There are one or two of us old folk who joined The Zach Greens as well. Some of us do care but other than casting a vote, it is very hard to right all the wrongs.
Yep. All true Grace. All happening right before our very eyes. Unfortunately, it’s what you would expect from a power-over (social darwinism) game. Despite the latest attack on the 99% — neoliberalism, with all its many accoutrements — austerity, decimation of labor unions, further enclosure/erasure of the commons, and privatization schemes, enlightened progress still made humanistic, social justice (BIPOC, LGBTQ+), and women’s liberation movements) gains. The system creates a vicious feedback loop. Arguably, the most critical threat, the Global Warming crisis, was the first to fall. The more progress “we the people” make, the more violent the ruling class become in an attempt to remain in power. Buckle up!
Absolutely brilliant Grace. Who knew Enshitification could even enshitify itself. This could be New Zealand. This could be Australia. This could be anywhere. Capitalism’s long game must be existential because once it has laid waste to the next generation, what’s left? The Enshitification of life is also happening in lock-step with the Enshitification of the very planet we all share.
Cambridge scholar Dr Luke Kemp at the Centre for the study of Existential Risk at the University of Cambridge writes, “We can’t put a date on Doomsday, but by looking at the 5,000 years of [civilisation], we can understand the trajectories we face today – and self-termination is most likely.” So, ladies and gentlemen, boys and girls of the next generation, place your bets.
I appreciate the cogent description of a number of the issues, however I am pretty sure that if you are going to question the policies of Labour then in equal or larger amount one needs to be clearly stating why Reform and/or the conservatives are offering toxic choices too. There is also a real danger of the Greens taking enough Labour votes to offer a Reform or Conservative victory or coalition, and that would be even more catastrophic. IE The situation is bad but the heartfelt and accurate deconstruction of Labour choices may end up making things worse. A bit like the Hispanic democrats that voted for Trump having been turned off by the accurate criticism of Biden et al. But they ended up even worse off than under the democrats.
One could argue that proportional representation is a key change to enable more useful choices for voters but no mention here of that being a necessary reform.
One could also mention that we live in a global world that we forced on the rest of the world (ie let markets decide) however now that Asian countries are more efficient than us we seek to impose the very protectionist tariffs and policies that we forced them to remove and whose removal forced them to become efficient.
One could also argue that up till now we have lived the comfortable life in the west by exploiting 3rd world natural resources and moving the value adding part of the process from the countries with raw materials to ourselves. This model is now dead. We need to earn our way competitively in the world. Make no mistake we are competing with countries and economies whose children study for 12-16 a day from early to late education.
We need to be honest that for the next generations in Western economies life is going to be considerably more difficult that previously.
We need to prioritise our state support and spending. This is going to involve some harsh choices about removing support from those have been used to having it. This is going to involve pain and a loss of living standards.
We need to make better choices even if they seem harsh. I was reading today about the young men who arrive on our shores in boats with just the clothes on their backs. We apparently have a system where they are taken to buy new phones and new clothes etc. To be clear, I am not advocating that they should go without clothes but I am saying that the clothes should come from second hand shops not brand new. It is iniquitous to ask taxpayers who themselves have to shop at second hand shops because they cannot afford new clothes to use their tax money to buy migrants new clothes.
The article criticises Labour for saying the young need to work harder. I would ask what is their alternative and how does that alternative manage to compete for business and trade in a world where others are working harder and longer both in education and work.
Finally let us stop this dog whistle focus on billionaires and the rich. It gives the impression that if they had less money then everything would be okay and detracts from the fundamental change we need to make in how hard we all work.
Labours removal of non-dom and talk of taxing the rich has just led to a massive loss of wealth and people who can run businesses that generate wealth to countries that do not have such policies and accept that those who work very hard and succeed do will up richer than those who do not.
A starting point and paradigm shift maybe in the words of Kennedy, to stop asking what the state can do for us and start asking what we can do for our country and state.
Is not the point that the existing massive inequalities in wealth are not, and never will be, conducive to many of the younger and less wealthy parts of society willingly making the big efforts you suggest? Your argument that hard work is reliably rewarded just no longer (insofar as it ever did) holds water. And I'm not aware of any good evidence that taxing the rich has led to a 'massive loss of wealth'.
I am not sure where you got the idea that I said work is 'reliably' rewarded. I certainly did not mean to make that suggestion. I fear you have fallen into making a staw man argument that you can then shoot down. Sounds good but just not the real world.
My view is far from that. Let me clarify.
The system is not fair, life is not fair whether in nature or in human societies. With the money we purloined from the rest of the world over centuries we ended up so comfortable that we think the world and our society owes us a reliable reward for work, that our government will make us whole if we chose to take foolish loans or even sensible loans with which if interest rates go up we cannot pay and we lose our money. This is not the way of the world you make your choice and you take the consequences good or bad, complaining that it is unfair is not helpful. There is no trans national kind benevolent guardian that will pick us up if we make a mistake or even if we get treated badly. There are common benefits for all of us like sewage systems, transport systems, argueably emergency health systems, that we should be responsible for in common. But ultimately people need to to remember that no one 'owes' them a job and certainly no one owes anyone a job commensurate with their education or idea of self importance. I do actually believe that those who succeed should assist others but even this I do not believe should be a mandated duty it should be a personal choice beyond taxation for the commons that we all share. This is a harsh reality for people who have been brought up to expect and demand that the world caters for them and that they have a 'right' to take and spend the wealth that others have earned or acquired. TBC I am not suggesting unfettered capitalism or law of the jungle, I do think thatbsocieties work better if people have a social conscience and chose to serve and help others and in some cases are made to do this by taxation etc. But the place we have reached now where we demand the ,right, job and the 'right' pay before being prepared to work are not going to allow us as a nation to compete in the global economy. I can fully see how nice a world this was but we need to begin to grasp that our parents lived this way because our nation was arguably to a certain extent a parasite upon the rest of the world - yes there was some symbiosis but we took far more than our share.
