Ten years ago this summer, voters in the United Kingdom chose to withdraw from the European Union. In other words, the long and winding process of Brexit began.

On this episode, Dan Richards talks with Watson professor and political economist Mark Blyth about the role Brexit has played in Britain's economy, society and politics in the ten years since that vote, and what the Brexit movement can tell us about the evolution of nationalist populist politics around the world. They also explore what policymakers could do to bolster the British economy and stabilize its politics today.

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DAN RICHARDS: From the Watson School of International and Public Affairs at Brown University, this is Trending Globally. I'm Dan Richards. 10 years ago this summer, voters in the United Kingdom chose to withdraw from the European Union. In other words, the long and winding process of Brexit began. On this episode, how has Brexit shaped Britain's economy, its society, its politics? And beyond its effects in the United Kingdom, what can the last 10 years of Brexit teach us about other nationalist, populist movements in the US and around the world? To help us think through all this is none other than Mark Blyth. Mark is a political economist at the Watson School and author of among other books, Inflation: A Guide for Users and Losers, and Austerity: The History of a Dangerous Idea. Mark, thanks, as always, for coming on the Trending Globally.

MARK BLYTH: It's a pleasure to be back.

DAN RICHARDS: I want to start with some more immediate news in British politics. So Prime Minister Keir Starmer announced his resignation just the other week in late June, meaning that by this fall, the UK will have a new prime minister, its seventh in 10 years.

For context, I believe that's as many prime ministers as the UK had in the preceding 40 years. What do you see as the biggest reasons for this sort of churn at the top of British politics? And what, if anything, does it have to do with Brexit? I mean, the timing is--

MARK BLYTH: It's not coincidental, but the usual thing you get is "British politics become so polarized, the parties have become so polarized and no one can agree on anything and no one gets anything done, so then you just choose another leader." And there's a little bit of truth to that, but not that much.

What's actually happened is that you have to go back to basically the Brexit campaign. And David Cameron, who was the conservative prime minister at that time, said, I will fall on my sword for this. So he did.

And then the conservatives got Theresa May and they didn't like Theresa May. They didn't want Theresa May. And the conservatives were basically at war with themselves. I mean, so much of Brexit is basically an internal power struggle within the British Conservative Party in terms of its genesis.

So Theresa May try to deliver a Brexit which her own party didn't like. So then she got killed. Then after that, we went to Boris Johnson. And that was very much like the clown car crash policy. And that coincided with, of course, with the pandemic. That was awful.

And then eventually he fell on his sword. And then eventually the Tories get voted out and then you get Labour coming in. I'm missing a couple of characters along the way. But the Labour comes in and Labour promises grown up governance, et cetera, and the trouble is they've got a guy who just basically inspires no confidence, no leadership whatsoever.

He won by the fact that everyone had no faith in the Tories and wanted them out after 13 years. So he got the job. But his own party again has no faith in him because he really is a bad leader. I mean, he has the lowest leadership approval rating in British history.

So the idea that the Labour Party would go into the next election with this guy would just be a suicide note. So in a sense, it's all imbricated with Brexit. That's where it all starts. But a lot of it has to do with internal party squabbles, and so on, and so forth.

DAN RICHARDS: And it also sounds like potentially just weak leadership. Weak personalities.

MARK BLYTH: Yeah, exactly. And parties that are particularly weak point. And the fact that the most popular party in the UK just now is the Reform Party, headed by Nigel Farage, who basically brought the country Brexit. So the guy who brought you Brexit is now the frontrunner to be the prime minister the next time round. So this is not a very stable place.

DAN RICHARDS: I was wondering as well, is it almost something to the effect of Brexit itself set a very high bar for expectations for how much political, economic, social change was going to come to the UK and that it was going to lead to a British Renaissance or something like that.

And it was a historic event in many ways, and that no governing party is able to meet those expectations. And there's just this ongoing disappointment with the rate of change, the scale of change in the country.

