Rule, Britannia! Rule the Waves! Britons Never Shall Be Slaves

Britannia Rules

In the 18th century, Great Britain was the predominant global center of science and philosophy. By the mid-19th century, it was by far the most powerful and wealthiest country. Its empire was the largest-ever in history - by the 20th century it spanned about a quarter of the globe's population and territory. The Industrial Revolution began in Britain and was proceeding at a breakneck pace. The tiny island accounted for almost half of the world's industrial output, two thirds of global coal production and three quarters of the world's steel output. Britain owned half of the world's ocean-going ships and half of the world's railway mileage. About 40% of the world's trade passed through British ports. The British pound was the global currency, and the London Stock Exchange was the largest in the world.

Britannia Sucks

A century later, the picture was quite different. Wartime food rationing in the UK was not abolished until 1954, later than the rest of Western Europe - a sign of an impoverished and ailing society. Runaway inflation peaked at 27% in 1975. Unemployment got out of control. By 1976, Britain became Protestant Europe's poorest country and the second-poorest country in the European Community. It ranked 29th in terms of GDP per capita, slightly above Italy, Spain, and Portugal. The UK's GDP, once the world's largest, had now dropped not only below that of the US and France but also of the vanquished foes - Germany and Japan. Its economic growth rate lagged behind that of most other West European countries. London was no longer the world’s preeminent financial hub, with investors fleeing to New York.

Britain was now "the sick man of Europe." At that time, the UK became the first OECD country to apply for an IMF loan, relegating itself to the level of Third-World countries - a humiliating experience, to say the least, for a country that used to rule the world. "Britain is a tragedy - it has sunk to begging, borrowing, stealing," Secretary of State Henry Kissinger said then, calling the UK a "scrounger" and a "disgrace."

Trade unions, which was a euphemism for criminal gangs using state-authorized and private coercion to bully both businessmen and workers, reached the height of their power, ousting governments and getting away with almost everything. The trend peaked during the Winter of Discontent (1978-1979), when strikes all over the country paralyzed the entire economy. Public services were almost shut down, piles of rubbish and corpses lay on the streets because of public-sector strikes, and electricity shortages were omnipresent.

The British Empire collapsed overnight, with colonial savages looting the wealth invested by British citizens with impunity (that was given the benign-sounding name of "nationalization", of course). By 1982, the United Kingdom, whose naval power used to surpass that of other great powers combined, degraded to the point when the tinpot dictator of a banana republic invaded sovereign British territory and was absolutely confident he would get away with it. Great Britain turned from a superpower into a second-rate or even third-rate country.

Moreover, Britain fell victim to an enormous brain drain. The best minds were crossing the ocean to the country where scientific freedom still remained. The UK had long ago lost the position of the world's philosophic center to Germany and was now being replaced by the US as the predominant scientific hub.

The causes of Britain's unprecedented greatness in the 19th century and its unbelievable decline in the 20th are quite clear. Britain is the birthplace of modern constitutional government, Magna Carta, habeas corpus and Lockean liberalism. In the mid-19th century, Britain was the foremost champion of laissez-faire agenda (along with the US). It was the world's only country with a consistently free-trade policy (even the US then fell prey to protectionism). Property rights were more secure than ever before.

By the mid-20th century, what once was a free economy turned into its opposite. The UK kept wartime price controls and regulations well into the 1950s, becoming Western Europe's only peacetime planned economy. Most prices were set by the government and most essential resources were state-allocated. According to Ludwig von Mises, in fundamental terms such an economy was emphatically not a market economy and did not differ from Soviet socialism, despite retaining a fiction of private ownership, which was a mere facade. "In matters of economic planning we agree with Soviet Russia," Clement Attlee said in 1946, marking perhaps the lowest ebb in the UK's intellectual collapse.

In the 1940s Britain was acquiring a quasi-totalitarian flavor reflected in George Orwell's immortal magnum opus, Nineteen Eighty-Four. Though Britain was still far from such slaughterhouses as Soviet Russia and Nazi Germany, they all shared such features as total state control over the economy and war hysteria. The U.K. Ministry of Information (MOI) with its absurd quest for censorship was an inspiration for Orwell's Ministry of Truth. In 1943 Orwell criticized wartime censorship in an article titled the Freedom of the Press. The height of MOI idiocy was its attempt to suppress all anti-Soviet sentiments and promote a pro-Soviet attitude in the media.

Though the planned economy was eventually abandoned in the 1950s as disaster followed disaster, by the late 1970s the British government nationalized perhaps more industries than any other West European country, turning the UK into a mixed economy where the government owned the "commanding heights" - something akin to Soviet Russia's New Economic Policy (NEP) in the 1920s and China's post-Deng Xiaoping "socialist market economy."

Unlike China and Russia, the British economy was burdened with yet another malignant tumor - the welfare state, which was growing rapidly since 1945 and was only surpassed by Scandinavia. The UK's National Health Service, established in 1948, is one of Europe's most centralized and socialized healthcare systems. In Britain, there are much fewer private hospitals than in Continental Europe (excluding Scandinavia), and the share of public funding for healthcare is among the highest (along with Scandinavian countries).

The cultural collapse was also proceeding unchecked. An image of Britain's culture at that time can be found in Anthony Burgess' Clockwork Orange, a novel featuring an anarchic society of roaming proto-hippie hooligans adopting Soviet lingo and pursuing meaningless, moronic lives. Meanwhile, the intellectual elite was getting rotten as an inflow of state subsidies and grants turned science and philosophy into a nest of charlatans and rent seekers.

Cool Britannia

In 1979 something happened that drastically changed the downward trend. By the early 2000s the UK’s GDP per capita was higher than those of France and Germany, while its total GDP exceeded that of France and some speculated that it was poised to overtake Germany’s. The UK became Europe’s fastest-growing economy and the world’s second largest services exporter. Inflation and unemployment fell drastically. Moreover, as a result of the Big Bang deregulation policy and the idiotic Sarbanes-Oxley Act in the U.S., London again became the world’s financial capital.

By winning the Falklands War and playing a major part in the Soviet Union’s collapse, the UK reasserted its international reputation and demonstrated that it still could stand up to aggressors. Along with the U.S. president and the CPSU’s General Secretary, the prime minister of the UK was part of the great triumvirate that ran things around the world. The UK became what came to be known as “cool Britannia” (a pun on “Rule Britannia”).

So, what brought about the change?

To be continued.