8 ms·

Everyone who bought into neoliberalism in the 80s is now experiencing economies that are mysteriously failing to thrive. Correlation isn't cause, except when it

Everyone who bought into neoliberalism in the 80s is now experiencing economies that are mysteriously failing to thrive. Correlation isn't cause, except when it is.

pipes 2y ago
So what was the alternative? Continue with the disaster of central planning. Which is the actual thing that destroyed British industry.
- sjducb 2y ago
  Go back to what the western world was doing in the 50’s. High tax and high public spending. In 1950 the US had a top marginal tax rate of 91%. The 50s were great, let’s do that again. https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/ https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing...
  - twoodfin 2y ago
    Federal receipts as a % of GDP has gone up and down by a few % but is basically unchanged from the 1950’s: https://fred.stlouisfed.org/graph/?g=ockN https://fred.stlouisfed.org/graph/?g=ockN Meanwhile the income tax burden, specifically, has gotten considerably more progressive: https://www.ntu.org/foundation/tax-page/who-pays-income-taxes https://www.ntu.org/foundation/tax-page/who-pays-income-taxe...
    - raoulj 2y ago
      Is figure 4's legend correct from the NTU link? It would seem that the grey is the top 1%, not bottom 50%.
    - yndoendo 2y ago
      The NTU only goes back to the 1980s and does not actually include any analysis of the 1950s. Looks like NTU also is positing their stance on the ideology that the 1% are the only ones that create jobs but they are the ones to most likely invest in large corporations. There seems no prospect to help the mom and pop shops or small companies that have stronger solutions beyond what large corporate tunnel vision provides. My personal taxes keep going up with these "Tax Cuts". I don't expect them to come down with the push for tax cuts for the wealthy. Nor has my income gone up. Wouldn't buying more local would reduce energy used for transportation of goods and services? I see less Amazon purchases and deliveries as a net benefit for the majority and a net deficit for the wealthy investors. Wealth that stays more in the community versus being shipped to Wall Street.
      - rangestransform 2y ago
        The majority definitely benefits from being able to buy cheap Chinese goods and go on cheap Europe trips while $BIGCOMPANY vacuums up money from the rest of the world to prop up the USD. In which other country can a guy cutting hair (out of many examples) afford so many international vacations?
        verall 2y ago
        > In which other country can a guy cutting hair (out of many examples) afford so many international vacations? In Europe? They can just take a train. Young people backpack all over Europe on shoestring budgets.
        yndoendo 2y ago
        This sounds like you are applying shifting baseline syndrome. [0] [1] [2] Another way to phrase shifting baseline is when people apply what they experience with an over weighted value. For example, the cost of living has skyrocketed in the USA compared to older generations, with the cost of a home, healthcare, and basic goods and services. Wages have been stagnant while the wealthy keep gaining more and more of economic power. Economic mobility is also quite low compared to 10 or 20 years ago. Those trips are most likely more cost effective compared to the 1950s because the technology was new and still evolving. Air travel was a luxury and now it is a commodity. Engineers have improved the technology to craft air plains while finding ways to reduce production cost. Cost savings have not be pushed to the working class and are shifted to the wealthy. If the wage increase of CEOs was linear with your wage. It would be higher and also be less of an economic for burden the masses. People over value the rare lucky ones as being the average of all. Kind of how a number of Americans are against taxing the wealthy because they believe they are or will become wealthy. It is rare to become wealthy and often those that are lacking in empathy and morals. Just like my Uncle that worked for Arbys, which is a millionaire because he believes and supports the idea that those below him should not be payed a living wage. At leas I learned from him that those franchises often run on debt because they try and pull out every last dollar into the owner's pockets. He was looking to become the owner but the debt was too great to buy in, as a millionaire. [0] https://esajournals.onlinelibrary.wiley.com/doi/10.1002/fee.1794 https://esajournals.onlinelibrary.wiley.com/doi/10.1002/fee.... [1] https://en.wikipedia.org/wiki/Shifting_baseline https://en.wikipedia.org/wiki/Shifting_baseline [2] https://earth.org/shifting-baseline-syndrome/ https://earth.org/shifting-baseline-syndrome/
  - pipes 2y ago
    And then what happened to those nationalised industries? https://m.youtube.com/watch?v=O7PVEaPh6Fw&pp=ygUUYWRhbSBzbWl0aCBpbnN0aXR1dGU%3D https://m.youtube.com/watch?v=O7PVEaPh6Fw&pp=ygUUYWRhbSBzbWl...
    - teamonkey 2y ago
      (Link from the Adam Smith Institute, a neoliberal thinktank)
      - linksnapzz 2y ago
