Two Hundred Years of Muddling Through: The surprising story of Britain's economy from boom to bust and back again

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A book that tells the story of Britain’s economic history over the past 200 years could hardly be more timely. The country is emerging from the grip of a pandemic that triggered the deepest recession in more than 300 years and the biggest annual increase in public borrowing in peacetime. At the same time businesses are grappling with the fallout from Brexit in the form of significant new barriers to trade, leading to empty shelves and staff shortages. Meanwhile, the government is split between a prime minister who believes that Britain can spend its way to a “roaring twenties” and a chancellor who fears that a heavily indebted government is at risk of an inflationary bust. So where do we go from here? An in-depth historical analysis of British economic policies. As someone who is totally new to the subject, this felt far too detailed and a lot of it went over my head. My eyes glazed over throughout many chunks of this book. However, for such a detailed book, the author mentioned the British Empire maybe twice, and given what a massive impact the Empire had on the British economy, I expected at least a chapter, or even half a chapter dedicated to it. I felt like large chunks of history (1990s to today) were also rushed. Tusher Ctr Intellectual Capital, University of California Tusher Ctr Intellectual Capital, Berkeley, California, USA I enjoyed this - it’s exactly the sort of readable, concise narrative (interspersed with enough statistics to help assure you it’s rigorous and some good anecdotes) that you’d expect from a BBC and Economist journalist.

Two Hundred Years of Muddling Through by Duncan Weldon review

You may change or cancel your subscription or trial at any time online. Simply log into Settings & Account and select "Cancel" on the right-hand side. Hart, S., and C. Banbury. 1994. How strategy-making processes can make a difference. Strategic Management Journal 15: 251–269. The author points to vested interests being a powerful force in hampering economic progress. For example, politicians tried to manufacture pre-election booms which led to stop -go episodes. Union power prevented economic progress. Later the trade unions were reformed by Thatcher and this eventually led to an economic revival. Economic rent has always been a factor in developed economies. Economic rents are a way of enriching oneself without producing anything extra, such as renting out a property, the rent of which is a product of demand and supply more than producing economic value. Open societies do not rely on economic rents for growth. Britain during the late 1600s- mid 1700s had an open internal market within the UK where goods could be sold across the country. Spain and France did not, which enabled landowners to make a lot of money, but not actually contribute to economic growth. Britain was therefore able to win the wars with countries by having a more tax producing economy. Again, the parallels to today jump out. movement of people within the UK is being hampered by high rents/social liquidity, keeping poor people and poor areas poor. Post revolution Britain was much better than the pre-version, where land/rents took nearly 24% of national income, compared to 11% after.

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Geography still dictates trade. During the high years of British imperialism, (1870) only 25% of exports went to the empire, and by 1900 only to 30%. Europe remained the UK’s most important export market.

The CapX Podcast: 200 years of muddling through - CapX The CapX Podcast: 200 years of muddling through - CapX

A terrific achievement, covering clearly but with subtlety everything from the spinning jenny to Covid-19’The UK is, at the same time, both one of the world’s most successful economies and one of Europe’s laggards. The country contains some of Western Europe’s richest areas such as the south east of England, but also some of its poorest such as the north east or Wales. It’s really not much of an exaggeration to describe the UK, in economic terms, as ‘Portugal but with Singapore in the bottom corner’. Looking into the past helps understand why. A central theme to the book is how the role and shape of the state has changed and adapted over time - not often for purely ‘ideological’ reasons, but more in response to economic developments and challenges, as well as the need to cope with huge global events (WW1 and WW2 loom large). Then came Brexit. This damaged economic confidence, sterling fell and the well-documented problems ensued. The global pandemic followed leading to falling economic growth and structural shifts in the heavily indebted economy. Why did we British become so attached to the idea that we always muddle through? Perhaps we should blame Churchill, whose “Keep Buggering On” mantra became a national catchphrase during the Second World War. But are we really a nation of muddlers-through? The UK is, at the same time, both one of the world's most successful economies and one of Europe's laggards. The country contains some of Western Europe's richest areas such as the south east of England, but also some of its poorest such as the north east or Wales. It's really not much of an exaggeration to describe the UK, in economic terms, as 'Portugal but with Singapore in the bottom corner'. Looking into the past helps understand why.