How the U.K. broke its own economy

Here's some more Recreational Statistics (a branch of Recreation Mathematics):

There are about 11.1 million residential properties in Australia, 30% of which, some 3.25 million residential properties, are held by investors.[1]

There are 25 million people in Australia, about 17.5 million of those are adults aged 25 years or older, of which about 12.8%, or 2.25 million, own one or more investment properties.[1,2]

Let's assume the majority of investment property owners also own their own home.

So, about 13% of Australian adults own about 60% of the housing.

Does that sound reasonable? I don't know if there's some alternate timeline where housing is more evenly distributed and life is better, or how to get there if we think that's a good idea.

1. https://realtyai.com.au/inside-australias-property-boom-how-...

2. https://realtyai.com.au/inside-australias-property-boom-how-...

Not only are they not bothered. If they are even slightly aware of the situation they know it's in their financial interest. And if they are not aware of the economics most still have a bias against new construction especially high density in their area, because of the "nuisance" that construction will cause.

For most people who own houses it's probably not relevant that the value has gone up?

If you upgrade you pay the margin, which is higher. Legal/admin/moving costs tend to be a percentage of house value, so costs are higher.

When you retire you might downsize and release a lot of equity, but that's not going to be true for most house owners (happy to be proved wrong) - downsizing is for the wealthy, if I ever downsize it will be to a cardboard box.

Most home owners will have children, prices being high negatively effects them, and finances tend to be somewhat shared (from 0% upwards...) so prices being high is a problem here too.

Maybe I'm missing something about the situation. I guess my kids will be happy for the money when I die, but it'll be easily eaten up by their housing debts.

So people without dependents; people who are very wealthy. Apart from those groups I don't really see how house value changing after purchase helps

>Because as the population grows, we need an equivalent amount of new housing.

In the UK (but also most elsewhere), population no longer grows. If censuses say differently, it's because immigrants are being imported from overseas, not from any organic growth. To believe that this is righteous is a strange thing, one has to accept that British people should suffer so that immigrants can gain.

If only those people outside of my window would just "vote with their wallets" and stop demanding a roof to live under, demand would die down and prices would stabilize again.

It's simple free market economics!

/s

>If you can't get local population to grow, you have to bring in your labor from somewhere else.

Self-fulfilling prophecy... local populations can't grow when they're starved of housing, energy, and most importantly of all, jobs.

Countries will have to adapt to lower or even declining birth rates and deal with it. The world cannot just keep on growing indefinitely, unless we populate Mars or whatever. The UK, Korea, El Salvador, Israel, Netherlands, Rwanda, etc., will have to learn to make their economies work with a steady state workforce even a shrinking workforce ala Japan.

Ironically, once "free" from Brussels, none of the conservatives have actually stop the migration rate or reduce it to nearly zero and they have not been honest about it either

The Grenfell Tower disaster happened because they chose to clad the building in plastic. If the building had in-wall insulation and no cladding or non-flammable cladding like say steel the whole thing would be a minor fire in one apartment.

The problem is high pop growth. If they regulated the growth to a manageable level, the problem would be manageable. As it is they are importing other countries' housing problems. We saw that in the Us in the 1920s where we had slums and boarding houses. At least in the US we have land. Places like the UK and Japan have limited land. Canada, Brazil, Argentine, Libya have lots of land, the UK does not.

I think the complaints have also been that people close to the wind farms don't see much economic benefit from them, and only get the negative (noise, loss of countryside, etc.). I believe that's changing though https://www.bbc.co.uk/news/uk-scotland-scotland-business-672...

I get your point about a click cycle - but I think papers like the mail and telegraph are a bit more intentional than that.

BTW I was talking about offshore farms - they are typically only just visible if you are at the coast on a clear day.

It is not any fossil fuel, it is specifically oil and gas. Coal is not a problem for energy independence as it is much more evenly distributed on Earth.

What Germany has done with its reliance on Russian gas is truly insane. Not only they closed nuclear stations, but they also have been closing coal power stations. They should be pushing electrical vehicles and modernization of coal plants instead as China is doing. Even from green perspective an electrical car that uses electricity from a modern coal plant generates less CO2 than a car running on oil products.

Note in terms of nuclear - using current technology you still need to dig your fuel out of the ground from very specific places in the world - though a different set of countries ( apart from Russia ).

Voting behaviors will seem strange if you look at things exclusively through the lens of a young-ish worker when you live in a society that is 35% retirees, 5% wealthy, and 5% living off the state.

