United Kingdom Anti-Crisis Alternative

The article deals with the factors that ensure the sustainability of the reproduction of the British socio-economic model in the long term. Some features of the conceptual role of the UK in the formation of the global world order were studied. The impact of the COVID-19 on the economy of the United Kingdom was shown and the reasons for the deepest decline in production in the history of the country were summarized. The factors of chronic decline in productivity on the British labor market and strategic approaches to solving this problem were presented. Some provisions of the Trade and Cooperation Agreement between the UK and the European Union are discussed. The concept of sovereign money is analyzed as a possible response of British economic experts to the challenges of modern crises.

Аннотация (др.)

В статье рассмотрены факторы, обеспечивающие устойчивость воспроизводства британской социально-экономической модели в долгосрочной перспективе. Раскрыты некоторые особенности концептуальной роли Великобритании в формировании глобального мироустройства. Показано влияние ковидкризиса на экономику Соединённого Королевства и обобщены причины самого глубоко падения производства в истории страны. Представлены факторы хронического снижения производительности на британском рынке труда и стратегические походы к разрешению данной проблемы. Обсуждаются некоторые положения Соглашения о торговле и сотрудничестве между Великобританией и Европейским союзом. Проанализирована концепция суверенных денег как возможный ответ британских экспертов на вызовы современных кризисов.

Ключевые слова

socio-economic modeling, financial innovation, technological transformation, COVID-19, UK economy, labor productivity, industrial strategy, EU-UK Trade and Cooperation agreement, sovereign money

Источник финансирования

This article is a translation of: Кузнецов А. В. Антикризисная альтернатива в Великобритании // Общественные науки и современность. 2021. № 1. C. 105—116. DOI: 10.31857/S086904990013421-5

Получено

14.03.2021

Дата публикации

31.03.2021

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29249

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ГОСТ	Кузнецов А. В. United Kingdom Anti-Crisis Alternative // История – 2021. – Modern History in Case of the Social Sciences and Humanities [Электронный ресурс]. URL: https://history.jes.su/S207987840015226-7-1 (дата обращения: 05.05.2024). DOI: 10.18254/S207987840015226-7
MLA	Kuznetsov, Аleksei "United Kingdom Anti-Crisis Alternative." ISTORIYA e20 (2021) DOI: 10.18254/S207987840015226-7
APA	Kuznetsov А. (2021). United Kingdom Anti-Crisis Alternative. ISTORIYA (e20) DOI: 10.18254/S207987840015226-7


1	Introduction The UK is the fifth largest economy in the world in terms of GDP [IMF 2020] and the volume of exports [The World Bank 2020] and it holds the first position in the world in terms of trade surplus in financial services [The City UK 2020, p. 8]. The United Kingdom is one of the least regulated economies [The World Bank 2019] and is among the top five countries in terms of innovation development, attracting more foreign investment in R&D than many of its major competitors, including Germany, France and China [Cornell University, INSEAD, WIPO 2020]. In spite of such high ranking demonstration, the year 2020 in the country was marked by a record drop in production, caused by the extremely negative reactions of market structures to coronavirus and Brexit. Now the UK government is using an ambitious industrial strategy the goal of which is to transform the country into the most innovative economy in the world by 2027. It is quite probable that implementing the planned structural transformations and holding one of the top positions in the the global economy will force British politicians to turn to the time-tested experience of solving internal development tasks by working out innovative approaches to financial sector regulation and their popularization.	* This article is a translation of:
2	A Synthesis of Liberalism and Dirigisme According to President of the Adam Smith Institute M. Pirie, the key to the success of the Anglo-Saxon model are its unique principles — adversarial principle and evolutionary principle [Pirie 2010]. Given the permanent influence of Great Britain on the global world order, it is difficult to overestimate the practical implementation of these principles. It is the United Kingdom that made a significant contribution into the formation of the international political system as well as the formation of the economic, financial, scientific, technological, informational and cultural image of the modern world.
3	It should be noted that maintaining internal political stability and influence in international relations was done at the cost of a firm combination of liberal and dirigistic methods in the regulation of economic activity [Reinert 2008]. For example, to prevent the destabilization of the economy after the collapse of the financial pyramid of the South Sea Company a law prohibiting the creation of new public joint stock companies was in action in England for a hundred years (1720—1825). Actively promoting the liberal ideas of Adam Smith, Britain was seen as the country with the most uncompromising protectionist policy towards the rest of the world until the middle of the 19th century [Chang 2002]. After World War II, to compensate for the loss of the colonial income, the main sectors of the economy (including the Bank of England) were nationalized and extraordinary tax rates (reaching 98 %) on the income of the richest individuals were introduced [Piketty 2016, p. 501].
4	At the same time British politicians worked to create the most favorable regime for the influx of foreign capital into the country. The result of this painstaking work was the emergence of the first world monetary system with a key role of the pound sterling and the emergence of the largest international financial centre in the City of London. Let us emphasize that after the United States had surpassed Great Britain in terms of foreign trade in 1880, the pound sterling retained its status as the leading reserve currency for more than half a century. Thus, in 1947 it accounted for more than 80 % of international foreign exchange reserves [Eichengreen, Chiţu, Mehl 2014, p. 10] — in other words, politics sometimes plays a more important role than the size of the economy, business and finance.
5	The collapse of the British Empire, completed by the Suez Crisis, required new schemes for extracting financial profits from the rest of the world. In the time of the Bretton Woods system crisis and the oil price shocks of the 1970s the symbol of financial liberalization was the Eurodollar market in London, which allowed banks to accept deposits and issue loans in foreign currencies, bypassing national laws and regulations. In the 1980s the policy of deregulation was continued by the Thatcher government, which extended neoliberal principles to stock trading, insurance and investment business, thus eliminating all possible obstacles to a large-scale inflow of capital into the British economy from other countries, primarily from the United States. In the 1990s the neoliberal paradigm was further developed within the framework of the Third Way doctrine, which actually legalized the offshore financial model of the global market with the key role of tax havens, the most significant of which were in direct or indirect British jurisdiction [Shaxson 2018]. Thanks to these innovations, London has regained its right to be the largest international financial center. And to this day the British capital tops the list of the global cities that are the most favorable for the inflow of international investment [Cushman & Wakefield 2019, p. 7].

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United Kingdom Anti-Crisis Alternative

Оглавление

Introduction

A Synthesis of Liberalism and Dirigisme