You are aware for instance that in the not distant past because we were going bankrupt paying for Chinese tea (and we had not yet stolen and smuggled the tea plants to India Sri lanka etc) we decided to grow Opium in India and sell it to the Chinese to make our balance of payments better. When. the Chinese objected we sailed gun boats up the Yangtse and shelled them until they agreed that we could make addicts of their citizens with opium so we could pay for our tea. Not a history you would know unless you look diligently but I assure you the Chinese are aware and remember these actions.
Refernce tax, yes the evidence is not yet clear for the whole UK but is more obvious in Scotland that taxing the rich leads to a loss in tax revenue. However this ignores several important factors.
the top 10 percent of tax payers pay 60 percent of all UK income tax(HMRC figures) . We are an outlier Internationally in having most of our tax come from a very small sub section of the population.
This is more dangerous as these tax payers and their capital is easily mobile and does not have to stay here nor do they.
By the time we notice the drop in tax income from a proportion of these top 10 percent of taxpayers who pay 60 percent of all income tax (HMRC figures) it will be too late they will have gone.
More dangerously we do not just lose their tax for one year it will likely be in perpetuity and we also are almost certain to lose a lot of the money that would otherwise have been invested in wealth creating projects in the UK that will now be more likely invested in the new place they live.
Even more dangerously a significant number of these people may be the very entrepreneurs and talent whose judgement and risk of their wealth and work we can sorely afford to lose. We need to be attracting people like that not making them feel unwelcome.
"let us stop this dog whistle focus on billionaires and the rich. It gives the impression that if they had less money then everything would be okay and detracts from the fundamental change we need to make in how hard we all work."
Can't agree with this and I think this statement really gets to the core of the disagreement.
Given:
- The totality of labour in the U.K. generates the wealth of the U.K. (I think this is true on its face?)
- The U.K. is one of the richest countries (#6 GDP) in the world and one of the biggest exporters in the world (#5 in 2024)
- Tiny minority has been progressively taking a bigger and bigger share of the total wealth
Then:
Billionaires are to blame for lower living standards for the masses.
So yes, I have to say I think if the billionaires had less money/wealth/resources - which would mean dismantling the institutions which siphon/give ownership of the wealth to billionaires and replacing them with one's that keep wealth in communities- then everything will be better if not "okay".
As for "hard work" - given what I've said above- working harder will make us even more richer as a country, because yes the totality of labour will go up, and then that money will go straight to the billionaires thanks to our socio-economic and political system so they can buy another private jet and you can live in the same 50sq meter flat with a £5000 rent.
Re “The totality of labour in the U.K. generates the wealth of the U.K.”
Firstly one should be honest and say this is a Marxist analysis. (Nothing wrong with that Marxism gives good tools for criticism capitalism, however I should also be honest and say that I know of no Marxist led economic system that has prospered in the world (I hope we can agree that Chinas prosperity post Deng Xiaoping is not Marxist or communist in nature )
Nearly all other economic theory hold that
The above statement simplifies reality by highlighting labour, but in practice wealth creation also depends on:
• Capital: machinery, buildings, infrastructure, financial capital used in production.[wikipedia]
• Land and natural resources: physical space, energy, raw materials.[wikipedia]
• Technology and organisation: know‑how, software, management systems that make labour more productive.[economicsobservatory +1]
It also ignores the reality that some ‘labour’ generates much more wealth than other ‘labour’
Which returns us to the point that if the ‘labour’ that generates the most wealth is better paid in other countries then that labour will have strong incentive to leave the country. Particularly in the UK where manufacturing exports put us at 13-15 largest in the world. Only if you include service industries like finance do you achieve your figure of 5th. Service industry labour can relocate and remote work pretty easily (ie little friction to going somewhere else)
Re Tiny minority has been progressively taking a bigger and bigger share of the total wealth
How do you address the issue that the
relative measures of wealth inequality (such as the wealth Gini coefficient) have been broadly flat or only slightly rising since the early 2000s, meaning the proportional gap between typical households has not exploded, even if levels are high.
And what would your view be on the studies that emphasise that the biggest change is in absolute differences (the number of extra pounds the rich have compared with others) driven by asset price inflation, rather than a dramatic, continuous rise in the percentage share of wealth held by the very richest over the last two to three decades?
Re: “which would mean dismantling the institutions which siphon/give ownership of the wealth to billionaires and replacing them with one's that keep wealth in communities- then everything will be better if not "okay".
Sounds great but I an intrigued what institutions you think would be dismantled and what would replace them?
To keep this brief, I think we're now homing in on "ownership" as the point of impasse - not a dispute in the economic model. Either way there is some fundamental disagreement I think we can uncover but not resolve by discussion - so not sure how useful it is to discuss.
While I do think technology and capital - developed and built by engineers, construction workers and scientists etc. - is created by labour- I do not think natural resources are created by labour.
On Natural resources, I believe the disagreement is on ownership since the aspect of natural resources which doesn't require labour to extract, maintain or develop (i.e. it already existing on the earth independently) is then a discourse which pivots on ownership.
To formulate it even clearer: since value is determined in some complicated way via culture, society, human cognition/genetics/nature etc. - if you accept that the object of what is valued (not value itself) is material in nature then said material form is a function of natural resources and labour.
This has no normative force, it's purely descriptive.
The normative question is: who owns what is produced - whether that be manufactured goods, technology rights, industrial machinery etc. - or natural resources such as land.
I guess the point of my comments is to point out that the disagreement is some fundamental ideological thing based on ownership/where value comes from or something of this nature.
I asked a number of simple questions about your suggestions in your previous comment, like you said that certain institutions which you suggest siphon funds to Billionaires needed to be dismantled and replaced. I asked what institutions and what would replace them but I can see no response to that?
