The Price of Big Government

Many U.K. readers will have seen the excellent Channel 4 documentary by Mark Durkin last evening which brought home the scale of the public debt here. I have already explored these figures many times, so I will not repeat them. 

The programme examined in depth the fact that big government (as opposed to state ownership) is a drain on the economy because it has to be paid for by the taxes on wealth creation by the private sector as the government makes no wealth. Properly organised and kept small, government can facilitate enterprise and wealth creation which in turn raises standards and creates jobs and multiplies. Big government burdens.

There is a case for arguing that major government shareholdings in corporations, especially banks and public utilities can be a good idea if it brings profits back to the Treasury, which can then invest them in services, but as a shareholder and not as manger. We had an element of this with the nationalised industries, but the lack of business acumen in their management made them sluggish and often unprofitable. The taxpayer/shareholder is different to nationalisation but no different to the pension saver/shareholder through their pension fund. Left-wingers might want to explore this.

What simply cannot sustain, as the C4 documentary showed, is a bureaucratic state which accounts for over half the country’s GDP as we have now in the UK. To underline this came the startling disclosure that the percentage of GDP controlled by the state in the United Kingdom, a free enterprise democracy, is twice the level of the GDP controlled by the Chinese government in a one party communist state. Dear me.