Britain is going to be a poor country and too many people don’t care

If you want to know why Britain is in such trouble, check out the outrageous overreaction to an old recording by Liz Truss, which claims British workers aren’t productive enough and some people don’t work hard enough. She claimed the obvious, and yet her comments were dismissed by half of Twitter as a “gotcha” moment and by Labor Party demagogues as “grossly offensive”.

When did we become so entitled, so complacent, so allergic to any kind of constructive criticism? What hope is there for Britain if it is now politically incorrect to explain that hard inoculation at school and work is a crucial way out of poverty? Why is it not clear that we must massively and urgently do whatever it takes to improve Britain’s appalling productivity?

For years, both Tory and Labor politicians have taken the easy way out, obsessed with “sharing the proceeds of growth” and green social engineering, taking prosperity for granted while slowly poisoning the economy with tax hikes, regulatory attacks, a ever-expanding insane housing and infrastructure planning system and injections of monetary crack cocaine.

It’s been a disaster: Real wages, the ultimate measure of a country’s economy, haven’t risen on average since 2006, the year before Northern Rock went bankrupt. Output per worker has not increased, and since what we earn is usually related to what we produce, wages have stagnated. This is an outrage and requires us to undergo a period of brutally honest self-reflection, as Truss suggests.

We should start by recognizing that we are now getting poorer by international standards, especially when we add our overvalued housing stock and second-rate health care. London is still quite wealthy in terms of GDP per person, but the rest of the country is alarmingly impoverished, especially when compared to America and a growing number of Asian economies.

Like us, Europe is in decline: we should not compare ourselves with France or Italy, but with Singapore, South Korea and the wealthier American states. The Remainers have nothing useful to add: their cries are a displacement exercise. Being part of the single market has done nothing for the eurozone’s growth or wages in recent decades: there are costs associated with Brexit and the benefits have yet to be realized largely due to the incompetence of the Johnson government, but Europe Well we don’t have the solutions to our, or his own, misery.

Truss did not say that all, if not most, of Britain’s problems are caused by laziness. She’s right, though, that some are, and we shouldn’t deny it. Recent immigrants to Britain are often amazed at our poor work ethic, lack of entrepreneurship or respect for education, and the widespread sense of victimhood, where people blame their problems on others rather than take personal responsibility for self-improvement. But they are also stunned by how high our taxes are, the waste at the heart of the public sector and the fact that it is so hard to build or get anything done.

Britain has turned into a three-speed society, with some people, including workers in warehouses, factories, vans, as well as numerous white-collar professionals, working extremely hard, much harder than ever before, their output closely monitored and controlled by technology. , but with their wages held back by productivity constraints.

The picture is different in office sectors where the work-from-home and HR cultures have spiraled out of control and there has been a proliferation of non-jobs in the corporate world. Office workers spend too much time communicating with each other, which is easy, instead of creating value, which is difficult. Bad, lazy, tick-box management is rife, some of it is caused by regulatory idiots. Many business types are resting on their laurels, isolated by cheap credit, lulled to sleep by house prices skyrocketing and into thinking they’ve made it in life and can relax.

Last but not least, parts of the economy suffer from the continuing dysfunction of the welfare state: despite Universal Credit, there are insufficient incentives for some groups to work more. This is a major reason why so many low-paying job openings go unfilled and, combined with our poor education and skills, for our extreme reliance on migrant workers.

All three challenges need to be tackled differently. We must be honest about the new British disease: our staggering lack of competitiveness, poor investment levels, the low quality of so many of our schools, the weakness of our skills, the disaster that is our infrastructure, our sky-high taxes, our deadly bureaucracy, and that it will be painful to fix all this. Incentives to work and invest must be encouraged: far too many people pay far too high marginal tax rates, and many young people are discouraged by our broken housing market.

Companies will have to be encouraged to invest much more. The economy demands more competition. The public sector needs radical reforms and downsizing. Crucially, higher interest rates would lead to a more rational allocation of capital and the elimination of wasteful jobs and low-return practices. One of the biggest barriers to change is the widespread nimbyism of the middle class, or at least the idea that things are good enough as they are, and that all new developments – from homes, airports, power plants or water reservoirs – must be stopped.

Capitalism itself cannot survive another decade of zero real income growth. The public will only tolerate for-profit and free markets if people feel that a rising tide is lifting all boats; but as incomes stagnate, they become increasingly skeptical. But Britain suffers from zombified social democracy, over-regulation and monetary socialism, not real capitalism. We wouldn’t be stagnant if a few million acres had been turned over to housing, or if monetary policy weren’t obsessed with a Proto-Keynesian desire to save over-indebtedness, or if a flat tax had been introduced in 2010, or if the Oxford-Oxford Triangle was introduced. Cambridge-London had turned into a gigantic high-productivity scientific enterprise zone.

Boris Johnson was meant to understand all this, but unfortunately he didn’t, and three years have now been wasted. Liz Truss, a principled libertarian, gets it, and, crucially, isn’t afraid to be blunt. The Tories can’t afford to screw this up again: it’s Truss’s way, hard graft and all, or a 2024 Labor landslide.

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