As you say at the end, this describes many countries. With just a few words changed, this entirely resonates with the UK. What is it with the Anglo nations that we’re all suffering the same?
I glibbly and unsatisfactorily allude to this at the end. Lots of these issues are global. US seems to be bucking the trend. Suspect their federalism helps.
The US prints the global reserve currency, and part of that deal is that people need to be able to buy USD-denominated assets. Its very easy to buy US real estate, because it has to be. No one will buy dollars if they can't use them. When the British pound was the reserve currency, over 6000 miles of rail was built in *two years*(1844 to 1846) in a country only 600 miles long. Again, this was necessary, you can't have these huge capital inflows without letting all that liquidity go freely to where investors see opportunities.
The huge compliance system makes sense when you consider that making it difficult to build new assets *now* benefits those who already hold established assets. Effectively we are transitioning from a capital economy based on investment, to a feudal economy based on rent extraction. The only distinction between socialism and feudalism is of degree - how much are the proles allowed to keep, and how much is the rentier class entitled to exact from them. ALP-style upper middle class socialism makes perfect sense when viewed from this angle.
It is a feedback loop. In those societies, the State must directly regulate human behaviours that were previously governed by social norms, peer pressure and intermediate institutions.
For example, there is no liquor licence for pubs in Japan, since people instinctively understand that getting obscenely drunk and shitting in someone's flower bed next door is the wrong thing to do. This would not work in Australia any more. The degree of social cohesion required for a light-touch system like that to work does not exist. In Australia, we require registered training organisations (RTOs) to provide Responsible Service of Alcohol training (RSA) to bar staff to instil the social mores which Japanese people hold naturally.
As the state encroaches, the instutitions that previously held sway wither away due to being starved of relevance, which in turn increases peoples' reliance on the state.
The truly perverse end-stage of this is the attempt to reconstitute civic society using government-funded NGOs. These NGOs pretend to represent communities but are not accountable to them, since they are funded by the government. It is almost comical how much their worldview is at odds with the people they claim to represent.
Incidentally, this feeds back into something that I've been thinking about a bit lately, this bit from Jameson:-
“In the United States, ethnic groups are not only the object of prejudice, they are also the object of envy; and these two impulses are deeply intermingled and reinforce each other mutually. The dominant white, middle-class groups - already given over to anomie and social fragmentation and atomization - find in the ethnic and racial groups which are the object of their social repression and status contempt at one and the same time the image of some older collective ghetto or ethnic neighbourhood solidarity; they feel the envy and ressentiment of the Gesellschaft for the older Gemeinschaft which it is simultaenously exploiting and liquidating.”
I learnt this week that in Vietnam you need a license to work in an office. Not to employ people (which is separate paper work), but to actually work in an office. Most of the world is even dumber than here
Great article, chuckled at “University Jihadists”. I think an interesting thought experiment looking at the decline of the liberals is what hill(s) are they really willing to die on given death is now an option. Couldn’t come up with a good answer except tax incentives for IP and maybe mass migration.
I think ON are the only hope but we have to be clear eyed that they are genuinely retarded. Maybe you should run as a candidate? They are v pro Israel (keeps some of the worst out) and you’d be an intellectual titan.
Also if political parties are special interest group dominated, perhaps it’s a sign of health and vitality still in the system that a new party can rise in a crisis of stagnation and managed decline.
Yes ON rising is a sign of vitality, albeit a sympton of decay. I can't imagine a less fulfilling life than politics. Although Andrew Leigh seems to be having fun...
Because of his big beautiful smile? Probably takes a special type of temperament to be a democratic politician.
If I recall correctly there were snippets from when he was a PhD student circling twitter of we’re entering an age of demographic change, the social negatives it will bring and the need to manage it. If so it reminded me a lot of old school British colonial officers managing some mixed polity in SE Asia but applied here.
Though there are even US military pilots (not exactly university jihadists) writing anti-Semitic stuff about being a good goyim for Israel, so I’m starting to think this tide is not merely just the keffiyeh wearing bleeding hearts, but maybe related to Israel’s conduct with Iran and Gaza, if even right wing Americans are being more cynical (and not even anti-Zionist, but anti-semetic)
A central problem with the political economy of all the secondary Anglo countries (Australia, Canada, New Zealand and Ireland) in particular is rentierism crowding out globally competitive and productive innovation.
Their housing bubbles are partly due to NIMBY zoning and speculation - both forms of land rentierism - but also inefficient oligopolies in construction and real estate, who extract regulatory rents from the state.
