Great article. I've often thought that the British horror at how America lets cities die (like Detroit) is entirely misplaced, the rise and fall of towns and cities is completely natural. When a town only exists due to one specific industry from the 19th century, why must it be supported by the state to continue indefinitely? It makes no sense either economically or for the wellbeing of the residents.
As you touched on, I think Britain's reliance on mass immigration is tightly linked to the freezing of internal migration. The south east has swelled with people from abroad because they have not come from other regions of Britain.
Finally, I imagine another important reason the textile industry was not given state support was that its output was not need as a national security issue.
Another excellent article. It's quite ironic that one of the few examples where the British state successfully "ran down" an old industry was with the railways which, arguably, are one of the few that actually benefit greatly from centralisation and state support. It's certainly a "loss-leader" situation but the infrastructure benefit of a robust and widespread rail system is well known.
The Beeching Cuts may have been right to axe services and stations to areas which no longer needed it but the malaise of the industry in general has continued to hamper transport infrastructure in this country.
The UK is unusual among major economies in having its political, economic and cultural capitals in the same city. Fixing that would boost aggregate activity because private sector growth is inhibited in London by costs, labour availability and planning constraints, while much of the rest of the country subsists on formal and de facto transfers.
Haven’t historic regional fiscal transfers been more about supporting regions to keep their head above water rather than investment to enable them to grow their infrastructure and economies?
Also, you don’t mention the experience of other countries. Is there a contrary conclusion that could be drawn from looking at another country that has successfully invested in its regions’ infrastructure?
Regarding the first point, I don’t think this is really true of regional policy before 1979, given that it generally focused on subsidising investment, not increasing welfare spending (or similar).
Regarding the second, I have only a limited knowledge of other countries, but Germany (for instance) has had only very limited success at decreasing the gap between East and West Germany despite enormous spending.
More generally, modern economies seem to be increasingly concentrating on a small number of big cities — Britain and London is no longer such an outlier in this regard.
Yes, somewhat, though in my view WfH has negative productivity effects that are being hidden because 40-something middle managers hate going into the office. I think that a lot more economic growth depends on physical proximity, and preferably physical proximity that is regular and often informal or semi-formal, than people are willing to accept.
Moreover, even if it is now easier to earn a living in one of these dying towns than before, that doesn't make them any less depressing when it comes to their amenities (or lack thereof). It is also often difficult to find a partner of similar economic, educational, and social status. Even if they could get away with living miles away from London, I think many young people would choose to spend their early careers in the Southeast if they could afford it.
I think WfH is working a lot less well than people realise, the negative impacts are disguised because 1) a lot of the people tasked with making these decisions are benefitting from WfH, and so very receptive to positive stories, and
2) the effects are corrosive. New starts integrate more slowly, graduates learn more slowly, etc. There's no sudden drop-off, and nothing is ever monocausal, so people aren't sure.
Indeed. A third factor that I neglected to mention in my original comment was that we have been deluded by the fact that WfH was pioneered by software engineers and similar. The problem of monitoring here is very easy: you have a relatively motivated workforce who are producing relatively transparent output.
Remove one, let alone both, and you start to run into problems.
Yeah this fits a more general pattern that I've noticed anecdotally.
Many (most?) people do much less work when WfH, but highly motivated, productive people are able to do more.
And highly productive people are disproportionately influential in a business's decision-making. They answer fewer questions, get pulled into fewer discussions, and have the flexibility to pick up their kids from school or whatever - they're loving it. And in the short term, the businesses are fine too, because a lot is being done by those people.
But the workforce is mostly made up of people whose productivity depends a lot on their environment. And those people are losing out, because they're learning less. Eventually that effect will dwarf the small productivity gains from the productive people having more focus time, and that's not even getting into the hard-to-measure benefits of highly productive people having impromptu chats with one another at the office.
Great article. I've often thought that the British horror at how America lets cities die (like Detroit) is entirely misplaced, the rise and fall of towns and cities is completely natural. When a town only exists due to one specific industry from the 19th century, why must it be supported by the state to continue indefinitely? It makes no sense either economically or for the wellbeing of the residents.