I really am intrigued as to what institutions you think need to be dismantled and what would replace them?
And if possible could you address the point I made about how your economic model would retain those who labour produces most wealth when other countries economies would value and pay them more?
The figures you used to capture the UKs place in exports (5th) can only be achieved by including service industries such as finance insurance else the figure is 13th or 15th depending on source.
On the one hand you seem to include service industries to assist your arguement about exports but on the other hand Marxist thought, I think, believes that Finance is not necessary.
I include a brief summary of non Marxist analysis of Finance and insurance type utility for an economy. Apologies if you are familiar with the model but it may help other readers and I have a feeling that finance may be one of the institutions you would seek to dismantle so it may assist you in identifying how you would replace it in modern economies tied to the global economic system. I am really intrigued hear how this dismantling might be achieved safely and what needs to be dismantled and would would provide for the utilities removed.
A Quick briefing on Core economic functions/utility of finance etc in a capitalist model
• channels savings into investment: Banks, investment funds, and capital markets mobilize household and corporate savings and direct them into productive uses such as factories, infrastructure, and technology firms. This capital formation is strongly associated with higher output, productivity, and long‑run economic growth in capitalist economies.[cbsl +3]
• Allocates capital and disciplines firms: By screening borrowers, pricing risk, and deciding which firms can raise equity or issue bonds, finance helps allocate resources toward projects with higher expected returns. Market valuations, credit conditions, and the threat of takeover or default also impose discipline on managers, influencing corporate governance and efficiency.[ipe-berlin +3]
Risk, time and uncertainty
• Transfers and transforms risk: Insurance, derivatives, and diversified investment vehicles allow households and firms to hedge against shocks such as price changes, defaults, illness, or natural disasters. This risk‑sharing encourages specialization and long‑term commitments that would be too dangerous in the absence of such instruments.[elibrary.imf +3]
• Intertemporal exchange and liquidity: Financial contracts transform short‑term deposits into long‑term loans, and illiquid assets into tradable claims, which expands the effective liquidity of the economy beyond what cash alone could provide. This makes it possible for people to smooth consumption over their life cycle and for firms and states to finance long‑horizon investments like R&D or infrastructure.[elibrary.imf +3]
Coordination and information
• Price signals and information aggregation: Interest rates, bond yields, stock prices, and credit spreads condense dispersed information about expectations, risk, and scarcity into observable prices. These signals guide decentralized decisions—where to invest, what to produce, when to expand or contract—in a way that is central to the coordination mechanism of capitalism.[ecb.europa +3]
• Payment and settlement infrastructure: Banks and payment providers operate the systems that clear and settle transactions, enabling everything from daily retail purchases to complex global supply chains. Efficient, reliable payment systems reduce transaction costs and are closely linked to higher levels of trade, employment, and income.[weforum +3]
Social benefits and systemic risks
• Expanding opportunity and inclusion: When well‑regulated, financial services can broaden access to credit, savings, and insurance for households and small firms, supporting entrepreneurship and poverty reduction. Governments also rely on bond markets and financial institutions to fund public goods such as infrastructure, health, and education.[hks.harvard +3]
• Financialization and instability: Critics argue that as finance grows relative to the “real” economy, it can foster speculation, inequality, and recurrent crises, indicating that beyond a certain size or complexity, the marginal utility of the sector may turn negative.
Contemporary debates in capitalism therefore focus less on whether finance is necessary—and more on what scale, structure, and regulation make its utility socially net‑positive.
Disclaimer: none of the policies I share here are probably any good, I'm sharing them to illustrate my position and demonstrate that the LTV does not need to inform policy. the latter of which needs to be grounded in real world realities and pragmatic, both to public opinion, the U.K. global standing as a minor first world power and the global status quo's. I think the immediate issue is the housing crisis. Organising in one's workplace, building solidarity, innovative small businesses etc. and other activism is all more important and aside to this.
To your first question:
The collection of institutions which siphons wealth to owners basically defines capitalism itself based on ownership and its many forms. One does not simply dismantle capitalism, in any form let alone in its totality for many domestic, industrial and international reasons.
That's what makes these questions very complicated rather than simple and also mostly pure conjecture.
It's particularly difficult for the U.K. to do any kind of radical policy- since you can't really remove any of it without international retaliation of some form which we are particularly susceptible to due to large debt and a internationally unprecedented current account deficit - as well as cultural and social commitment to neo-liberalism. But there's also not really another option other than a slow and painful descent into poverty or fascism.
I personally (not that my opinion matters!) would not even think of dismantling London finance; it would be a disaster for the U.K. economy. And the LTV being purely descriptive does not commit one to dismantling finance. Finance channels a lot of international wealth to the U.K. thanks to pax americana which is still the current global era. Therefore, before any departure from the status quo , I would seek to make it clear internationally that the system as is will continue for the city of London.
Rather to allow us to work towards a current account surplus I would consider implementing a dual currency system a little bit like China's RMB and Yuan but not identical - so that we can export via a weaker currency than the pound. I'd leave the current system 100% intact that's why it's not identical to China - since we'd continue exporting/importing in the Pound for the existing economy financial services etc.
This'd all be difficult to implement including possibly having some manufacturing areas of the U.K, goods and services be solely traded in this currency, and also importing via this new currency after floating it internationally. Initially, there can be some transitionary period where this new currency prices itself at half the pound for instance. The Bank of England would issue this currency. Further specifics I haven't considered, because this is just a conjectural exercise which has no effect on real policy!
As for dismantling institutions and what replaces them - depends on what we're removing. The Green's are very moderate here, reforming the system and will sway the needle a little in favour of working people. I think this is good - if we ignore the so called "scroungers" the right always speaks of - it will also give a helping hand to those who need a safety net to be more creative, pursue passions and take innovating risks whether in the workplace or starting a new venture. Particularly important for our highly educated labour base who mainly have financial opportunities rather than manufacturing one's.
