Warning! Long because I don't really have anything else to add after this.
Your posts raise some legitimate issues around demographics, productivity, pension sustainability, infrastructure, incentives and the long-term fiscal pressures facing the UK. I do not doubt that most serious economists would accept that the UK faces genuine structural economic problems which cannot simply be ignored.
Where I think the discussion starts to fall apart is when quite absolutist economic opinions are presented as though they are basically unquestionable mathematical facts. Economics is not mathematics or physics. There are multiple schools of thought, different assumptions, behavioural responses and political trade-offs. As the joke goes - put 10 economists in a room and you’ll get 11 opinions.
That is why statements like:
– “mathematically there is no other option”
– “the maths simply doesn’t provide any other possible outcome”
– “it will happen regardless”
– “anybody who understands basic maths can see…”
fall short, especially when compared with the nuance and uncertainty that serious economic analysis often involves.
You also repeatedly imply that disagreement can only really come from ignorance. I would refer you back to the old joke about 10 economists in a room. Economics is full of competing theories, imperfect information, political trade-offs and debates about incentives, behaviour and risk.
There are lots of possible responses to long-term fiscal pressure:
– productivity and growth reforms
– industrial strategy
– infrastructure investment
– immigration and labour market reform
– healthcare reform
– pension reform
– retirement age changes
– tax reform
– housing and planning reform
– borrowing
– mixed public/private approaches.
They all present different cost/benefit trade-offs. Reasonable people can disagree about those trade-offs without dismissing each other as incapable of “big picture thinking”.
You also double down in some of your replies in a manner that undermines your credibility and your arguments. There is a difference between arguing strongly and repeatedly implying that disagreement mainly reflects ignorance or stupidity.
Comments like:
“economically illiterate electorate”
“mathematical illiterates”
“my primary school children understand this”
“people refuse to accept economic reality”
“grabby and entitled people”
“self-righteous retirees”
“people have no grasp of basic maths”
It is a debate, not a mental wrestling match where the aim is to shame opponents into silence or submission. I have been guilty of this myself and am trying to do better.
Have you considered that people may disagree because they have legitimate concerns? They may:
– question the assumptions
– disagree with the weighting of causes
– distrust how reforms would actually be implemented
– support universal systems because they believe they are the right thing to do
– or think behavioural and social consequences matter more than you do.
That is not the same thing as being incapable of understanding economics or believing the current situation can continue indefinitely.
To be fair, some of your proposals are entirely reasonable. They are also things that many people you have levelled your disdain toward have already discussed themselves:
– infrastructure investment
– industrial strategy
– vocational training and education reform
– childcare provision
– reducing tax cliff edges
– preventative healthcare
– improving productivity and incentives.
They are all legitimate policy discussions. It’s that pesky word again: “discussion”.
But even there, I think your A+B=C approach understates how difficult implementation is in reality. A lot of the argument seems to assume that:
– savings from pension reform would actually be redirected into productive investment
– governments would maintain disciplined long-term strategies
– behavioural responses would remain manageable
– and means-testing would not fundamentally damage trust in the pension and savings system itself.
Those are pretty huge assumptions, not mathematical certainties.
And this is where I think the contribution-based side matters more than you are prepared to acknowledge. The creation of the post-war welfare state was not originally framed as charity.
Beveridge himself wrote:
“Benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.”
and my particular favourite,
“The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”
That distinction matters politically and psychologically because many people do not see the state pension as simply “free money”, but as part of a reciprocal social contract tied to decades of National Insurance contributions and deferred entitlement. That does not mean reform should never happen. But it does help explain why people react strongly to aggressive means-testing proposals. Many see it not just as fiscal reform, but as weakening the contribution principle and changing the rules after people have spent decades planning around them.
I also think there is a broader behavioural issue here that your analysis and proposed solutions miss. If people increasingly feel that:
– prudent saving will simply reduce future support or be used by the government as an extension of the public purse
– pension rules will continually change
– asset accumulation will be penalised
– long-term planning is unreliable
– or security in retirement is becoming increasingly uncertain
then people will naturally change their behaviour accordingly. There are always unintended consequences. Look at what happened when it was suggested that the tax-free portion of pensions could be reduced. There was an uptick in people taking their tax-free lump sums. Many people use that money to clear remaining mortgages or stabilise their retirement finances, not simply for luxury spending.
Or take the Renters’ Rights Bill. Regardless of what people think about smaller landlords, many were still providing additional homes for the rental market. Large numbers exiting the market was hardly ideal. Reducing supply while demand remains high simply creates further pressure and instability elsewhere in the system.
