Britain's decline was inevitable.

I'm not making a subjective comment, rather an objective one based upon our societal trends and that old, but sadly still relevant notion of social "class".

Of course there are many exceptions to the rule, but I am necessarily dealig in macro-trends and generalisations as such a discussion requires. It is not a condemnation of the less intellectually able, more a lament of the fact that a post-industrial society will struggle to have need for them.

Poor deluded soul, baaaar humbug, you'll be saying that Jonny foreigner has some thing worthwhile to listen to next......

Good post. Difficult to argue with much of that.

Germany, and indeed many of the Northern European countries have been much more progressive with their attitude to wealth/power and its distribution.

Good OP Alex.

'There is a false premise in the OP. Britain did not get rich soley because we were exploiting other countries. In fact it was the industrial revolution that enabled Britain to do said exploiting on such a global scale. The reality is that Britain actually subsidised the Empire from mid to late 19th century onwards.
Britains decline is more to do with its failure to capitalise on that technological and scientific lead. Even as recently as the 1950's or early '60's Britain was a world leader in many areas of science and technology.
I blame Labour.

MX5 - Goodnight

It's something that I would like to know too, but I don't believe the experts even know, even though the will no doubt profess to.

I think it only works when we have someone else to 'exploit', it's really the basis of capitalism and I fail to understand how it is sustainable in the long term for many reasons.

It's also why I believe the UK is doomed in the long term. With 2 billion + Asians gaining knowledge and modernising their societies they will surely move any financial activity closer to their own geographical areas. London has a history of being a trading center but that is exactly what it is - history. The reality is I think it will decline forever as the east ascends.

I agree in a sense but I reject the hypothesis that manufacturing is the basis of wealth creation. Hong Kong and Singapore have faced the same problem in much starker terms. Both developed on the basis of cheap labour manufacturing cheap goods and very quickly found themselves becoming significantly more expensive than their neighbours.

The solution was to export the skills and investment for manufacture to the areas where the inputs - ie labour and raw materials - are cheaper, while continuing to drive production through innovation and investment. Both Singapore and Hong Kong have managed to do this with relative success because of the flexibility of their governments.

After WW2 the UK made it's most fatal error in nationalising industries as an attempt to preserve them. Rather than these industries like coal, steel and heavy manufacturing wasting away gradually as we moved production overseas, they were in fact bank rolled by those people who got a better return on investment, ie the very people who were making money through exporting expertise and investment, the tax payer.

The fact is, heavy industry and mass production are not worthwhile in a country that has wage demands 4 or 5 times in excess of other countries. Rather our comparative advantage must lie in expertise, investment and the specialist manufactures which people are prepared to pay a premium for. If I want an Aston Martin, I want to buy into the heritage and tradition of the company, I'll pay a premium for something that's manufactured in Britain and I will make allowances for somethign that is handmade by craftsmen. Not so if I want a cheap and reliable box to drive to the shops in.

Attempting to defy this logic had two negative effects. Firstly it was a drag on the more productive sectors of the economy who faced higher taxes. Secondly, and much worse, it skewed incentives. This kept resources in unproductive sectors and steered them away from the more productive sectors. Those who in the 1960s and 70s made the perfectly rational decision based on future wages to take up an apprenticeship in a ship yard or a coal mine suddenly found they had no work in the 1980s, and the skills they had learned were available at 1/3rd of the price in the developing world. Conversely those who made the investment of going to university and who worked in the productive sector found that the taxes were so high, their labours were better spent overseas, and Britain lost out again.

Politically and sociologically it was perhaps inevitable that as the birthplace of the industrial revolution the UK would attempt to keep heavy industry going at all costs. In pure economic terms however it was a simple bad policy in my view, and there is nothing inevitable about that.

Reversing the decline is at once simple and impossible. I have no doubt at all that if we cut taxes, abolished regulations and let the market determine incentives for itself, then after a bumpy ride to begin with, we would soon enough return to healthy economic growth, which would feed a resurgence of the country culturally, morally and intellectually at the same time. It's impossible however because there is simply no political will for that, and much as I would love to blame WinkyMcfknuts for all our woes, he is but a product of a much deeper problem. In post nationalised Britain people believe Thatcher's modest attempt at liberalising the economy is the cause of all our woes. We would all merrily be digging coal out of the ground and building ships now had she but kept up the subsidies a little bit longer.