It's not Russia, the US and the Saudis, it's Exxon Mobil, Shell, BP, etc. honestly Aramco and Gazprom probably have very little influence on decision making in Europe and the US compared to the local interests.

> The other aligned narrative is nuclear and I consider it to be Trojan horse to continued reliance on fossil fuels at least for the next 25-30 years whilst countries like Germany would argue with NIMBY’s and politics to try and even build just one new power station.

Nuclear is not a Trojan horse, nuclear proliferation and meltdown fears condemned Europe to energy dependence. It's too late now, the capacity should have been built 30 years ago, but the successful fearmongering meant there was virtually no construction for the last 30 years[1].

The real Trojan horse is natural gas, they greenwashed it, invested and continue to invest in natural gas projects[2].

1. https://en.wikipedia.org/wiki/Nuclear_power_reactors_in_Euro... 2. https://edition.cnn.com/2022/07/06/world/eu-votes-natural-ga...

I come from Cornwall in the UK, and whenever I go back there I am struck by how many on shore windfarms and turbines there are there. As you drive through the countryside they are everywhere.

I have asked hundreds of local people what they think of them over the years, and not one of them have ever said anything about them spoiling the view. The farmers love them as they get subsidies for putting them on their land, and generally people think they are doing a good thing and are happy to tolerate them.

I personally dont think this is an issue with spoiling the view .

> Offshore, wind farms may ‘spoil’ a view out to sea, though they are also harder to oppose.

In my experience off-shore wind, even off a popular tourist beech has very little impact. Often just about visible in the haze in the distance.

The impact of onshore wind is definitely more notable. I personally don't find it that offensive, I find them elegant in the day way as an aircraft might be. Also, the blot on the land could be almost completely eradicated in hours if something better was invented tomorrow. Compared to the decades long process of decommissioning even fossil fueled power plants that seems like a pretty big win.

It's why I specifically mentioned offshore - there has been huge growth in the UK of these - and most of them are so far out to see you'd be lucky to see them even on a clear day.

The logic against them seems to be - can't rely on wind power alone ( true - but nobody is suggesting that ), so we must destroy them all as a symbol of 'netzero'. It makes no sense.

>p.s. I think you meant to write fomenting

Yep. Thanks.

It's also a convenient wedge issue, regardless of the merits in either direction.

As a resident of Scotland, I'm looking forward to zonal pricing. It might also balance out the London centric nature of the UK, as I expect it to end up with higher prices.

I agree with the incentives for zonal pricing to encourage clean local production. The downside however is that the grid becomes defunded and a tragedy of commons ensues. We invest in common infrastructure precisely because of variance, which in the long run we hope to ameliorate.

Coal is dead in the UK, from 30% in 2014 to 0.5% in 2024.

They went a full month with zero coal electricity generation back in 2020 and 2025 will be entirely coal free.

Even natural gas is in decline.

The UK is still implementing the Large Combustion Plant Directive ( https://www.legislation.gov.uk/uksi/2015/1973/2015-12-31 ), so separate UK level legislation would be required to legalize any new coal plant. Very unlikely scenario.

But not for someone thinking their £2m house will “lose value”

There are a lot of rich people in the U.K.

I'd wager that for the sort of person who has the desire to care deeply about stopping windmills being built (perhaps feeling a need to 'conserve' the old way of doing things), instead of say, worrying about putting food on the table - this is pocket change.

No product on a real market ever works like that (otherwise all goods of the same kind would cost the same everywhere in a country, priced at the marginal cost of supplying it to the most remote island community, which everyone can attest is not how markets work).

Such a behavior only happens on artificial markets that have been designed for that purpose to match an ideological vision of how an “ideal market” should behave.

Turns out the “ideal market” is a dystopia instead of the intended utopia.

Can you explain this?

In commodities market, the strike price is between the lowest price seller and the highest buyer.

In the goods market, individual buyers buy depending on their elasticity of demand unless the good has inelastic demand (rare).

Neither matches what you seem to say.

The war is a very strong reason not to rely on imported gas. We've seen that across Europe. Heck, there's a pipeline through the war zone which is surviving because everyone involved depends on it.

It's misleading, and those who use it generally know it's misleading. It's used to persuade the layperson that electricity generated by wind turbines is cheaper to the consumer or industry than electricity generated by thermal sources or hydro turbines, when in fact that is only true if you disregard the requirement for said electricity to be available on demand - a fairly important omission.

