PREVIEW： Brokenomics ｜ Are we a rich country or a poor one？
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Summary
What does it mean to be rich? Is it a number, or is it something more like a set of 5 things that make a man a rich man? Or is there something more to it than that? I m not sure.
Transcript
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Hello and welcome to Brokernomics. Now, I've been thinking a bit philosophically lately,
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I've been thinking about what does it actually mean to be rich. Now, at first blush, this is one
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of those sort of questions which, you know, maybe the mere fact that you're asking it gives you
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your answer. I mean, maybe you don't ask, am I rich or am I sane, unless you actually are,
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and then you're just sort of pontificating a bit too much about it. But I'll tell you what got me
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thinking about it is Guy Ritchie. He has this good series called The Gentleman.
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And it starts out with this sort of montage of what you might assume are very rich people,
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landed gentry living in their country estates in their big houses. But they're all absolutely broke.
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And, you know, yes, they live on a country estate with a very big house that's been in the family for
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17 generations or whatever it is. But they're completely poor. And, you know, the roof is
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shot through. And, you know, they can't afford to fix it. And nobody goes upstairs anymore,
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because the upstairs is just covered in tarpauling and buckets everywhere, which they just had to go
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up and occasionally empty out the window. So, you know, it is possible to, on first blush,
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look rich while being completely poor. Spoiler alert, where I'm coming to this is basically
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Western nations today. Because I keep getting told that people are coming here because
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we are a rich country. But it doesn't feel like that to me. It feels to me like we are completely
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broke. But anyway, now on my philosophical journey, I started pondering, you know, what does it mean to be
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rich as an individual for a start? And I came to about five factors, I think, that clinched it for me.
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And, you know, the first big one is that you get to control your time. You know, if your hours are
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directed by debt and obligation and fear of loss, then maybe you're not actually rich.
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You know, is the man who earns 40k a year with no mortgage, who has time to raise his children
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and control over his calendar and can do what he wants when he wants, is he richer than a banker on
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300k, who is chained to a Blackberry and a mortgage on a on a two million pound McMansion?
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You know, I think maybe the rich man is the guy who does not necessarily have a lot,
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but who needs little. And that sort of knocks on the head any notion that being rich is a number.
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I don't think it is a number. I think it's something else.
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it's about redundancy. You know, it's resilience. It's not living paycheck to paycheck, even if the paycheck is a really big number.
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It's redundancy in money, but also in energy. You're not burnt out.
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You're not in relationships that you hate. You're in relationships that you appreciate.
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You know, you're not lonely. You have future options. You're not trapped.
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You know, if the threat of government and HR departments and bank managers and blackmailers can collapse your life,
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maybe you're not rich, you're fragile. So wealth has to be sovereignty.
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Four, the ability to raise the next generation.
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You know, if you can't afford to raise children without relying on subsidies or extended family,
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then maybe you're not rich. You're just releasing a lifestyle.
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You know, historically, wealth always meant land and food and family and safety.
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Whereas today, the sort of generally accepted definition appears to be synthetic and leveraged.
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So, you know, you get sick or you lose your job or the government has some insane notion,
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like we're going to do two years of lockdowns unless you agree to take the thing.
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We need a test to ask if you're rich and, you know,
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play along at home and see how you feel about these questions.
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It's, you know, can you stop working for a year and be fine?
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Can you have another child and not go into debt?
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HR departments, algorithms, employers, associates,
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Do you have the ability to walk away from, you know, deals and social contagions and people
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Can you live where you want and how you want and still sleep well at night?
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And if you're mostly answering yes to those questions, then I think you're rich,
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even if you live simply, even if your number isn't as big as somebody else's number who can't
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And, you know, we've got this kind of inversion in the modern world where, you know,
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the average person in the US or UK or, you know, pick your country.
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I think this applies to the entire Anglosphere and most European Western nations and, well,
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But, you know, the average person, they've got a smartphone and they've got a pension fund
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and they've got access to Amazon and they might even buy a lot of stuff on Amazon.
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But they can't afford a home and they can't afford children and they can't afford to speak freely at work.
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You know, they're asset linked, credit fed, but existentially rather poor.
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So anyway, so then I started thinking about, okay, well, what does this mean
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Because, you know, I think that a nation is healthy and rich when a single income family can raise children in safety.
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I think it's when their citizens are not surveilled or coerced or economically trapped
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or having to ask permission from their bloody bank to withdraw some money.
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And if they don't give a good enough reason, then they get told no and they can make transactions.
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I think a nation is rich when it produces more than it consumes and it doesn't have to rely on leverage in order to get there.
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And I think it is rich when it treats the future as something to invest in and not something that you just extract from
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to keep your old people in the lifestyle that they have come to expect from the largesse of the state.