This also applies to non-tradables generally like retail, banking and telecoms. Even though this inflates the cost of living, governments protect these sectors so they *won't* innovate people out of jobs. The dynamic is similar in health and education thanks to the strong unions there.
Meanwhile of course, low birthrates and brain drain are invoked to justify replacement migration levels, which keeps higher ed and paygo pensions solvent while putting more upward pressure on housing and downward pressure on wages. The key thing is that all of these benefit rentiers - empty-nest boomers and oligopoly class donors - and hurt per capita living standards, thus continuing the cycle.
Then as we all know, natural resources can be both a blessing and a curse, as their rents introduce further distortion. Australia can sell minerals and gas; Canada, oil and timber; New Zealand, farm animals and the right to gawk at its pretty scenery. Ireland has tourism too, but also just rents its tax code to multinationals who do their actual innovation elsewhere.
The problem with all of these activities is they result only incidentally from the basic fact of the state's sovereignty and territorial control, so instead of broad prosperity they simply induce boom-bust cycles that siphon capital from the development of other exports.
Obviously this isn't the full picture, since the UK is suffering too and it's the country originally responsible for underdeveloping the other four so that London could prosper, a dynamic the City has now replicated with its own domestic periphery.
So perhaps there really is something inherent to Anglo political culture which exacerbates national malaise once the high trust institutions that produced success run into turbulence and get captured. Alongside its other advantages, America escapes this because it was always lower trust and is no longer run by WASPs anyway.
The more people trust their government and their media, the more valuable it becomes to "seize the means of moral production" in order to advance special interests. Scoldocracy is the long-term result. Without a formal basis for trust, it can become a self-defeating prophecy: https://www.lesswrong.com/posts/jinzzbPHshif8nmnw/do-not-conquer-what-you-cannot-defend
The steelman of populism is: even if it makes things worse in the short term, it's still a necessary way to put the fear of God in the political class. I don't know if that strategy actually works, but I think it may be the implicit logic behind a lot of populist voting.
"America escapes this because it was always lower trust and is no longer run by WASPs anyway."
I suspect there is greater influence of Friedmanite ideology in the US even now. Maybe the billionaire who made their money as a disruptive outsider will hesitate to request regulatory capture, in a way the billionaire who made their money through rent-seeking will not. Perhaps political economy can enter self-sustaining attractor states.
I think Cameron Murray’s pillar though is that zoning and hence NIMBY’s aren’t a problem, that it simply changes where houses are built, rather than how many.
But also that immigration should be cut, as I guess only one arm of supply and demand actually counts.
Nothing to do with Anglos. Same for France, Germany, etc. Basically just incredibly stupid people getting elected because the world is too complicated for most people to understand: we rebuilt a world that we didn't evolve for and at the same time we turned evolution down to 1 or 2 with some of the fruits of that world: modern medical science and reason. Now the (great?) majority of us live in a world we aren't adapted for and cannot understand.
Great piece but you let Turnbull off too easy with his incredibly bad faith rollout of the NBN. If more people knew the details of this he would be a pariah.
We’ve all got our hobby horses when it comes to the rent seeking that make us most irate. The one that still makes my blood boil was the successful lobbying around “HELP debt relief” for Australia’s most educated and privileged at a public cost of $16bn.
Hard to know what’s to be done… a slow glide into mediocrity seems the most likely path barring something unexpected.
We are in a bad moment and the current gov bears a bunch of responsibility but also the rotten fruit from decisions and policies set prior to this gov are falling (eg ndis, public gov expansion, union beligerence, immigration, etc all predate albo)
They have no interest in proper government. Labor has 2 interests and 2 interest only. Help thr unions. Get elected. Neither of these are compatible with good governance.
This is a terrific cri de couer. Two observations. First, we've been here before. Between 1891 and 1933, GDP per capita growth was basically zero. In 1933, we looked like Argentina. But we managed to break out of that growth slump by being purposeful. Second, I would characterise our present state as Australia is complacent, rather than sick. It has coasted for too long on the extended China boom, immigration-boosted GDP growth and a naive belief in fake wealth accumulation (i.e. rising house prices, almost equally matched by rising levels of household debt).
I am thinking primarily of Giblin, Copland and the beginning of serious economics applied to public policy from the mid-1930s onward, the successful embrace of Keynesian economics starting in 1939 and the detailed planning that went into preparing for the post-war world in the early 1940s (as set out so well by Stuart Macintyre in Bold Experiment). These initiatives set Australia up for three decades of high per capita growth in incomes.
