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Culture War Roundup for the week of December 9, 2024

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The economic vibes have been weird in Europe for 15 years now.

Europe is over unless the business weecking EC gets the Milei treatment and Council of Europe and the atrocious ECHR that prevents deportations of illegals gets utterly destroyed.

I suppose we never really recovered from 2008, but most of the 2010's felt normal-ish to me.

In my particular European country, 2008 threw the entire political system into permanent disarray. Societal trust never recovered, and the infrastructure-debt incurred by the austerity of the 2010s was never paid back.

I have honestly never gotten the feeling that we properly recovered from 2008, despite many economic indicators showing otherwise. The Southern European countries by and large don't even have those.

infrastructure-debt

What is this?

Investment into infrastructure that's needed, but has yet to happen. In other words, it's what is "owed" to your country's infrastructure to keep everything functional at the desired level.

Speaking for England, we didn’t crash in 2008 exactly, nothing visibly changed. It’s just that from that point, things started slowly deteriorating. The cohort before me were being begged to use up academic funding, mine was scrambling for cash. University fees went up. Salaries went down. Just, very slowly, absolutely everything started getting worse and hasn’t stopped.

Personally I think that the period between Thatcher and 2008 was an illusion. We had nothing real to sell, so we sold our seed corn and our prestige. 2008 was just the day that stopped working.

What was the seed corn that you sold? I’m having a hard time figuring out what you’re thinking of.

Was thinking of things like our utilities, factories (all the car brands), our transport systems, our real estate (all those flats in the centre of our capital being sold to Chinese investors as glorified safety deposit boxes), our engineering (ARM) etc.

All those things are what a country needs to thrive IMO. Most of it was stuff that had broken down after decades of socialism. Despairing of being able to fix those things, or find money to invest in them, we sold them instead. And because we had loads of cash, we told ourselves we were rich and congratulated ourselves on how well we understood the post-industrial globalised world. See Terry Pratchett’s Making Money for an example of the genre. But we weren’t rich any more than an aging dowager who pawns her jewellery, and we understood nothing.

Despairing of being able to fix those things, or find money to invest in them, we sold them instead.

Was there a realistic shot at fixing or investing in those areas, or was selling them the only realistic option in your opinion?

Hard to say. ‘No, they couldn’t be reformed’ is certainly plausible. Things like Rover cars, the mines, and the factories had leveraged their ‘too big to fail’ / ‘we represent national prestige so it’ll look terrible if you let us fail’ for decades and the parasites had run their hosts into the ground.

Thatcher et al either lacked the appetite for a political purge or didn’t think they could pull it off, and chose to destroy or sell them instead. The idea was that whichever German conglomerate bought Jaguar wouldn’t care that it was a British prestige brand, only whether it was profitable or not. (And the current issues Jaguar is having makes the limit of that approach clear).

I wasn’t alive then and I have no idea whether Thatcher had a chance of destroying the unions without killing their hosts. I think it would have been worth trying. The alternative was just delaying decline.

Unfortunately Thatcher’s successors (Blair, Brown, Cameron) drank the Kool Aid along with the rest of the country (plus me to be fair) and started thinking that getting rid of everything except financial services and the ‘creative industries’ had been an inspired act of economic genius rather than an act of desperation.

Like many economists, they seemed to believe that deregulation caused or triggered growth rather than merely removing one set of obstacles to it. So we kept slashing and selling and we didn’t do anything useful with the money.

Scargill and the like had toppled a labour government: humiliating the PM at the time and dragging the country into a standstill. I would focus on Thatcher's predecessors (Callaghan, Wilson) as she was largely a reaction to their failed policy. If unions will sabotage the pro-Labor party, there's no point in government negotiating with them. By the time Thatcher came to be the public wanted the government to destroy the power of the unions and once that was accomplished they dispensed of her for more amiable neoliberal money-men: she was just the hatchet-man.

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Thatcher et al either lacked the appetite for a political purge or didn’t think they could pull it off, and chose to destroy or sell them instead.

Thatcher didn't want to save them, selling them off wasn't an act of desperation it was an act of political ideology.

"Margaret Thatcher strongly supported the initiative, as did the majority of her government, and considered it as a fundamental to improve the economic performance. “As she explained in her memoirs, [she] saw privatisation as ‘fundamental to improving Britain’s economic performance’. But it also chimed with her political ideology.”"

She believed that private industry with decreased regulation was the best way forward. She also wanted council houses and social housing in general out of public ownership and into private hands.

Indeed her famous "The lady's not for turning" speech was given because she was under significant pressure to stop her neoliberal policies. This wasn't desperation, this was exactly the culmination of her principles. Even if they had been performing well and the UK economy was doing well, she would have tried to do the same.

As for unions, she didn't kill them but she crippled them (or they crippled themselves depending on your opinion of Scargill et al). Trade union membership dropped nearly 10 percent during her tenure and days lost to strikes dropped 10 fold by the end of her final year. British Steel had returned to profitability by halving the workforce among other changes, but was still privatized/ This wasn't a fire sale, it was a strategy. And largely she was proven correct, most of the privatized companies showed improvements in performance and labor productivity, even those that were already running reasonably well.