Socialist failure: Britain-is-poorer-than-any-US-state-yes-even-Mississippi

[Free Northman Reborn]

Interesting article. I haven't assessed its veracity or the accuracy of its calculations, but the source seems credible enough. And yes, I know Britain is hardly the epitome of socialism, by European standards. But compared to the US, it is probably halfway to the North Korea side of the socialist spectrum. I do note the last sentence of the article, which I bolded for emphasis.

Upon request, I've removed most of the article (which can be found at the link below) and just retained the concluding paragraphs.

http://www.forbes.com/sites/timworstall/2014/08/25/britain-is-poorer-than-any-us-state-yes-even-mississippi/


Britain really is poorer than even the poorest of the US States, yes, including even Mississippi.

One final point: while exactly this study may not have been done very similar ones have. I specifically recall someone making this comparison with Sweden a few years back. And theres a vast research program called the Luxembourg Income Study which exists to look at exactly these sorts of things. Even if exactly this study hasnt been done there things very like it have been as a part of that program. And the LIS is where Branko Milanovic is now based, its at CUNY, and its the research program that Paul Krugman has just been hired (at a quite lovely salary) to be the public face of. Milanovic will of course be doing the actual running of it.

As an example of output from the LIS they had a wonderful paper a decade ago showing that the bottom 10% in the US have the same incomes (yes, PPP adjusted) as the bottom 10% in either Sweden or Finland. While the top 10% have very much larger incomes than the top 10% in either country. All that redistribution hasnt made the Nordic poor richer than the American poor but it has made the rich poorer.

[Lyanna Stark]

This is hilarious. I shall sit back with my popcorn in my failed socialist state and wait until someone rips this apart. :lol:

EDIT: Just one question: are you trying to talk yourself into how Bad it is with progressive taxation and other socialdemocratic reforms, or are you trying to talk us who are the beneficiaries of said reforms into that they are Bad? I am uncertain about the motive, really.

The first goal seems pointless since you are already convinced and the second...well, I just wonder how to convince people that the average ability to buy loads of Stuff is better than being on average slightly less well off and have good social services for everyone. It seems a pointless endeavour to me.

[Free Northman Reborn]

This is hilarious. I shall sit back with my popcorn in my failed socialist state and wait until someone rips this apart. :lol:

Quite possible, yes. I merely posted it to get some thoughts on it.

My back of the matchbox quick calc showed that despite having a fifth of the US population, the UK has only has about a sixth of its GDP. Hence it is quite easy to see that the per Capita GDP will be lower. And that's before any PPP calculations.

Anyway, I too look forward to the feedback.

[Lyanna Stark]

Well, my main query will still be: what do you want to achieve with the discussion? Do you want to convince people something like GDP is more important than social services like education for everyone, universal healthcare, care for the elderly, public transport investments, annual leave etc.?

GDP is *one* measure to apply but hardly the end all and be all to determine whether the place is good or bad to live in for the general majority. Do you personally believe Alabama is a better place to grow up than the UK for someone on average income? (Apart from the American fuck yeah reasons.)

The fact that you somehow think Northern Europe is like North Korea is also...amusing. Having lived in both the UK and Sweden it just makes me wonder what sort of delusions one must have about the policies and the people here to believe that a huge majority are some frothing at the mouth socialists.

EDIT: Although I did hear second hand information from about 20 years ago that someone got asked whether we European communists were allowed our own clothes or whether we all had to wear socialist uniforms. And whether we were allowed such capitalist things as traffic lights. (Unsure why traffic lights in particular were considered capitalist.)

[mormont]

The idea that the UK is in any way 'socialist' is somewhat dubious to start with.

Worth noting is that the UK is also poorer than most of Northern Europe, despite being the least 'socialist' of any of those countries. So should we conclude that it's 'socialism' or the lack of socialism that is the cause?

[MinDonner]

Well I'm convinced. Moving to Mississippi tomorrow. :lol:

[shadowofasshai]

Don't mind living in a poor ass country with free health care, half decent education (American education lol), world leading politics, job security, annual leave, no guns.

But wait, I can buy clothes and food slightly cheaper in Alabama, wow. America is amazing.

[Free Northman Reborn]

Well, my main query will still be: what do you want to achieve with the discussion? Do you want to convince people something like GDP is more important than social services like education for everyone, universal healthcare, care for the elderly, public transport investments, annual leave etc.?

GDP is *one* measure to apply but hardly the end all and be all to determine whether the place is good or bad to live in for the general majority. Do you personally believe Alabama is a better place to grow up than the UK for someone on average income? (Apart from the American fuck yeah reasons.)

The fact that you somehow think Northern Europe is like North Korea is also...amusing. Having lived in both the UK and Sweden it just makes me wonder what sort of delusions one must have about the policies and the people here to believe that a huge majority are some frothing at the mouth socialists.