If you tax landlords in general, capitalists seeking rents from property, at say some absurd rate which effectively ends the rental economy as we know it: say some single digit % of the rental property value p.a. , house prices will crash significantly as they increased significantly due to landlords via the marginal buyer effect. Revenues raised can be used to create social housing.
You obviously don't do this straight away, it would be a disaster - we'd need better planning so it doesn't cripple housing supply etc.
I'd leave London outside of the Tax, international capital arrives in London which is important for our financial account. Rather, create better paid jobs elsewhere so people can reliably move to these areas with cheaper housing prices. Currently, moving out of London means moving away from your job. I understand this abandons people in London, I'm just not sure if it's feasible without international retaliation. It may be a bubble which bursts on it's own at some point.
but the math generally checks out if social housing is produced adequately to reduce rent demand, it will keep rents low to balance out the reduced number of rental properties induced by the tax.
I also don't think it's unfair since house prices rocketed and ability to purchase was easy thanks to govt. policy except for new landlords, who I wouldn't subject to the tax either for 10 years?
Again all this is to illuminate the position: policy is a bit pointless to point towards from my armchair.
To your second point:
What do we mean by labour flight of "wealth creators"? and what policy is causing these people to leave?
If they are going to leave because of taxes, why haven't they left already? We have high income taxes in this country, if you're a financier you could move to singapore.
For the same reasons one does not simply change the system, labour cannot simply leave, since it is precisely the British state which has enabled the ecosystem to create a finance hotspot in the world. Not even mentioning cultural and social reasons for people not moving.
As for billionaires, they also don't exist in a vacuum. Their wealth is contingent upon the British economy. I'm not trying to tax foreign wealth.
Of course, the landlord tax above - it would hit many - but it'd be a progressive tax mostly hitting billionaires.
We don't have it that bad yet anyway; it will get worse and can get much worse. Inequality isn't completely egregious yet, but it will be if we keep support.
For now, if we can address the housing problem we're not in a bad spot in my opinion.
All this is aside to the LTV though and my opinion hardly matters.
Thank you for your graciousness and temperance in our exchanges and apologies if I come across to "full on" on occasions.
I really appreciate your thoughts above and I agree with so many of your observations and thoughts.
I just wish our policy makers could be more open and honest in a public conversation about both the real difficult and pretty intractable issues that face us. And help more people grasp the complexities a difficulties involved in creating and implementing policy.
Unfortunately certainly at the political level I just see so much point scoring and trying to attack the "other side" with no thought as to the consequence of such constant talking down of any policy.
I confess to being disgusted by Badenoch and the conservatives perpetual drive to score points often at cost to the countries perception both internal and external.
Would be so much better if they could understand the opposition just like them do care passionately about the country. And as a protocol first measure any party political point against its cost or benefit to the country before opening their mouths. Unfortunately in the age of soundbites.......
It was only a hundred years ago that the majority of young and old could not afford houses or credit or whatever. It was only after two world wars and millions of “peasants”
were killed that life moved towards something similar to what you describe Grace. We still had rationing when I was a child, coal fires, no double glazing etc.. I was thirty before I could afford a car or a company pension. Tax was 30 odd per cent, mortgage interest was up to 14%, credit cards were up to 25% and many us Yes, things improved massively and computers came in. I only mention this because I was lucky to have a childhood in council houses and got to a grammar school but things were too rosy for many of us back then either. I do agree that things are awful now but rampant Thatcherism caused most of this and we continue to suffer from malignant capitalism now.
Sorry, I’ll go and have my breakfast now and try to chill. Take care y’all. Steve.
"It’s almost as though he’s trying to alienate them."
Better to alienate them than alienate The City if one is hopelessly in thrall of the unverifiable mythologies of contemporary economic orthodoxy, I guess?
For those unemployed British young people , I have a suggestion for them: go to big cities in China and teach oral English there ,it's a good choice! There is a huge demand for foreign English teachers in the developed areas in China.
Very interesting read. I think it is quite a similar article Mike Green wrote, though his is also looking a the squeeze of the middle class. The reasons though are very similar, which is a system rigged for the wealthy and a state which has no answers. Would like to discuss this with you further:
No vision , no purpose . Just short term missions to tick a few boxes.
Whatever they do the press will attack them, so they may as well be bold and take action.
I see it all the time with my clients. The ones who have values, are curious, don’t accept the status quo inspire themselves and others to take small steps .
They adapt and evolve as they go. They listen, learn as they go.
They say FEAR is
False
Expectations
Appearing
Real
They are drifting and freezing as a result. Real leadership means enabling others to take the lead in their own lives and society supports.
Taking to people in the Labour Party is like talking to someone with trauma. They are still stuck with ideas from decades ago.
At least the Greens talk about hope and Zack has said he doesn’t want it to be about him. He’s on the right track in the leadership world and next step is to show that they have a robust economic policy. I am happy to engage with them and you . They will win if they show they are not just about the environment ( even though it’s the most important thing and we can adopt Doughnut Economics)
We shouldn’t underestimate the power of a functioning housing market; the next generation being able to work for a home they can call their own. This fulfils a very basic need of safety and security. We see lack of regulation and enforcement of building standards, pushing liabilities on to home owners for shared spaces that would have been council maintained through ‘fleecehold’, onerous lease contracts that now appear unappetising to lenders, and shared ownership homes, the most brutal abuse of the state on first time buyers.
I’m interested in a specific point as an accountant in practice. Where the next generation has no hope of buying a home and securing a mortgage, will more people not report and not pay tax on their income? Is this the most direct way to opt out of the system that already delivers a broken social contract?
There are one or two of us old folk who joined The Zach Greens as well. Some of us do care but other than casting a vote, it is very hard to right all the wrongs.
Another insightful and eloquent piece. All power to your elbow.
Thanks Iain!
Generation F@$ked! That’s also the title of a very good book by Alison Pennington.
