Britannia Unchained

Copyrighted material 9781137032232

© Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore and Elizabeth Truss 2012 All rights reserved. No reproduction, copy or transmission o this publication may be made without written permission. No portion o this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions o the Copyright, Designs and Patents Act 1988, or under the terms o any licence permitting limited copying issued by the Copyright Licensing Li censing Agency, Agency, Saron House, 6-10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims or damages. The authors have asserted their rights to be identifed as the authors o this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2012 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint o Macmillan Publishers Limited, registered in England, company number 785998, o Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division o St Martin’ Martin’ss Press LLC, 175 Fith Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint o the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN: 978-1-137-032 978-1-137-03223-2 23-2

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Contents

Acknowledgements

vi

Introduction 1. The Chains 2. A Tale of Two Nation Nationss 3. Revenge of the Geeks 4. Work Ethic 5. Buccaneers 6. Britannia Unchained Conclusion

1 7 12 38 61 78 100 113

Notes Bibliography Index

117 133 137



Introduction

On 8 August 2011, 20-year-old Ashra Rossli set out to cycle to a scared emale riend. It was the middle o the London riots. A group o thugs got in his way. Ashra tried to get past. He received a punch straight to the ace, which broke his jaw in two places.1 His attacker was 17-year-old Beau Isagba. At the age o 14, Beau had earned his rst conviction or possession o a knie. At 16, he earned a second or possession o cannabis.2 Beau pulled Ashra o his bike, and to the delight o his gang mates, threw him to the ground. Beau cycled away with his new bicycle. Ashra sat dazed on the ground. A ew minutes later two young men approached. They asked i he was okay, and helped Ashra to his eet. While Ashra was still dazed, these young men took their opportunity to steal his PlayStation. Their actions were recorded on another girl’s mobile, and then placed up on YouTube or the world to see. So ar, 6 million people have watched what was to become one o the iconic scenes o the London riots. Just a year beore 2012’s Jubilee and Olympic year, the world saw Britain at its worst. Ashra, an accountancy student rom Malaysia, had been in Britain just one month. He was a hard working, ambitious student, who had scored a string o As in his exams at school. 3 He orgave his attackers. He told reporters that he was not angry,4 that he still believed in Britain and that he was determined to stay. 5 This episode symbolises some o the issues we wish to tackle in this book. Ashra represents the best o a new ambitious, hard working, developing world. Sadly, Beau Isagba represents the worst o what some elements o Britain have become. Britannia Unchained is a book about what Britain can learn rom the rest o the world. As the world becomes more competitive, Britain will have to work harder to keep up. Britain has much to be optimistic about. The horror o the riots was an aberration, not an accurate picture o the day to day o London lie. Nevertheless, i we are to prosper in uture, we have to much learn rom the Ashras o the world. 1


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Britannia Unchained

The latest economic crisis is only the most recent maniestation o more undamental problems. In Britain, there has been too great a tendency to attribute results to ortune or background, coupled with a general reluctance to take hard decisions on economic policy. Britain has also suered rom a diminished work ethic and a culture o excuses. In twenty-rst-century Britain, more people look to others to solve their problems. The dependency culture has grown dramatically. By February 2012, 5.7 million people o working age in Britain were collecting some kind o benets. At over 13 per cent o the working population, this is one o the highest proportions in the OECD. It is now clear that, unless we get a grip o these problems, the next British generation will end up with a diminished share o the world’s wealth and resources. It is also likely that the new ideas which will shape the world may come rom India or Brazil, rather than Britain. The current crisis should be seen as a wake-up call to all Britons. There is no inevitability about the uture. We need only look at Greece and Italy, or Germany and Canada, to see the dierent paths taken by nations. Some decide to take control o their own destiny, while others maniestly ail to do so. All ve authors grew up in a period where Britain was improving its perormance relative to the rest o the world. The 1980s, contrary to the belies o many on the let, were a successul decade or Britain. They were a time when, ater the industrial chaos o the 1970s, business and enterprise began to fourish once more. We want to see this spirit o innovation renewed. We know that Britain can be successul. The seeds o this revival are there. We also see pockets o inspiration around the country that, i unleashed, could propel us into the superleague rather than the also-rans. Our research capability is the best in the world. We have technological companies who work tirelessly on new products. There are many stories o people who have earned enormous success through their own eorts. But changing Britain’s ortunes needs a relentless energy and determined ocus. Vitally we will need to be tougher in taking on vested interests. These occur in lots o guises, through bureaucratic inertia, and many o the perks which a generous welare state lavished on previous generations. We have to ensure that the general climate or business is attractive. This means that we should stop indulging in irrelevant debates about sharing the pie between manuacturing


