Britian is stuck: How can we get it moving again?
<p>Our productivity per worker lags behind our peers, such as France, the Netherlands, Germany, Denmark and the US. The UK seems stuck in a perilous middle ground. We’re being outdone by the continental model; higher taxes funding excellent infrastructure that boost productivity, exemplified by France with it’s abundant new tram networks and a tax to GDP ratio of 45%, or the US, where considerably lower taxes mean free wheeling dynamic capitalism, but much fewer services provided by the state.</p>
<p>It may seems obvious that we simply need to make a tough choice- get off the fence. Raise taxes to fund more infrastructure, or cut back on what the state delivers in order to reduce taxation. Although these work for the countries following them, neither is particularly politically palatable in the UK and therefore highly unlikely to happen. Rather than joining in the tug of war for either side, we need to find a way <a href="https://www.overcomingbias.com/p/tug-sidewayshtml" rel="noopener ugc nofollow" target="_blank">to tug on the rope sideways</a>.</p>
<p>The UK manages to be a productivity laggard despite having one of the world’s most dynamic cities, London, which can <a href="https://www.economist.com/1843/2014/08/18/what-is-the-capital-of-the-world" rel="noopener ugc nofollow" target="_blank">genuinely claim to be the capital of the world</a>. We fall behind because <a href="https://www.tomforth.co.uk/mostimportantgraph/" rel="noopener ugc nofollow" target="_blank">our other large cities are failing to take advantage of the agglomeration effect</a>, in which larger cities reap productivity benefits from better matching and knowledge sharing that occurs with larger labour markets.</p>
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