This may be true, on a watt basis. It also ignores the physics of a synchronous grid. You need to produce exactly what you use at any given moment. If you fail to do that by a little bit bad things happen. If you fail by a lot, the grid fails. You need to be able to get power when you need it, not when it's convenient to your generation plant. If you want to compare solar or wind to something more dispatchable you should really be using numbers from either a pretty massive distributed overbuild or including storage or both. Otherwise it simply isn't apples to apples. I am an electrical engineer specializing in the design of control systems for renewable generation.

Check out "The Price is Wrong" by Brett Christophers[1]. It explains at length that what matters is not price, but how profitable an investment is. And how wind and PV don't look great without subsidies in various guises.

1. https://www.amazon.com/Price-Wrong-Capitalism-Wont-Planet/dp...

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Capacity factor is calculated into lcoe, what's your point? Moreover, downtime for wind turbines is much less of an issue for a grid than large power plants (even with a significantly higher capacity factor), because you run into much bigger issues if your GW plant is down, compared to a couple of MW (and no the probabilities of all your renewables mix going down at the same time is very low, unless you're Luxemburg).

Batteries aren't produced at remotely enough scale to be viable for grid storage. To put this in perspective, the world uses 60 TWh of electricity per day. By comparison global lithium ion battery production was 1.1 TWh [1]. Remember, production capacity is distinct from the actual production figures. It's typical for actual production figures to be ~50% of production capacity.

Intermittent sources don't just experience daily fluctuation, but also seasonal fluctuation. Even just 3 days of storage amounts to an impossible amount of batteries to provision, even assuming growing battery production capacity. Not to mention, even modest amounts of battery grid storage would severely hamper EV adoption, which would increase emissions.

There's a reason why most plans for a primarily wind and solar grid assume that there will be some technological breakthrough that solves storage: hydrogen, compressed air, alternative battery chemistries, etc. are really common to see in plans for a primarily renewable grid.

1. https://interactanalysis.com/insight/global-li-ion-battery-s...

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from a non-economic standpoint it was just as stupid, the idea of "taking back control" is predicated on the concept that the UK was forced to accept rules imposed by others and would be free to stop doing that.

But the UK had substantial influence on those, and it no longer does, while still having to follow them to be able to do business with the EU.

And indeed, the UK has not really diverged from the EU in the last 8 years and voted a new government that wants to tighten the relationship.

It was a generic protest vote "I don't like how things are going and I was happier when I was young". I can empathize, but it was still self-inflicted harm.

Brexit was absolutely about Economic conditions. Anti immigration sentiment was one big factor that everyone talks about, but in reality the sentiment itself was a symptom on display for the underlying condition of people having their living standards drop. The second big factor people kept bringing up was that EU was making decisions for UK, which people thought needed to be reversed. Austerity measures, which EU adopted, were the single biggest reason why people felt they needed more control. They also slowed down the post 2008 recovery, which meant people weren’t doing as well anymore. Anti immigration sentiment also rose once people were unhappy and needed someone to take the blame.

It was sold as a win on all fronts. Who wouldn't want a new hospital every year?

I'm not sure people would vote for it if they knew it comes with an economic meltdown.

Maybe still they would do, though.

> "I dont think brexiteers were largely voting on economic grounds - a point which is lost on most remainers."

You think remainers missed all the racism from the leave side and thought it was only about economics? Even when Boris Johnson's Vote Leave, Michael Gove and George Osbourne, Labour representatives, Green Party representatives, Nichola Sturgeon, and Unison reps were publicly condeming Nigel Farage and UKIP for their "blatant attempt to incite racial hatred" poster?

https://en.wikipedia.org/wiki/Breaking_Point_(UKIP_poster)

I attribute much of our malaise to it being a long time since anything was done on 'economic grounds'. I'd love for us to have a fraction of the desire for capitalist principles that former communist countries have.

It’s an article looking back at the last 16 years - hard to do that when you’re looking forward, no?

Already achieved, easily.

We’d had a decade of zero growth and 30 years of industrial decline in the North. The country was not doing well, that’s the primary reason it was inevitable putting a big button marked “do not press, posh boy David Cameron says he doesn’t want you to but has no other solutions. Ignore the people saying it will fix the country” would result in the button being pressed.

The economy was doing well for some parts of the country, but you can only ignore the rest for so long.

Real GDP per capita growth for US vs UK was almost identical until 2008. The last 3 years have been terrible for the UK, but if you're looking for the start of UK's stagnation you have to go much farther back than Brexit.

I wonder how Napoleon would react to finding out that British voted to impose the continental system on themselves.

It has preformed broadly in line with other western European economics. If you look at GDP numbers over time the big problem was COVID. The UK is richer relative to France or Italy than it was 25 years ago, but no European country has done as well as the US:

https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...