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and services, the north and the south, women and men. Instead, we should ocus on trying to make it easier or rms to recruit people and ensuring the tax burden is less onerous. To achieve these goals we think it is helpul to take a step back and go on a worldwide journey, so to speak. In the long run, what goes on in Sao Paulo, Beijing and Mumbai may well aect the uture o Western Europe more than partisan disputes about precisely how ast to cut public spending. The recent crisis in the Eurozone has been the story o European countries’ ailure to adapt to international competition. Countries like Greece and Italy, which adopted the euro, ound that their costs became too high and eectively priced them out o international markets. Both countries saw a marked decline in productivity. This development aected these countries as much as particular decisions their governments made relating to public spending. The situation o Greece, Spain and Italy in 2012 should be a warning to Britons about some o the dangers ahead. The really deep austerity cuts acing Greece and Italy have been avoided, so ar, in Britain. Yet many o the structural problems in the economies o the countries o Southern Europe are shared by Britain: a large, bloated public sector; increasingly large liabilities regarding pensions in the public sector; too much spending and too little growth; poor productivity. Britain’s continued use o its own currency, the pound sterling, has shielded it rom the worst eects o the scal crisis aecting Europe. But the problems Britain aces are, like those o European countries, long-standing. Britain’s own cultural history, where issues o class are particularly potent, has also made the situation more critical. Beyond the statistics and economic theories, there remains a sense in which many o Britain’s problems lie in the sphere o cultural values and mindset. These are, naturally, more dicult to analyse than economic problems. They are also harder or politicians and commentators to address. Ater the nancial crisis o 2008, many people in the West began to question the basis o ree market capitalism. ‘Business’ became a dirty word. The ‘at cat’ bankers, who had all grown extremely rich, were castigated on all sides o the political divide. Yet, in the emerging economies o Asia, South America and Arica, economic progress continued unabated. In these countries individual initiative and ree enterprise continued to drive progress. Millions o people are



Britannia Unchained

being pulled out o poverty across the world by the simple processes o capitalism. Britannia Unchained is unembarrassed about its support or business, the prot motive and the individual drive o the wealth creator. The term ‘globalisation’ is a cliché. However, it is certain that, or the rst time in centuries, the world economy is being driven by what happens outside Europe and North America. At the same time, many parts o the old world are ghting back. Germany has embarked on a programme o welare reorm. Countries in Scandinavia are pursuing labour market reorm. Canada has successully cut its decit. It makes sense then or anybody involved in politics in Britain to engage ully with what’s going on in the wider world. Britannia Unchained is an attempt to do just that. Each chapter o the book looks at a particular aspect o economy and society in a particular country, or countries, and tries to draw general conclusions about the lessons that can be learned. The rst chapter, ‘The Chains’, sets out the central question o the book. It asks whether we are inevitably destined or national decline. Britain has oten wallowed in sel-pity as the glories o Empire have ebbed away. The chapter argues that Britain is once again acing the same loss o condence last seen in the 1970s. Chapter 2, ‘A Tale o Two Nations’, looks at the Canadian approach to public spending. It has been striking how eective Canada has been in meeting the challenges o the nancial crisis. It is widely known that the position o Canadian banks has been much stronger than their counterparts in the United States and Europe. Chapter 2 also looks at how Canada reormed its government in the 1990s. Ater a decade o reckless spending Canada successully managed to cut its spending and start upon the way to growth and more sustainable development. Chapter 3 is about educational aspiration in Britain. This chapter, entitled ‘Revenge o the Geeks’, shows how education is viewed in India and other thriving new economies and contrasts these with Britain, where the ideals o celebrity culture and instant ame are prevalent. In many opinion surveys conducted in Britain it has been ound that young people aspire to be ashion models or proessional ootballers ahead o becoming lawyers, doctors or even scientists. We argue that one advantage o the rising economies is the emphasis they place on education. Young people in India and South Korea are more