MARK BLYTH: I'd put it slightly different. Brexit became the vector for a lot of different complaints that crystallized around this as being the solution to a set of problems for which it never was the solution. So let me put this in a longer term perspective. You have to go back to Mrs. Thatcher.

So Mrs. Thatcher breaks the post-war consensus, privatizes lots of industries, basically creates the kind of much more neoliberal framework for UK economic governance. And what the original Tories wanted to do was to reinvigorate British industry.

If you go back to the Nineteen Seventies when they're formulating these plans, no one had an idea of a post-industrial economy, right? The notion that of firms that basically deal in brands, the internet, right? None of this existed or was even conceptually possible.

So the idea was that if we basically bust up labor markets, get rid of the inflation problem and liberalize finance, then we'll get more money in industry and we'll be back to good Britain making stuff.

And of course, what happened was when you deregulate the banking sector in a period of high inflation and high rates, that becomes the most profitable part of the economy.

And Britain basically became a financial and consumption driven economy, and de-industrialized, and became driven by the service sector. Now that was all great and dandy until basically Two Thousand and Eight, when there was a big financial crash and the British economy was so geared around finance. I did a paper in Twenty Twenty-Five that estimated the growth contribution of the Greater London area to British GDP, and it's 34%.

DAN RICHARDS: Wow.

MARK BLYTH: Yeah, exactly. I mean, it's huge, right? And this is all tied into finance and similar industries. So when that model gets a punch in the face, as it did in Two Thousand and Eight, from which it never really recovers. And then you regulate these industries as a problem. You regulate their profits out of existence, so they never quite recover. So then the question is, well, what exactly is the British growth mode?

And they don't really have one at the moment. So they stagger along with a very slow recovery, made much worse by the austerity turn of the Cameron administration. And then because things have been really pretty awful for the past eight years, all of this gets crystallized around the problem is Europe. If we were just on our own, we could do so much better.

So it's like, all right, well, we'll give that one a go. And they try this at exactly the moment when the rest of the world is becoming nationalist and protectionist. So the whole notion was trading Britain, we will sign our own free trade deals with Mesopotamia, et cetera, et cetera, right?

And of course, none of that is remotely possible in the current moment. So they've just basically been dealing with - or rather not dealing with - the fact that they'd have finance dependent growth model which is seriously impaired, which they don't have a replacement for, which then got crystallized in Brexit as this will solve it, which really just made it worse.

And all of the estimates of the long-term effect of this is essentially you've reduced real GDP by about 4% over the long-term. And if you look at British wages, I mean, they're barely above where they were before the financial crisis in some cases.

DAN RICHARDS: Right.

MARK BLYTH: So this has been a very, very long, slow grinding period during a cost of living crisis, right? The price level always goes up and stays up, even if the inflation rate goes down and people are pissed off and hurting and they don't believe the politicians, for obvious reasons, have the right beam on this.

DAN RICHARDS: I want to go back, maybe a little later in the conversation to a potential different growth model for Britain, or how you think leadership in the country could make a path forward that's a little more stable and prosperous. But what do you see as the biggest effects of Brexit over the last six or seven years since it was officially enacted?

MARK BLYTH: Well, it's about, if you've got a nasty scab on your leg and you just keep picking the scab that's really it. It's a sideshow in the great scheme of things. But ultimately, how do you make your way in the world? You buy and sell things and you trade with each other, and you voluntarily decided to leave the world's largest free trade zone.

Now there's lots of problems with Europe. Is it over bureaucratized? Yes. Do they have a terrible approach to data protection which has crippled their ability to do AI industries? Yes. Has Britain being out of that actually been an advantage? Well, it could be, but they haven't capitalized upon it, right?

So there's lots of ways in which Brexit gets played, but I tend to think you need to see it in the context of those bigger shifts that longer term. Focusing on its own doesn't really tell you that much about what's going on.

DAN RICHARDS: In some ways, it was a story that maybe started at the financial crisis.

MARK BLYTH: Yeah, I mean, so the whole thing was--

DAN RICHARDS: We can always go back.

