Can the British Economy Take It?

CU wrote something characteristically interesting (and characteristically spelled …) the other day in a BTL comment:

it is a miracel [sic] the economy has broadly gone on under this weight of uncertainty

And gone on rather well, in the (global) circumstances.  Which leads me to ponder on two potentially conflicting points.  First, the optimistic angle:  “There’s a great deal of ruin in a nation“, as Adam Smith had it, meaning that an established economy can bear quite a lot of apparently destructive nonsense before it is, actually, ruined.  (We’ve had BTL commenters here noting that Life Goes On even in Ukraine and Syria.) 

In similar vein it has sometimes been noted how little difference politicians, for all their bluster, actually make on the economy: so maybe a zombie government-parliament can play its silly games without too much impact.  Retrospective analyses frequently pin big economic trends on global factors, often creeping up on the supposedly knowledgeable players who are supposed to be in command of such things, taking politicians and economists alike by surprise.  When things go well – as they usually do, see Economic Growth for centuries now – some folks (not least, errr, capitalists) tend to attribute this to the workings of markets and free trade.  

On the other hand … well, we could look at Venezuela.  Politicians can have an impact.  Perhaos more appositely (until Corbyn gets his hands on the levers), the great JK Galbraith was wont to say that economics and policy-making in the UK are more complex than elsewhere because Britain is, first and formost, a trading nation, ever since it first muscled onto the world stage at the tail end of the Tudor dynasty.  (Some would say a pirate nation, of course.)   There are more moving parts in our economy, many of them exposed to the outside.  This contrasts with, say, the French or traditional US economies, more heavily based on agriculture and other internal resources, and more self-sufficient accordingly.

Of course. others have their problems too – one thinks of the great exporters, Germany and China.  So if there’s Trading Trouble afoot, we may not be alone.

Still, it can’t be denied we’ve added an extra twist to our own local story.  And if things do take a downturn, whether caused by Brexit/uncertainty, or made worse by it, or just because of global conditions, there’s one other important thing to bear in mind.  Whatever in detail the British Settlement has been, that has kept the show on the road for all these years without the polar-opposite, seemingly irreconcilable positions coming into stark conflict, one aspect must surely have been this: that a large and ‘broadly unproductive section of society’ (I am choosing my words carefully here) has accepted its lot without taking to the streets, just so long as it keeps being paid to watch daytime telly.

If the City can’t keep laying the golden eggs, and that financial transfer to the rest of the nation can’t be afforded in future; well, then …

ND