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likely to work hard at school in order to enter well paid and respected proessions. It is clear that a society motivated in this way will become, over a short period o time, more successul and productive. Chapter 2 gives suggestions as to what Britain can learn in this respect. In Chapter 4, entitled ‘Work Ethic’, we explore the nature o the work ethic in South Korea, Singapore and Hong Kong and contrast this to that ound in Britain. We ask ourselves, ‘What is it about these countries that makes them so dynamic?’ In this chapter we look at the way in which the state has made Britons idle. Our culture o instant gratication ignores the years o persistence that lie behind real success. Too many people in Britain, we argue, preer a lie-in to hard work. Chapter 5, entitled ‘Buccaneers’, is a wider exploration o the nature o business innovation and entrepreneurial drive. In this chapter the achievements o Israel, perhaps surprisingly to some, are celebrated in the area o science and technology. Israel has shown how venture capital can be attracted into exciting areas. This capital is particularly supportive o technological innovation and businesses which rely on what is sometimes called ‘the knowledge economy’. Through the application o science and business acumen, exciting commercial opportunities oten arise. Overshadowed by political concerns, Israel remains an underappreciated hub o scientic innovation. By contrast, it is a commonly observed eature o modern Britain that the state and bureaucracy have become more entrenched over the last decade. There is a eeling that initiative and individual enterprise have been stifed by an obsession with rules, regulations and ‘health and saety’. This climate o excessive bureaucratic control has made Britain less competitive on the international scene. The nal chapter, ‘Britannia Unchained’, returns to the question o whether Britain is an old country, ated to gradual decline. It argues that it should instead see itsel as a young country with its best days still ahead. Britain’s attitude is contrasted with that o Brazil, a vibrant and dynamic emerging economy. Brazil has enjoyed a decade o prosperity, and its people display a ervent patriotic spirit, underpinned by a sense o optimism. A new ‘baby boom’, however, is ensuring that Britain, too, is a young and growing country. There are many promising opportunities or the uture i the British are prepared to work hard.



Britannia Unchained

We hope that these chapters, by identiying areas in which Britain can improve, will provoke some debate about our uture as an advanced economy in the world. The world in 2012 oers exciting prospects or countries ready to seize the day. There is no reason why, ollowing the example o other nations, Britain cannot share in this bright uture.



1

The Chains

In the wake o the fnancial crisis, 1970s-style pessimism that Britain is destined to decline has returned. The British have lost confdence in themselves and in their history.

The Return of Decline

In March 1979, on the occasion o his retirement, the British Ambassador to Paris Sir Nicholas Henderson sent out the traditional valedictory letter to the Foreign Secretary. It was gloomy in tone. ‘Our economic decline has been such as to sap the oundations o our diplomacy. Conversely, I believe that, during the same period, much o our oreign policy has been such as to contribute to that decline … today we are not only no longer a world power, but we are not in the rst rank even as a European one. Income per head in Britain is now, or the rst time or over 300 years, below that in France.’ 1 The signs o this decline were everywhere: You only have to move about western Europe nowadays to realise how poor and unproud the British have become in relation to their neighbours. It shows in the look of our towns, in our airports, in our hospitals and in local amenities; it is painfully apparent in much of our railway system, which until a generation ago was superior to the continental one … So far as the management of major capital projects by government is concerned our vision appears limited and our purpose changeable … We started work on two large plans, the third London airport and the Channel tunnel, only to cancel both.2

Despite the apparent decline, some argued that there was something to be said or Britain’s relative poverty. Perhaps it was the Germans and the French who worked too hard, while the Brits had discovered what really mattered: ‘Others will argue that the British way o lie, 7



Britannia Unchained

with ingenuity and application devoted to leisure rather than to work, is superior to that elsewhere and is in any case what people want.’ 3 But as Henderson warned, it was doubtul that such a way o lie could continue or long, i decline was continued. By the time Henderson wrote his letter, Britain had arguably been in relative decline or nearly a hundred years. The ormer ‘workshop o the world’ had ailed to take sucient advantage o the second stage o the Industrial Revolution. The British lagged in developing chemicals behind Germany, in cars behind France and electricity behind America. In the wake o the 1929 Wall Street Crash and the worldwide Depression that ollowed, Britain retreated rom its Victorian liberal principles. 4 The days o sound money, ree trade and ree competition were over. Ater the Second World War, the Government went still urther, nationalising the health, gas, coal, and railway industries. In 1950, Britain was still richer as a nation than France or West Germany. By the time o Henderson’s letter, 30 years later, Britain had allen behind. Between 1950 and 1973, Germany grew twice as ast per hour worked.5 The long decades o uncompetitive markets and entrenched labour power had nally caught up with Britain. Economic weakness at home was matched by political weakness abroad. The Empire had disappeared. The debacle at Suez was evidence o a lack o infuence, the relationship with America was weakened, and de Gaulle twice vetoed Britain’s entrance into the Common Market. Britain could no longer be said to be a great power. The 1970s would be seen as the nadir o British decline. British society was alling apart, as governments o both let and right ound themselves squeezed between trade union power and growing infation. Edward Heath had to declare an ocial State o Emergency a record ve times in less than our years. 6 Unemployment passed 1 million in 1975, or the rst time since the 1930s. Popular companies like Rolls Royce went bust. Frequent power cuts could bring the country to a standstill. Strikes and industrial disputes were endemic. Trade union leaders like Derek ‘Red Robbo’ Robinson, shop steward at British Leyland, proved as powerul as leading politicians. Between 1978 and 1979 he caused over 500 walk-outs at the Longbridge plant.7 In hospitals, women gave birth by candlelight, trac lights ailed across the country,8 and even Prime Minister’s Questions was lit by candles and paran lamps.9 Blue Peter taught children how to line blankets