MARK BLYTH: Yeah. No, but I mean, social scientists have a nice word for this, which is it's overdetermined, right? I mean, if it's not one cause that would have pushed it this way, it's another.

And in a sense, Britain was kind of middle of the pack OECD performer in terms of growth, and now it's become Italy. I mean, it hasn't really grown in 20 years, right? That's the big story. Brexit isn't the big story. That's the big story.

DAN RICHARDS: One thing that played a role in Brexit, even if it's not a big story, it's illustrative of a set of trends and sentiments in British politics. And a big part of it seemed to be that it's not just issues of slow economic growth or wage stagnation, but those things overlaid on a geographic inequality.

You were talking about the centrality of London earlier. How do you think about geographic inequality or distribution of resources geographically? How does that affect of political dissatisfaction that we're seeing?

MARK BLYTH: So this is, again, a long standing complaint in British politics prior to Mrs. Thatcher's successive governments had what they actually called regional policy, where they try to move certain government functions out and gave zoning for certain industries and certain parts of the country rather than others, and gave investment preferences for one area rather than another.

And under the Thatcher administration, subsequent administrations that fell away, and so long as London was growing at a very, very high rate, and you could tax in and redistribute to the regions, it didn't matter.

But when London kind of stopped growing, and actually the most recent figures show that London's productivity is falling below the national average, the ability to transfer out becomes much, much more problematic.

But what's more interesting and more serious on this is how this affects people in a daily life. And the way I like to talk about it is this during the austerity years. I mean, one of the most famous figures was at the Northern town called Preston, and Preston because of government cuts, lost one-third of its budget.

Now, if you're London and your local government loses a third of its budget, you close down a bunch of art centers but the city keeps going because there's wealth and prosperity. In Preston, when you do that, it's massive, right?

So that created a huge backlash that we now see in terms of the populist backlash. Now, where you also see this regional inequality coming through is in that - and this is what Reform and other of popular right wing parties capitalize on - are the cultural effects of this.

So what happens when you have regions that for a long time live off of transfers? Things aren't going very well. And then they really take a nosedive. All you young people leave.

DAN RICHARDS: Yeah.

MARK BLYTH: And when you young people leave, then who moves in? Well, it tends to be immigrants. Those immigrants are ethnically different from you. That's what Reform and others capitalize on. And that's what the mainstream parties have been very bad at.

So my point being, if we just stop at the economic effects of regionalism you get a part of the story, but not the most interesting part, because a huge part of British politics now, as it is here and in other places, is being written on the terrain of where culture and economics meet.

DAN RICHARDS: It makes me think of an interesting figure from a recent Ipsos poll that showed that the majority of Britons support rejoining the EU, just over 50%, but in that same poll, a similar majority said that they would prioritize full control of immigration over rejoining the EU. But it's not as simple as just xenophobia, right? This is a question, like--

MARK BLYTH: Well, I mean, no doubt for some people it is, but for others, I mean, it's a simple thing to do with housing.

DAN RICHARDS: Right.

MARK BLYTH: So what happened with Brexit. And this is where it gets very interesting. Brexit is premised upon control of the borders, right? So a whole bunch of people are - estimates around two million people - who were EU citizens from Eastern Europe just said, all right, I'm done. And they left.

And the problem was they were highly skilled people who did things run your health service. So when that happens, where do you go? You go to India, you go to Nigeria, and then you give these people who are coming in family visas and they bring a bunch of their family with them.

So under the Boris wave, it was equivalent to the Biden wave by a couple of million people in a couple of years entered the country. Now, if you're then settling in places whereby they haven't built social housing and public housing in a generation and a half.

DAN RICHARDS: Right.

MARK BLYTH: And you're relying on private landlords and terrible housing stock. What's going to happen? You're going to get a squeeze. So you're not just getting a kind of a cultural identity squeeze. You're really getting a fiscal squeeze. And also the services for local governments, which are underserviced and overtaxed.

And it creates exactly a fair bit of politics that neither of the mainstream parties, labour, or conservative, are really willing to talk about, and not just leaves it open for Farage and Reform and others to basically make political hay out of this.