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And by all those metrics, Britain was richer in the 1990s, not because we had a bigger number.
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You know, the national balance sheet was much smaller then,
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because people had more control over their lives and they lived more fulfilling lives.
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And it feels today that we are rich in the number, but we're actually quite poor in everything else.
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We were certainly poor in sovereignty. So then I thought, OK, well, let's quantify this.
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Let's quantify what does it mean for a nation to be rich?
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So number one, it can sustain itself without extraction.
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You know, if a nation produces enough food and energy and capital and training in its people
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without bleeding future generations through debt obligations or relying on foreign bailouts,
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you know, if it doesn't live on debt debasement and imported labor just to function.
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Well, Britain today runs persistent twin deficits, you know, fiscal and current account,
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which in itself is a massive red flag in corporate finance.
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You know, compare that to post-war Britain. Poor on paper, but we built our own homes.
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We mined our own coal and we educated our own engineers and we raised the next generation.
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And even by the 1990s, which is kind of where the point that I want to focus on as a distinction from today,
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because actually the 1990s is not that long ago. And I can remember it personally and I can remember it was fine.
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It was nice. It was, I mean, compared to today, it's a bloody golden age compared to today.
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You know, in the 1990s, balance of trade was mildly negative, but basically on everything else that I talked about,
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it was good. Today, the UK imports, well, basically everything, energy, food, labor, capital.
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What does it export? Debt and some services. Right. The second factor in is a nation rich,
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is can it raise the next generation and keep them safe? That's important. Keep them safe.
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Britain's fertility rate is 1.5 and that's only when you include
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the new arrivals who are a little bit better on that front.
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Child poverty, housing instability, mental illness, family, they're all up and then family
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formation is down. Well, that doesn't look good. If you look at educational standards on these
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metrics where they compare nations, Britain peaked in about 2006 and has been declining ever since.
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And you only need to look a little bit at some alternatives. You know, take Israel, for example.
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Israel is less wealthy per capita. Right. But it's got a fertility rate of three.
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It's got a strong national identity, which admittedly is causing a bit of an issue at the
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moment. But we won't go into that here. I'll let Faraz do that on his show.
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But all round, it looks like a civilization which is confident and assertive and it's in growth mode.
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That's not what it looks like here. I mean, even compare us to France.
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But they've got a fertility rate of 1.8, which is about as high as it gets in Europe.
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They do channel some subsidies, some state subsidies. Of course, they do their France
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France into that. But, you know, they have a much better rate than we do here.
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Third factor. You've got to protect your nation from chaos.
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Safety is pretty foundational. A rich nation maintains law and order.
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Borders. It prevents urban collapse, which urban areas tend to do, if not managed correctly.
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And in London, major crime is up. Assaults are up. All sorts of altercations are up.
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Antisocial behavior is not only up, it's actively tolerated.
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And border control is barely functional. Well, I don't even know if I can use the word barely anymore.
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You know, 1.2 million arrivals in 2003. And it has come down a bit, but not much.
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The net numbers have come down because so many Brits are giving up and leaving the country.
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But that's a cheat. We can't allow them that. Compare that to 1990s Britain.
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In some things, crime had peaked at that point. Murders were higher than they are now.
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We get more antisocial behavior and assaults and all the rest of it.
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But importantly, the 1990s is community cohesion was considerably higher.
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And trust in institutions, well, it existed. People still had it.
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It's very low-crime. It has a small state, but very high-functioning services.
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It's got a state which is rich in capacity, even though it's small in size.
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You compare that to something like Sweden, which is trying to do everything through the state.
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High nominal wealth, but it just keeps importing dysfunction.
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And it has no go zones and grenade attacks and gang warfare and considerable demographic anxiety.
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Well, the fourth thing I thought of is, okay, well,
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what if the citizens in your country have autonomy and they have time?
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You know, I would think that a rich country enables its people to live and not just survive.
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And in Britain today, dual income is basically a requirement to raise children,
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which of course means that somebody else ends up raising your children for you.
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Commute times are up. Working hours have flatlined. Mental health has declined,
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most significantly in young people. Anxiety and depression are well up in young people.
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Only 39% of 25 to 34 year olds own their own home.
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The rest rent from boomers or the state. And by own your own home,
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I don't, of course, I don't mean that you actually own your own home.
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What I mean is that you nominally own it while you lease it from the bank and make mortgage payments.
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And compare that to the mid nineties, you know, a single income could support a family back then.
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You know, we're always given the example of this Homer Simpson's character who we're told is a loser,
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but young people look at him today and say, well, look, he was raising a family on a single income
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and he's got a detached home and he has holidays.
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I can't accept that this guy's a loser by any means, but it's just because he's from the nineties.
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More people owned homes by 30 in the nineties and there was less surveillance,
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there was less debt and there was more trust. You know, again, you know, pull out some comparisons.
