The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
In your example of elderly care, an extended family in Italy may care for their own grandmother (and they'd probably live longer). But the market in Italy isn't so bouyont so the younger generation can't get high paying jobs and move out even if they wanted to.
The high spending and marketisation in the US skews the game for everyone whether they like it or not.
You highlight and try and predict the eventual problems of non-marketisation but you don't seem and try and do the same to the eventual problems of marketisation.
These things are difficult to predict, but already for example we notice some problems with ultra-marketisation in the UK where house prices are now 10-12x average annual salary (it used to average 6-8x for the last two decades), and all the social strife this is causing in society. For example it can eventually lead to mass violent protests against migrants or electing extreme political parties.
Another example is that it has seriously degraded public services, since nurses can barely survive on their salary there is huge shortage of medical employees leading to huge waiting list for medical, even critical, operations.
Not disagreeing with your central points - but average UK salary is now £35k and the average house price is £289k - therefore house prices are currently 8.25 times the average salary.
Regional variations will make this far worse in many popular and coastal towns - but the average is 8.25 times in 2024.
Yes you are right, I think I was referring to London, not UK (although 8.25 ratio for the UK is pretty bad given that it was around 4-5 not that long ago).
Average London salary: £44,000
Average London House: £531,000
There are many other UK-wide statistics pointing out to the jump in housing unaffordability (including rent) over the last 5 years.
Even if house prices is slightly more sane outside metropolitan, one needs to factor in how difficult it is to find jobs outside metropolitan areas, so the quantity of jobs outside expensive metropolitan areas need to be factored in, not just the average salary.
Totally agree - I live in a small (coastal) town where a there are very few jobs outside of service roles - and they are highly seasonal. Average salary for peole that work in the town must be around £20-25k and even cheap houses here are £200k - but often far far higher.
London is wild - I was lucky to buy a flat (£142k) when I was still young (2006) - which would have been 4.7 time my salary (though I bought with my wife). Even then, and with two good salaries, staying on in London with 2 kids wasn't really an option for us.
And as you say, this is replicated up and down the country in other major cities - people are just priced out or trapped in renting. No idea what my kids will do.
If there would be a market for better urban zoning (instead of the mandatory bribing "attempts" of various officials) housing could be built much much more efficiently.
(It's a tragedy that most housing constructions are basically suburb expansions or "terraced properties" or these few sad few storey things. There's no vision at all.)
Interesting that you call this a problem of marketization and not of the governments callous immigration policy and the racism/nationalism of the average brit.
If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county". The largest culprit after mass immigration is the unwarranted fear of bodily harm from living "poor countries"
"If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county"."
Your comment is seriously detached from reality. If your whole life, job etc is located in one area, then moving far away for cheaper housing often isn't easy. It's especially hard for someone with a family.
UK and most other Western countries have high housing prices mostly because houses have become speculative assets for rich investors.
Worth noting it's not a linear relationship - 100k immigrants do not take 50k or whatever homes that would have gone to people already there. That's because immigrants also create building companies and incentives for existing ones to build more houses, and because immigrants disproportionately work in construction and thus provide workforce to build more.
The UK experienced this when Brexit caused many Eastern Europeans to go home, and even more not to come; there's now a big construction workforce shortage and housebuilding is being held up.
Cost of housing is rising in places where there's barely any immigration. (Yes, in places where there are more influx of people with money to a place - migrants from abroad, migrants from the next town, or in some lucky places we even have birth rate above death rate - demand [in the economic sense] will go up even more.)
But most of the price increase (ie. actual demand, meaning potential buyers with enough money) is because over the last few decades houses got much better (triple glazed windows, heat and noise insulation, safety standards increased, HVAC for the whole house not just 1 sad split unit, oh and houses got bigger, so all in all we put in more material, more stuff and so on), and service costs got higher (in part due to the Baumol effect) and availability of credit increased with the price (banks love to give bigger loans when it's backed with a relatively safe liquid asset), so buyers can and do pay these enormous amounts.
And then there's the supply side. "Cities" are horribly mismanaged. Most development happens in suburbs. (Because it's easy.) Productivity of the construction industry is so ridiculously low that people are in complete and utter denial even about the prospect of building things. Housing? Rail? Nuclear power plants? (They have given up, they just want to preserve the status quo apparently.)
It's good that our cities are not burning down regularly anymore, but this forced stasis is still bad. It's good that we don't have monarchs or urban planners who randomly reshape half of our cities every generation without fair compensation.
At the same time it's still very bad that we ourselves don't reshape our cities to adapt to each generation!
About the "nursing shortage" in the UK: The solution is simple, pay fair salaries from the NHS. This would probably required higher taxes to better fund the NHS, but good luck with that in the current UK political environment. Instead, the UK has decided to pay poor nursing salaries and import cheap labour from poor countries. Is this a win? I doubt it.
> The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
It goes both ways though, when shit hits the fan if your economy is based on airbnb and food delivery you're fucked.
Look at Russia, half the GDP of Germany but twice the steel production, 4 times the wheat production, 1st producer of fertilizer, huge amount of gas, &c. They had roughly the same military budget as Germany in 2020, yet the german army virtually doesn't exist.
It depends if you think our current mass productivism/consumerism practices are a bubble or the end game of humanity, history seems to prove that it goes in cycle of good and bad times. Poor countries would probably even fare better than most in case of major events, the bigger they are the harder they fall.
Germany is much richer than Russia because their economy adds much more value to raw inputs. Their industry produces much more refined, valuable goods. For example, before the idiotic invasion of Ukraine, Germany imported huge amounts of Russian gas, that was used by industry to created refined, valuable goods.
Also, it is weird that you chose to comment about the German military. First, due to WW2 era agreements, they are severely limited in how they can deploy their military. Japan is similar. Also, Germany spent 50B EUR last year on their military, and that is set to rise by another 10-20B EUR this year with some extra, one-off spending. These are not small numbers!
The problem of marketisation is that it's a shredder for human values. The economic machine doesn't care what the constituent parts are, as long as they move correctly.
My ideal world we would pay a reasonable wage to people to take care of their own children and the eldarly relatives. These are real valuable and nessasry jobs that end up being an economic drag on those that can least afford it. So instead of paying a stranger to help grandma do household chores make meals and drive her to her medical appointment why not pay her granddaughter to take care of her instead taking a second job to pay for the assured living facility? Why have both parent work two job and pay for all day daycare when dad can stay at home clean house and watch the kids? We fear population colapse as younger generation put off or decides not to have kids and yet child care cost so much that they cant aford to have kids instead pay people to be parents and nurture and raise children.
Is there evidence for this? In wealthy, developed European countries, I would bet in the southern ones, they are less likely to live in elderly homes, and vice versa with northern ones. I guess that this trend is more about culture than ability to pay.
In your example of elderly care, an extended family in Italy may care for their own grandmother (and they'd probably live longer). But the market in Italy isn't so bouyont so the younger generation can't get high paying jobs and move out even if they wanted to.
The high spending and marketisation in the US skews the game for everyone whether they like it or not.
(no moral judgements here, just observations)