Two interesting articles parallel each other on the question, "Is Britain poorer than every US state?" The first author to take a stab at this question is Fraser Nelson, writing for The Spectator, who makes some interesting observations:
I came across a striking fact while researching this piece: if Britain were to somehow leave the EU and join the US we’d be the 2nd-poorest state in the union. Poorer than Missouri. Poorer than the much-maligned Kansas and Alabama. Poorer than any state other than Mississippi, and if you take out the south east we’d be poorer than that too.
This appears to be a rather bold statement. That is, until you read the response from Tim Worstall at Forbes:
Fraser Nelson, over at the Spectator, has a little post about how the UK, Britain (the native home for both of us), is actually poorer than all but one of the US States. Tucking in right behind Alabama and just above Mississippi. Despite the fact that he once fired me from the employ of that fine magazine he’s a nice guy so I’ll point out that he’s largely correct but falls over in one final detail. For Britain is actually poorer than all US States, all of them bar none.
I would recommend reading both pieces as they provide an interesting take on comparing the wealth of the two countries. However, what appears to be the major (and potentially, only) difference between the two analyses is the tweaking of one particular value, purchasing power parity (PPP), as noted by Worstall:
Fraser has used the average PPP for the US. But as we can see there’s different PPP adjustments for different States. If $100 will buy you $115 worth of goods in Mississippi this is the same statement as the correct PPP adjustment for Mississippi incomes, or in this case GDP, is 100:115. Or, if you prefer, Mississippi’s properly PPP adjusted GDP per capita is $40,400 or so: well above the UK’s $36,200.
If you were interested in refuting one of the above author's arguments, how would you do it? What assumptions and methodologies (among other options) would you change?
GDP per capita is naturally flawed in some ways. By the same logic, Luxembourg and Belgium are richer than the countries like the U.K. and Japan. They are indeed richer, by some measures, though I think most would agree aggregate GDP is the best measure of total wealth.
You could try to argue that stuff like quality and access to healthcare, education, public transit aren't accounted for in the GDP figures...
I could be wrong, and someone tell me if I am... But of course all of those are accounted for in the GDP figures...? Government spending is a part of GDP...
he is talking about the amorphous concept of 'utility', not the actual spending eg. how much more is society improved by the fact that your public transit system is clean? that your child's place of education is safe? such things are hard to measure
Exactly what @"matayo" said. Others have pointed it out as well, but essentially anything that is qualitative could be argued as such. Britain's Tube, for example, is widely regarded as one of the "best" subway systems in the world.
lol... I guess that just means it's only downhill everywhere else?
The reason I used the word "qualitative" was that GDP is meant to be used as a measure of economic activity, not of well being. They're not interchangeable terms (although they may be highly correlated). In theory, if government spending (no matter how wasteful) is high enough, then GDP will rise regardless. The utility derived would be irrelevant.
A country could spend their entire budget digging holes and filling it up again, and it would appear as if that action were resulting in positive economic activity, and a contributor to the GDP. Which is fine but that says nothing for the living standards and well being of the people living there.
http://en.wikipedia.org/wiki/Median_household_income
http://en.wikipedia.org/wiki/List_of_U.S._states_by_income
Exclude the City of Westminster, the City of London, the Royal Borough of Kensington and Chelsea and yes, the UK is probably poorer than any state in the US.
What these numbers don't tell though it's the utter disgrace that the other cities of the UK (I would generalize and say of the British Isles at large) are.
Little disclaimer: I of course don't mean any offense to the British people. It's just my view. And I come from an even shittier country, so you can call it kind of even.
Some of the cities in the North of UK are very very poor. Even the politicians do not go their for fear of protests.
It does only mean that GBP is still undervaluated from his crisis' drop, and confirms once again that USD is structurally overvaluated.
Doesn't mean the market is wrong or that he will correct, it just testifies on the actual consensus about the future outlook of these countries on one side, and the impact of having THE international currency on the other side.
At least Britain isn't France. They at least have that.
france is master race you fucking mong
France is the only one of the three to actually have skiny girls. Enough said.
In short -- no.
And the ppp thing is rigged: -When they fix a basket how do they compute his price with regard to quality? they probably take the cheaper one. But cheap food in US is very cheap and very shitty. -How do they choose the basket components? If they choose it based on US consumption, which they probably do, the same basket will be more expensive in UK, because the consumption adapt to local prices, and UK people will buy more of a different product if this one is cheaper in UK, and less of the relatively expensive one.
It is crazy how centralized the wealth in London is, outside the M25 its not great. You could probably go up North and buy a street of houses for 50k. I like to think of it like a Detroit spread over a larger area....
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