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I don't know, Japan, Japan, they have long work hours. They have low immigration. They have high
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savings. So they're rich in capital, but they're rather poor in time because they really like to work.
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Italy, on many metrics, wealthy families, but they've got a declining young population.
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They've got deep stagnation and it looks like a country which is rich in heritage, but broke in future prospects.
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Right. Fifth thing, what is it? What is a rich nation? Well, it can defend itself and it can make its own decisions.
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A rich nation is not a vassal. It has military, industrial and cultural sovereignty.
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The UK's armed forces are at a post-war historic low. Its energy independence is gone. It cannot make
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independent decisions and chart its own course when it is dependent on France to keep the lights on.
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Our cultural policies outsourced to NGOs rather than being something that we collectively agree on.
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Monetary sovereignty is at most nominal because the Bank of England is constantly playing catch up to
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world markets and basically the dollar. Let's throw in another couple of comparisons. Hungary.
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It's small, economically weaker, but very rich in sovereignty. It controls its own borders and it defines its own culture.
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United Arab Emirates, it's resource driven, but heavily investing in diversification,
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city building and national prestige. And you get a sense of that national prestige. They feel it out there.
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They feel like they're building towards something. So then we start thinking, okay, well,
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is Britain rich? And can we ask, is it richer than it was in the 1990s? Well, if you go for a standard
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economist, they're going to go with yes, because the number is bigger. But then you ask me, who's not a
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standard economist, and I think, okay, right. Productivity growth, 1990s, it was 2% a year.
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Today it's 0.4 and I find that number questionable. So are we richer? No.
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Young home ownership was 60%. Now it's 39%. Are we richer? No. No, we're not.
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Single income families, perfectly feasible in the 1990s. Today, very rare. Are we richer? No.
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No. Energy autonomy. Right. So back then, thriving North Sea oil exports. Today, we are a net importer.
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So are we richer? No. Crime and public order. It was recovering in the 1990s. It was improving.
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In today, it's fraying. And people have actively lost faith in the police who are largely seen as enemies.
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So are we richer? No. No, no, we're not. Border control. In the mid-90s, it was basically intact.
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Today, there was no semblance of border control. So are we richer? Again, no.
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No. NHS, not a fan of the model myself, but 1990s short waits. You know, if you did use it, it was available
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and relatively quickly. Today, there was a 7.4 million backlog, I believe. So are we richer
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on the metric of the NHS? No. Mental health? There are international measures for looking at
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these things. I think they call them CMD. I'll look this up. So in the mid-90s, it was 15%
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on this metric. Today, it's 23%. So are we richer in mental health? No. Again, fertility. It was 1.8
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back in the mid-90s, which is still too low. But what we would give for 1.8 today.
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So are we richer? Again, no. Sovereignty. We had it. We didn't have complete national sovereignty.
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The dollar was still dominant and international bodies were still powerful. But we could chart our
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own course back then and today it is deeply constrained. We can't make a move without
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it being agreed at some international level. So are we richer on national sovereignty? Again, no.
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So look, I've just whizzed you through whatever that was, you know, maybe 7, 8, 9, 10 metrics.
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And on every single one of them, we are poorer than we were in the 1990s.
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So then I started to get a bit philosophical, right? So a nation is rich when it can sustain its people,
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its future and choose its own destiny. And today, Britain is not rich on any part of that metric.
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We're wealthy in valuation. If you get the auditors out to value our assets, we look rich.
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We're poor in national vitality. We're prosperous in metrics, but we're actually collapsing in function.
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And we are free on paper. You saw Keir Starmer stand up with Donald Trump and Keir Starmer insisted
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that we've long had a tradition of free speech. And Trump is just like, you don't have any more,
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do you? It's ridiculous. So it actually, we're not free in actuality. So, you know, we've got this
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situation where globally the richest nations may be those rising from poverty with intent.
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You know, it might be countries like on these sort of metrics, you know, India, Poland, Indonesia,
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they're not yet rich in assets, but they are rich in energy and purpose and demographic optimism
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and a sense of going somewhere. We don't have any of that. So then I thought, okay, right,
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I'll get some metrics and I'll put some metrics against this stuff. So GDP per capita on a purchasing
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parity basis. I did all of these on purchasing parity basis. 48,000 a year, right? National debt,
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101% of GDP. Fertility, 1.5. Energy balance, we're a net importer. Migration, over a million a year.
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Productivity growth, zero something percent. Public order collapsing. NHS backlog, high.
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Young ownership, low and falling. And cultural confidence is, it's just gone. It's just gone.
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So we're wealthy in name. We're called a rich country. But on every metric that I look at,
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we're not rich at all. If you would like to see the full version of this premium video,
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