        The story of British Leyland is enough to scare anyone w/ even half a brain away from ever allowing British politicians to have even the least bit of influence over a company that competes anywhere near the consumer space.
        teamonkey 2y ago
        You mean how it was successfully and profitably-run for over a decade part-nationalised, following its near-collapse as a private company? Or how in the Thatcher era, the government began to privatise and divest the most valuable parts of the company (and arguably a huge amount of British soft power) for little return to the taxpayer? Notably it sold Mini to BMW, Leyland to DAF, Jaguar and Land Rover to Ford. Privately-run Ford nearly went bust in the 2000s and famously had to be bailed out by the US taxpayer, but they sold off Jaguar and Land Rover to Tata in the process.
        linksnapzz 2y ago
        successfully and profitably-run for over a decade part-nationalised, "successful" and "profitably run", taking into consideration the recommendation to Tony Benn that the Wilson gov't provide 1.2 billion pound investment; plus the buyout of existing BL shareholders at 1/5 the value of their shares, plus the pre-existing tariff regime, without even touching the product and manufacturing issues that had dogged them since the Austin-Morris days. Pigs can fly, if given enough thrust...Labor didn't fix BL, it just kept the shambolic structure upright, albeit canted at a weird angle. Jaguar was privatized in '84 (and nobody at BL was going to pony up money for new models) and only in '90 did Ford purchase it, for as it turned out, way too much. "Nothing wrong with this that a bulldozer couldn't fix" said a Ford exec after first touring the Jaguar plant on Brown's Lane in Coventry. Neither BMW nor Ford were ever able to make Land Rover work as a reliably profitable company. Also, Ford was never bailed out in 2008. Alan Mullaly hocked almost all of the company to get liquidity before the crash, which was prescient. After that, the entirety of the former Ford "Premier Automotive Group" (save for Lincoln) was jettisoned, as it was in the long term a money-loser. Jaguar and Land Rover to Tata, Volvo to Geely, and Aston-Martin to ...some Saudis.
  - tick_tock_tick 2y ago
    I mean I think most billionaires would welcome the 1950s tax code. The reduction in their bills would be amazing! The only people paying those number would be our new "middle" class doctors, lawyers, etc people who make a lot of income but limited investments.
  - orangecat 2y ago
    High tax and high public spending. Government spending was a slightly lower percentage of GDP than today (https://fred.stlouisfed.org/series/FYONGDA188S https://fred.stlouisfed.org/series/FYONGDA188S), and a whole lot of that was defense (https://econofact.org/u-s-defense-spending-in-historical-and-international-context https://econofact.org/u-s-defense-spending-in-historical-and...). The 50s were great, let’s do that again. Assuming you're not a non-white person, or a woman who wants a career. Although getting rid of Medicare would certainly help the budget.
    - Chinjut 2y ago
      Is there something intrinsic to the general setup of government spending in the 1950s that makes it incompatible with equal rights for minorities and women? These would seem to be orthogonal issues.
    - sjducb 2y ago
      Obviously I’m talking about re-creating the economic policies of the 1950s, not the equality policies.
  - milesrout 2y ago
    Nobody paid a 91% tax rate in practice. What a silly thing to focus on, a headline marginal tax rate nobody paid. The 1950s were great for places like the US, Australia and New Zealand because they were initially fairly unregulated (wartime planning was ended and the market took over) and they weren't destroyed by the war. The UK had rationing into the mid 50s while its empire crumbled. It was not some heavenly place. Millions left the UK for the new world, including my grandparents, because the UK was in a dire state. Over the next 20-30 years, the anglosphere became progressively more regulated, more taxed, more controlled, and more unionised. You needed a licence to import a new car. You needed a licence to import magazines. Exchange rates and interest rates were controlled by the government and adjusted for political purposes. Large parts of the economy were run inefficiently by the state as make-work schemes to prop up "full employment" policies that were politically popular but very expensive. The oil shock of the 1970s revealed how bad this scheme of economic management was at responding to changing conditions. When you have thea biggest economy in the world and you were untouched by a war that decimated your competitors it is easy to look good. But the system was not capable of responding to changing conditions because it was largely driven from the top down by bureaucrats and politicians for the sake of implementing their preferred social policies and winning elections respectively. In the 1980s, this came to a breaking point. This was true everywhere, but the clearest example is not the US or the UK but New Zealand. It nearly went bankrupt trying to maintain completely unsustainable exchange rates for political reasons and there was a small consitutional crisis when the outgoing government refused to implement the incoming government's instructions to lower the