A few years ago I wrote a set of scenarios – with Joe Ballantyne and Andy Sumner – on the prospects for the world economy to the early 2020s. In one of the scenarios we saw the “West” regenerate itself by a combination of public investment and by bringing home its high value manufacturing. After I’d drafted this post, David Cameron popped up at Davos to promote the idea of “re-shoring”, even if he seems less keen on the notion of public investment. And according to a recent report in The Conversation by some Birmingham University researchers, there are signs that re-shoring is starting to happen, that British businesses are bringing it back home.
So, by way of a thought experiment: what if London is about to peak? The reason would be the way housing provision and housing regulation had destroyed the economic balance of the city, and there are some serious warning signs. Recently, there’s also been a wave of commentary on this. But first, let’s just roll back to the ’70s.
Britain’s high speed train project, HS2, is something of an enigma wrapped in a mystery. The projected costs are spiralling, currently at £50bln and counting; the line antagonises voters in every constituency it is planned to run through, and could cost the government seats in the next election; and pretty much every credible transport expert says that if you’re going to spend that much money on rail infrastructure you’re better linking regions together rather than creating a faster funnel into London. And yet the project stays afloat, buoyed up, it seems, by the claims of its supporters. (more…)
I spotted this in a review by the critic Terry Eagleton:
Bertolt Brecht tells the tale of a king in the East who was pained by all the suffering in the world. So he called his wise men together and asked them to inquire into its cause. The wise men duly looked into the matter, and returned with the news that the cause of the world’s suffering was the king.
I’m indebted to a letter in The Guardian for this account by J K Galbraith of the history of the American economy between 1929′ the year of the Crash, and 1932, the last year of the Hoover administration:
“Gradually interest rates were brought down. The rate at which banks could borrow was 1.5%, hardly a usurious charge. Bonds were bought on a considerable scale and the resultant cash went out to the banks. Soon the banks were flush with lendable funds.
“All that remained was for customers to come to the banks. Now came a terrible discovery. The customers wouldn’t come. Even at the lowest rate they didn’t think they could make money. And the banks wouldn’t lend to those who were so foolish as to believe that they could.”
And people say that history never repeats itself.
The image is a 1932 cartoon mocking Hoover for asserting that prosperity was just around the corner. It is from the Princeton Alumni Weekly, and is used with thanks.
Mrs Thatcher’s only been in Hell for 30 minutes, and already she’s closed three of the furnaces and another three are on strike.
It wasn’t on Twitter, or on a political blog, but on the listserv of some football fans – fans, as it happens, of a club in a former mining area in the north of England. As Hugo Young said in his posthumously published piece on her (he died in 2003) in Tuesday’s Guardian, “Thatcher was a naturally, perhaps incurably, divisive figure.”
For my part, I think you need only one chart to understand her influence on Britain, which shows the step-change in inequality during her time in power. I’ve published this here before, when I blogged on the 30th anniversary of her first election victory:
Over at the excellent Global Dashboard, Alex Evans has a post reflecting on the things he and David Stevens called wrong (and less wrong), looking through their development and poverty lens, in the aftermath of the crisis. In a similar spirit, my sometime colleague Ian Christie sent me ‘Ten notes on the crisis’, representing his take on what we’d learnt about economics and politics since 2008. I thought they deserved a wider audience. And so, with his permission, I’m republishing his Ten Notes here. They start below the fold.
One of the most alarming articles I’ve read this month was by the Cambridge-based economist Ha-Joon Chang. He’s the author of 23 Things You Didn’t Know About Capitalism, and has a sharp eye for how markets and economies work in practice. Anyway, he noted that despite a substantial devaluation of the pound since the financial crisis, both service exports and manufacturing exports had also fallen. This isn’t how devaluation is supposed to work.
The received wisdom about the collapse of the British entertainment chain HMV and its acquisition by the distress specialists Hilco is that it didn’t see the internet coming. And doh! Actually, the truth has a lot more to do with economics and the way finance dominates business. This long post is broken into two parts: part 2 is here.
The immediate cause of HMV’s collapse, of course, was the British recession, which has gone on longer than anyone expected, and the economy is now teetering on the edge of an unprecedented triple dip recession. Here’s the NIESR chart showing comparative GDP since the pre-recession peak for the past six recessions. The black line at the bottom is the current recession, and yes, this chart should be on the wall of every economic policymaker in the UK.
I’ve just had a review of The New North published in the APF’s quarterly newsletter, Compass. I’m sharing it here.
As the Arctic ice cover shrinks ever smaller, it seems a good time to review Laurence Smith‘s book The New North, which was well-received when it was published in hardback and has just been published in paperback. It tells four stories about the way in which climate change will re-shape the north of the planet (generously defined as the world north of 45*N) in the decades to 2050.
Smith, a geographer at UCLA, describes the book as “a 2050 thought experiment”, and any futurist would have been pleased to have written it. His building blocks are four long-term global trends – demographics, natural resource demand, globalisation, and climate change. Along the way a fifth intrudes, of “enduring legal frameworks”, that he sees as an outcome but I would regard as a further long-term trend driven by value shifts towards increasingly rights-based political frameworks.