DAN RICHARDS: And much has been written, too, about how economic precarity, economic instability can increase senses of tribalism.

MARK BLYTH: Yeah, it makes it zero sum. There's a lot of chatter on the Democratic left internationally about degrowth as a solution to climate change. We all consume less. And on paper that makes sense. Except then you go talk to people who are already struggling to consume anything, and you tell them that they have to do with less.

And when you have positive inflation, when you've got very low growth, when you've got what Britain is for 60%, 70% of the population, a low wage economy, that's not a nice combination.

And then basically, when you're pulling in lots of immigrants that are competing for housing stock, when you've got strained public services, it is little wonder that you get the reaction that you do.

DAN RICHARDS: Right, I feel like this is a good segue kind into what all of this can help us think about nationalist, populist politics around the world? And we've talked a little bit about some of the core features that Brexit, the Brexit movement shared with populist movements in the US.

But I guess I wonder, how much do you think of Brexit movement or the reform movement now is a uniquely British phenomenon? And how much is it part of a global trend?

MARK BLYTH: Oh, it's massively global. I mean, there's three different variants that you can look at right away. So the first one is the European one. And the European one, the Germans have a term for this is Herrenvolk welfare, right? Which is basically we like the welfare state, but only for people who are us.

And it's about remigration and basically restoring the core of the working class. You see, the national populist version of that in the United States is the national conservatives that you get with Bannon, which is re-industrialization women have more kids, immigrants get squeezed out, et cetera, right?

Latin America gives you a very different one, much, much more libertarian, right? Much, much more of deeply anti-labor, et cetera, for their own historical reasons. But this is all happening concurrently, right?

This is all against mainstream politics. Now, what is it that you've got there. You've basically got across all of these cases, whether it's the Northwest of France, whether it's the North of England, whether it's basically the working classes of Latin America, they feel that the economy is fixed, it's rigged. It's all going to the top 10% which is true, right?

And ultimately, they're the ones that are bearing the cost. And where we see a really interesting reaction to this now, particularly in the United States, is in the backlash against AI.

Because what you've got is essentially, all right, so let me get this straight. We voted for Donald and these guys and they were going to re industrialize America. And actually they're just going to basically replace all of us with robots. And we're going to bear the costs again. And you can begin to see this both on the left and as a backlash against AI and tech, right?

DAN RICHARDS: Yeah.

MARK BLYTH: If you're willing to see that, you have to see that as part of this is how people in this class have been feeling for the past 40 years, right? That's where this comes from.

DAN RICHARDS: At the same time, in the last, speaking of a backlash in the last few years, a number of these populist nationalist leaders have lost re-elections. And we've seen the Tory Party lose, the Tories lose power in the UK. How do you think nationalist populism has evolved since maybe the Brexit vote? Like is it on its way out or is it changing and if so into what?

MARK BLYTH: Well, it's not on its way out because - and this is what Starmer shows. If you basically are handed a mandate and you're unable to articulate what that mandate is, and you basically think that technocratic rule following is what you get rewarded for.

And you don't really understand why people are complaining, then they will keep looking for alternatives. And the alternative is the populist right. Now, if you look at the strange marriage of convenience between Le Pen and Bardella in France, they're still ahead in the polls, if you look at--

DAN RICHARDS: Sorry, can you explain who Bardella is?

MARK BLYTH: Yeah, so basically, Le Pen's been running the party. Her father ran the party. She's the--

DAN RICHARDS: Nationalist French party.

MARK BLYTH: Yeah, exactly. The French National Front. And for a while, it looked like she was going to be done for embezzlement of funds. And now the courts have ruled that she can actually run. But he was being groomed as the heir apparent.

And now he's the heir not apparent. So they're running together. It's a bit weird, but nonetheless they're running. The point is they're still ahead. When you look at Spain, Spain's very interesting because Spain just did not just a huge amount of immigration. They then naturalized the whole bunch of them, which is enraged the populace in France, et cetera.

