe became common, then its economy collapsed until it became an offshore financial center and developed the TT/bike racing tourism industry further. Now it's quite prosperous, although Douglas is still kind of a dump (they are trying to improve it).

Could immigration be part of the puzzle? Lots of low skill immigrants raise the GDP but lower it per capita and lower productivity.

I think so. When a country is replacing automatic car washes with immigrants holding buckets, it's clear that immigration affects productivity.

https://theconversation.com/the-return-of-the-hand-car-wash-and-the-uks-productivity-puzzle-39594

Perversely, instead of using the high-tech cleaners at garages we choose to pay others to wash our cars using the most inefficient of methods – a hose, bucket, water, soap and sweat. The hand car wash has grabbed around half of the commercial car wash market in the UK.

Yeah, the reason for that is that the "high tech cleaner at the garage" is pretty much a set of revolving brushes that blow soapy water over the car as it drives through where you have to remove aerials, fold in the wing mirrors, and so on yourself. Car valeting services (the hand car wash) offer a 'premium' service - they promise to get the car clean in all the nooks and crannies the car wash misses, they'll clean the inside as well, do detailing etc. as you require:

We specialise in all areas of mobile car valeting and detailing offering many different levels of services from just a quick exterior wash or interior clean to a whole showroom interior and exterior makeover!

Take car care to the next level with our range of detailing services, including paint correction, enhancement and protection detailing.

So if you're going to get your car cleaned, you might decide that instead of a quick automated wash, you'll hand it in for the full service and get a shiny, new-smelling car back without having to lift a finger yourself.

We're living in a service economy now, you have the choice between quick automatic wash or full service wash. Does the author of that piece complain that "nowadays, perversely, instead of getting the high-tech vending machine instant coffee people go to special shops that have humans making hot and cold beverages by hand!"

Presumably the argument is that, in a country running hot, there would be many high-paying jobs in growing areas. The people now hand-washing cars would be doing those jobs and tempting them back would require larger salaries than most people can afford. In other words, the author is complaining about the absence of Baumol's cost disease.

https://www.vox.com/new-money/2017/5/4/15547364/baumol-cost-disease-explained

On the other hand: in Scott's post he discusses how the PPP GDP is the metric which has suffered, as opposed to the market-exchange GDP. That is to say—the recent decline seems to be one of purchasing parity, where your money doesn't buy as much.

For easily-transportable goods, which could just as well be sold in any country, this doesn't apply much: you get pretty much the market exchange rate. It is the non-transportables, like services, which are cheaper in some countries than others, leading to a PPP adjustment.

That is: the complaint that PPP hasn't caught up is a complaint that labor is particularly expensive, that services are affected by Baumol's cost disease or the like. Developing countries typically have favorable PPP exchange rates, because they have plenty of cheap labor; people who don't have better things to do with their time than to work for cheap.

If we accept the difference between PPP GDP and market-exchange GDP as describing the issue, that seems to imply that the problem is that there is too much cost disease (or other reasons why labor is generally expensive), not too little.

As a Brit who moved back home a few years ago after 7 years in the US, I am also very interested in this debate.

To be honest, since moving back, it feels like my standard of living has continued to improve along the lines of a typical mid-life success sequence. Lots of stuff is cheaper in the UK; groceries, phone plans, and pharmacy items are all examples. The NHS makes private health insurance strictly unnecessary, but as the NHS gets more stretched, more and more of us middle-class Brits have it. But my wife and I pay £250/month for a very nice private policy that covers us and the kids and has very good deductibles and copays.

On the other hand, wages are dramatically higher in the US (if my wife were working in the US in an equivalent role, she’d be earning 3x her current salary). Also, US suburban house prices and sizes are extremely reasonable by UK standards.

One extra bit of context that may be useful: British people love to moan, whether it’s about the weather, public transport, or overpaid celebrities. It’s practically a national pastime. Similarly, we like to talk about national decline, precisely because we have generally quite positive associations with the past; these differ across the political spectrum, of course, with eg the left being more likely to get nostalgic about pre-Thatcher days of strong unions and national industries, but they’re there. Brexit has supercharged a lot of these pessimism/declinism narratives, with the globalist side of the political spectrum keen to point to Brexit as the cause of this new phase of decline (even worse than the previous one!). So I’d caution Americans and other non-Brits from getting too sucked into this — while Britain does have real problems, the whole debate is also systematically infested by national psychodrama.

Standard of living is steady because Britain is still consuming a lot. That's not a contradiction if the country is funding that consumption through more debt (both public and private) or through selling assets. That's not sustainable, and part of the recent economic problems has been people realizing that the party can't go on like this forever with no sign of growth.

So I’d caution Americans and other non-Brits from getting too sucked into this — while Britain does have real problems, the whole debate is also systematically infested by national psychodrama.

Every country has it's own self-image and psychodrama - Britain's is only noteworthy because it's the one most legible to Americans, and because it is probably going to destroy the country if it carries on.