And of course it didn't help us that all our available means of acquiring infrastructure and manufactured goods were being bombed to rubble by the Luftwaffe or being sunk by both the Germans and the Japanese. We then realised how deep a hole we were in from an industrial perspective and how vulnerable we were to being cut off from a maritime perspective. I believe this, more than anything, drove the massive increase in capital growth over the next two decades - which we pissed away by voting in an ardent globalist in Whitlam...
Great piece. I would not call myself an Australian in case a nativist pops out of a bush to let me know otherwise, but I have nothing but love for the country, I think it’s the best in the world. I hope the elites wake up to the stagnation and pull the band aid off on housing and immigration.
It is wild how much of a good hand Australia has been dealt. I was recently reading about the 19th century Australian settlement and it is surprising how rich it has always been.
As for Argentina, I would not be so harsh to compare Australia with it unless indeed, Australia turns out to be just a giant mine
Australia has never really been sovereign, outside of perhaps a short period in the early 20th century. It’s a resource extraction outpost for the global economy with a few scraps thrown to the locals to keep everything going. Our mining and agriculture are impressive but not much else is. Our small population has saved us the entire time but give us a population like Brazil (seems the plan) and we will resemble Brazil but with far more catastrophic biogeographic issues ticking away underneath.
Kvetch for PM?
As you say at the end, this describes many countries. With just a few words changed, this entirely resonates with the UK. What is it with the Anglo nations that we’re all suffering the same?
I glibbly and unsatisfactorily allude to this at the end. Lots of these issues are global. US seems to be bucking the trend. Suspect their federalism helps.
The US prints the global reserve currency, and part of that deal is that people need to be able to buy USD-denominated assets. Its very easy to buy US real estate, because it has to be. No one will buy dollars if they can't use them. When the British pound was the reserve currency, over 6000 miles of rail was built in *two years*(1844 to 1846) in a country only 600 miles long. Again, this was necessary, you can't have these huge capital inflows without letting all that liquidity go freely to where investors see opportunities.
The huge compliance system makes sense when you consider that making it difficult to build new assets *now* benefits those who already hold established assets. Effectively we are transitioning from a capital economy based on investment, to a feudal economy based on rent extraction. The only distinction between socialism and feudalism is of degree - how much are the proles allowed to keep, and how much is the rentier class entitled to exact from them. ALP-style upper middle class socialism makes perfect sense when viewed from this angle.
It is a feedback loop. In those societies, the State must directly regulate human behaviours that were previously governed by social norms, peer pressure and intermediate institutions.
For example, there is no liquor licence for pubs in Japan, since people instinctively understand that getting obscenely drunk and shitting in someone's flower bed next door is the wrong thing to do. This would not work in Australia any more. The degree of social cohesion required for a light-touch system like that to work does not exist. In Australia, we require registered training organisations (RTOs) to provide Responsible Service of Alcohol training (RSA) to bar staff to instil the social mores which Japanese people hold naturally.
As the state encroaches, the instutitions that previously held sway wither away due to being starved of relevance, which in turn increases peoples' reliance on the state.
The truly perverse end-stage of this is the attempt to reconstitute civic society using government-funded NGOs. These NGOs pretend to represent communities but are not accountable to them, since they are funded by the government. It is almost comical how much their worldview is at odds with the people they claim to represent.
Incidentally, this feeds back into something that I've been thinking about a bit lately, this bit from Jameson:-
“In the United States, ethnic groups are not only the object of prejudice, they are also the object of envy; and these two impulses are deeply intermingled and reinforce each other mutually. The dominant white, middle-class groups - already given over to anomie and social fragmentation and atomization - find in the ethnic and racial groups which are the object of their social repression and status contempt at one and the same time the image of some older collective ghetto or ethnic neighbourhood solidarity; they feel the envy and ressentiment of the Gesellschaft for the older Gemeinschaft which it is simultaenously exploiting and liquidating.”
I learnt this week that in Vietnam you need a license to work in an office. Not to employ people (which is separate paper work), but to actually work in an office. Most of the world is even dumber than here
Great article, chuckled at “University Jihadists”. I think an interesting thought experiment looking at the decline of the liberals is what hill(s) are they really willing to die on given death is now an option. Couldn’t come up with a good answer except tax incentives for IP and maybe mass migration.
