Source: Global Times
US " Atlantic Monthly " article on October 25, original title: How did the UK become Western Europe one of the poorest countries It has been difficult for the UK in the past few months, energy prices have continued to soar, and inflation has exceeded double digits. The longest-serving British monarch died, and the shortest-serving Prime Minister has resigned. Behind the sensational headlines is a deeper story about decades of economic failure that provides reference for the future.
From the "world factory" to the "world banker"
In the imagination of Americans, Britain is a rich country that brought them modern capitalism and the industrial revolution . But if we look strictly from the figures, as a rich country, the UK is too poor, and its living standards and wage levels are significantly lagging behind other Western European countries. In fact, in some ways, the current real wage of in the UK is below the level 15 years ago and may be even lower next year.
This disaster has been brewing for decades. After World War II , the UK's economic growth rate is slower than that of many countries in the European continent. By the 1970s, the British had a national debate, with the focus of the debate on why they were behind and how this former empire turned into a relatively closed and undying economy. In the 1980s, under the leadership of Mrs. Thatcher , the market was deregulated and the financial industry became a jewel in the British economy. Mrs. Thatcher's favor for neoliberalism had a complex chain effect. From the 1990s to the first decade of the 21st century, the British economy developed rapidly, and London's financial industry took the lead. Britain, which made its fortune as the "world factory" in the 19th century, became a "world banker" in the 21st century.
When the global financial crisis broke out in 2008, the engine of the rise of the UK economy suffered a heavy blow. Fearing that the deficit has risen, the British government has adopted austerity, which has resulted in a catastrophic result, with real wages falling for six consecutive years. Faced with what writer Fentan O'Toole called "the dull anxiety caused by the decline in living standards", Conservative politicians have found a "scapegoat" for this slow disaster. They provide an anxious voter with a terrible list of outsiders: immigrants, asylum seekers…everyone is among them, except for the actual national policymakers who have weakened Britain’s competitiveness. A group of older, extremely nostalgic middle-class voters demanded "Brexit" and they got what they wanted.
"Humans snatch the job of robots"
Over the past 30 years, the British economy has chosen finance over industry, the government has chosen austerity over investment, and voters have chosen a closed and poor economy over an open and prosperous economy. The foreseeable outcome is a surprisingly low wage decline and productivity growth.
British media is worried that robots will take away everyone's jobs, but the reality is exactly the opposite. "From 2003 to 2018, the number of automatic car washes fell by 50%, while the number of manual car washers increased by 50%," said Duncan Weldon, an economist-based commentator. "It's more like humans stealing the job of robots."
According to the International Federation of Robots, the UK's manufacturing industry is less automated than other equally wealthy countries. In 2020, the number of robots owned by tens of thousands of industrial workers in the UK was only 100, and the average robot density was lower than that of Slovenian and Slovak . An analysis of the UK's "productivity puzzle" concluded that nearly all UK industries have lower productivity than their Western European counterparts, except for London and the financial sector.
The weakness behind the appearance
UK is the first industrialized country and the first to de-industrialize . The country has launched a world-changing productivity revolution, but now its productivity data is the worst of all major economies. Once the world's most powerful global empire, it now does not hesitate to reduce global trade and talent introduction. Since Brexit, immigration, exports and foreign investment have all declined, which may reduce the size of the UK's economy by several percentage points in the long run.
People who have been to the UK may not agree with the picture I outlined.This may be because they are familiar with London, not the entire country. As writer Noah Smith pointed out, London's financial strength masks the weakness of its overall economy in innovation and manufacturing. As economic analyst Klein said, "Except London, Britain is one of the poorest countries in Western Europe."
Britain is now the negative textbook for other countries to deal with the "dark trinity" of deindustrialization, degrowth and slander foreigners. "Brexit" cut off further economic growth and laid the groundwork for a political farce that has resumed over and over again. (Author Derek Thompson, translated by Chen Xin)