Copyrighted material 9781137032232 The Chains

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with newspaper to keep elderly relatives warm without heating. In early 1974, Britain was temporarily reduced to a three-day week. Rubbish piled up on the streets, and inamously during the 1978 so-called Winter o Discontent, even the dead were let unburied. ‘Goodbye, Great Britain,’ said a Wall Street Journal editorial, ‘it was nice knowing you.’10 ‘Britain is a tragedy,’ mourned Henry Kissinger. ‘It has sunk to borrowing, begging, stealing until North Sea oil comes in.’11 According to a Brussels correspondent, Britain was now only admired in Europe ‘or its ability to stagger along on its knees’. 12 The dictator Idi Amin wrote to Heath oering aid, and claiming that he was ‘ollowing with sorrow the alarming economic crisis bealling on Britain’.13 In response to the crisis, British society turned inwards. Class divisions loomed large. As the oreign correspondent put it, ‘The apparent ecklessness o the British worker and his delight in wringing the once golden goose’s neck is matched in continental eyes by the reluctance o the British management to get to work rst [and] roll up its sleeves.’14 Trade unions and political parties became more radical, the political consensus o the postwar years broken. Across the Western world, there was a sense that progress and growth was coming to an end. The Limits to Growth, written by a team o MIT researchers, published in 1972, argued that humanity’s ood and resources would soon run out. By 1992, the authors predicted, world supplies o zinc, gold, tin, copper and oil could be exhausted.15 Within the decade, it had sold 4 million copies. 16 The 1967 Famine, 1975! warned that ‘Population-ood collision is inevitable; it is oredoomed.’ Haiti, Egypt and India were already a lost cause, and should be let to starve. 17 The 1968 The Population Bomb argued that ‘in the 1970s and 1980s, hundreds o millions o people will starve to death in spite o any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.’ 18 This apocalyptic book went on to sell 2 million copies.19 Clearly, the mass doom ailed to come about. World populations continued to grow, and there is no sign yet o reaching a limit to resources. Britain, too, ound its way back rom the edge. Margaret Thatcher’s reorms helped reintroduce competition back into the economy, and weakened trade union power. Between 1995 and 2007, UK real GDP per hour grew aster than France, Germany and



Britannia Unchained

even the United States. 20 The collapse o the Soviet Union in 1989 and the deeat o the Argentine military junta in 1982 helped regain international respect. Even British sot power recovered as culture boomed. For a brie moment in the mid 1990s it was possible to speak o ‘Cool Britannia’ without any apparent irony. Yet, in the wake o the nancial crisis o 2007, it seems that a spirit o decline has returned. ‘Forget the Great in Britain’, said an article in Newsweek in 2009.21 Perhaps, people wondered, Margaret Thatcher didn’t so much save Britain as put o the inevitable. The nancial crisis showed, some argued, that the perceived prosperity o the 1980s was little more than a massive stock bubble. The quagmire o the Iraq War put to an end the idea o justied military intervention. Britain is increasingly isolated rom the European Union, and distant rom an America preoccupied by the rising BRIC (Brazil, Russia, India, China) economies. The prospects or long-term economic growth look gloomy. The national debt is above £1 trillion and growing. The other symptoms o decline seem to have also returned. Radical political views are gaining support. Agonised navel-gazing is now the ashion, debating the distribution o growth, rather than how to grow the economy as a whole. Hundreds camped in the ‘Occupy London’ protests outside St Paul’s Cathedral in the autumn o 2011. The West as a whole looks set to drastically shrink in infuence compared to China and the other new economies. Once again, the idea that growth is unsustainable is popular. ‘Every society clings to a myth by which it lives’, argues Tim Jackson o the Sustainable Development Commission. ‘Questioning growth is deemed to be the act o lunatics, idealists and revolutionaries. But question it we must. The myth o growth has ailed us.’ Instead, Jackson argues, we should ocus on the ‘quality o our lives and in the health and happiness o our amilies … the strength o our relationships and our trust in the community’. 22 Even the three-day working week is seemingly back in ashion. The new economics oundation (ne) argues that instituting a 21-hour working week would help tackle ‘overwork, unemployment, overconsumption, high carbon emissions, low well-being, [and] entrenched inequalities’.23 Britain has lost condence in itsel, and what it stands or. Britain once ruled the Empire on which the sun never set. Now it can barely keep England and Scotland together. No wonder many have concluded