I think ON are the only hope but we have to be clear eyed that they are genuinely retarded. Maybe you should run as a candidate? They are v pro Israel (keeps some of the worst out) and you’d be an intellectual titan.
Also if political parties are special interest group dominated, perhaps it’s a sign of health and vitality still in the system that a new party can rise in a crisis of stagnation and managed decline.
Yes ON rising is a sign of vitality, albeit a sympton of decay. I can't imagine a less fulfilling life than politics. Although Andrew Leigh seems to be having fun...
Because of his big beautiful smile? Probably takes a special type of temperament to be a democratic politician.
If I recall correctly there were snippets from when he was a PhD student circling twitter of we’re entering an age of demographic change, the social negatives it will bring and the need to manage it. If so it reminded me a lot of old school British colonial officers managing some mixed polity in SE Asia but applied here.
Though there are even US military pilots (not exactly university jihadists) writing anti-Semitic stuff about being a good goyim for Israel, so I’m starting to think this tide is not merely just the keffiyeh wearing bleeding hearts, but maybe related to Israel’s conduct with Iran and Gaza, if even right wing Americans are being more cynical (and not even anti-Zionist, but anti-semetic)
A central problem with the political economy of all the secondary Anglo countries (Australia, Canada, New Zealand and Ireland) in particular is rentierism crowding out globally competitive and productive innovation.
Their housing bubbles are partly due to NIMBY zoning and speculation - both forms of land rentierism - but also inefficient oligopolies in construction and real estate, who extract regulatory rents from the state.
This also applies to non-tradables generally like retail, banking and telecoms. Even though this inflates the cost of living, governments protect these sectors so they *won't* innovate people out of jobs. The dynamic is similar in health and education thanks to the strong unions there.
Meanwhile of course, low birthrates and brain drain are invoked to justify replacement migration levels, which keeps higher ed and paygo pensions solvent while putting more upward pressure on housing and downward pressure on wages. The key thing is that all of these benefit rentiers - empty-nest boomers and oligopoly class donors - and hurt per capita living standards, thus continuing the cycle.
Then as we all know, natural resources can be both a blessing and a curse, as their rents introduce further distortion. Australia can sell minerals and gas; Canada, oil and timber; New Zealand, farm animals and the right to gawk at its pretty scenery. Ireland has tourism too, but also just rents its tax code to multinationals who do their actual innovation elsewhere.
The problem with all of these activities is they result only incidentally from the basic fact of the state's sovereignty and territorial control, so instead of broad prosperity they simply induce boom-bust cycles that siphon capital from the development of other exports.
Obviously this isn't the full picture, since the UK is suffering too and it's the country originally responsible for underdeveloping the other four so that London could prosper, a dynamic the City has now replicated with its own domestic periphery.
So perhaps there really is something inherent to Anglo political culture which exacerbates national malaise once the high trust institutions that produced success run into turbulence and get captured. Alongside its other advantages, America escapes this because it was always lower trust and is no longer run by WASPs anyway.
The more people trust their government and their media, the more valuable it becomes to "seize the means of moral production" in order to advance special interests. Scoldocracy is the long-term result. Without a formal basis for trust, it can become a self-defeating prophecy: https://www.lesswrong.com/posts/jinzzbPHshif8nmnw/do-not-conquer-what-you-cannot-defend
The steelman of populism is: even if it makes things worse in the short term, it's still a necessary way to put the fear of God in the political class. I don't know if that strategy actually works, but I think it may be the implicit logic behind a lot of populist voting.
"America escapes this because it was always lower trust and is no longer run by WASPs anyway."
I suspect there is greater influence of Friedmanite ideology in the US even now. Maybe the billionaire who made their money as a disruptive outsider will hesitate to request regulatory capture, in a way the billionaire who made their money through rent-seeking will not. Perhaps political economy can enter self-sustaining attractor states.
I think Cameron Murray’s pillar though is that zoning and hence NIMBY’s aren’t a problem, that it simply changes where houses are built, rather than how many.
But also that immigration should be cut, as I guess only one arm of supply and demand actually counts.
Even then, Murray’s thesis is largely wrong about eg upzoning and Auckland anyway https://onefinaleffort.com/blog/a-response-to-murray-and-helm-on-aucklands-upzoning
Nothing to do with Anglos. Same for France, Germany, etc. Basically just incredibly stupid people getting elected because the world is too complicated for most people to understand: we rebuilt a world that we didn't evolve for and at the same time we turned evolution down to 1 or 2 with some of the fruits of that world: modern medical science and reason. Now the (great?) majority of us live in a world we aren't adapted for and cannot understand.
