How very weird from Larry Elliott

Now let\’s look at the economy. Initially, the challenge came from the United States and Germany, but after the second world war the UK was also eclipsed in terms of growth rates and living standards by France, Italy and the Scandinavian nations. More recently, the threat has come from the bigger emerging economies of India and China.

Warning signs of imminent decline have too often been ignored and even when they have been heeded, wrong lessons have been learned.

Who actually cares about relative decline? It\’s absolute levels that matter.

Relative decline comes from the way in which cuntries previously following insane Marxist prescriptions are now joining us in the sunlit uplands of classical liberalism (perhaps overstating things there but still….). This is good isn\’t it? Our fellow humans are gaining better lives: no, not at our expense at all, simply by stopping doing stupid things.

Indeed, we get richer precisely because they do so.

So where\’s the beef? Do I or you care that Britain is 5th, 7 th or 15th in the international league tables for standards of living? Or should we care that living standards are as good as we can make them? That is, we should care about absolute riches, not relative?

12 comments on “How very weird from Larry Elliott

  1. Most people (still!) think it’s a zero-sum game, or are at least prone to slip into that way of thinking under malevolent persuasion.

  2. I keep on repeating that the concept of diminishing returns is really one of those great economic learnings that very few people grasp.

  3. The league table ploy has always been the way to get people to eat shit & like it.
    “The National health Service is the best in the World.” worked for you, didn’t it? ;¬p
    No doubt still is for some obscure metric buried in the small print.

    Or you can compare against time rather than other entities & come up with Broons tractor production figures ‘proving’ we’re all steadily getting richer. And the same device will get people to demand to eat shit – hence the reported rise in alcohol related health incidents against falling alcohol consumption. Achieved by massaging what’s measured.

    What we really need is a league table of best scam.

  4. I couldn’t care less about UK vs. China, but on the other hand, if the UK declines against a comparable economy, say Germany, then we’re doing something wrong and I want to know what it is.

  5. To be fair; relative decline so severe that we slip down the (per capita) league tables can be interpreted as a failure to achieve our full potential in terms of growth and hence standard of living. The wealth gap with China narrowing is unequivocally a good thing for anyone who is against poverty or who enjoys the benefits of trade. Whereas slipping behind Hong Kong, Taiwan and Singapore should make alarm bells ring (although again yay for people getting richer and double-yay that we can trade with them).

    Their position isn’t due to them having better endowments of natural resources. Hence we could – maybe should, given the advantages we’ve had – be that rich, and aren’t. When the UK topped the tables it was a sign we were as developed and rich as was known to be humanly possible, given existing state of technology. Now we are richer and more developed and more technologically advanced, and that’s a good thing, but we know we could be doing even better. Somewhere along the line we dropped the ball, and we’re no longer at the forefront of human possibility. You don’t have to be a xenophobe, or a politician, to find some cause for regret in that.

    (All this language in terms of ‘threat’ to our economy is bonkers though, and unpleasant.)

  6. Relative decline matters when buying things other than manufactured goods. The ski resorts of the Alps are filling up with Russian tourists, nabbing the best chalets (those positioned closest to the slopes) and booking the best restaurants. Cheap holidays to exotic locations will be a thing of the past as those locations become wealthier. As our relative position falls, we become less able to afford global land rents.

    Obviously all this growth is better for the sum of human happiness; but on a purely selfish basis I miss the days when beer was £1 a pint on the beaches of the Med.

  7. “I miss the days when beer was £1 a pint on the beaches of the Med.”

    Still is. In fact cheaper. 1€ the pint in a beachfront bar not 200 metres from here.

    And in this case we are truly comparing like with like because it’s some filthy English beer.

    Which is the point about comparisons.

  8. I think the people on the receiving end of German bombs in World Wars One and Two may have had something to say about relative decline. Even though they may have been absolutely wealthier than their Victorian relatives.

    Relative wealth doesn’t matter as long as everyone in the world is a nice reasonable liberal person. But not everyone reads the Independent and thinks that football loyalty is a primitive relic of a bygone evolutionary period. Some people are nasty and want to do us harm. Some of them have nuclear weapons. And these days quite a few of them are in charge of entire countries which are growing very rapidly and will soon eclipse Britain by a long way.

    Now with the growth of wealth does tend to come a growth in the sort of people who listen to Radio Four. But it is not guaranteed. I do not notice Singapore becoming much more liberal.

  9. As the people of China have closed the gap with us by dint of supplying us with cheap shiny goods, I am quite happy with the result.

  10. Weird indeed. Doesn’t Larry realise that one of the reasons British sportsmen don’t do so well internationally is because they don’t think they can? It’s not that they think too much of themselves, it’s that they don’t believe in themselves. I know from my teaching that if someone believes they can’t do something, they can’t – even if it is actually well within their capabilities. Larry’s article is distinctly unhelpful.

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