exchange rate. The economy was dominated by what were called "Think Big" schemes: government infrastructure projects that made no financial sense but looked good on election posters and "created jobs". Large numbers of businesses did entirely pointless things like assembling Japanese cars from components more expensively than could be done in Japan, because car imports were restricted. Many other examples exist. Agriculture was heavily subsidised by the state. The new governments in the 1980s (I am talking about the West generally now) did away with much of this rubbish. They lowered trade barriers, reduced or eliminated subsidies, and privatised the elements of the public sector that had no reason to be run by the public sector. Sometimes when privatised these businesses failed. But that wasn't because they were privatised, it was because they had never made any financial sense in the first place. The fundamental point is that the 1950s system was the same as the 1960s and 1970s system. If you go back to the 1950s, you also go back to the 1970s. The system was the same, the same incentives would exist, and the result would be similar. Give the economy over to the public sector and in a few years all thought of making what customers want and will pay for is substituted with using economic power to achieve social goals and win elections. We had better make sure we hire more Xs, they deserve more representation, and we better put money into Y, people love to hear about Y, and so on. And before long it is a lumbering inefficient mess.
  - yardstick 2y ago
    That environment was directly proceeded by WW2, which required massive capital investment to rebuild Europe[1]. In the UK we were still rationing candy and meat during the early 50s[2]. So, I’m not particularly eager to recreate those conditions. 1. https://en.m.wikipedia.org/wiki/Marshall_Plan https://en.m.wikipedia.org/wiki/Marshall_Plan 2. https://en.m.wikipedia.org/wiki/Rationing_in_the_United_Kingdom https://en.m.wikipedia.org/wiki/Rationing_in_the_United_King...
- bojan 2y ago
  I have a lot of issues with the work of Yanis Varoufakis, but he has one idea that I'd like to see tried out - and that is that the workers own 10% of their companies, obviously getting 10% of the profit, etc. At least in Europe it's uncommon to get shares as part of the compensation package, so I'm curious how the Varoufakis' idea would end up working. It's worth giving it a shot.
  - pipes 2y ago
    It doesn't sound like a bad idea. And I really wish the UK was more like the USA with stock options etc
  - nradov 2y ago
    I'm not opposed to employee ownership but there's no reason to think that mandating a certain minimum level will produce better outcomes. The equity dilution will increase the cost of capital, making it harder to start or expand businesses. Most workers have virtually zero ability to impact shareholder returns. And low skilled workers really need cash today, not the possibility of dividends or capital gains tomorrow.
  - lotsofpulp 2y ago
    As a worker, I don't want 10% of my business' volatile profit. I would rather have reliable cash, that I can invest in SP500. Or at least that is the case with employees of most businesses.
  - milesrout 2y ago
    Why would I want that as a worker? I am already "overexposed" to the fortunes of my employer by virtue of being employed by it. If my employer does well then I get paid better, get a bonus, etc. If my employer does poorly then I risk being laid off. Why would I want to invest in that risk when I have relatively little control over the success of the business, as opposed to investing the same amount of wealth in the market more generally or in assets that counter some of that risk? Also, generally, why should employees automatically get some part of the company? What have they done to deserve it?
- threatofrain 2y ago
  Central planning is likely going to be a feature of all manners of world-leading governments, whether we're talking about dictatorships, theocracies, or democratic republics. Imagine, for example, a country that wants to get into the chip game at this point.
  - deleted 2y ago
    [deleted]
- msm_ 2y ago
  I have zero doubts everyone commenting has read the article. That makes me even more surprised, that some people seem to have conclusions that are in direct opposition to what the article says. Since, as we all know, the article is about how central planning ruined the UK economy, and the later reforms were not enough to fully unblock it. Particularly, it postulates deregulating housing and making it harder for people to oppose new investments (especially related energy and infrastructure)..
Aromasin 2y ago
Turns out Thatcherism only works as long as the state still has assets to sell off. The delusion that assets would stay in the hands of the working and middle class, and not end up with the wealthy inheriting class, has to be one of the biggest political failures of our government on the modern era. It's lead to the possible death of the Conservative Party if they fail to fight off Reform and the Liberal Democrats.
- robertlagrant 2y ago
  You're surely joking. The IMF isn't bailing out the UK, and there aren't 3 day week debates because of the failing power supply. What's led to the death of the Conservative party is them doing exactly the opposite what a lot of Conservative voters want: bigger economy, and slower immigration.
