Posted originally on Jan 7, 2026 by Martin Armstrong |  

Britain is not becoming a nation of part-time workers by accident, nor is this some benign lifestyle evolution as the press would like to portray it. It is a symptom of a collapsing incentive structure, and once incentives break down, the economy follows. Britons today work, on average, 2.3 fewer hours per week than they did twenty years ago.

Economists keep missing the point because they obsess over employment levels rather than productivity and motivation. Adam Smith understood this centuries ago. The wealth of a nation depends on the productive use of its population, and labor itself is capital. When you penalize labor through taxation and regulation, you destroy the capital base of the economy. Britain has done precisely that.
The expansion of the welfare state requires ever-higher taxes, and those taxes do not fall evenly. They fall disproportionately on those who actually work, produce, and take risk. Britain has created a system in which the marginal benefit of working harder is weak or outright negative, once taxes, lost benefits, compliance costs, and inflation are taken into account. Under those conditions, rational people become unproductive.

What is especially telling is that this is no longer confined to low-income workers. Highly skilled professionals are opting to reduce hours, shift into part-time roles, or deliberately cap income to avoid punitive tax thresholds. When doctors, engineers, accountants, and executives start making lifestyle decisions based on avoiding taxation rather than maximizing productivity, the system is already broken.

Governments always pretend this is about “work-life balance.” That is propaganda. People have always valued their time. What has changed is confidence. When people believe that extra effort will improve their future, they work harder. When they believe the state will confiscate the reward while increasing the risk, they stop. Productivity collapses not because people cannot work, but because they no longer believe it is worth it. People no longer believe the system is fair, and once that belief is gone, productivity never recovers without a crisis.

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