That's not a contradiction if the country is funding that consumption through more debt (both public and private) or through selling assets. That's not sustainable

If I've learned anything from observing the American Debt drama, it's that increasing debt is the most sustainable thing in the world.

The UK, isn't America. America has gotten away with high levels of debt because it is growing. It also faces a less steep demographic hill.

US tfr is like 1.65, UK is like 1.62, not a huge difference. Immigration levels per capita are similar, the UK is notably higher officially but the US sees more illegal migration which probably cancels that out.

Britain's is only noteworthy because it's the one most legible to Americans, and because it is probably going to destroy the country if it carries on

Most of this comes down to "Britain is the second-largest Anglo country after the US, with Canada and Australia in distant 3rd and 4th place". And the UK isn't going to be destroyed by poor governance, if it is destroyed by anything it will be large scale population movement/change, and that's as true for France and Germany and Sweden as it is for the UK.

£250/month, especially when it's for what I assume is some sort of gap insurance to cover what the NHS can't, sounds really high to me. That's ~$320 a month. Here in the US, at my last 3 or 4 employers, the monthly premium for the nicer plans has never been more than about $200/month after my employer's contribution. And there are always high deductible plans that are significantly cheaper than that.

Wasn't employer health insurance in the US started off as a way around caps on salaries/high taxes? Instead of paying Jim Smith $5,000 a month and he pays the full whack of taxes on that, you pay Jim $3,000 and offer him a health insurance scheme?

Something like that anyway, and then it became a way of enticing workers in tight labour markets - we offer health benefits! - and now it's become the way you pay the sky-high prices for medical care, and the prices can be sky-high because the providers assume everyone will be paying via insurance?

As such, this is another way that trying to transfer incomes has shot ourselves in the foot. We wanted to transfer incomes, so we came up with ideas like capping salaries or putting high taxes on high salaries. But the market still wants to pay people for skills, so various benefit schemes arose. Many of them have been slowly neutered, but the "healthcare and education are wonderful" effect makes it difficult to pull back on employers contributing to healthcare.

However, the guiding principle for healthcare policy is transferring incomes from the young, wealthy, and healthy to the old, poor, and sick. To do this without letting people in on the secret of just how insanely much it is doing this, it has to be designed in a way to maximally hide everything that is happening. So, nobody sees. Sure, I can kinda see how my mother is able to fight cancer using the best treatments in the world, hopping in to and out of the hospital as her condition goes up and down, while only paying her OOPM for the year so she doesn't even have to think about the "cost" of any given treatment choice... but I can't really see all the millions of people who are essentially forced to pay for it.

The side effects of all of this hiding are pretty brutal. First, since no one knows how much any actual thing costs, it leads to all the price inflation/"discount" games and ultimately, more money going to the healthcare industry. Since the healthcare industry benefits from this, they're more than happy to work with the government on the income transferring piece as a sort of baptists/bootleggers union. Second, they have to actually figure out how to force people to pay into the scheme, which results in the punishments needing to be harsh for people who are young and/or wealthy and/or healthy who try to opt out of having their income transferred away. Since it turns out to be slightly difficult to simply coerce individuals directly (see the individual mandate SCOTUS case) and because historical efforts to futz with the tax system resulted in widespread employer plans, by far the best mechanism the government can use to force people into this income transfer is by coercing employers. After all, they're the ones currently footing the accounting bill for a massive amount of the hidden costs!

The final result is a massive and perverse system that absolutely crushes people for, for example, lose their job and suddenly realize that buying their own insurance is incredibly expensive. We try to transfer incomes back to these folks via a variety of means, but the whole edifice of constant problems stems from our constant desire to transfer incomes more and more, in every situation possible, but trying to hide how much we're doing it.

Huh, I hadn't actually heard that before but seems to be so, plus taking advantage of the new tax deduction.

It’s £250/month for a family of four with a £150 annual deductible, and it’s specifically to allow us to get electives done quickly in fancy hospitals.

It might be hard to compare but I have a decent gap insurance in Sweden and that is like 18$ a month and I've never had any co-pay. Let's say we have a family of four, thats about 70$ a month (rates are different for children and usually bundled with other insurance policies so it makes it hard to add them up).

£250/month, especially when it's for what I assume is some sort of gap insurance to cover what the NHS can't, sounds really high to me. That's ~$320 a month. Here in the US, at my last 3 or 4 employers, the monthly premium for the nicer plans has never been more than about $200/month after my employer's contribution. And there are always high deductible plans that are significantly cheaper than that.

Most PMC employers in the UK like mine pay for private health insurance with no monthly premium. This includes all of big tech, finance, consulting, corporate law etc.. The deductible is usually pretty reasonable. £250/month for two people is pretty reasonable, it's mainly to guarantee you a US-style of care in case you get cancer or something else very serious, where you might spend weeks in hospital. I still think the figure seems high though, looking at the BUPA website and pricing in young people with no underlying conditions etc..

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