UK growth, decline or muddling along?

[funduffer]

Nice substack from Nick Tyrone's This week in Brexitland:

https://nicktyrone.substack.com/p/this- ... vember-55e

TLDR: The UK could follow three growth paths, but the first 2 are politically impossible:

Path 1: Growth with immigration

Path 2: Zero growth, no immigration, socialism.

Path 3: Muddle along (current path!)

Is there another way?

FD

[Dicky99]

Nice substack from Nick Tyrone's This week in Brexitland:

https://nicktyrone.substack.com/p/this- ... vember-55e

TLDR: The UK could follow three growth paths, but the first 2 are politically impossible:

Path 1: Growth with immigration

Path 2: Zero growth, no immigration, socialism.

Path 3: Muddle along (current path!)

Is there another way?

FD

AI, growth, no immigration

[SalvorHardin]

I take the view that the UK is going to be a low growth and highly regulated economy for the foreseeable future. Very much muddling along, possible with a bit more regulation if Labour wins the next election (though not much more; the Conservatives are also addicted to regulation and low growth policies). Too many vested interests prefer to tie the economy down in red tape.

The state blob will continue to churn out regulations with little or no cost-benefit analysis. Taxes and state borrowing will continue to rise. Well organised NIMBYs will continue to lobby and protest against all sorts of developments (which would be approved in most other developed countries). Improvements in productivity will be weak (a lot of the British economy is addicted to cheap imported labour).

Britain has become addicted to debt, government spending and having a massive bureaucracy. Meanwhile the Wars in Ukraine and Israel will cause the British state to spend more on defence and security, which means less spending elsewhere (or more borrowing).

This is why I mostly choose to invest outside the UK nowadays. That's not to say that it's all bad for investors in Britain. Regulations often create barriers to entry which allows incumbent businesses to charge much higher prices (businesses routinely lobby for tighter regulations to discourage competition). What's bad for consumers is often good for producers. If the producers can invoke health and safety or environmental protection this will allow them to cloak themselves in righteousness whilst ripping off the consumer (housebuilders with planning permission teaming up with environmentalists to prevent further development in an area lets them charge more).

This is the "Bootlegger and Baptist" principle at work. The Baptists wanted alcohol to be banned in America because of "the evils of drink" (and they got their way in 1920). The Bootleggers wanted the legal sale of alcohol to be banned (or at least highly restricted) because this would massively increase demand for illegal alcohol. Both wanted the same outcome for very different reasons.

https://en.wikipedia.org/wiki/Bootleggers_and_Baptists
https://www.econtalk.org/bruce-yandle-on-bootleggers-and-baptists/

Of course if your profitability largely depends upon the government favouring your business, it's always possible that a change in government will remove (or reduce) these protections. But that's what lobbyists are for...

[Lootman]

I take the view that the UK is going to be a low growth and highly regulated economy for the foreseeable future. Very much muddling along

Yes and moreover both Sunak and Starmer are tinkerers rather than reformers, so again it will be more of the same, to slightly worse.

In a variation of "think globally; act locally" my attitude is "live in the UK; invest overseas".

Of course if Starmer is lying and plans wealth taxes, taxing capital gains as ordinary income, applying NICs on all forms of income and crimping the tax benefits of ISAs, then all bets are off as the risk takers and wealth creators flee the country.

[Ashfordian]

Britain has become addicted to debt

This and the servicing of the debt is what is dictating the growth we have. There is no short term fix either.

We also need to wean ourselves off the Ponzi immigration scheme that we've been running since the turn of the century as automation will come back to bite harder the longer this short term(short sighted?) approach continues.

[scotview]

AI, growth

Yes, that's possible.

But how will the induced unemployment in the clerical/admin sectors, like Local Government impact on growth. I would have thought that mass unemployment would be counter productive to "growth".

For example, I just heard Rishi say that pupils could be assigned an AI personal tutor

Will the notion of growth and GDP still be relevant in the future ?

[scotview]

Will the notion of growth and GDP still be relevant in the future ?

Just saw part of the interview with Musk and Sunak discussing AI and the impact on jobs. They openly mentioned UBI.

[Dicky99]

But how will the induced unemployment in the clerical/admin sectors, like Local Government impact on growth. I would have thought that mass unemployment would be counter productive to "growth".

Puts me in mind of the 1980s when as a teenager I got a Sinclair ZX80 computer. I remember at that time the predictions that these computers would cause mass unemployment for those who didn't have manual skills.

[CliffEdge]

Will the notion of growth and GDP still be relevant in the future ?

Just saw part of the interview with Musk and Sunak discussing AI and the impact on jobs. They openly mentioned UBI.

We already have it but we're not happy about it. Sunak of course has form.

[Tedx]

UNI is essentially bringing the State Pension age forward 50 years. It's not really a solution.