But the difference there is the vast majority of immigration come from Latin America. So they speak the same language. They're culturally the same, right? They're more Catholic than the Spanish themselves--

DAN RICHARDS: Similar at least.

MARK BLYTH: Exactly right. They fit right in. They get easy access to welfare, et cetera. That was an easy lift for them. Unsurprisingly, as I said, remember the three things number of people, number of hours. Spain is one of the fastest growing economies in Europe.

So are there positive benefits to immigration when handled quote unquote correctly? Yes, there are, but if you set your stall out as all immigration is bad, you've got a hard problem when it comes to governance because your economy will shrink. That's as simple as that. Or you basically have to employ lots and lots of robots or equivalent.

So when it comes to actually governing for real on their own, we haven't really seen this yet in Europe. We've seen them in coalition, we've seen them being part of the governing classes, as we've seen in Sweden and other places, but we haven't really seen them run a big country on their own. When they run a big country, it's not likely to work out that well because at the end of the day, the problem of slow growth is not we need to get rid of people.

DAN RICHARDS: Speaking of emphasizing growth and looking at future models for Britain or other countries in this moment, the likely next prime minister of the UK, Andy Burnham, has spent the last nine years as mayor of Manchester and he's talked a lot about reindustrializing neglected parts of the UK.

He has promoted state investment and ownership of certain public goods, like the bus system in Manchester. He's also talked about foreign- attracting more foreign investment, a vision that he has described as quote, business friendly socialism.

MARK BLYTH: Right.

DAN RICHARDS: And I wonder, what do you make of how he's talking about the issues facing Britain and the approach to addressing it?

MARK BLYTH: So how I think about this is every country needs a growth story. So America's growth story is AI.

DAN RICHARDS: Right now.

MARK BLYTH: Yeah, yeah. And it has been for the past five years.

DAN RICHARDS: Sure.

MARK BLYTH: And we have no idea if this thing's going to actually pay off. We have no idea what it will ultimately do. We have no idea if it will result in a giant financial bust. We have no idea if it really works out, as the tech lords think.

And one-third of us are now permanently unemployed. What that will do to American society. We've got all the data center problems, electricity, water, et cetera. But we have a growth story.

DAN RICHARDS: Yeah.

MARK BLYTH: And we're going to pursue it. And that's why you've got high rates of investment. That's why you've got high rates of growth, right? Britain hasn't had that for at least two and half decades. And what this last labor government was unable to do was to articulate that.

And if you think you could go back to Brexit. Brexit was a growth story. Brexit was if we get rid of these European shackles, we will trade with Mesopotamia and we will have growth, right? And then Truss came along, right? I didn't mention Truss earlier. She was another one, right?

DAN RICHARDS: The shortest of the prime ministers.

MARK BLYTH: Yeah, exactly. And her thing was insane, which was basically we need to deregulate banking. Memo: we've already done that. You don't get to do it twice, right?

But it was essentially like, let's double down on financialization and tax cuts, right? And that didn't work and she was gone, et cetera. But it was an attempt at a growth story.

DAN RICHARDS: Yeah.

MARK BLYTH: So what Andy's trying to do is find a growth story, right? And that growth story has to be one that basically deals with regional inequality. But realizing that just simply devolving powers isn't anything, and that ultimately growth does come from the private sector and it comes from private investment.

Yes. Can you make better public services? Can you make better choices? Can you assist investment? Yeah, but I mean, things that I've happened to tangentially be involved in. I mean, if you're trying to get a kind of development grant from the British government, if you're entrepreneurial tech firm you can have to show two years of profits before they give you the money. If you had two years of profits wouldn't need the money.

I mean, this is just epically badly calibrated. It's like rules from another era. So part of it is - and this is the abundance agenda in the United States - is like we need left wing deregulation to actually allow people to do things and allow the private sector to grow.

But at the same time, we can't just hand everything over to a bunch of tech lords who become trillionaires and the rest of us become serfs. And what Andy has got to do, and what he's just beginning to do, is figure out what that growth story for Britain could be.