Index Compiled by Sue Carlton

9/11 terrorist attacks 29 Addison Lee minicabs 62, 63 Airbnb 98 Allensbach Institute 40 America see United States Amin, Idi 9 antisemitism 86 Antrobus, Lavern 75 AOL 81 Apple 60, 81, 91, 105 The Apprentice 75 apprenticeships 74 ArcelorMittal 73 Argentine military junta, deeat o (1982) 10 ARM 68 austerity measures 3, 36, 66 Australia 30, 32–3, 65, 88, 111 Bakewell, Joan 109–10 Balls, Ed 25–6, 27, 28, 29, 30, 31, 33 Balls, Michael 25 Bank o England independence 25 see also central banks bankruptcy 91, 92 see also business, and ailure banks Australian 33 bailouts 12, 33 Canadian 4, 13, 33–5 Chinese 95 and mathematical knowledge 45, 47–8 Bar-Natan, Bernard 78–80, 84 Basel II regulations 47 Beleza Natural 103–4 Beuchler, Simone 102

Black Wednesday 25 Blair, Tony 17, 24, 27, 29, 115 Blanchower, David 20 boom and bust, end o 25, 27, 30, 115 Branson, Richard 97 Brazil 5, 100–6, 112, 113, 115 crime 102–3, 105 democratic elections 104 demographics 104 education system 105 and global recession 101 and international investment 105 military coups 104 Olympic Games (2016) 101–2, 103 and optimism 5, 100–2, 103, 105, 106, 111 poverty and inequality 102, 104–5 productivity 105, 115 BRIC (Brazil, Russia, India, China) economies 10 see also emerging economies Britain see United Kingdom British Chamber o Commerce survey (2011) 87 British flm industry 97 British Social Attitudes survey 109 Brittan, Samuel 20 Brown, Gordon 17, 24, 25, 26–9, 30, 33, 36 Buckley, Sir George 58 business 2, 3–4 enterprise zones 88 and ailure 91–2, 95–6, 99 and inormal economy 88–9 and regulation 87–8, 89 Callaghan, James 24, 114 Cameron, David 20 Campbell, Kim 16

137



Britannia Unchained

Canada 4, 12, 13–19, 32, 33–7 banks 4, 13, 33–5 cutting defcits 4, 14–18, 30, 32, 37 diversifed economy 34 education 36, 37 fnancial regulation 34–5 points-based immigration system 36 spending cuts 17–18 CDOs (collateralised debt obligations) 47, 48 CDSs (credit deault swaps) 47 celebrity culture 4, 74–5, 76, 115 central banks independence 25, 27 see also Bank o England Centre or Economics and Business Research 101 Centre or Social Justice 67, 70, 73 Charles II, King o England 21 childcare, cost o 71 Chile 30, 32 China 10, 46, 53, 113, 115 aging population 106, 107 education 43, 44, 113 Chinese students in UK 58–9, 72 enterprise culture 95 inormal economy 89 patent registration 54 Chrétien, Jean 16–18, 35, 36 chutzpah 81–2 Cidade de Deus slum 100 City of God (2002) 100 Clark, Joe 15 Clarke, Ken 27–8 Clinton, Bill 25 ComRes poll 87 Conederation o British Industry 74 Conservative Party (Canada) 35 consumer law 89 Cool Britannia 10, 115 Costa, Edivan 103 credit card debt 12, 30 Crosland, Anthony 26 Crow, Bob 63

Crowdcube 98 crowdunding 98 Darling, Alistair 111 Day Care Trust 71 De Gaulle, Charles 8, 105–6 Deak, Lex 92 debt 10, 12, 19–24, 30–3, 115 debt delusion 19–20, 23 and deault 21–2, 101 and economic growth 21, 22, 23–4 and fnancial crises 22–3 and uture generations 67, 70 and responsible spending 24, 33 defcits 23–4 see also United Kingdom (UK), and defcit; Canada, cutting defcits; debt delayed gratifcation 71–2 demographics 106–11 population aging 32, 100, 101, 106–7 population growth 9, 113 Devey, Hilary 75–6 Dickson, Julie 35 Dieenbaker, John 15 dot com bubble 11, 29, 94 Dragons’ Den 75 Duncan, Arne 38 Duncan, Emma 57 Duncan-Smith, Iain 75 Dyson, , James 97

Economic Freedom of the World (Cato Institute) 36 economic growth 113 and demographic dividend 108 unsustainability o 9, 10 Economic Stabilisation Plan (Israel) 83 Edison, Thomas 91 education 4–5, 38–60 comparing school systems 38–41 cramming establishments 43–4 and graduate jobs market 44–5 and hard work 50, 57, 59