What will be the intended and unintended consequences of the mansion tax or AB’s potential land value taxes? Many homeowners are asset-rich on paper but cash-poor in reality. People often say they can simply downsize, but downsize into what exactly? There aren’t enough homes, let alone enough of the right type of homes in the right locations. Yes, freeing up larger family homes may help a few buyers. But there is uncertainty at the moment, so many people will delay big purchases. A quick look at the market will tell you many of those homes are already languishing. The people downsizing then move into two or three-bedroom homes and start competing with first-time buyers, younger families and other downsizers in an already constrained market. If there are still not enough homes overall (and it will take years to deliver them), pressure does not disappear, it simply shifts elsewhere within the system.
Governments have not been entirely honest, upfront or consistent when it comes to tax policy, incentives and market intervention. So I think you overstate the level of trust many people still have in them, particularly those who have spent decades trying to build stability and independence for later life. Not just people, but businesses too. How many firms have chosen not to expand because of rising tax burdens, higher employer NI, business rates, wage pressures and difficult trading conditions all arriving at once? Businesses that feel unable to plan with confidence often become more cautious, and that is not generally good for investment, productivity or growth.
So we end up with:
– lower saving
– lower investment
– reduced trust in institutions
– reduced entrepreneurial risk-taking
– lower workforce participation
– or even moving assets and talent elsewhere.
Those are entirely predictable first and second-order economic effects. You mentioned cliff edges yourself. What is the incentive to move beyond them if people can end up worse off overall through a combination of taxation and/or withdrawal of support? That is a perfect example of behaviour adapting, but not necessarily in a way that benefits the wider economy.
You also clearly place a lot of emphasis on pensions and demographics, but I do not think the UK’s problems can really be reduced mainly to retirees or welfare costs.
There are also major structural issues:
– weak productivity growth
– underinvestment
– housing shortages
– planning failures
– unstable industrial policy
– infrastructure weakness
– declining investment confidence
– Brexit-related trade frictions
– and decades of political short-termism, with taxpayers often ultimately carrying the cost.
Add in the broader issue of the UK making money increasingly through debt, owning assets and/or moving money around rather than through productive work, innovation, infrastructure and long-term investment and you have the perfect storm. Property becoming treated primarily as an asset class rather than somewhere to live is probably one of the clearest examples of that in the UK economy. That was driven far more by decades of policy, finance-led growth and structural incentives than by ordinary pensioners.
Who got the dividends and who is picking up the cost for the water companies? Because I also think there are valid questions around relying so heavily on partnerships and investment structures focused primarily on maximising short and medium-term investor returns, often using complex tax “efficient” structures that can move large portions of profits out of the country rather than supporting long-term productive investment and sustainable economic growth. It goes without saying that investment is essential, but fiduciary responsibility matters too, because incentives and time horizons are important. If large parts of the system increasingly reward:
– asset extraction
– short-term returns
– leveraged gains
– complex tax efficiency structures
– and investment models built around relatively short 3–5 year exit windows
then where is the incentive for genuinely patient long-term investment?
Shareholders and PE are not necessarily the saviours many people present them as.
Where are the investors willing to:
– build productive capacity over decades
– invest through weaker periods
– prioritise long-term infrastructure
– support innovation with uncertain payoffs
– or accept slower returns in exchange for a stronger and more stable economy over the longer term?
I am concerned about how reliant the UK has become on international capital and external investors in ways that can benefit the country in the short term, but allow a large proportion of the longer-term profits, dividends and returns to ultimately flow back out of the country again. Like I said foreign investment is not inherently bad and obviously the UK benefits from external capital, jobs and investment. But if too much of the economy becomes structured around short-term capital flows, asset inflation and extracting returns rather than building long-term productive capacity, resilience and domestic investment, then that can create long-term structural weaknesses of its own as well.
And while comparisons with countries like Australia are interesting, systems cannot always be transplanted neatly between countries with very different:
– demographics
– resource wealth
– pension structures
– housing markets
– immigration patterns
– and institutional histories.
Australia also benefits from a very different resource base and economic structure to the UK.
You clearly more informed in some areas than than many posters and some of the structural concerns you raise are perfectly valid. But you don't have to be an economist to understand incentives, behavioural responses or the importance of trust in institutions. Nor should economic literacy become an excuse for hostility toward people who disagree with you.
I find my own views challenged and adjusted regularly through discussions. Some core beliefs will stay the same, such as believing a civilised society should have a social security system, but other views evolve over time as I am exposed to different viewpoints and research different subjects.
Your points comes across as dictatorial, dismissive and at times openly contemptuous toward people who disagree with you. Ironically, given how economically literate you clearly are, that feels like a missed opportunity to genuinely educate people or challenge their thought processes rather than alienating or trying to shame them.
People are far more receptive to an economist analysing trade-offs than to a politician defending an ideological position.