[vand]

I actually see a lot in the UK to be very positive about, because our reliance on property as the main path to wealth is now over. That was never a sustainable long term strategy for the country as a whole, but it did allow a lucky generation a select group of people who went whole-hog in on property to massively benefit.

If you want to do well in Britain going forward you are going to have to work for it - learning skills, producing value, taking business risk, rather than sit on your [expletive deleted] and watch your house do all the earning for you. And the good news, imo, is that we are doing that - Britain has a young and vibrant technology industry - a few years behind the US but there is some good stuff happening, and real wealth is being created. We don't see it very much in our stock markets because most of it is own privately, but I think over the next 10 years even our mid and large caps will eventually have a lot of these new companies amongst them.

But there are also going to be a lot of people who will be left behind. I see that as an ineviability, too -- when wealth is created it is never distributed evenly. So I do things improving for most people, but they will still moan about it more than ever because, hey, we're British.

[Adamski]

Muddling along.

We've got low productivity, high national debt, high taxes, etc and a whole host of problems. Labour, well you know my thoughts on them

Our economy is like an eastern european country with Singapore attached, as South East vs rest of UK very different in terms of standard of living.

[servodude]

Muddling along.

We've got low productivity, high national debt, high taxes, etc and a whole host of problems. Labour, well you know my thoughts on them

Our economy is like an eastern european country with Singapore attached, as South East vs rest of UK very different in terms of standard of living.

Corporal punishment, exorbitant crazy fees to own a car, bans on chewing gum, 90% of land being publically owned, national service... which bit of the UK is like Singapore?

[Tedx]

.....35 degrees, 90% humidity. Same Government for 60 years, state controlled press, no right to protest.

Maybe it's different in London from the rest of the UK?

[Nimrod103]

Muddling along.

We've got low productivity, high national debt, high taxes, etc and a whole host of problems. Labour, well you know my thoughts on them

Our economy is like an eastern european country with Singapore attached, as South East vs rest of UK very different in terms of standard of living.

Corporal punishment, exorbitant crazy fees to own a car, bans on chewing gum, 90% of land being publically owned, national service... which bit of the UK is like Singapore?

.....35 degrees, 90% humidity. Same Government for 60 years, state controlled press, no right to protest.

Maybe it's different in London from the rest of the UK?

Well I find the comparison interesting. London doesn't have the high temperatures and humidity (at least not outside the heated shops and offices), but it has had the same London centric civil service in charge for a hundred years, the press is not controlled but is 'confined' in what it can say, as are protests such as those against ULEZ. And owning a car in London will gradually become increasingly difficult, because road space is at a premium. And I also loath chewing gum. Singapore is a lot more than corporal punishment. It is also probably one of the most concentrated areas of corporate profitability and high living standards in the World.

Of course it differs from London in that the streets are everywhere safe to walk on, at all times of the day and night. What's not to like?

[Tedx]

Try talking about the Singaporian government the same way that's discussed here, even in supposedly private company and you'll find there's plenty not to like.

[Lanark]

AI, growth, no immigration

My prediction is that for every job "created" by AI, there will be 2 jobs for real people unpicking the mess created by AI.

[Nimrod103]

Try talking about the Singaporian government the same way that's discussed here, even in supposedly private company and you'll find there's plenty not to like.

It just means the political limitations go in slightly different directions and are aimed at different people. Criticise the paramountcy of the Chinese population, the one party state, or the business dealings of PAP politicians, and you will find yourself in jail. To get into jail in the UK all you need do is tell a Bahraini to go back to Bahrain.

[CliffEdge]

Muddling along.

We've got low productivity, high national debt, high taxes, etc and a whole host of problems. Labour, well you know my thoughts on them

Our economy is like an eastern european country with Singapore attached, as South East vs rest of UK very different in terms of standard of living.

Corporal punishment, exorbitant crazy fees to own a car, bans on chewing gum, 90% of land being publically owned, national service... which bit of the UK is like Singapore?

Slave labour...

The only truly civilised country is England and that is under threat because of primitive religions becoming influential.

[ursaminortaur]

Try talking about the Singaporian government the same way that's discussed here, even in supposedly private company and you'll find there's plenty not to like.

It just means the political limitations go in slightly different directions and are aimed at different people. Criticise the paramountcy of the Chinese population, the one party state, or the business dealings of PAP politicians, and you will find yourself in jail. To get into jail in the UK all you need do is tell a Bahraini to go back to Bahrain.

If you are referring to Tory MP Bob Stewart he wasn't jailed but was just given a £600 fine.

https://www.bbc.co.uk/news/uk-england-london-67310954

A Conservative MP who told an activist to "go back to Bahrain" has been found guilty of a racially aggravated public order offence and fined £600.

Bob Stewart, MP for Beckenham in south-east London, got into a row with Sayed Ahmed Alwadaei outside the Foreign Office's Lancaster House in Westminster on 14 December.