WIll check it out!
Yep. All true Grace. All happening right before our very eyes. Unfortunately, it’s what you would expect from a power-over (social darwinism) game. Despite the latest attack on the 99% — neoliberalism, with all its many accoutrements — austerity, decimation of labor unions, further enclosure/erasure of the commons, and privatization schemes, enlightened progress still made humanistic, social justice (BIPOC, LGBTQ+), and women’s liberation movements) gains. The system creates a vicious feedback loop. Arguably, the most critical threat, the Global Warming crisis, was the first to fall. The more progress “we the people” make, the more violent the ruling class become in an attempt to remain in power. Buckle up!
I think our only hope is the Green Party. I may be naive but I am done with tactical voting. Thank you for always writing the truth Grace 💕
Absolutely brilliant Grace. Who knew Enshitification could even enshitify itself. This could be New Zealand. This could be Australia. This could be anywhere. Capitalism’s long game must be existential because once it has laid waste to the next generation, what’s left? The Enshitification of life is also happening in lock-step with the Enshitification of the very planet we all share.
Cambridge scholar Dr Luke Kemp at the Centre for the study of Existential Risk at the University of Cambridge writes, “We can’t put a date on Doomsday, but by looking at the 5,000 years of [civilisation], we can understand the trajectories we face today – and self-termination is most likely.” So, ladies and gentlemen, boys and girls of the next generation, place your bets.
I appreciate the cogent description of a number of the issues, however I am pretty sure that if you are going to question the policies of Labour then in equal or larger amount one needs to be clearly stating why Reform and/or the conservatives are offering toxic choices too. There is also a real danger of the Greens taking enough Labour votes to offer a Reform or Conservative victory or coalition, and that would be even more catastrophic. IE The situation is bad but the heartfelt and accurate deconstruction of Labour choices may end up making things worse. A bit like the Hispanic democrats that voted for Trump having been turned off by the accurate criticism of Biden et al. But they ended up even worse off than under the democrats.
One could argue that proportional representation is a key change to enable more useful choices for voters but no mention here of that being a necessary reform.
One could also mention that we live in a global world that we forced on the rest of the world (ie let markets decide) however now that Asian countries are more efficient than us we seek to impose the very protectionist tariffs and policies that we forced them to remove and whose removal forced them to become efficient.
One could also argue that up till now we have lived the comfortable life in the west by exploiting 3rd world natural resources and moving the value adding part of the process from the countries with raw materials to ourselves. This model is now dead. We need to earn our way competitively in the world. Make no mistake we are competing with countries and economies whose children study for 12-16 a day from early to late education.
We need to be honest that for the next generations in Western economies life is going to be considerably more difficult that previously.
We need to prioritise our state support and spending. This is going to involve some harsh choices about removing support from those have been used to having it. This is going to involve pain and a loss of living standards.
We need to make better choices even if they seem harsh. I was reading today about the young men who arrive on our shores in boats with just the clothes on their backs. We apparently have a system where they are taken to buy new phones and new clothes etc. To be clear, I am not advocating that they should go without clothes but I am saying that the clothes should come from second hand shops not brand new. It is iniquitous to ask taxpayers who themselves have to shop at second hand shops because they cannot afford new clothes to use their tax money to buy migrants new clothes.
The article criticises Labour for saying the young need to work harder. I would ask what is their alternative and how does that alternative manage to compete for business and trade in a world where others are working harder and longer both in education and work.
Finally let us stop this dog whistle focus on billionaires and the rich. It gives the impression that if they had less money then everything would be okay and detracts from the fundamental change we need to make in how hard we all work.
Labours removal of non-dom and talk of taxing the rich has just led to a massive loss of wealth and people who can run businesses that generate wealth to countries that do not have such policies and accept that those who work very hard and succeed do will up richer than those who do not.
A starting point and paradigm shift maybe in the words of Kennedy, to stop asking what the state can do for us and start asking what we can do for our country and state.
Is not the point that the existing massive inequalities in wealth are not, and never will be, conducive to many of the younger and less wealthy parts of society willingly making the big efforts you suggest? Your argument that hard work is reliably rewarded just no longer (insofar as it ever did) holds water. And I'm not aware of any good evidence that taxing the rich has led to a 'massive loss of wealth'.
I am not sure where you got the idea that I said work is 'reliably' rewarded. I certainly did not mean to make that suggestion. I fear you have fallen into making a staw man argument that you can then shoot down. Sounds good but just not the real world.
My view is far from that. Let me clarify.
The system is not fair, life is not fair whether in nature or in human societies. With the money we purloined from the rest of the world over centuries we ended up so comfortable that we think the world and our society owes us a reliable reward for work, that our government will make us whole if we chose to take foolish loans or even sensible loans with which if interest rates go up we cannot pay and we lose our money. This is not the way of the world you make your choice and you take the consequences good or bad, complaining that it is unfair is not helpful. There is no trans national kind benevolent guardian that will pick us up if we make a mistake or even if we get treated badly. There are common benefits for all of us like sewage systems, transport systems, argueably emergency health systems, that we should be responsible for in common. But ultimately people need to to remember that no one 'owes' them a job and certainly no one owes anyone a job commensurate with their education or idea of self importance. I do actually believe that those who succeed should assist others but even this I do not believe should be a mandated duty it should be a personal choice beyond taxation for the commons that we all share. This is a harsh reality for people who have been brought up to expect and demand that the world caters for them and that they have a 'right' to take and spend the wealth that others have earned or acquired. TBC I am not suggesting unfettered capitalism or law of the jungle, I do think thatbsocieties work better if people have a social conscience and chose to serve and help others and in some cases are made to do this by taxation etc. But the place we have reached now where we demand the ,right, job and the 'right' pay before being prepared to work are not going to allow us as a nation to compete in the global economy. I can fully see how nice a world this was but we need to begin to grasp that our parents lived this way because our nation was arguably to a certain extent a parasite upon the rest of the world - yes there was some symbiosis but we took far more than our share.