  - bojan 2y ago
    Didn't they get more independence with Brexit? Regarding the immigration, sure, the Conservative voters maybe want less of it, but rich and influential Tories actually like immigration as it allows their businesses to thrive (even more). The UK has more capital going around than her own people.
    - mattlondon 2y ago
      Legal immigrants from the EU were not the only source of migrants to the UK. Many come from elsewhere, legally and otherwise. Guess what: we have Brexit but we still have immigrants - impossible?! </sarcasm> Plus it was never about immigration, it was always - I think - a classic case of misinformation and greed from many places. Sadly many people fell for it.
      - EndShell 2y ago
        > Plus it was never about immigration, It was partly about immigration. According to these surveys 43% of people that voted leave think immigration should be reduced. https://public.tableau.com/views/Publicopinion2023/FIGURE9?:language=en-GB&:embed=y&:sid=&:redirect=auth&:embed_code_version=3&:loadOrderID=8&:display_count=y&:origin=viz_share_link https://public.tableau.com/views/Publicopinion2023/FIGURE9?:... > it was always - I think - a classic case of misinformation and greed from many places. Sadly many people fell for it. Why do many people assume that if someone thinks differently about a particular political issue they must have fooled somehow? Considering there is data that partially contradicts your belief that it wasn't about immigration, maybe your assessment about their level of understanding of the issues involved is also incorrect.
necubi 2y ago
The article is about how bad land and energy policies (essentially central planning)—dating from the post-war period—are holding back the British economy. Is that neoliberalism?
- PaulKeeble 2y ago
  It is, neoliberalism has been about taking away all the state owned assets and putting everything the country needs into private hands. This is what has stalled the economy and its what is fuelling enormous inequality. Calling for ever more of it falls really flat now after 40 years of the same strategy making things worse for the average person.
- notahacker 2y ago
  In fairness, whilst the article isn't without merit, it's authored by some of the only people in the UK that actually describe themselves as neoliberal. Which is why it's focusing on "green belt" planning policy and ignoring the fact that local government built 150k houses per annum back when we actually built enough houses, something which "neoliberal" policy introduced by Thatcher essentially made impossible, and why the article treats rail privatization as a success story rather than a service British citizens use in increasing numbers despite sky-high prices (and the government subsidising it more than when they owned it!) not least because markets have moved the jobs into London and the affordable housing out of London.
  - deleted 2y ago
    [deleted]
  - modo_mario 2y ago
    > ignoring the fact that local government built 150k houses per annum back when we actually built enough houses Well you had 728,000 people coming in last year. It'll have to be a bit more i fear.
- Nasrudith 2y ago
  Neoliberalism is basically the economic equivalent of "allelopathic medicine" - it is a word used mostly by kooks who are out of the mainstream for damned good reasons.
daedrdev 2y ago
neoliberalism is strongly against NIMBYism and other restrictions on land that are a big part of the UK's problems from my understanding
BurningFrog 2y ago
To some people, everything is still Thatcher's fault, 40 years later.
- PaulDavisThe1st 2y ago
  As one of those people ... it's not so much that everything is (still) Thatcher's fault. Had she not won in 1979, doubtless the UK would be facing a different mix of problems, some the same, some different. But Thatcher set the ball in motion on the tracks it has been on more or less since her first win, and it is those tracks that are the fundamental source of many of the problems in the UK (not all of them, but the biggest ones).
  - ryan93 2y ago
    [flagged]
Johanx64 2y ago
>Everyone who bought into post-industrial "service-based" economies in the 80s is now experiencing economies that are mysteriously failing to thrive. Fixed it for you. I don't understand how people expect "service-based" economies to actually create any long term wealth, growth or prosperity. Unless you're serving increasingly ever more lattes to each other, and increasingly more "banking-services" and rents upon rents somehow are supposed to "grow" the economy and create "prosperity". The more you de-industrialize your country and outsource everything, to the point that you're failing to meet even your energy needs, and competency to quickly build plants or infrastructure projects dies out, it's bound to result in at best stagnation and going to the shitter eventually, it's a matter of time.
- BeFlatXIII 2y ago
  At the same time, uncapped growth of physical goods is simply impossible on a finite planet. No matter how you slice it, forever growth is delusional.
- reverendsteveii 2y ago
  How does one reindustrialize, then?

