The UK as an LEDC

The state of being a less economically developed country (an LEDC) is not a disease with a clear cause and diagnosis. It is a syndrome; a group of symptoms taken together that build a bigger picture. These symptoms are to do with the nature of employment and the services the government is able to offer. In turn, this has a knock on effect on health, the size of families, life expectancy and death rates. Each symptom is intuitive to work out: if it’s bad—low life expectancy—it’s symptomatic of an LEDC.

The UK government is behaving a lot like it doesn’t have a lot of money. I don’t understand the economics of that very well; government-economics don’t work like home-economics, and the government spending should be at a level the country will be worth, soon. But, that discussion and debate aside, the government simply isn’t spending. One of the services the UK government clearly isn’t spending on is the NHS. This has led to what has been coined the “postcode lottery”.

The postcode lottery refers to the fact that different hospitals in the UK offer different services. Some long-term illnesses are prevented, or medicated or given palliative care from one hospital, but not another. And each hospital has a “catchment area”, just like a school. One postcode is assigned to one hospital, which may provide the services you need, where the next street over will be assigned a different hospital. This pattern is noticeable particularly in cancer patients.

The reason for this lottery is not malice. Doctors and the board of directors really are trying to balance resources; the cost of one medication for one person may be enough to treat 2 others. How do you manage that balance?

The problem is living in one of the most developed countries in the world is a direct contradiction to that question being asked. One of the most developed countries in the world has to decide how to manage its resources for its own citizens’ health. This is barely fairer than having health allocated based on wealth (he says, with an undisguised dig at American health insurance). It is, at bottom, fair to say that the availability of and access to healthcare is decreasing.  If access to healthcare is decreasing then, firstly, the government is delivering less of a service and, secondly, the life expectancy which has been kept high and the death rate that has been kept low by highly available healthcare can expect to deteriorate.

Earlier in this post, when I said that I don’t understand the economics, I wasn’t being entirely honest. Government spending is meant to be an investment in the country. It should spend a little more than it earns through taxes to increase the value of the country. The system works on the trust that the country will become worth enough to make up for that deficit. The increased worth becomes taxes in the future. This works because as a country becomes more valuable it homes more businesses which pay a lot of taxes. It is a permanent state of buying things on credit. If you stop trusting that the country will become more valuable, job security decreases so you don’t get the business you need to make up the deficit you already have. In fact, you lose businesses. But you can’t stop spending, so the deficit becomes bigger. Eventually, it becomes so big that the country cannot expect to be stable and even more business is lost.

This can be seen in the UK, and it is symptomatic of an LEDC because all of the higher-order, high-powered jobs are basically full. If you want a job now, you should expect to be overqualified or to aim for a factory job. I’ve worked in a factory as a university graduate. My brother has to volunteer before his degree will mean anything. The job availability in the UK is low, and that means low income. The issue of low income is compounded by an increasing cost of living, which goes up faster than salaries. The nature of employment in the UK, despite being a service economy, is becoming more manual. This primary and secondary level economic activity (i.e. jobs) is indicative of an LEDC and is a regression from the tertiary and even quaternary level services we should expect. (If you’re not familiar with these terms, think of them as level 1, 2, 3 and 4. 4 is the best.)

This is not just about the on-the-ground nature of employment (although that is a symptom of an LEDC). This is also about tax revenue. Primary and secondary level activities are low-salary and therefore low-taxation activities. That means the government has less money to play with. And that means the services they can offer become less (including healthcare). In turn, life expectancy and death rates get worse… this is the entropy of a system.

Birth rates are another symptom of an LEDC. I don’t have to name many countries—India, Zambia, Uganda—for you to recognise the pattern of poorer countries having more children to a family. Well, the UK is doing the same thing slowly. The BBC says the birth rate was the highest since 1972. The Office for National Statistics highlights the facts quite well, claiming “The UK has a higher percentage of households with three or more children than three-quarters of European Union countries”. The ONS also says that the UK has a higher average family size than 75% of our EU counterparts.

I said this is a symptom of being an LEDC. But this also matters! Having a lot of children is problematic for the sole reason that children are financially dependent and inactive. Not just for parents, but also for a country. A country pays for education, care and even child support for each child in the UK. With tax revenue already diminishing, the demands on our schools are going up. This means that education can only get worse (short of an amazing revolution, which I remain permanently excited for). But poor education only increases the birth rate issue, as well as teen pregnancy (a double issue because it means creating a financially dependent child before the parent becomes economically active).

And the whole thing goes in a cycle. We’re not an LEDC yet, and not by a long way. But the fact is that as soon as development starts to slip that way it gathers inertia very quickly. A country can enter free fall. Once you fail to maintain the task of catching up becomes exponentially more difficult. But my uncle always used to say that the UK would become a 3rd World Country (which is basically what LEDC means) and he could well be right.

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