Copyrighted material 9781137032232 Index

and parental aspiration 57, 59, 72–3 students choosing easier subjects 42–3, 45, 46–7 and work experience 43, 74 see also United Kingdom (UK), education; Programme or International Student Assessment (PISA) Edward III, King o England 21 emerging economies 3, 11, 113, 115 and scientifc development 52, 53 and women 50 see also Brazil; China; India; Mexico; South Korea Enron 92 enterprise zones 88, 94 entrepreneurship Brazilian shantytowns 103–4 and courage 98–9 in US 90, 93–4, 96–7 and work ethic 67–8 see also Israeli entrepreneurial culture Erlich, Yigal 83, 84–5 Eurozone crisis 3, 12, 21, 37, 114 Exchange Rate Mechanism 24–5, 115 Facebook 55, 76, 95 ailure as part o business 91–2, 95–6, 99 see also risk Famine, 1975! (1967) 9 avelas (Brazilian shantytowns) 101–4 drug lords 102–3 entrepreneurial spirit 103–4 eed-in taris 85 Ferguson, Niall 21, 66, 91 First Care Products 79 fscal rules 25, 27, 29, 30, 31, 33 see also Golden Rule Flaherty, Jim 35 Flikr 95 Frankel, Jerey 29 uel prices 62 Furedi, Frank 87

139

geek culture 48–51 General Motors 92 Germany birth rate 107 economic growth 8 educational reorm 41 high-tech industry 52 and PISA results 40–1, 57 welare reorm 4 Giords, Gabrielle 78, 79–80 Gladwell, Malcolm 86 Global Competitiveness Report 2011/12 88 global fnancial crisis (2007–08) 2–3, 4, 9–10, 31–2 responses to 13–14 globalisation 4, 54 Golden Rule 28, 29 Google 60, 81, 93 Gou, Terry 105 Gove, Michael 38 Greece 3 Grifn, John 62 Haddock, Richard 64 Harord, Tim 92 Hari, Johann 19 Harper, Stephen 35, 36 Harvard University Harvard Institute o Economic Research 68, 69 and New Keynesianism 25, 26 Hasan, Medhi 19 Hawke, Bob 32 Heath, Edward 8, 9, 114 Henderson, Sir Nicholas 7, 8 Heritage Foundation 36 Hernández, Daniel, Jr 78 Hewlett Packard 81, 93 Higher Education Policy Institute 57 Hinduja brothers 72–3 Hodge, Margaret 43 Homan, Reid 97 Hong Kong 5, 36, 66, 113 Howard, John 33 Human Rights Act 74



Britannia Unchained

Hutton, Will 26 hyperination 21, 83, 104, 105 IBM 81 ICQ (instant messaging programme) 81 Imperial College 58 India 4–5, 100, 113, 115 attitudes to science and technology 44, 46, 49–51 Institutes o Technology 51, 53 work ethic 57, 72–3 innovation 5, 93–4, 97, 98–9, 105, 114 and inormal economy 88–9 and necessity 86, 91 patent applications 81, 82, 95–7 and risk 91–2 see also entrepreneurship; Israeli entrepreneurial culture; venture capital instant messaging 81 Intel 68, 81 intellectual capital 52, 53, 112 intellectual property law 55, 89 International Indicators o Educational Systems (INES) project (OECD) 39 International Monetary Fund (IMF) 34, 114 internet 55, 81, 88, 99, 108–9 Intuit 92 Iraq War (2003) 10 Isagba, Beau 1 Isenberg, Daniel 83, 94, 95–6 ‘Israeli bandage’ 78–80 Israeli entrepreneurial culture 78–86 government support or 83–6 and Jewish immigrants rom Soviet Union 86 technology sector 80–1, 86 and venture capital 5, 80, 84–5, 94 Italy 3, 52 Ive, Jonathan 91 Jackson, Tim 10 Jain, Nitin 50

Japan aging population 106–7 education 40, 43, 55 work ethic 106 Jebel Ali Free Zone (Dubai) 88 Jeerson, Thomas 90 Jobs, Steve 89 Jobseeker’s Allowance 74 John-Baptiste, Ashley 45–6 Johnson, Samuel 98 Jones, Peter 97 Katz, Lawrence 25 Katzir , Ephraim 83 Keating, Paul 32 Keegan, William 26, 28 Kennedy, John F. 23–4 Keynes, John Maynard 20 Keynesian economics 14–15, 20, 24, 28 Kinnock, Neil 28 Kissinger, Henry 9 Krugman, Paul 19 Kumar, Manmohan S. 22 Laski, Harold 14 Last.m 55, 98 Le Dang Doanh 89 Leavis, F.R. 46 Lehman Brothers 92 leverage 35 Li, David 47–8 Liberal Party (Canada) 16–18, 35 The Limits to Growth 9 LinkedIn 95, 97, 98 London tube-drivers 63 Lopes, Antonio Francisco Bonfm (‘Nem’) 103 Loughner, Jared Lee 78 Lula da Silva, Luiz Inácio 100–1 M-Systems Ltd 81 Macaulay, Thomas 19, 21 Macmillan, Harold 114 Major, John 28 Malaysia, women and tech careers 50



