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The British Disease (April 2006)

This article was first published on The Guardian's Comment is Free

The allegations about Wayne Rooney's gambling debts casts an intriguing light on the wonders of the Blair-Brown economy.

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The allegations about Wayne Rooney's £700,000 in gambling debts casts an intriguing light on the wonders of the Blair-Brown economy, contrasted with fuddy-duddy old Europe. A couple of weeks ago the German weekly Focus, a Thatcherite publication, was touting casinos, on- and off-line, to its readers. It found that Germans were spending $33 per head per year on gambling, Italians $43, Austrians $151 and the French $154. The British were blowing $626: $37.5 billion a year or about 2.5% of Gross Domestic Product.

Big boost for growth, eh? Or, as Gordon Brown's hero Adam Smith put it anent lotteries in general, "a tax on all the fools in creation". But the style of the City of London has been, from the railway mania of the 1840s on, closer to the green baize tables of Whites and Almacks than to textile mills and laboratories. Brown the puritan profited from the "irrational exuberance" of the boys in red braces during the dotcom boom, auctioning off third-generation mobile-phone licences in 2000, and banked over £20 billion for facilities the Telegraph's Roger Bootle estimated at perhaps £3 billion.

This sleight-of-hand enabled Brown counter-cyclically to inject investment into the public sector to combat the post-2002 downturn. Nice footwork. But if we dissect Britain's crude growth figures to sort out "social capital" - investment in research and development, training, transport, etc. - from gambling, drinking and shopping, we don't find much for our comfort.

 
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