EDIT: Although I did hear second hand information from about 20 years ago that someone got asked whether we European communists were allowed our own clothes or whether we all had to wear socialist uniforms. And whether we were allowed such capitalist things as traffic lights. (Unsure why traffic lights in particular were considered capitalist.)

Allow me at least some licence for figures of speech. I thought I acknowledged in my opening paragraph that the UK is probably among the least socialist countries in the EU, and the North Korea reference was used humorously.

Anyway, the article deals with the UK, so that analysis is all I've got.

I'll head back to Above Top Secret to trawl for someting on the Nordic countries then. Not holding out much hope,though.

[shadowofasshai]

I will also point out that Americans allow a lot of sub standard ingredients into their food to make it cheaper. Corn syrup? come on. Edit: this makes the PPP kind of irrelevant.

Also wasn't the American treasury just printing close to 50 billion a day?

[Horza]

Not actually news that US per capita GDP is larger than European, nor that European countries provision public goods better.

Worstall's amendment to Nelson's work does a good job of demonstrating the weaknesses of GDP and income figures for measuring things like public goods and quality of life; there are things the average Brit gets for "free" that no sum will buy a Mississipian.

[sologdin]

mississippi is of course also a great bastion of socialism.

[daskool]

Interesting article. I haven't assessed its veracity or the accuracy of its calculations, but the source seems credible enough. And yes, I know Britain is hardly the epitome of socialism, by European standards. But compared to the US, it is probably halfway to the North Korea side of the socialist spectrum. I do note the last sentence of the article, which I bolded for emphasis.

http://www.forbes.com/sites/timworstall/2014/08/25/britain-is-poorer-than-any-us-state-yes-even-mississippi/

Fraser Nelson, over at the Spectator, has a little post about how the UK, Britain (the native home for both of us), is actually poorer than all but one of the US States. Tucking in right behind Alabama and just above Mississippi.

Despite the fact that he once fired me from the employ of that fine magazine hes a nice guy so Ill point out that hes largely correct but falls over in one final detail. For Britain is actually poorer than all US States, all of them bar none.

We should point out that this doesnt mean that the median income in all US States is either higher or even equal to UK incomes. For while thats limited by the GDP per capita, properly adjusted for price differentials (ie, by PPP), there are also other influences. For example, the percentage of national income that flows to capital is a little higher in the US than the UK.

Further, the US is a more unequal country (the properly adjusted gini is some 0.38 there, to 0.33 for us) meaning that the rich are taking a larger portion of that national income. So this is not a measure of median incomes and living standards although it is a useful guide to them.

Fraser is entirely correct in what hes done here: Just to explain PPP for you. Prices vary across places. In the US food is generally cheaper than it is in Europe, medical care generally more expensive. So what we try to do with PPP is work out what exchange rates would need to be in order to make prices of all of these different things the same in the different places. Its not an exact science, more of an art. But if what youre trying to measure is living standards then its somewhere between useful and essential as a part of your workings.

So, if Frasers correct in general why isnt he correct in total? Because the US is a large enough place that we should make PPP adjustments for the price differences between the States as well (quite possibly the UK is large enough to do that as well, certainly London living standards fall quite a lot when you do). A useful guide to that came out just last week: Fraser has used the average PPP for the US. But as we can see theres different PPP adjustments for different States. If $100 will buy you $115 worth of goods in Mississippi this is the same statement as the correct PPP adjustment for Mississippi incomes, or in this case GDP, is 100:115. Or, if you prefer, Mississippis properly PPP adjusted GDP per capita is $40,400 or so: well above the UKs $36,200.

And yes, it is generally (although not necessarily wholly) true that PPP adjustments like this raise income and or GDP in poorer places and lower them in richer. So we would expect properly adjusting for all poor State GDPs by State PPPs to increase the recorded incomes in all of those poor States.

Britain really is poorer than even the poorest of the US States, yes, including even Mississippi.

One final point: while exactly this study may not have been done very similar ones have. I specifically recall someone making this comparison with Sweden a few years back. And theres a vast research program called the Luxembourg Income Study which exists to look at exactly these sorts of things. Even if exactly this study hasnt been done there things very like it have been as a part of that program. And the LIS is where Branko Milanovic is now based, its at CUNY, and its the research program that Paul Krugman has just been hired (at a quite lovely salary) to be the public face of. Milanovic will of course be doing the actual running of it.

As an example of output from the LIS they had a wonderful paper a decade ago showing that the bottom 10% in the US have the same incomes (yes, PPP adjusted) as the bottom 10% in either Sweden or Finland. While the top 10% have very much larger incomes than the top 10% in either country. All that redistribution hasnt made the Nordic poor richer than the American poor but it has made the rich poorer.

