22 March, 2025 Sebastian Wang @ Libertarian Alliance
According to Tim Wallace, writing in The Daily Telegraph on 12th March 2025 (Britain ‘no longer a rich country’ after living standards plunge),
British GDP per capita in 2025 is lower than it was in 2005. Some of
the former communist countries of Eastern Europe, which were poorer than
Britain in 2005, have caught up and are overtaking it. Wallace cites
figures that show a steady absolute and relative decline in British
economic performance, concluding that “Britain’s economic stagnation is
no longer an anomaly but a persistent reality.” This is not simply a
matter of economic cycles or short-term policy errors but a structural
malaise afflicting the whole of British life.
I accept that measuring GDP and GDP per capita is less a
science than an art. GDP does not easily capture real improvements in
living standards that come from technological progress rather than gross
production volume. There are also methodological issues—should we
measure GDP in nominal or real terms? Should we adjust for purchasing
power parity? Nevertheless, when GDP figures are used comparatively
rather than absolutely, and when they show clear trends over time, they
do tell us something.
The significance of Britain’s economic stagnation is twofold.
Firstly, it demonstrates the extent of governmental mismanagement. If a
country filled with intelligent and industrious people, untouched by war
or natural disaster, does not achieve strong economic growth, the
obvious blame is misgovernment. The British ruling class has laid on so
many taxes and regulations that people are losing both the incentive and
the ability to create wealth.
Secondly, national wealth correlates with national power. If Britain
is economically strong, it can help shape the world to its own
advantage. If it is weak, it is at the mercy of others. Throughout the
past three centuries, British economic strength underpinned its ability
to shape the world. This may not always have been done in noble ways,
but at least there was power to wield. Today, Britain is sliding into
economic insignificance, and as it does so, its geopolitical relevance
diminishes.
A nation that lacks control over its own economic fate
cannot hope to shape the outer world in its favour. The debates over
foreign policy and international influence depend on this central
reality. Without economic strength, they are little more than academic
exercises. A country that is poor and weak does not get to dictate
terms; it is forced to accept them. Britain’s present direction ensures
that it will soon find itself in that position—voiceless in the affairs
that shape its own future. As Thucydides sort of said: The strong take what they will; the weak give what they must.
Eastern Europe’s relative economic rise is not, in itself, a cause
for concern. These are small countries with limited geopolitical
ambitions. What does matter is the long-term direction of much bigger
and more important countries, particularly China. Over the past forty
years, China has grown from economic irrelevance to what is arguably the
largest economy in the world. In terms of GDP per capita,
China remains behind Britain, but it is closing the gap rapidly. The
following table illustrates China’s economic growth over the past
decades: (See the original for the chart that appears here.)
This clearly shows the rapid pace of China’s economic expansion and its increasing dominance in global markets.
Western conservatives and libertarians often attribute China’s rise
purely to market liberalisation. This is an incomplete explanation by
itself. If the reforms of Deng Xiaoping were a necessary cause, but they
were not the only reason for China’s rise. There are longer term causes
to be taken into account.
In 1900, China faced two major problems. First, its advanced
education system was almost entirely focused on the Chinese classics.
The curriculum was centred around rote memorisation and reproduction of
difficult literary texts. This method of learning produced a deeply
conservative elite, trapped in in its beliefs about the world,
and in its assumptions about the means of understanding the world, and
therefore unable to respond effectively to the rapid scientific and
technological progress that had begun in Europe after about 1600.
Second, China’s population had risen from approximately 150 million
in 1600 to around 400 million by 1900. This put pressure on the land and
led to widespread malnutrition. Malnourished populations suffer from
lower effective intelligence, creating a society that struggles to
innovate or respond to crises. What happened in China was a perfect
example of a high-level trap, where the scale of the population outpaces
economic and technological development, leading to diminishing returns
in productivity.
Unlike the early modern European states, which saw
technological progress that increased agricultural yields and industrial
output, China remained fixed on traditional methods that could not
support its growing population. As a result, the society was locked in a
cycle of subsistence farming and overpopulation, unable to break free
without radical restructuring. China’s decline in the 19th and early
20th centuries was not simply the result of colonialism or foreign
interference—it was a structural issue brought on by internal
stagnation.
The Communists, through their undeniably violent and destructive
means, eliminated these barriers to progress. The Cultural Revolution,
though disastrous in its immediate effects, targeted what the Communist
Party termed the “Four Olds”—Old Customs, Old Culture, Old Habits, and
Old Ideas. The goal was to purge China of its traditional structures and
values, which were seen as barriers to the Communist utopia. This
included attacks on Confucian scholarship and the destruction of
temples, together with the persecution of intellectuals and academics.
However, while this movement failed to bring about the classless
Communist society that was its intended goal, it did succeed in
eradicating the deep-rooted conservative bias of Chinese education and
culture.