Everyone who bought into neoliberalism in the 80s is now experiencing economies that are mysteriously failing to thrive. Correlation isn't cause, except when it is.

pipes 2y ago

So what was the alternative? Continue with the disaster of central planning. Which is the actual thing that destroyed British industry.

sjducb 2y ago
Go back to what the western world was doing in the 50’s. High tax and high public spending. In 1950 the US had a top marginal tax rate of 91%. The 50s were great, let’s do that again. https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/ https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing...
- twoodfin 2y ago
  Federal receipts as a % of GDP has gone up and down by a few % but is basically unchanged from the 1950’s: https://fred.stlouisfed.org/graph/?g=ockN https://fred.stlouisfed.org/graph/?g=ockN Meanwhile the income tax burden, specifically, has gotten considerably more progressive: https://www.ntu.org/foundation/tax-page/who-pays-income-taxes https://www.ntu.org/foundation/tax-page/who-pays-income-taxe...
  - raoulj 2y ago
    Is figure 4's legend correct from the NTU link? It would seem that the grey is the top 1%, not bottom 50%.
  - yndoendo 2y ago
    The NTU only goes back to the 1980s and does not actually include any analysis of the 1950s. Looks like NTU also is positing their stance on the ideology that the 1% are the only ones that create jobs but they are the ones to most likely invest in large corporations. There seems no prospect to help the mom and pop shops or small companies that have stronger solutions beyond what large corporate tunnel vision provides. My personal taxes keep going up with these "Tax Cuts". I don't expect them to come down with the push for tax cuts for the wealthy. Nor has my income gone up. Wouldn't buying more local would reduce energy used for transportation of goods and services? I see less Amazon purchases and deliveries as a net benefit for the majority and a net deficit for the wealthy investors. Wealth that stays more in the community versus being shipped to Wall Street.
    - rangestransform 2y ago
      The majority definitely benefits from being able to buy cheap Chinese goods and go on cheap Europe trips while $BIGCOMPANY vacuums up money from the rest of the world to prop up the USD. In which other country can a guy cutting hair (out of many examples) afford so many international vacations?
      - verall 2y ago
        > In which other country can a guy cutting hair (out of many examples) afford so many international vacations? In Europe? They can just take a train. Young people backpack all over Europe on shoestring budgets.
      - yndoendo 2y ago
        This sounds like you are applying shifting baseline syndrome. [0] [1] [2] Another way to phrase shifting baseline is when people apply what they experience with an over weighted value. For example, the cost of living has skyrocketed in the USA compared to older generations, with the cost of a home, healthcare, and basic goods and services. Wages have been stagnant while the wealthy keep gaining more and more of economic power. Economic mobility is also quite low compared to 10 or 20 years ago. Those trips are most likely more cost effective compared to the 1950s because the technology was new and still evolving. Air travel was a luxury and now it is a commodity. Engineers have improved the technology to craft air plains while finding ways to reduce production cost. Cost savings have not be pushed to the working class and are shifted to the wealthy. If the wage increase of CEOs was linear with your wage. It would be higher and also be less of an economic for burden the masses. People over value the rare lucky ones as being the average of all. Kind of how a number of Americans are against taxing the wealthy because they believe they are or will become wealthy. It is rare to become wealthy and often those that are lacking in empathy and morals. Just like my Uncle that worked for Arbys, which is a millionaire because he believes and supports the idea that those below him should not be payed a living wage. At leas I learned from him that those franchises often run on debt because they try and pull out every last dollar into the owner's pockets. He was looking to become the owner but the debt was too great to buy in, as a millionaire. [0] https://esajournals.onlinelibrary.wiley.com/doi/10.1002/fee.1794 https://esajournals.onlinelibrary.wiley.com/doi/10.1002/fee.... [1] https://en.wikipedia.org/wiki/Shifting_baseline https://en.wikipedia.org/wiki/Shifting_baseline [2] https://earth.org/shifting-baseline-syndrome/ https://earth.org/shifting-baseline-syndrome/
- pipes 2y ago
  And then what happened to those nationalised industries? https://m.youtube.com/watch?v=O7PVEaPh6Fw&pp=ygUUYWRhbSBzbWl0aCBpbnN0aXR1dGU%3D https://m.youtube.com/watch?v=O7PVEaPh6Fw&pp=ygUUYWRhbSBzbWl...
  - teamonkey 2y ago
    (Link from the Adam Smith Institute, a neoliberal thinktank)
    - linksnapzz 2y ago