You are aware for instance that in the not distant past because we were going bankrupt paying for Chinese tea (and we had not yet stolen and smuggled the tea plants to India Sri lanka etc) we decided to grow Opium in India and sell it to the Chinese to make our balance of payments better. When. the Chinese objected we sailed gun boats up the Yangtse and shelled them until they agreed that we could make addicts of their citizens with opium so we could pay for our tea. Not a history you would know unless you look diligently but I assure you the Chinese are aware and remember these actions.
Refernce tax, yes the evidence is not yet clear for the whole UK but is more obvious in Scotland that taxing the rich leads to a loss in tax revenue. However this ignores several important factors.
the top 10 percent of tax payers pay 60 percent of all UK income tax(HMRC figures) . We are an outlier Internationally in having most of our tax come from a very small sub section of the population.
This is more dangerous as these tax payers and their capital is easily mobile and does not have to stay here nor do they.
By the time we notice the drop in tax income from a proportion of these top 10 percent of taxpayers who pay 60 percent of all income tax (HMRC figures) it will be too late they will have gone.
More dangerously we do not just lose their tax for one year it will likely be in perpetuity and we also are almost certain to lose a lot of the money that would otherwise have been invested in wealth creating projects in the UK that will now be more likely invested in the new place they live.
Even more dangerously a significant number of these people may be the very entrepreneurs and talent whose judgement and risk of their wealth and work we can sorely afford to lose. We need to be attracting people like that not making them feel unwelcome.
"let us stop this dog whistle focus on billionaires and the rich. It gives the impression that if they had less money then everything would be okay and detracts from the fundamental change we need to make in how hard we all work."
Can't agree with this and I think this statement really gets to the core of the disagreement.
Given:
- The totality of labour in the U.K. generates the wealth of the U.K. (I think this is true on its face?)
- The U.K. is one of the richest countries (#6 GDP) in the world and one of the biggest exporters in the world (#5 in 2024)
- Tiny minority has been progressively taking a bigger and bigger share of the total wealth
Then:
Billionaires are to blame for lower living standards for the masses.
So yes, I have to say I think if the billionaires had less money/wealth/resources - which would mean dismantling the institutions which siphon/give ownership of the wealth to billionaires and replacing them with one's that keep wealth in communities- then everything will be better if not "okay".
As for "hard work" - given what I've said above- working harder will make us even more richer as a country, because yes the totality of labour will go up, and then that money will go straight to the billionaires thanks to our socio-economic and political system so they can buy another private jet and you can live in the same 50sq meter flat with a £5000 rent.
Re “The totality of labour in the U.K. generates the wealth of the U.K.”
Firstly one should be honest and say this is a Marxist analysis. (Nothing wrong with that Marxism gives good tools for criticism capitalism, however I should also be honest and say that I know of no Marxist led economic system that has prospered in the world (I hope we can agree that Chinas prosperity post Deng Xiaoping is not Marxist or communist in nature )
Nearly all other economic theory hold that
The above statement simplifies reality by highlighting labour, but in practice wealth creation also depends on:
• Capital: machinery, buildings, infrastructure, financial capital used in production.[wikipedia]
• Land and natural resources: physical space, energy, raw materials.[wikipedia]
• Technology and organisation: know‑how, software, management systems that make labour more productive.[economicsobservatory +1]
It also ignores the reality that some ‘labour’ generates much more wealth than other ‘labour’
Which returns us to the point that if the ‘labour’ that generates the most wealth is better paid in other countries then that labour will have strong incentive to leave the country. Particularly in the UK where manufacturing exports put us at 13-15 largest in the world. Only if you include service industries like finance do you achieve your figure of 5th. Service industry labour can relocate and remote work pretty easily (ie little friction to going somewhere else)
Re Tiny minority has been progressively taking a bigger and bigger share of the total wealth
How do you address the issue that the
relative measures of wealth inequality (such as the wealth Gini coefficient) have been broadly flat or only slightly rising since the early 2000s, meaning the proportional gap between typical households has not exploded, even if levels are high.
And what would your view be on the studies that emphasise that the biggest change is in absolute differences (the number of extra pounds the rich have compared with others) driven by asset price inflation, rather than a dramatic, continuous rise in the percentage share of wealth held by the very richest over the last two to three decades?
Re: “which would mean dismantling the institutions which siphon/give ownership of the wealth to billionaires and replacing them with one's that keep wealth in communities- then everything will be better if not "okay".
Sounds great but I an intrigued what institutions you think would be dismantled and what would replace them?
To keep this brief, I think we're now homing in on "ownership" as the point of impasse - not a dispute in the economic model. Either way there is some fundamental disagreement I think we can uncover but not resolve by discussion - so not sure how useful it is to discuss.
While I do think technology and capital - developed and built by engineers, construction workers and scientists etc. - is created by labour- I do not think natural resources are created by labour.
On Natural resources, I believe the disagreement is on ownership since the aspect of natural resources which doesn't require labour to extract, maintain or develop (i.e. it already existing on the earth independently) is then a discourse which pivots on ownership.
To formulate it even clearer: since value is determined in some complicated way via culture, society, human cognition/genetics/nature etc. - if you accept that the object of what is valued (not value itself) is material in nature then said material form is a function of natural resources and labour.
This has no normative force, it's purely descriptive.
The normative question is: who owns what is produced - whether that be manufactured goods, technology rights, industrial machinery etc. - or natural resources such as land.
I guess the point of my comments is to point out that the disagreement is some fundamental ideological thing based on ownership/where value comes from or something of this nature.
I'm now more sure it's about ownership.
Not sure if you agree?
Not certain that I do.