By breaking with the past in so violent a manner, China
unintentionally created a blank slate on which a more realistic approach
to development could be written. Once the rigid classical tradition was
removed, the way was cleared for a more efficient reception of Western
science and technology. In conjunction with later economic reforms, this
allowed millions to rise out of poverty and malnutrition, ultimately
enabling China’s natural intellectual capital to flourish.
Today, malnutrition is virtually non-existent in China, and the
country’s technological and scientific output reflects this. The
following table demonstrates the steady increase in calories availabile per capita in China during the past four decades:
| Year |
Calories per Capita per Day |
| 1980 |
2025 |
| 1990 |
2345 |
| 2000 |
2650 |
| 2010 |
2990 |
| 2020 |
3200 |
| 2025 |
3300 |
This rise in average calories available correlates with improvements economic development.
Now, Britain is not threatened by China in a direct military sense.
Despite the media hysteria, China has little interest in military
confrontation with the West. However, China’s rise carries deep
geopolitical consequences. No Chinese person has forgotten the so-called
‘century of humiliation’ between the First Opium War and the Communist
victory in 1949, and Britain was the main perpetrator of that
humiliation. The Opium Wars, the sacking of the Summer Palace, the
unequal treaties—all these remain bitter wounds in Chinese historical
consciousness. The idea that a weakened Britain, prostrate by its own
mismanagement, will not face some form of reckoning is naive.
Resentment
does not vanish merely because time has passed. When one power rises
and another declines, a reckoning of sorts becomes inevitable. If
Britain continues on its path of economic and strategic decline, China
will find it hard to resist the temptation to kick the former empire
while it is down, and Britain, its former strength abolished by its own
misdirected efforts, will find it equally hard to resist. The strong take what they will; the weak give what they must.
One example is China’s vocal support for the return of the Elgin
Marbles to Greece, a move that aligns with its broader efforts to
challenge Western narratives on cultural heritage. In 2021, Chinese
state media openly backed Greece’s claim, citing historical injustices
and the need for cultural restitution. This is not merely symbolic but
part of a larger diplomatic effort to strengthen alliances with nations
that share grievances against past Western imperial actions. As China
continues to expand its global influence, we can expect more instances
where it uses soft power to support causes that blame real or alleged
Western abuses of past strength, further shifting the geopolitical
balance.
Britain’s response should not be to join in neoconservative fantasies
about “containing China.” Every neoconservative project of the past 30
years has ended in disaster. The Middle East interventions produced
nothing but a lake of blood. The war in Afghanistan was an outright
humiliation. The Ukraine conflict has been a costly and bloody failure.
These people have demonstrated time and again that they are incapable of
directing a coherent foreign policy. Trusting them to handle relations
with China is absurd.
Instead of engaging in doomed geopolitical schemes, Britain should
focus on reversing its own decline. This means radical economic reform:
- Tax Cuts: The British tax burden is among the
highest in the developed world. Slashing taxes will incentivise
productivity and investment.
- Deregulation: Britain is suffocating under layers
of regulation that make enterprise difficult and costly. Entire
industries are being strangled before they have a chance to grow.
- Monetary Stability: The pound must be stabilised. A return to the gold standard or an equivalent policy would provide long-term monetary security.
- Abolition of Green Mandates: The obsession with
“Net Zero” policies is economic self-sabotage. Britain should
immediately end all subsidies for inefficient energy sources and reverse
the restrictions placed on reliable power generation.
- Reindustrialisation: Britain cannot remain a
country of financial services and hospitality alone. A serious
industrial policy is needed to revive British manufacturing and
technological development.
None of this can be done without addressing the ruling class itself.
Britain’s economic decline is not an accident—it is a direct consequence
of policies that benefit the ruling class at the expense of the nation.
The people who run Britain do not suffer from stagnation. They enrich
themselves regardless of whether the economy grows or shrinks. They
profit from financial speculation and green subsidies. Their wealth is
detached from the real economy.
Unless this system is reformed—or replaced—Britain will continue its decline.
Britain is facing its own century of humiliation. If current trends
continue, it will become increasingly irrelevant, unable to shape its
own future. The answer is not to lash out at rising powers or indulge in
military adventurism. The answer is radical economic and political
reform. Without it, Britain will continue its descent into irrelevance.
Reading List
- Allen, Robert C. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press, 2011.
- Broadberry, Stephen, and Kevin O’Rourke, eds. The Cambridge Economic History of Modern Europe. Cambridge: Cambridge University Press, 2010.
- Coase, Ronald, and Ning Wang. How China Became Capitalist. New York: Palgrave Macmillan, 2012.
- Economy of China. Wikipedia. https://en.wikipedia.org/wiki/Economy_of_China.
- Maddison, Angus. Chinese Economic Performance in the Long Run. Paris: OECD Publishing, 2007.
- Pomeranz, Kenneth. The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton: Princeton University Press, 2000.
- Wallace, Tim. “Britain ‘No Longer a Rich Country’ After Living Standards Plunge.” The Daily Telegraph, March 12, 2025.