What makes this worse is remembering that the South East of England, London in particular, is one of the wealthiest places on the planet. Go to the North of England, parts of Scotland, the scale of inter generational poverty is epic. I went with my wife a few years back to visit her family in Lanarkshire? OMFG!

This is hilarious. I shall sit back with my popcorn in my failed socialist state and wait until someone rips this apart. :lol:

EDIT: Just one question: are you trying to talk yourself into how Bad it is with progressive taxation and other socialdemocratic reforms, or are you trying to talk us who are the beneficiaries of said reforms into that they are Bad? I am uncertain about the motive, really.

The first goal seems pointless since you are already convinced and the second...well, I just wonder how to convince people that the average ability to buy loads of Stuff is better than being on average slightly less well off and have good social services for everyone. It seems a pointless endeavour to me.

Why bother yourself with facts and figures and assorted other nonsense?

[Larry of the Lawn]

Is petroleum used to calculste PPP? Because if it is, its just one more reason this article is out of touch.

[Horza]

What makes this worse is remembering that the South East of England, London in particular, is one of the wealthiest places on the planet. Go to the North of England, parts of Scotland, the scale of inter generational poverty is epic. I went with my wife a few years back to visit her family in Lanarkshire? OMFG!

You do realise that Mississippian GDP per capita is an aggregate too, right? and hence, when you take into account the greater disparities in access to said GDP (I'm guessing Mississippi's Gini index would be something to behold) that exist there relative to the UK, without UK equivalent levels of public goods provisioning (healthcare springs to mind...) you're looking at quite the picture.

[shadowofasshai]

Why bother yourself with facts and figures and assorted other nonsense?

PPP is irrelevant to the calculations, and makes the OP completely irrelevant. Food is cheaper because of the quality. To buy the same quality food in American that Europeans eat would probably cost about the same or marginally less, negligible really. GDP is also a measure of imports and exports. Does that fact that the UK imports more goods and America exports more goods mean the the UK is poor? No, it is not really relevant.

[daskool]

You do realise that Mississippian GDP per capita is an aggregate too, right? and hence, when you take into account the greater disparities in access to said GDP (I'm guessing Mississippi's Gini index would be something to behold) that exist there relative to the UK, without UK equivalent levels of public goods provisioning (healthcare springs to mind...) you're looking at quite the picture.

Yeah I get that, just as, I'm guessing, in the poorer parts of the UK there are areas of wealth to go along with the extreme deprivation. I was simply pointing to my own experience of visiting the UK, arriving in London and staying with friends and then going to see my wife's family in Scotland. It was as if I'd moved from a hyper capitalist uber prosperous first world western nation to an utterly hopeless remnant of Soviet communism after the wall came down. The point being these two regions were in the same country, massive welfare state and all.

[daskool]

PPP is irrelevant to the calculations, and makes the OP completely irrelevant. Food is cheaper because of the quality. To buy the same quality food in American that Europeans eat would probably cost about the same or marginally less, negligible really. GDP is also a measure of imports and exports. Does that fact that the UK imports more goods and America exports more goods mean the the UK is poor? No, it is not really relevant.

Have you been to Scotland? It makes southern cusine look like haute couture......I still have flashbacks, Iron Brew? Vomit in a can?? Everyone eating french fries every single day of the week!

[Lyanna Stark]

I think one of the main points is that the UK isn't a massive welfare state. The Scandinavian countries and the Netherlands are probably top. Not the UK.

The UK also had extremely poor social mobility adding on to economical divides.

[shadowofasshai]

Have you been to Scotland? It makes southern cusine look like haute couture......I still have flashbacks, Iron Brew? Vomit in a can?? Everyone eating french fries every single day of the week!

Blues Brothers is one of my favourite restaurants. Iron Brew? What about pink lemonade? Candied yams? Corn syrup in everything? Yes the Scots might not have the best diets but at least they have to be able to eat food of a reasonable quality.

Edit: last I checked America was still the fattest place on earth.

Edit again: And still is. http://health.usnews.com/health-news/health-wellness/articles/2014/05/28/america-tops-list-of-10-most-obese-countries

[Horza]

Yeah I get that, just as, I'm guessing, in the poorer parts of the UK there are areas of wealth to go along with the extreme deprivation. I was simply pointing to my own experience of visiting the UK, arriving in London and staying with friends and then going to see my wife's family in Scotland. It was as if I'd moved from a hyper capitalist uber prosperous first world western nation to an utterly hopeless remnant of Soviet communism after the wall came down. The point being these two regions were in the same country, massive welfare state and all.

Yes, but my point was that those people are actually doing better than the Mississippians at the same point of the income scale, which is no ringing endorsement of the last four decades of British economic and social policy but does give you some idea of weaknesses of the Nelson/Worstall GDP comparison.