I asked a number of simple questions about your suggestions in your previous comment, like you said that certain institutions which you suggest siphon funds to Billionaires needed to be dismantled and replaced. I asked what institutions and what would replace them but I can see no response to that?
I really am intrigued as to what institutions you think need to be dismantled and what would replace them?
And if possible could you address the point I made about how your economic model would retain those who labour produces most wealth when other countries economies would value and pay them more?
The figures you used to capture the UKs place in exports (5th) can only be achieved by including service industries such as finance insurance else the figure is 13th or 15th depending on source.
On the one hand you seem to include service industries to assist your arguement about exports but on the other hand Marxist thought, I think, believes that Finance is not necessary.
I include a brief summary of non Marxist analysis of Finance and insurance type utility for an economy. Apologies if you are familiar with the model but it may help other readers and I have a feeling that finance may be one of the institutions you would seek to dismantle so it may assist you in identifying how you would replace it in modern economies tied to the global economic system. I am really intrigued hear how this dismantling might be achieved safely and what needs to be dismantled and would would provide for the utilities removed.
A Quick briefing on Core economic functions/utility of finance etc in a capitalist model
• channels savings into investment: Banks, investment funds, and capital markets mobilize household and corporate savings and direct them into productive uses such as factories, infrastructure, and technology firms. This capital formation is strongly associated with higher output, productivity, and long‑run economic growth in capitalist economies.[cbsl +3]
• Allocates capital and disciplines firms: By screening borrowers, pricing risk, and deciding which firms can raise equity or issue bonds, finance helps allocate resources toward projects with higher expected returns. Market valuations, credit conditions, and the threat of takeover or default also impose discipline on managers, influencing corporate governance and efficiency.[ipe-berlin +3]
Risk, time and uncertainty
• Transfers and transforms risk: Insurance, derivatives, and diversified investment vehicles allow households and firms to hedge against shocks such as price changes, defaults, illness, or natural disasters. This risk‑sharing encourages specialization and long‑term commitments that would be too dangerous in the absence of such instruments.[elibrary.imf +3]
• Intertemporal exchange and liquidity: Financial contracts transform short‑term deposits into long‑term loans, and illiquid assets into tradable claims, which expands the effective liquidity of the economy beyond what cash alone could provide. This makes it possible for people to smooth consumption over their life cycle and for firms and states to finance long‑horizon investments like R&D or infrastructure.[elibrary.imf +3]
Coordination and information
• Price signals and information aggregation: Interest rates, bond yields, stock prices, and credit spreads condense dispersed information about expectations, risk, and scarcity into observable prices. These signals guide decentralized decisions—where to invest, what to produce, when to expand or contract—in a way that is central to the coordination mechanism of capitalism.[ecb.europa +3]
• Payment and settlement infrastructure: Banks and payment providers operate the systems that clear and settle transactions, enabling everything from daily retail purchases to complex global supply chains. Efficient, reliable payment systems reduce transaction costs and are closely linked to higher levels of trade, employment, and income.[weforum +3]
Social benefits and systemic risks
• Expanding opportunity and inclusion: When well‑regulated, financial services can broaden access to credit, savings, and insurance for households and small firms, supporting entrepreneurship and poverty reduction. Governments also rely on bond markets and financial institutions to fund public goods such as infrastructure, health, and education.[hks.harvard +3]
• Financialization and instability: Critics argue that as finance grows relative to the “real” economy, it can foster speculation, inequality, and recurrent crises, indicating that beyond a certain size or complexity, the marginal utility of the sector may turn negative.
Contemporary debates in capitalism therefore focus less on whether finance is necessary—and more on what scale, structure, and regulation make its utility socially net‑positive.
I doubt anyone is reading this other than us!
Disclaimer: none of the policies I share here are probably any good, I'm sharing them to illustrate my position and demonstrate that the LTV does not need to inform policy. the latter of which needs to be grounded in real world realities and pragmatic, both to public opinion, the U.K. global standing as a minor first world power and the global status quo's. I think the immediate issue is the housing crisis. Organising in one's workplace, building solidarity, innovative small businesses etc. and other activism is all more important and aside to this.
To your first question:
The collection of institutions which siphons wealth to owners basically defines capitalism itself based on ownership and its many forms. One does not simply dismantle capitalism, in any form let alone in its totality for many domestic, industrial and international reasons.
That's what makes these questions very complicated rather than simple and also mostly pure conjecture.
It's particularly difficult for the U.K. to do any kind of radical policy- since you can't really remove any of it without international retaliation of some form which we are particularly susceptible to due to large debt and a internationally unprecedented current account deficit - as well as cultural and social commitment to neo-liberalism. But there's also not really another option other than a slow and painful descent into poverty or fascism.
I personally (not that my opinion matters!) would not even think of dismantling London finance; it would be a disaster for the U.K. economy. And the LTV being purely descriptive does not commit one to dismantling finance. Finance channels a lot of international wealth to the U.K. thanks to pax americana which is still the current global era. Therefore, before any departure from the status quo , I would seek to make it clear internationally that the system as is will continue for the city of London.
Rather to allow us to work towards a current account surplus I would consider implementing a dual currency system a little bit like China's RMB and Yuan but not identical - so that we can export via a weaker currency than the pound. I'd leave the current system 100% intact that's why it's not identical to China - since we'd continue exporting/importing in the Pound for the existing economy financial services etc.
This'd all be difficult to implement including possibly having some manufacturing areas of the U.K, goods and services be solely traded in this currency, and also importing via this new currency after floating it internationally. Initially, there can be some transitionary period where this new currency prices itself at half the pound for instance. The Bank of England would issue this currency. Further specifics I haven't considered, because this is just a conjectural exercise which has no effect on real policy!
As for dismantling institutions and what replaces them - depends on what we're removing. The Green's are very moderate here, reforming the system and will sway the needle a little in favour of working people. I think this is good - if we ignore the so called "scroungers" the right always speaks of - it will also give a helping hand to those who need a safety net to be more creative, pursue passions and take innovating risks whether in the workplace or starting a new venture. Particularly important for our highly educated labour base who mainly have financial opportunities rather than manufacturing one's.