      The story of British Leyland is enough to scare anyone w/ even half a brain away from ever allowing British politicians to have even the least bit of influence over a company that competes anywhere near the consumer space.
      - teamonkey 2y ago
        You mean how it was successfully and profitably-run for over a decade part-nationalised, following its near-collapse as a private company? Or how in the Thatcher era, the government began to privatise and divest the most valuable parts of the company (and arguably a huge amount of British soft power) for little return to the taxpayer? Notably it sold Mini to BMW, Leyland to DAF, Jaguar and Land Rover to Ford. Privately-run Ford nearly went bust in the 2000s and famously had to be bailed out by the US taxpayer, but they sold off Jaguar and Land Rover to Tata in the process.
        linksnapzz 2y ago
        successfully and profitably-run for over a decade part-nationalised, "successful" and "profitably run", taking into consideration the recommendation to Tony Benn that the Wilson gov't provide 1.2 billion pound investment; plus the buyout of existing BL shareholders at 1/5 the value of their shares, plus the pre-existing tariff regime, without even touching the product and manufacturing issues that had dogged them since the Austin-Morris days. Pigs can fly, if given enough thrust...Labor didn't fix BL, it just kept the shambolic structure upright, albeit canted at a weird angle. Jaguar was privatized in '84 (and nobody at BL was going to pony up money for new models) and only in '90 did Ford purchase it, for as it turned out, way too much. "Nothing wrong with this that a bulldozer couldn't fix" said a Ford exec after first touring the Jaguar plant on Brown's Lane in Coventry. Neither BMW nor Ford were ever able to make Land Rover work as a reliably profitable company. Also, Ford was never bailed out in 2008. Alan Mullaly hocked almost all of the company to get liquidity before the crash, which was prescient. After that, the entirety of the former Ford "Premier Automotive Group" (save for Lincoln) was jettisoned, as it was in the long term a money-loser. Jaguar and Land Rover to Tata, Volvo to Geely, and Aston-Martin to ...some Saudis.
- tick_tock_tick 2y ago
  I mean I think most billionaires would welcome the 1950s tax code. The reduction in their bills would be amazing! The only people paying those number would be our new "middle" class doctors, lawyers, etc people who make a lot of income but limited investments.
- orangecat 2y ago
  High tax and high public spending. Government spending was a slightly lower percentage of GDP than today (https://fred.stlouisfed.org/series/FYONGDA188S https://fred.stlouisfed.org/series/FYONGDA188S), and a whole lot of that was defense (https://econofact.org/u-s-defense-spending-in-historical-and-international-context https://econofact.org/u-s-defense-spending-in-historical-and...). The 50s were great, let’s do that again. Assuming you're not a non-white person, or a woman who wants a career. Although getting rid of Medicare would certainly help the budget.
  - Chinjut 2y ago
    Is there something intrinsic to the general setup of government spending in the 1950s that makes it incompatible with equal rights for minorities and women? These would seem to be orthogonal issues.
  - sjducb 2y ago
    Obviously I’m talking about re-creating the economic policies of the 1950s, not the equality policies.
- milesrout 2y ago
  Nobody paid a 91% tax rate in practice. What a silly thing to focus on, a headline marginal tax rate nobody paid. The 1950s were great for places like the US, Australia and New Zealand because they were initially fairly unregulated (wartime planning was ended and the market took over) and they weren't destroyed by the war. The UK had rationing into the mid 50s while its empire crumbled. It was not some heavenly place. Millions left the UK for the new world, including my grandparents, because the UK was in a dire state. Over the next 20-30 years, the anglosphere became progressively more regulated, more taxed, more controlled, and more unionised. You needed a licence to import a new car. You needed a licence to import magazines. Exchange rates and interest rates were controlled by the government and adjusted for political purposes. Large parts of the economy were run inefficiently by the state as make-work schemes to prop up "full employment" policies that were politically popular but very expensive. The oil shock of the 1970s revealed how bad this scheme of economic management was at responding to changing conditions. When you have thea biggest economy in the world and you were untouched by a war that decimated your competitors it is easy to look good. But the system was not capable of responding to changing conditions because it was largely driven from the top down by bureaucrats and politicians for the sake of implementing their preferred social policies and winning elections respectively. In the 1980s, this came to a breaking point. This