The Great British Betrayal

The Rise of Britain's Rentier Regime

Since the election of Margaret Thatcher’s Conservative government in 1979, Britain has undergone a great experiment. Economically, the UK became the exemplar of neoliberalism in Europe. Politically, the UK has quietly transitioned to a postnational state, undergoing one of the greatest demographic transformations in the West.

Although the landslide victory of Tony Blair’s “New Labour” in 1997 may have seemed like a return to the model of European social democracy that Britain exemplified after the Second World War, Blair’s “Third Way” represented rather the embrace of neoliberalism by the establishment Left, summed up nicely by their spokesman Peter Mandelson’s declaration that “we are all Thatcherites now”.

Under the leadership of both the Conservative Party and New Labour, Britain has transitioned from a traditional industrial and manufacturing powerhouse to a highly financialised rentier economy. The effects have been profound. The average Briton is considerably worse off and entire regions have been left behind at the same time London has become a booming centre of international finance. The UK has been denationalised by decades of mass-immigration and cultural leftism, and has become the prime example of “anarcho-tyranny”, where the state punishes minor offences and acts of dissent against the liberal consensus with extreme force, while serious crime runs out of control in major cities.

The Rentier Regime

The fundamental transformation in the British economy since the 1980s is the movement away from an economy that made things to an economy that made money. Up to then, Britain’s economic might had been centered on its manufacturing. Britain was the birthplace of the industrial revolution, and the dual expansion of its colonial empire and rapid advances in engineering allowed for the creation of a vast trading network, where colonies provided the raw materials and markets for British manufacturing. Northern English cities like Manchester, Sheffield and Newcastle became manufacturing powerhouses serving the world.

Britain has shifted from an entrepreneurial capitalism to rentier capitalism: an economic system organised around income-generating assets. In this system, ownership of sought-after scarce assets — land, natural resources, intellectual property — is the source of a significant portion of economic activity, and the regime is dominated by vastly wealthy rentiers. Wealth is built around having rather than doing.

In his book Rentier Capitalism, the economic geographer Brett Christophers showed that the main effects of Thatcherite-era reforms were to open up new income streams to rentiers that had little or no productive effects. The pattern since then has been the privileging of rentier accumulation over investment in productive economic activity. The share of UK GDP coming from manufacturing was 32% in 1973, today it is under 9%. The UK today is producing a lot of money, but not much else.