Once upon a time, comparing a national economy to Mississippi was considered highly pejorative. But, such is the mire in which the UK now finds itself, this is precisely what ex-MP Douglas Carswell – and current president and CEO of the Mississippi Centre for Public Policy – did in an excellent article published last month.
I recalled it after hearing Andrew Marr say Liz Truss was correct on Sunday Morning with Trevor Phillips. He went on to say: “The British economy is too small to give the British public the kind of public services and living that they have come to expect that they deserve”.
Whether we deserve it or not is a moot point, but the meaning is clear: we need massive growth to be able to continue to afford what we currently have. Or, as your granny used to say, you have to cut your cloth according to your coat.
The article is worth reading in full, but in the simplest terms the answer – in some ways – is that Britain is poorer than Mississippi. For one, the UK’s output per person was the equivalent of £36,753 ($45,485) while Mississippi’s was slightly higher at £38,130 ($47,190).
What? I hear you cry. Mississippi? Isn’t that the poorest state in the US of A? It may well have been in the past, but no longer.
Mississippi has undertaken a program which we should emulate – and which other countries have already done to great effect. Historically, the state was highly regulated, even to practice quite mundane professions.
Over the last decade or so, many of these regulations have been judiciously repealed. In turn, this has meant that fewer public servants are needed – down some 5-6%. Last year they also passed the biggest ever tax cut for a state.
How did all of this happen? As Carswell explains: “Policy makers here have drawn inspiration from the State Policy Network, a constellation of state-level think tanks, borrowing ideas that have worked well elsewhere. We got the idea for labour-market deregulation from Arizona and Missouri. Tennessee inspired us to move toward income-tax elimination. Florida’s successful liberalization stands as an example of how we could reduce more red tape.”
He has experienced the change first hand – as well as the optimism it has brought about.
Now, I don’t know about you, but I really, really like the idea of making use of policies and ideas that work. It’s akin to the basic tenet of ‘levelling up’ in the UK, which, if it were properly implemented, would transform the country. And the deregulation and tax cutting for Mississippi echo what Liz Truss was trying to do. Whether Brexit will be beneficial in the long run remains to be seen, but it has given the UK the possibility of changing lots of things – the problem is, few have happened so far.
Carswell goes on to say: “Since Britain voted to leave the EU in 2016, the U.K. economy has grown by 5.9%; German GDP has increased by only 5%. Unlike Germany, the UK has so far also managed to avoid recession. Far from a reduction in trade, Britain has seen a boom in exports, especially in the service sector, since withdrawing from the EU trade block. Service exports grew by nearly 23% in real terms… the strongest growth in this sector among the G7 countries, according to data from the OECD, and far more than in neighbours…”
As Guido Fawkes would say, ‘despite Brexit’.
So as this column is dedicated to all things crypto, what does all this mean for the UK? Quite rightly, the existing laws in Mississippi refer to monetary value as a ‘medium of exchange’ – a very broad definition, but one which perfectly encapsulates what crypto is actually all about. It ensures that anyone doing such a thing needs a licence.
In the UK, we have slightly distanced ourselves from Europe’s insistence on controlling everything, and as a result we have a window of opportunity to be the ‘crypto country of choice’ worldwide.
Rishi Sunak is very keen on this, as well he might be, because of the potential for GDP growth. Unfortunately, changing anything here takes a long time, and the British default position nowadays is to legislate advantages away.
One example is the Online Safety Bill. Regulators are being handed the power to force a fictional technology on companies which includes a ‘backdoor’ into encrypted messages that can let in the government. Unfortunately, it will also provide access to spies and hackers. How can the UK hope to attract talent and investment if it breaks a technology the world relies on?
Sadly, many elements of it are going to have unforeseen consequences that are going to hurt Britain’s competitiveness as a tech player for many years to come.
So, let’s hear it for the legislators in Old Miss. They have done for their state what could, and should, be done here – if only we had the will to make it happen.
Temple Melville is CEO of The Scotcoin Project Community Interest Company (CIC)