No, @chakrabortty‎, Britain is not a developing country, we just need to quit hitting ourselves in the face

Moderat_cover1There is a production possibility frontier. That’s the posh way of saying there’s a technological limit to riches. Then I think about developing vs developed countries I think about how can countries get closer to that frontier. Britain is at, or close to that limit. Britain’s challenge is finding new ways to do things and splitting the proceeds of what we can already do.This is why I think Chakrabortty (and by association Larry Elliott) is wrong here:

Let’s admit it: Britain is now a developing country

We have iPads and broadband – but also oversubscribed foodbanks. Our economy is no longer zooming along unchallenged in the fast lane, but a clapped-out motor

Britain has decided through its imperfect institutions that we want to have a little more of the economic pie in the hands of banksters (via bailouts), a little less in the hands of the unemployed and disabled (via cuts) and the rest more directed by the market than by benefits. That’s the consensus policy view since about 2009/10.

Until the 1870s [1] Lancashire was the high-tech centre of the world (stop sniggering at the back). To get richer we had to invent new things and new ways of doing things. That’s what the UK looked like then and its what it looks like now. A developed country needs to think of new ways of doing things to get richer. A developing one (or, to be less more accurate, an undeveloped one) needs to adopt them.

Argument by definition is the worst, but how else can this argument proceed? Britain doesn’t need to adopt new ways of doing things from elsewhere to solve the problems of poor investment in R&D, bad infrastructure, income inequality or gender inequality, that Chakrabortty discusses. We already know how to deal with them we’ve just decided, as a polity, not to.

The coalition slashed capital spending because it looks like an easy short term fix for the deficit, same goes for the disabled and the poor. Bankers got bailed out because they made a convincing case they would drag everyone else down if they weren’t. Manufacturing got dismantled in the 80s and 90s and fixing the UK’s supply chain will be hard because its a bit of a mystery for how we get from here to there. We can’t just set up a factory manufacturing lead toys with “Made in England” on them like the Germans did,  [2] we have to work it all out again.

As to being overtaken by Taiwan or South Korea. Good for them! This is what successful developing countries look like…

Export (1)

…that’s right. They look like developed countries. This is as good as reason to get the champagne out as any.

Chakrabortty has a point about the concentration of economic wealth leading to a concentration of political power. That’s something I’ve been writing about since I started this blog….so…I guess this isn’t a “developing country problem” at all, it’s a problem of power and it will never go away. Relegating the abuse of power by elites to a pathology of poor countries is unhelpful. Britain has problems but they’re problems we have created. We don’t need to learn anything new – the hallmark of a developing country – we just need to quit hitting ourselves in the face.

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[1] After that things got a bit more complicated ask in the comments for MOAR History if you want.

[2] Okay! You get MOAR history anyway. The first things to carry “Made in X” on them were toy soldiers from, I believe, Sheffield because the Germans had got hold of some machinery and were making cheap knockoffs. The Germans didn’t know how to get richer when they were a developing country, so they adopted processes from us. Britain couldn’t steal back so it invented “Made in England” as a crude and effective branding to protect their business. See how it works?

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