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Wanna Argument?
Big versus Small Government
Is Britain's economy highly dominated by government in comparison to other countries, like the USA?
In his book, "The State We're In", Will Hutton describes the global experiment that has taken place over the last twenty-five years: "Everywhere there is a loss of faith in state intervention.....Instead the emphasis is on deregulation, flexible prices and private ownership".
In the USA, there has been a struggle between two opposing forces: liberalism and conservatism
Traditionally, American liberalism meant a bigger role for the government, whereas conservatism believed in the importance of the market. The forces of conservatism appear to have won. At the end of the Clinton administration, it was clear that cutting the size of government and reducing bureaucracy and regulation were specific policy aims. Indeed, Clinton pursued 'downsizing' of the
government so much that he could claim to have overseen the smallest American government in thirty-five years.
In the UK, there has been the intention to reduce the size of public expenditure since the early 1980s. The following table shows the extent to which this policy has failed:
General government total outlays as a percentage of GDP in selected countries
| Country |
1978-79 |
1980-84 |
1985-89 |
1990-95 |
| Japan |
30.6 |
32.7 |
31.7 |
33.8 |
| Germany |
47.3 |
48.2 |
46.2 |
48.2 |
| France |
44.8 |
49.7 |
50.7 |
52.7 |
| Italy |
42.0 |
46.7 |
50.7 |
53.9 |
| UK |
41.2 |
44.3 |
40.5 |
42.0 |
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Not only is the failure of the UK to reduce its public sector expenditure clear from the above table. It is also apparent that government spending in the UK is proportionately lower in the UK than in its major EU partner states, but higher in relative terms than in the US or Japan.
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