Not really, growth in the UK has effectively stalled since 2008, quite a few years before Brexit.

I’m sure Brexit hasn’t helped, but it seems that the economic stewardship of the coalition and post-coalition governments was also lacking.

I don’t know what the UK can do about it, but it’s been stuck in a spiral of economic stagnation for over 15 years now.

Allowing the concentration of wealth solely amongst the super wealthy.

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Oh yeah. Higher than I thought! I still doubt it's as high as housing or migration, but yeah probably the first thing after that.

Thanks for the thoughtful response.

Australia does sort of have a land constraint problem too, insofar as there aren't a lot of places in Australia where anyone would really want to live.

Agriculture in Australia accounts for about 55% of land use.[1]

About 70% of Australian land is arid or semi arid.[2]

About 87% of the population lives within 50 kilometres of the coast.[3]

About 0.5% of Australian land area is used for housing.[4]

About 50% of Australian land area is suitable for and used for grazing.[4]

Dryland cropping, dryland horticulture, irrigated pastures, irrigated cropping, irrigated horticulture, intensive horticulture and animal production, account for about 5.14% of Australia's land area.[4]

New housing development in Australia is largely done by encroaching on some of the best land for growing food, where there used to market gardens, crazing, vegetable cropping, etc, close to towns and cities, that production is being pushed further out.

New housing development is largely captured by businesses and companies that can afford to develop the land and cope with all the regulatory burden. Even in the regional areas, a block of land suitable for building a house goes for about $280,000[5] - about 5 years median income.[6] Then you'll probably want a build a house on that land, and that's going to cost you about $300,000.[7] For a total of about $550,000.

Even in the fairly average, fairly ordinary area I live in, house prices are up about 110% since about 10 years ago.

I don't know if there's some alternate timeline where housing in Australia is more evenly distributed, or if that would result in a better life for the majority of Australians, or how to get there if we think that's good idea.

Also see my other recent comment here[8] for a breakdown of ownership of the housing stock.

Thanks for motivating me to put this comment together, I had been meaning to review this data since the last time I look at it over five years ago.

1. https://www.agriculture.gov.au/abares/products/insights/snap...

2. https://www.dcceew.gov.au/environment/land/rangelands

3. https://soe.dcceew.gov.au/coasts/pressures/population

4. https://www.agriculture.gov.au/abares/aclump/land-use

5. https://hia.com.au/our-industry/newsroom/economic-research-a...

6. https://www.abs.gov.au/statistics/labour/earnings-and-workin...

7. https://www.residentialattitudes.com.au/building-advice/the-...

8. https://news.ycombinator.com/item?id=43257766

That mentality is exactly what leads to the problem. You want to hold everyone organization accountable for every perceived failing which leads them to optimize towards a state where they can justify existence but do as little as possible to minimize the potential for any perceived failing.

Oo! Oo! Is it a free and fair public election?

Yeah I argue that's human nature. When you're in danger (or perceived danger) you will make drastic moves to survive. When you're in a good spot, you are less incensed to rush things. And generally, status quo in not-bad times is the majority.

So on a macro level a progressive or simply sympathetic minority has to fight a conservative majority in order to keep pushing for change.

The only solace here is that the you rarely need a majority to enact change. Apparently movements need a critical capacity of 3.5% in order to start this network effect of people joining in due to popularity bias.

Competition? Like when “old men argue, young men die”?

And real (“real”) progress for whom? Your analysis is completely opaque.

> Not the OP but look at the difference between what governments can do when there is a sense of urgency (i.e it is wartime or one is in recent memory) vs what they do when it's not.

Every example I can think of involved rushing through legislation and policy changes that were not looked upon kindly given a moment of retrospection.

The New Deal, Japanese internment camps, the PATRIOT Act, Zero COVID policies, etc. The one exception might be something like the Space Race, but that also had a lot to do with Operation Paperclip, which had its own ethical dilemmas.

The UK tried a mildly libertarian government in 2022. The experiment lasted 50 days.

I hope that phrasing it that way focuses on the action and not split into a flame war

At least in Germany it's clear that it would be the AfD. In the US, you could say republicans, but I'm getting the impression that democrats are prone to this too.

This doesn't describe council houses I've seen in London and surroundings (e.g. Milton Keynes/Bletchley).

What I remember: - small rooms - mould - no insulation - in larger buildings gardens, if any, would be only for ground floor flats - in smaller buildings flats would be split over 3 levels, with each level being rather small - often wired entrance to the flats from outdoor gallery/balcony (in larger buildings) - low ceilings (for my liking)