If you tax landlords in general, capitalists seeking rents from property, at say some absurd rate which effectively ends the rental economy as we know it: say some single digit % of the rental property value p.a. , house prices will crash significantly as they increased significantly due to landlords via the marginal buyer effect. Revenues raised can be used to create social housing.
You obviously don't do this straight away, it would be a disaster - we'd need better planning so it doesn't cripple housing supply etc.
I'd leave London outside of the Tax, international capital arrives in London which is important for our financial account. Rather, create better paid jobs elsewhere so people can reliably move to these areas with cheaper housing prices. Currently, moving out of London means moving away from your job. I understand this abandons people in London, I'm just not sure if it's feasible without international retaliation. It may be a bubble which bursts on it's own at some point.
but the math generally checks out if social housing is produced adequately to reduce rent demand, it will keep rents low to balance out the reduced number of rental properties induced by the tax.
I also don't think it's unfair since house prices rocketed and ability to purchase was easy thanks to govt. policy except for new landlords, who I wouldn't subject to the tax either for 10 years?
Again all this is to illuminate the position: policy is a bit pointless to point towards from my armchair.
To your second point:
What do we mean by labour flight of "wealth creators"? and what policy is causing these people to leave?
If they are going to leave because of taxes, why haven't they left already? We have high income taxes in this country, if you're a financier you could move to singapore.
For the same reasons one does not simply change the system, labour cannot simply leave, since it is precisely the British state which has enabled the ecosystem to create a finance hotspot in the world. Not even mentioning cultural and social reasons for people not moving.
As for billionaires, they also don't exist in a vacuum. Their wealth is contingent upon the British economy. I'm not trying to tax foreign wealth.
Of course, the landlord tax above - it would hit many - but it'd be a progressive tax mostly hitting billionaires.
We don't have it that bad yet anyway; it will get worse and can get much worse. Inequality isn't completely egregious yet, but it will be if we keep support.
For now, if we can address the housing problem we're not in a bad spot in my opinion.
All this is aside to the LTV though and my opinion hardly matters.
Thank you for your graciousness and temperance in our exchanges and apologies if I come across to "full on" on occasions.
I really appreciate your thoughts above and I agree with so many of your observations and thoughts.
I just wish our policy makers could be more open and honest in a public conversation about both the real difficult and pretty intractable issues that face us. And help more people grasp the complexities a difficulties involved in creating and implementing policy.
Unfortunately certainly at the political level I just see so much point scoring and trying to attack the "other side" with no thought as to the consequence of such constant talking down of any policy.
I confess to being disgusted by Badenoch and the conservatives perpetual drive to score points often at cost to the countries perception both internal and external.
Would be so much better if they could understand the opposition just like them do care passionately about the country. And as a protocol first measure any party political point against its cost or benefit to the country before opening their mouths. Unfortunately in the age of soundbites.......
It was only a hundred years ago that the majority of young and old could not afford houses or credit or whatever. It was only after two world wars and millions of “peasants”
were killed that life moved towards something similar to what you describe Grace. We still had rationing when I was a child, coal fires, no double glazing etc.. I was thirty before I could afford a car or a company pension. Tax was 30 odd per cent, mortgage interest was up to 14%, credit cards were up to 25% and many us Yes, things improved massively and computers came in. I only mention this because I was lucky to have a childhood in council houses and got to a grammar school but things were too rosy for many of us back then either. I do agree that things are awful now but rampant Thatcherism caused most of this and we continue to suffer from malignant capitalism now.
Sorry, I’ll go and have my breakfast now and try to chill. Take care y’all. Steve.
"It’s almost as though he’s trying to alienate them."
Better to alienate them than alienate The City if one is hopelessly in thrall of the unverifiable mythologies of contemporary economic orthodoxy, I guess?
Thank you again for your insights, Grace. 😊
For those unemployed British young people , I have a suggestion for them: go to big cities in China and teach oral English there ,it's a good choice! There is a huge demand for foreign English teachers in the developed areas in China.
Very interesting read. I think it is quite a similar article Mike Green wrote, though his is also looking a the squeeze of the middle class. The reasons though are very similar, which is a system rigged for the wealthy and a state which has no answers. Would like to discuss this with you further:
https://substack.com/home/post/p-179492574
No vision , no purpose . Just short term missions to tick a few boxes.
Whatever they do the press will attack them, so they may as well be bold and take action.
I see it all the time with my clients. The ones who have values, are curious, don’t accept the status quo inspire themselves and others to take small steps .
They adapt and evolve as they go. They listen, learn as they go.
They say FEAR is
False
Expectations
Appearing
Real
They are drifting and freezing as a result. Real leadership means enabling others to take the lead in their own lives and society supports.
Taking to people in the Labour Party is like talking to someone with trauma. They are still stuck with ideas from decades ago.
At least the Greens talk about hope and Zack has said he doesn’t want it to be about him. He’s on the right track in the leadership world and next step is to show that they have a robust economic policy. I am happy to engage with them and you . They will win if they show they are not just about the environment ( even though it’s the most important thing and we can adopt Doughnut Economics)
We shouldn’t underestimate the power of a functioning housing market; the next generation being able to work for a home they can call their own. This fulfils a very basic need of safety and security. We see lack of regulation and enforcement of building standards, pushing liabilities on to home owners for shared spaces that would have been council maintained through ‘fleecehold’, onerous lease contracts that now appear unappetising to lenders, and shared ownership homes, the most brutal abuse of the state on first time buyers.
I’m interested in a specific point as an accountant in practice. Where the next generation has no hope of buying a home and securing a mortgage, will more people not report and not pay tax on their income? Is this the most direct way to opt out of the system that already delivers a broken social contract?