Okay. Welcome back to Gary's Economics.

Today, we are going to talk about

the changing shape of Great Britain.

I've come down to Waterlooville

because I’m helping my Mum and Dad out with an eye test,

but bloody hell.

Like, this is definitely not what it was.

I grew up around here.

I used to sit on that cannon as a kid,

and I think a lot these shops, like,

I remember I used to come and get my Pepe

jeans from one of these shops. But look at it.

There's bloody nothing here.

It's crazy.

I want to talk about this.

This phenomenon of the death of the smaller town.

I've been thinking about this for a long time,

so a couple of years ago

in the winter, I went to Colombia for two months

because I wanted to practice my Spanish

and because I hate winter.

So Colombia is a massive country, its about,

I think it's like five or six times bigger than the UK.

It might even be more.

And the population is a lot less than the UK,

just over half the UK. So

it's a big, low population density country.

It's a much poorer country than the UK.

So I was expecting it to be quite rural, right?

There's a lot of space, there's a lot of farmland.

There's not that many people.

I thought it would be like spread out,

you know, it’s a poorer country,

so there might be people, like, working in agriculture.

But I got there,

I flew into Bogotá

and straightaway Bogotá is like a massive city.

Bogotá is like, you know, it's almost as big as London,

it might even be as big as London.

And I was quite surprised, right,

because you have much fewer people in the country,

but they've got a massive city the size of London.

And then after that, I took a bus to Medellín,

which is the second biggest city.

And then again you have another city which is

almost as big as London.

So I was kind of like a little bit blown away by this,

like how can this country, massive country

with a relatively small population, have two cities

the size of London?

And it got me thinking about this quite a lot.

And the more I travelled in Latin America

and in other countries as well,

I started to realise that actually

this is quite commonly the shape

of like a relatively well developed

but very unequal country, which is that

you have a huge amount of farmland,

but it's largely industrialised

and not many people live in that farmland.

And all of the people then basically,

they have no jobs and they need jobs.

So they have to swarm basically

to where the rich people are

because the rich have all the money

and you end up with these sort of,

huge super cities

with a very, very wealthy centre and kind of large area

of essentially very low quality housing.

You could call it a slum around these these big cities.

And this is not unique to Colombia.

This is the situation

in most poorer,

most monarchical countries in the world. And

it basically got me

thinking about what the shape of a country is.

I think in capitalism, your country has to...

the physical shape of your country

has to reflect the wealth distribution of your country.

And if you look at Western European countries,

they have a different shape,

which is they have some big cities,

some smaller cities, and they have some towns,

they have some people living in rural settings.

It's much more diverse

than these extreme unequal countries

where increasingly the people live

in these slums around super cities.

And if you think about it, this makes sense, right?

Because if you have a relatively equal economy,

then every person in that economy is a small scale

wealth holder.

They are a worker and they're also a consumer.

And what that means is basically any

size settlement, is sustainable?

Because as long as you have a group of people there

you have

wealth holders, you have consumers,

and you have workers,

and everybody can work for each other

and everybody can consume each other's work.

So, you know, small cities are sustainable,

towns are sustainable, villages are sustainable

because everybody can work for each other.

But once you have a very unequal society,

then what you have is basically two kinds of people.

You have a very large group

of very poor people who need to work,

and you have a very small group of extremely wealthy

people who have an enormous amount of money to spend.

And what that means then is if you have

a group, a village,

which doesn't include any rich people,

you have a ton of workers and you have no employer,

you have no consumer.

So these small cities basically become,

they basically become non-viable, non sustainable.

And these cities have to essentially disband

and the people need to move towards

not even necessarily the big cities,

but wherever rich people exist.

And I think what we have in this country,

the UK and you also see in the US in places

like the Rust Belt and actually a lot of Europe,

I think what you have

is transitional countries

in the sense that we used to be a country

with a relatively large property owning middle class.

So these people lived in a variety

of different cities, big cities, small cities,

towns, and these places were sustaining.