was true everywhere, but the clearest example is not the US or the UK but New Zealand. It nearly went bankrupt trying to maintain completely unsustainable exchange rates for political reasons and there was a small consitutional crisis when the outgoing government refused to implement the incoming government's instructions to lower the exchange rate. The economy was dominated by what were called "Think Big" schemes: government infrastructure projects that made no financial sense but looked good on election posters and "created jobs". Large numbers of businesses did entirely pointless things like assembling Japanese cars from components more expensively than could be done in Japan, because car imports were restricted. Many other examples exist. Agriculture was heavily subsidised by the state. The new governments in the 1980s (I am talking about the West generally now) did away with much of this rubbish. They lowered trade barriers, reduced or eliminated subsidies, and privatised the elements of the public sector that had no reason to be run by the public sector. Sometimes when privatised these businesses failed. But that wasn't because they were privatised, it was because they had never made any financial sense in the first place. The fundamental point is that the 1950s system was the same as the 1960s and 1970s system. If you go back to the 1950s, you also go back to the 1970s. The system was the same, the same incentives would exist, and the result would be similar. Give the economy over to the public sector and in a few years all thought of making what customers want and will pay for is substituted with using economic power to achieve social goals and win elections. We had better make sure we hire more Xs, they deserve more representation, and we better put money into Y, people love to hear about Y, and so on. And before long it is a lumbering inefficient mess.
- yardstick 2y ago
  That environment was directly proceeded by WW2, which required massive capital investment to rebuild Europe[1]. In the UK we were still rationing candy and meat during the early 50s[2]. So, I’m not particularly eager to recreate those conditions. 1. https://en.m.wikipedia.org/wiki/Marshall_Plan https://en.m.wikipedia.org/wiki/Marshall_Plan 2. https://en.m.wikipedia.org/wiki/Rationing_in_the_United_Kingdom https://en.m.wikipedia.org/wiki/Rationing_in_the_United_King...
bojan 2y ago
I have a lot of issues with the work of Yanis Varoufakis, but he has one idea that I'd like to see tried out - and that is that the workers own 10% of their companies, obviously getting 10% of the profit, etc. At least in Europe it's uncommon to get shares as part of the compensation package, so I'm curious how the Varoufakis' idea would end up working. It's worth giving it a shot.
- pipes 2y ago
  It doesn't sound like a bad idea. And I really wish the UK was more like the USA with stock options etc
- nradov 2y ago
  I'm not opposed to employee ownership but there's no reason to think that mandating a certain minimum level will produce better outcomes. The equity dilution will increase the cost of capital, making it harder to start or expand businesses. Most workers have virtually zero ability to impact shareholder returns. And low skilled workers really need cash today, not the possibility of dividends or capital gains tomorrow.
- lotsofpulp 2y ago
  As a worker, I don't want 10% of my business' volatile profit. I would rather have reliable cash, that I can invest in SP500. Or at least that is the case with employees of most businesses.
- milesrout 2y ago
  Why would I want that as a worker? I am already "overexposed" to the fortunes of my employer by virtue of being employed by it. If my employer does well then I get paid better, get a bonus, etc. If my employer does poorly then I risk being laid off. Why would I want to invest in that risk when I have relatively little control over the success of the business, as opposed to investing the same amount of wealth in the market more generally or in assets that counter some of that risk? Also, generally, why should employees automatically get some part of the company? What have they done to deserve it?
threatofrain 2y ago
Central planning is likely going to be a feature of all manners of world-leading governments, whether we're talking about dictatorships, theocracies, or democratic republics. Imagine, for example, a country that wants to get into the chip game at this point.
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msm_ 2y ago
I have zero doubts everyone commenting has read the article. That makes me even more surprised, that some people seem to have conclusions that are in direct opposition to what the article says. Since, as we all know, the article is about how central planning ruined the UK economy, and the later reforms were not enough to fully unblock it. Particularly, it postulates deregulating housing and making it harder for people to oppose new investments (especially related energy and infrastructure)..