See my reply Squiffy… it’s about having us on God’s side. Our pre-occupation with wealth accumulation had left us spiritually impoverished.
It started straight after WWII, with all the innovation and new found wealth, the churches started to empty.
Once we lost that prayer connection, that gratitude connection , we became more vulnerable to the forces of materialism.
Grace and mercy were less frequent and our politicians became more vain, more greedy.
I fear we will have to bear more misery because trying to be Christian is no longer in fashion.
because you have limited human capital
An absolute tour d’force mate, well done. Should be required reading
Glad you enjoyed the rant!
Great piece but you let Turnbull off too easy with his incredibly bad faith rollout of the NBN. If more people knew the details of this he would be a pariah.
Canada, same problems.
Nice vent.
We’ve all got our hobby horses when it comes to the rent seeking that make us most irate. The one that still makes my blood boil was the successful lobbying around “HELP debt relief” for Australia’s most educated and privileged at a public cost of $16bn.
Hard to know what’s to be done… a slow glide into mediocrity seems the most likely path barring something unexpected.
Yes. Insane. Partly a function of forcing everyone through engorged unis and offering fake degree.
“The Albanese government cannot be blamed for the economic conditions it inherited.”
That’s true but I have another chart that shows it has not only underperformed previous Australian governments but also contemporary OECD governments.
We are in a bad moment and the current gov bears a bunch of responsibility but also the rotten fruit from decisions and policies set prior to this gov are falling (eg ndis, public gov expansion, union beligerence, immigration, etc all predate albo)
They have no interest in proper government. Labor has 2 interests and 2 interest only. Help thr unions. Get elected. Neither of these are compatible with good governance.
This is a terrific cri de couer. Two observations. First, we've been here before. Between 1891 and 1933, GDP per capita growth was basically zero. In 1933, we looked like Argentina. But we managed to break out of that growth slump by being purposeful. Second, I would characterise our present state as Australia is complacent, rather than sick. It has coasted for too long on the extended China boom, immigration-boosted GDP growth and a naive belief in fake wealth accumulation (i.e. rising house prices, almost equally matched by rising levels of household debt).
Can you say more about what "being purposeful" means?
I am thinking primarily of Giblin, Copland and the beginning of serious economics applied to public policy from the mid-1930s onward, the successful embrace of Keynesian economics starting in 1939 and the detailed planning that went into preparing for the post-war world in the early 1940s (as set out so well by Stuart Macintyre in Bold Experiment). These initiatives set Australia up for three decades of high per capita growth in incomes.
And of course it didn't help us that all our available means of acquiring infrastructure and manufactured goods were being bombed to rubble by the Luftwaffe or being sunk by both the Germans and the Japanese. We then realised how deep a hole we were in from an industrial perspective and how vulnerable we were to being cut off from a maritime perspective. I believe this, more than anything, drove the massive increase in capital growth over the next two decades - which we pissed away by voting in an ardent globalist in Whitlam...
Great piece. I would not call myself an Australian in case a nativist pops out of a bush to let me know otherwise, but I have nothing but love for the country, I think it’s the best in the world. I hope the elites wake up to the stagnation and pull the band aid off on housing and immigration.
I enioyed your debut piece v much
Astonishing how virtually all of this applies to Canada.
Something to be written about the global phenom
He does not miss 🎯🎯🎯🎯
Hear hear 🇦🇺❕
I agree with most of this so don't appreciate the slight insult to me and my wardrobe of cardigans!
The world is unjust!
Banger of a post!
It is wild how much of a good hand Australia has been dealt. I was recently reading about the 19th century Australian settlement and it is surprising how rich it has always been.
As for Argentina, I would not be so harsh to compare Australia with it unless indeed, Australia turns out to be just a giant mine
We've pretty much been a "giant mine" for most of this Country's existence, as well as a primary producer.
Australia has never really been sovereign, outside of perhaps a short period in the early 20th century. It’s a resource extraction outpost for the global economy with a few scraps thrown to the locals to keep everything going. Our mining and agriculture are impressive but not much else is. Our small population has saved us the entire time but give us a population like Brazil (seems the plan) and we will resemble Brazil but with far more catastrophic biogeographic issues ticking away underneath.
Bravo