Now, for me, it's pretty straightforward. I mean, Britain's got a couple of strategic, internationally competitive sectors, which is basically biotech, defense, higher education, right?

DAN RICHARDS: Is finance no longer in that growth sector?

MARK BLYTH: No, it's not globally, it's not globally competitive. I mean, essentially if you look at global finance these days, the big firms are firms that do asset management, right? So Vanguard, people like this, right?

Trillions under management. You've got private equity, private credit. That's not London, right? London's a bunch of American banks that are doing foreign exchange trading and then a few niche players. Is it still important? Yes. Is what it was in its heyday? Absolutely not. Are they going to get that back? Probably not, right? Britain's got a huge export sector that's based on services.

DAN RICHARDS: Yeah.

MARK BLYTH: So banking related insurance, things like if you want to design the inside of a cruise ship, there's apparently only a couple of firms in the world that do this. And they're both based in London weird things like this, right?

So it's a question of figuring out, what exactly have you got that adds to gross value added? How do you grow? How do you nurture these sectors? What are the adjacent sectors you can build out of this? What would be an AI strategy for Britain, right? So what Andy's trying to find what Britain hasn't had for the longest time is a growth story.

DAN RICHARDS: Well, and it sounds crucially it is a growth story, but unlike, say, maybe the United States growth story right now, which is--

MARK BLYTH: Give Musk whatever he wants.

DAN RICHARDS: Right, it's finding a growth story that is regionally diffuse, that allows prosperity in places that have been down and out. If not for moral reasons, for political reasons, too.

MARK BLYTH: And this is something to go back to that '70s period we're talking about and how Thatcher wanted to reinvigorate industry, but it ended up being something else. If we think about the kind of globalization period, what did it do to Britain?

If you go back to the '70s to that relatively closed economy, take three cities, you've got London, you've got Birmingham, which is the second city, and then let's take Bolton, right?

So what did Bolton do. Bolton was an engineering town, right? British engineering. And then what did Birmingham do. Birmingham were basically the big firms that bought things from Bolton. And then what is it that London did. London financed that and also did some stuff abroad. It all made sense.

Fast forward 30 years, and then what does London care about now. Does it care about Birmingham? Not much. It's forgotten where Bolton is. What does it do? It basically cares about Amsterdam. It cares about Paris. It cares about New York. It cares about other globally interlinked cities.

What does Birmingham do? It goes through a hard period in the Nineteen Nineties and the early Two Thousands. It begins to find its feet because it's a big agglomeration. It's got some universities, et cetera, it's fine. What does Bolton do? It suffers.

And this is not just in Britain. This is everywhere. So you've got this kind of upscaling and then this networking of these very productive parts of the economy geographically dispersed, which are also regionally and globally interlinked.

It's really hard these days to get a firm to go to Glasgow.

DAN RICHARDS: Right.

MARK BLYTH: What's the point? Why would I want to be in Glasgow? I want to be - if I'm in biotech, I want to be in Cambridge, right? One of the things that Andy could do is basically create the incentives for biotech to get out of Cambridge and go to Manchester.

Because they've got all the lab space that they need. It would be half the price. The rents would be cheaper. That's the type of thing you've got to do. That's where government can play a role, but government can't make that sector happen.

DAN RICHARDS: Public support of Brexit has gone down on the whole since it was voted on 10 years ago. I mentioned earlier that over half of Britons support rejoining the EU. That number is almost 70% for 18 to 34-year-olds.

But I wonder if there was a world 10 years from now where public support for Brexit massively improved and people looked back on that vote and that movement as a positive step for Britain, what would need to happen between then and now?

MARK BLYTH: The Britain would really have to take advantage of the fact that it no longer has European regulations and its investor class, and its government would have to be in exactly the same page. They would need to be a national growth strategy, a growth story that they both agreed upon, and they'd have to heavily invest into it.

And that could be AI-related, AI adjacent, that could be through strategic sectors like aerospace, that could be through biotech, through higher education. It could be a combination of the above, but that's what they need to do. It's impossible to set up, let's say an AI or even AI adjacent firms in the EU because of GDPR.

