Is Britain Without London Really Poorer Than Any U.S. State?

About a decade ago the Spectator's Fraser Nelson made the observation that when London is cut out of the picture Britain is poorer than Mississippi when considered in terms of per capita Gross Domestic Product, with comparisons of this sort since becoming a commonplace.

Is it really true, however?

Recently checking the relevant statistics at the Office of National Statistics I found that in per capita terms London was in 2022 almost twice as "rich" as the rest of Britain, with a per capita GDP of £63,400 to £32,900.

As sterling equaled $1.24 on average in 2022, one may say that Britain outside London had a per capita GDP of $40,800 that year. Meanwhile (going by the GDP figures from the U.S. Bureau of Economic Analysis, and the mid-year population figures from the U.S. Census Bureau) the poorest U.S. state was Mississippi, which had a per capita GDP of $48,600 in that year--while second-poorest Alabama had a rather higher $56,200. In other words, Britain outside London was about a quarter poorer than Alabama, and a seventh poorer than Mississippi, when judged by that metric.

The result is that the numbers really do bear out the claim--unfortunately for Britain. Still, significant as the regional disparity may be within Britain, the disparity within London itself should not be overlooked. The city has a Gini coefficient of 0.58--which bespeaks far greater inequality in London than in the country as a whole (Britain's score ranged over 32-33 in 2017-2021), and indeed a wider disparity than has been observed in countries like Botswana and Colombia. It is thus not Londoners who are rich, but a comparative few of them--once again, the differences between classes trumping the differences between regions, though of course acknowledgment of the fact is less than congenial for commentators who prefer to concentrate their attention, and their audience's, on anything else.

Meanwhile, whether one thinks in terms of region or class the reality is inseparable from the way the British economy has transformed since Margaret Thatcher's time, with a near half century of neoliberal reform thoroughly deindustrializing and financializing Britain. London has been a beneficiary of financialization, and the city's emergence as a second or even first home for a disproportionate share of the planet Earth's oligarchs, their hangers-on, parasites, etc.--while other regions have had less to show in the way of anything to blunt the losses.

Of course, Keir Starmer's new government being what it predictably is, anyone would be very naive indeed to expect any significant change in direction any time soon--with whatever little room there may have been for those questioning this path to continue hoping for change pretty much shrinking every time Chancellor of the Exchequer Rachel Reeves makes a public statement.