But now we have moved

and we are continually moving into this more

Colombia type model.

You know, it's common across Latin America,

including the poor countries in Asia,

maybe some Eastern European countries.

We're moving to that very unequal model where

people need to live, where the rich people live.

So they need to move,

they need to move to these super cities.

And

you’re seeing that,

you're seeing the world basically split

into two kinds of places or places

where there are no rich people and places

where there are rich people.

And I think this is often described

by economists in a way

which I think is incorrect as an increasing...

such a classic economist way to describe a problem,

increasing preference towards large cities.

They say, well,

people just like large cities now, so

everybody's moving to large cities.

But I think this doesn't really

fit the model right,

because if you look at a place like

Newcastle, Newcastle is a large city,

Glasgow is a large city.

These are cities where there's

increasing economic deprivation and people are leaving.

Whereas if you look at a place like

Cambridge or Oxford,

these are small cities

and yet these are places

where people are moving to the cities

and where housing is extraordinarily expensive.

If you look at, for example,

the Swiss Alps or the Hamptons,

a popular holiday destination

in the states for wealthy people,

these are not big cities

and they're becoming very expensive.

So actually what you are seeing is people flooding

from the country to wherever rich people are.

And that is what you have to do

when countries become more unequal.

I think we are moving

from the physical shape of an equal country

to the physical shape of an unequal country.

And you also see that in big cities.

So I'm from London, I come from Ilford in East London.

And

this is a place

where people are swarming to this place.

And one of the most common

solutions that is put forward to the housing crisis is

you have to build more houses,

you have to build more houses.

And

I'm from Ilford and people from other,

sort of, more distant suburbs, poorer

suburbs of London

will be very aware that in these places

enormous amounts of housing is being built.

And if you go to the street I grew up on,

the density has increased enormously.

All of the houses have been expanded upwards,

all the houses have been expanded backwards.

There was a factory at the end of the street

which has been knocked down

and replaced with a massive block of flats.

And these

are providing extremely low quality housing

because these cities are increasingly full of extremely

poor people.

And I think

I'm not opposed to building more houses, but I think

unequal economies,

the shape of these countries

is basically enormous slums around the wealthy centers.

And that,

because our economy

is becoming a very unequal economy,

that is what our country wants

to become like from a capitalist perspective.

So if we build more houses

under this situation of high and growing inequality,

we will build that physical slum space.

If you go back to Ilford,

especially the part of Ilford I'm from,

that is what it's becoming.

So I think when I see this video,

what I see is a transitional country.

You know, we used to be a middle class country

and we are becoming a very highly unequal country.

And highly unequal countries

don't have cute little towns for ordinary people.

They have slums for ordinary people.

And if you go to,

you know, if you go to highly unequal countries,

like most of the countries in Latin America, you know,

you go to Mexico City, you'll see the same thing.

People are forced out of the countryside.

The countryside gets,

you know, industrialised from a farming perspective.

Some of it gets kept as playgrounds for the rich

and people swarm to the big cities and

I'm very skeptical that building

will solve the problem.

I lived in Tokyo for two years,

and that is a city with 38 million people

and very unaffordable housing.

I think poverty is the problem.

You know, if you don't get money

in ordinary people's pockets,

then everybody has to live close to the rich people

and there are fewer and fewer rich people

and those people are richer and richer. So

I think unless you fix the wealth distribution,

then this video of emptying out

small towns is the future of this country,

But not just this country,

but also America and also most of Europe.

And I don't want it to go that way.

And one solution is we build more housing in London

and we turn London into the super slum it's becoming.

And another solution is

we get money in people's pockets and allow people

to live where their families have lived in 100...

for hundreds of years

because they can afford to work for each other.

And that's the future

which I'd rather have for this country, for America

and for the rest of Europe. We can do it.

But we can only do it if we deal with inequality.

And the only way to deal with inequality

is to tax the rich.

So we're going to campaign for it, we’re here

every week. Thank you for your support.