They're basically they have this regulation about privacy, which means quite reasonably, you don't get my data. Well, if I go and get your data, I can't train my models. It's over, right?

So which is why the EU has nowhere in this game. So you need to take advantage of that. Is it possible to do that? Yeah, but it's been possible for the past decade and they haven't done it because the governing classes, particularly the Conservative Party, have been utterly crap.

And then people become obsessed for reasons that we went through with immigration and other sorts of things which direct you away from developing that type of focus. In fairness, Boris and others in the Tory Party had a bit of this with their leveling up strategy, right?

And the idea of the Northern powerhouse and trying to electrify the trains across the Pennines, which was knocked together, the four cities there and these are all good moves. But they didn't happen. And then we also had in the UK this absolute debacle called HS2, which was this attempt to build a railway.

Now, considering that we built the first one you'd think how to do this. The cost overruns were incredible. 80% of the cost of the railway was simply the legal petitions about where it should go. Everything had to go underground at one point, because of complaints from environmentalists, they had to build 150 pounds million shed to protect 48 bats, right?

I mean, it's gone. Like, it really is just. It's a comedy, right? I mean, it's absurd. So you got to the point that even if you've got the cash you can't build it because it's just a bureaucratic kludge, right? All of that has to be broken, not just for Brexit to be a success, but for Britain to be a success.

DAN RICHARDS: So what would be your first priorities? We've talked about a lot of different issues facing Britain's economy, politics, culture, partially the result of Brexit, partially Brexit maybe being more of a symptom of longer term issues. So if you were advising the next prime minister, maybe Andy Burnham, what would be your policy priorities?

MARK BLYTH: So I think it would be basically deciding what the strategic sectors are, getting together with everybody who's on the business side of that and saying, OK, how do we make it easier for you to invest? How do we do this, right? How do we do it in such a way that we're not just in a race to the bottom? We're not just trying to lower already low wages. How do we get this going?

That's like the macro side of it, but the micro side of it, the government can do much more on - and this is true everywhere - and I've been banging this drum for the past at least five years. Housing, right? What if you're in anywhere from the 0 to the 80th percentile of the income distribution spend an awful lot of money on your rent, right?

And it's going up and up. And we only build prohibitively expensively for people who are in the top 20% We stopped building houses for normal people in Nineteen Eighty, right? Across the developed world, and then we turned housing into an asset class, right? Which basically meant that supply constraints means that the price goes up so the existing owners benefit.

So we got to break that, just build tons of housing. If you build tons of housing you also create the possibility of increasing skills. You learn lots of electricians, HVAC, building, et cetera, et cetera, all of which you need for green retrofits.

So it's climate friendly, right? You can do of stuff, that helps the skills, increases labor, mobility, housing plus skills equals more labor mobility around the country. That's productivity enhancing. Just do a ton of housing. Just burn the planning regulations. Go back to the local governments, give them the bond financing, back up to do it.

And get them to build a bunch of housing if they can borrow it for and rent it. It's an asset on the balance sheet. It's not a liability. Your net debt goes down. It's because it's earning you money. There's a crying need for proper quality housing, for working class people right across the developed world.

And we're just not rising to that task. And if you want to be seen to do something that matters for ordinary people, that would be seen and would matter more than anything else I could think of.

DAN RICHARDS: I think that's a great note to leave it on. And you've given us a ton to think about beyond housing as well. So as always, Mark, thank you so much for coming on to Trending Globally.

MARK BLYTH: It's been a pleasure.

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DAN RICHARDS: This episode was produced by me, Dan Richards and Juliana Merullo. Our theme music is by Henry Bloomfield with additional music by the Blue Dot Sessions. If you enjoyed this episode, leave us a rating and review on Apple, Spotify, or wherever you listen to podcasts.

And if you haven't subscribed to the show, please do that too. If you have any questions, or comments, or ideas for guests, or topics for the show, send us an email at [email protected], again, that's all one word [email protected]. We'll be back soon with another episode of Trending Globally. Thanks.

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