As you touched on, I think Britain's reliance on mass immigration is tightly linked to the freezing of internal migration. The south east has swelled with people from abroad because they have not come from other regions of Britain.
Finally, I imagine another important reason the textile industry was not given state support was that its output was not need as a national security issue.
Another excellent article. It's quite ironic that one of the few examples where the British state successfully "ran down" an old industry was with the railways which, arguably, are one of the few that actually benefit greatly from centralisation and state support. It's certainly a "loss-leader" situation but the infrastructure benefit of a robust and widespread rail system is well known.
The Beeching Cuts may have been right to axe services and stations to areas which no longer needed it but the malaise of the industry in general has continued to hamper transport infrastructure in this country.
The UK is unusual among major economies in having its political, economic and cultural capitals in the same city. Fixing that would boost aggregate activity because private sector growth is inhibited in London by costs, labour availability and planning constraints, while much of the rest of the country subsists on formal and de facto transfers.
Is it that unusual?
France, Russia, Thailand, Philippines, spain, sweden, norway, denmark, finland.....
This article is beyond excellent; it is important.
Haven’t historic regional fiscal transfers been more about supporting regions to keep their head above water rather than investment to enable them to grow their infrastructure and economies?
Also, you don’t mention the experience of other countries. Is there a contrary conclusion that could be drawn from looking at another country that has successfully invested in its regions’ infrastructure?
Regarding the first point, I don’t think this is really true of regional policy before 1979, given that it generally focused on subsidising investment, not increasing welfare spending (or similar).
Regarding the second, I have only a limited knowledge of other countries, but Germany (for instance) has had only very limited success at decreasing the gap between East and West Germany despite enormous spending.
More generally, modern economies seem to be increasingly concentrating on a small number of big cities — Britain and London is no longer such an outlier in this regard.
Communist china could be a good example
The manchurian industrial heartland (built by japan) was deliberately destroyed and entire factories were relocated to the undeveloped south
Yes, somewhat, though in my view WfH has negative productivity effects that are being hidden because 40-something middle managers hate going into the office. I think that a lot more economic growth depends on physical proximity, and preferably physical proximity that is regular and often informal or semi-formal, than people are willing to accept.
Moreover, even if it is now easier to earn a living in one of these dying towns than before, that doesn't make them any less depressing when it comes to their amenities (or lack thereof). It is also often difficult to find a partner of similar economic, educational, and social status. Even if they could get away with living miles away from London, I think many young people would choose to spend their early careers in the Southeast if they could afford it.
Yeah this is my sense of it too.
I think WfH is working a lot less well than people realise, the negative impacts are disguised because 1) a lot of the people tasked with making these decisions are benefitting from WfH, and so very receptive to positive stories, and
2) the effects are corrosive. New starts integrate more slowly, graduates learn more slowly, etc. There's no sudden drop-off, and nothing is ever monocausal, so people aren't sure.
Indeed. A third factor that I neglected to mention in my original comment was that we have been deluded by the fact that WfH was pioneered by software engineers and similar. The problem of monitoring here is very easy: you have a relatively motivated workforce who are producing relatively transparent output.
Remove one, let alone both, and you start to run into problems.
Yeah this fits a more general pattern that I've noticed anecdotally.
Many (most?) people do much less work when WfH, but highly motivated, productive people are able to do more.
And highly productive people are disproportionately influential in a business's decision-making. They answer fewer questions, get pulled into fewer discussions, and have the flexibility to pick up their kids from school or whatever - they're loving it. And in the short term, the businesses are fine too, because a lot is being done by those people.
But the workforce is mostly made up of people whose productivity depends a lot on their environment. And those people are losing out, because they're learning less. Eventually that effect will dwarf the small productivity gains from the productive people having more focus time, and that's not even getting into the hard-to-measure benefits of highly productive people having impromptu chats with one another at the office.