Mandelson, Peter 94, 115 Manpower Talent Shortage Survey 73 Margin Call (flm) 47 Marland, Jonathan, Baron 85 Marshall, Alred 52 marshmallow test 71–2 Martin, Paul 16–18, 35, 36 Massé, Marcel 18 Mayer, Marissa 48 meritocracy, in emerging economies 49 Merkel, Angela 46 Mexico debt deault 22 education 44, 55 Peso Crisis (1994) 16 women and tech careers 50 Michau, Jean-Baptiste 70 Michel, Harald 107 Microsot 68, 81 miners’ strike (1983–84) 114–15 Mirabilis 81 Mischel, Walter 71 Mittal, Lakshmi 73 mobile phones, dual-sim-card 89 Moo.com 55 Moody’s 47 Mossbourne Academy (Hackney) 59 Motorola 81 Mulroney, Brian 15–16, 36 NAFTA (North American Free Trade Agreement) 15 NASDAQ 80, 94 A Nation at Risk, report on US education system 39, 40 National Commission on Excellence in Education 38–9 National Employment Savings Trust Scheme (UK) 87 National Health Service (NHS) 28, 29, 31 Netanyahu, Binyamin 86 Neuwirth, Robert 89 New Keynesianism 25, 26 New Labour 24, 25 and growing defcit 29–33

141

inaccuracy o budget orecasts 29 investment in public services 12, 28–9 macroeconomic ramework 27–30 tax increases 28–9 North Korea 36 North Sea oil 9, 37 Obama, Barack 100 ‘Occupy London’ protests 10 O’Donnell, Gus 27, 30 OECD, comparing school systems 31, 38–41 Osted 59, 71, 73 Old Age Pensions Act (1908) 69 Oliveira, Silvinha 103 Olympic Games in Brazil 101–2, 103 London tube drivers pay 63 Paypal 93, 95 Pedro II, Emperor o Brazil 104 pensions 3, 32, 63, 69–70, 110 pension age 69 Peston, Robert 28 PISA tests see Programme or International Student Assessment (PISA) ‘The Poles are Coming’ 63–4 poll tax riots (1990) 69, 115 The Population Bomb, (1968) 9 Postlethwaite, T. Neville 38 PriceWaterhouseCoopers 94 private enterprise, used or social ends 26–7 Programme or International Student Assessment (PISA) (OECD) 36, 38, 39–41, 44, 57, 105, 115 prudence 24, 27–9, 33 public services, investment in 12, 28–9, 31 ‘quants’ 44, 45, 47–8 Reagan, Ronald 38–9 reality television 75–6, 115



Britannia Unchained

Recent Work Capability Assessments 70 The Red Paper on Scotland 26 Reich, Robert 25 Reilly, Cait 74 Reinhart, Carmen M. 21, 22 resources, running out 9 risk 99 and innovation 91–2 risk-aversion 86–8, 91, 92 see also ailure Robinson, Derek (‘Red Robbo’) 8 Rogo, Kenneth S. 21, 22, 29 Rolls Royce 8 Romer, Christina 22 Rossli, Ashra 1 Rousse, Dilma 101 Royal Society or the Encouragement o Arts (RSA) 61 Sahami, Mehran 60 Sainsbury’s, and migrant workers 64 Samuels, Tim 64 Sand Hill Road 93–4 Saragoza, Eric 54 Sarkozy, Nicholas 66 SAT (Standard Assessment Tasks) tests 39 Save the Children 71 Scandinavia, labour market reorm 4 Schleicher, Andreas 38, 39, 40, 41 Science Museum, London 56 science and technology 38–60 attitudes to 48–51 securitisation 35 Sedi 103 seed capital 84, 98 see also venture capital Seed Enterprise Investment Scheme 98 Seedrs 98 Sela, Yonatan 86 Sequoia Capital 98 Silicon Roundabout (London) 55, 97, 112 Silicon Valley 93–4, 95, 97, 554 Simon, Leslie 48