Aromasin 2y ago

Turns out Thatcherism only works as long as the state still has assets to sell off. The delusion that assets would stay in the hands of the working and middle class, and not end up with the wealthy inheriting class, has to be one of the biggest political failures of our government on the modern era. It's lead to the possible death of the Conservative Party if they fail to fight off Reform and the Liberal Democrats.

robertlagrant 2y ago
You're surely joking. The IMF isn't bailing out the UK, and there aren't 3 day week debates because of the failing power supply. What's led to the death of the Conservative party is them doing exactly the opposite what a lot of Conservative voters want: bigger economy, and slower immigration.
- bojan 2y ago
  Didn't they get more independence with Brexit? Regarding the immigration, sure, the Conservative voters maybe want less of it, but rich and influential Tories actually like immigration as it allows their businesses to thrive (even more). The UK has more capital going around than her own people.
  - mattlondon 2y ago
    Legal immigrants from the EU were not the only source of migrants to the UK. Many come from elsewhere, legally and otherwise. Guess what: we have Brexit but we still have immigrants - impossible?! </sarcasm> Plus it was never about immigration, it was always - I think - a classic case of misinformation and greed from many places. Sadly many people fell for it.
    - EndShell 2y ago
      > Plus it was never about immigration, It was partly about immigration. According to these surveys 43% of people that voted leave think immigration should be reduced. https://public.tableau.com/views/Publicopinion2023/FIGURE9?:language=en-GB&:embed=y&:sid=&:redirect=auth&:embed_code_version=3&:loadOrderID=8&:display_count=y&:origin=viz_share_link https://public.tableau.com/views/Publicopinion2023/FIGURE9?:... > it was always - I think - a classic case of misinformation and greed from many places. Sadly many people fell for it. Why do many people assume that if someone thinks differently about a particular political issue they must have fooled somehow? Considering there is data that partially contradicts your belief that it wasn't about immigration, maybe your assessment about their level of understanding of the issues involved is also incorrect.

necubi 2y ago

The article is about how bad land and energy policies (essentially central planning)—dating from the post-war period—are holding back the British economy. Is that neoliberalism?

PaulKeeble 2y ago
It is, neoliberalism has been about taking away all the state owned assets and putting everything the country needs into private hands. This is what has stalled the economy and its what is fuelling enormous inequality. Calling for ever more of it falls really flat now after 40 years of the same strategy making things worse for the average person.
notahacker 2y ago
In fairness, whilst the article isn't without merit, it's authored by some of the only people in the UK that actually describe themselves as neoliberal. Which is why it's focusing on "green belt" planning policy and ignoring the fact that local government built 150k houses per annum back when we actually built enough houses, something which "neoliberal" policy introduced by Thatcher essentially made impossible, and why the article treats rail privatization as a success story rather than a service British citizens use in increasing numbers despite sky-high prices (and the government subsidising it more than when they owned it!) not least because markets have moved the jobs into London and the affordable housing out of London.
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- modo_mario 2y ago
  > ignoring the fact that local government built 150k houses per annum back when we actually built enough houses Well you had 728,000 people coming in last year. It'll have to be a bit more i fear.
Nasrudith 2y ago
Neoliberalism is basically the economic equivalent of "allelopathic medicine" - it is a word used mostly by kooks who are out of the mainstream for damned good reasons.

daedrdev 2y ago

neoliberalism is strongly against NIMBYism and other restrictions on land that are a big part of the UK's problems from my understanding

BurningFrog 2y ago

To some people, everything is still Thatcher's fault, 40 years later.

PaulDavisThe1st 2y ago
As one of those people ... it's not so much that everything is (still) Thatcher's fault. Had she not won in 1979, doubtless the UK would be facing a different mix of problems, some the same, some different. But Thatcher set the ball in motion on the tracks it has been on more or less since her first win, and it is those tracks that are the fundamental source of many of the problems in the UK (not all of them, but the biggest ones).
- ryan93 2y ago
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Johanx64 2y ago

>Everyone who bought into post-industrial "service-based" economies in the 80s is now experiencing economies that are mysteriously failing to thrive. Fixed it for you. I don't understand how people expect "service-based" economies to actually create any long term wealth, growth or prosperity. Unless you're serving increasingly ever more lattes to each other, and increasingly more "banking-services" and rents upon rents somehow are supposed to "grow" the economy and create "prosperity". The more you de-industrialize your country and outsource everything, to the point that you're failing to meet even your energy needs, and competency to quickly build plants or infrastructure projects dies out, it's bound to result in at best stagnation and going to the shitter eventually, it's a matter of time.

BeFlatXIII 2y ago
At the same time, uncapped growth of physical goods is simply impossible on a finite planet. No matter how you slice it, forever growth is delusional.
reverendsteveii 2y ago
How does one reindustrialize, then?