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Scott: Highlights from the comments on British economic decline.
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.
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 same is true for almost all Western Europe, it’s not a UK-specific problem.
And from the article you link:
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.
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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.
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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.
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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.
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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.
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.
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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.
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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.
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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.
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I doubt the difference between knowing English natively and as a second language is enough to grant you economic superpowers.
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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.
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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.
You missed out an additional cycle of nationalisation and privatisation under Attlee/Churchill in the 1950s.
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I think a big part of this was the feeling that (thanks to a combination of empire & socialism) there was a feeling that
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.)
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.
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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 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.
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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.
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