Singapore 5, 66, 113 smart phones 55 Smith, Adam 20 Snow, C.P. 46 social mobility 11, 76–7 The Social Network (flm) 48 solar energy sector, subsidies 85 Songkick 98 South Korea 4–5, 113 education 43–4, 55 working hours 66 Soviet Union 86, 89, 105 collapse o 10 SpaceX 95 Spain 3, 41, 52, 66 Spotiy 98 Standard & Poor’s 47 Stanord University (US) 60, 93, 97 Stephens, Philip 28 strikes 8–9, 66, 69, 114–15 Stringer, Sir Howard 58 Süddeutsche Zeitung 40 Suez crisis (1956) 8 Sugar, Alan 75, 76 Summers, Larry 25 sustainable development 4, 10 see also economic growth Sweden 30, 32 Switzerland 30, 32, 52 Tang, Jessie 72 Tata, Ratan 64 taxation 12, 28–9, 31, 37, 88, 109, 110 impact on working hours 68–9 increases under New Labour 29 taxi drivers, work ethic 61–3 Tech City (London) 97 tech industry 51–5 international collaboration 53–4 low-wage workers 54 and tech skills 54–5 Technological Incubators Program (Israel) 79, 83–4 technology see science and technology; tech industry



Thatcher, Margaret 9, 10, 11, 114–15 Toynbee, Polly 31 trade unions 8, 9, 63, 69 Trudeau, Pierre Elliot 14–15 True Flash Filing System 81 Tug, Tuggy 72 TweetDeck 55, 98 Twitter 93 unemployment 20, 23 Canada 14, 16, 18, 34 Europe 66 UK 70, 73, 74, 77, 87 Unison union 70 United Kingdom (UK) attitudes to academic achievement 45–7, 59 debt 10, 12, 30–3, 115 and defcit 19–21, 27, 29–33 economic decline 7–11, 12–13, 115 economic growth 9–10, 12, 114, 115 education 4–5, 12, 31, 42–3, 44–8, 51–60 ailure o 57–8, 115 maths teaching methods 56–7 and parental aspiration 57, 59 perormance in PISA tests 40, 41, 57, 115 and science and technology 51–3, 54–60, 115 tuition ees 60 end o empire 4, 8, 10, 114 and entrepreneurship 76, 91, 97–8 and European Union 10 government subsidies 85 graduate jobs market 44–5 innovation 98, 114 intellectual capital 52, 53, 112 patent applications 95–7 pensions 3, 63, 69–70, 110 population growth 100, 107–8 productivity 61, 66–7, 77 public spending 3, 27–8, 31, 114, 115

143

regulation and red tape 5, 30, 37, 87–8, 98, 109 relationship with US 8, 10, 90 research and development 88 and risk-aversion 86–8, 91, 92 strikes 8–9, 69, 114–15 taxation 12, 28–9, 31, 37, 88, 109, 110 technology companies 97–8 trade union power 8, 9, 63, 69 universities 52–3, 57, 58, 97 rise in science and tech applicants 59–60 venture capital 94, 98 welare policies 109, 110 and dependency 2, 67, 68, 70–1, 77, 109 unsustainability o 106 Winter o Discontent (1978) 9, 114 and work ethic 2, 61–77, 111–12 working hours 65, 66, 68, 77 young Britons 75, 108–11 and entrepreneurship 76 unemployment 74, 77 United States (US) attitude to bankruptcy 91 cost o patent process 96 and debt 22, 24, 31 Declaration o Independence 90 and economic reedom 36 education 12, 38–9, 40, 42, 46, 57 entrepreneurial spirit 90, 93–4, 96–7 and global fnancial crisis (2007–08) 19, 32, 37 investment in IT sector 93–4 women in tech careers 49 worker productivity 57, 67 working hours 65, 66, 68 universities non-courses 43, 46–7 see also United Kingdom (UK), universities urban riots (2011) 1, 75 USB ash drive 80–1



Britannia Unchained

Varga, Getúlio 104 Velez, Leila 103–4 venture capital 5, 80, 84–5, 93–5, 98 see also seed capital Vietnam 54, 89 vocational training 74

Wall Street Journal 9, 14, 36, 96 Wanless report 29 Wei, Nat 59 Weizmann, Chaim 83 Wenzhou, China 95 Willetts, David 67 Wilshaw, Sir Michael 59 Wilson, Harold 114 Wol, Martin 26 Wolley, Trevor 45 women and tech careers 48–9, 50–1 working and cost o childcare 71 Woos, Jaejoon 22 work ethic 2, 5, 13, 61–77 and entrepreneurship 67–8 Europeans 65–6 impact o childcare costs 71

impact o welare system 68, 70–1, 74, 77 Japan 106 migrant workers 63–4 and role models 74–7 role o schools 73–4 worklessness 67 Workers’ Party (Brazil) 101 working hours 65, 66 eect o unionisation 69 impact o tax rates 68–9 World Economic Forum 35, 87 Wriston, Walter 20

X Factor 45, 75 Yes Minister 47 Yom Kippur War (1973) 83 YouTube 1, 95 Yozma programme (Israel) 83, 84–6 Zappos 98 Zhou, Biyan 42 Zuckerberg, Mark 76 Zynga 95


Britannia Unchained

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