Covid triggers fear of ‘big state’ politics

Big spenders: In France and Finland, the government spending represents over half the national GDP.

Is "big government" necessarily a bad thing? The pandemic has lead to an explosion of public spending. For supporters of a small state, this will create a terrible threat to our liberties.

Rishi Sunak sprang up to the despatch box. The eyes of the nation, as well as the socially distanced House of Commons, awaited his spending review with baited breath.

In 23 short minutes, the UK chancellor announced £6.6bn for healthcare, £4.3bn to target unemployment and £2.6bn more for schools. The deficit for 2020 will be £396tn: Britain’s highest level since World War Two.

But before the chancellor had uttered a word, Conservative critics denounced a possible pivot to “big government”: a situation in which a high proportion of a country’s GDP is spent by the state. “It’s going to look horrible,” ventured one senior MP.

The battle between big and small states has raged among politicians and economists for decades. Advocates for small government, who are often on the right, believe that individuals are paramount. The state should be limited so that it does not intrude on our lives, our livelihoods and our liberty. Taxes should be kept low. “Government is not a solution to our problem,” said former US President Ronald Reagan, “government is the problem”.

For the predominantly left-wing defenders of big government, countries exist so that we can pool resources and share responsibilities. We should trust the state to advance our communal interest benignly and give it an active role in shaping our economy. According to economist Mariana Mazzucato, “You always need the state to roar.”

Big state sceptics caricature it as a nanny state, where people are coddled and controlled like unruly children, prevented from making their own decisions. In return, opponents of the small state might compare it to being thrown out naked into a wilderness, reliant on your own wits to survive.

The size of states often stems from their history. France, whose state spends Europe’s highest percentage of GDP, has been wedded to big government since the regime of Napoleon Bonaparte in the early 19th Century. Convinced that a central authority could transform society, Napoleon built infrastructure, founded publicly-administered schools and controlled prices on goods.

Critics of the French system have often blamed the elephantine enormity of its state for stifling economic growth. But when President Emanuel Macron tried to implement measures to shrink the state in 2018, he triggered transport strikes and the gilets jaunes protests.

Big spending can also result from geography. In Finland, large state spending provides support and services for those living in a harsh, sparsely-populated landscape of freezing winters and interminable nights. For those in the wealthy, populous south, however, taxes spent on the frigid north might seem earnings thrown away.

In some cases, small governments go hand-in-hand with dysfunction. Low-spending Nigeria’s GDP is the largest in Africa and 26th in the world. Yet it is also hugely unequal and riven with corruption. The majority of its enormous, exploding population of 200 million people face poverty, unemployment and limited rights. The crime rate in capital Lagos is so high that the country barely qualifies as a night-watchman state.

And small states do not necessarily protect freedom. The proportion of GDP spent by the government in minute, extremely prosperous Asian city-state Singapore is only 1.3% higher than in Nigeria. But it has effective one-party government, censorship and harsh punishments for crimes. “Its laws,” says economics commentator Guy de Jonquières, “prohibit chewing gum, littering, jaywalking and even leaving lavatories unflushed”.

Is "big government" necessarily a bad thing?

Turn on the taps

Undeniably, say some. The more taxes we give to the state, the more we lose as private individuals. The larger the government, the greater the power it possesses to trample over our freedoms. The big state is an anachronism that belongs to despots like Napoleon, not a model for modern democratic states. In countries such as Finland, it can lead to an unfair distribution of resources. Fair societies are those that offer us the greatest choice over our earnings and activities.

Not at all, say others. We appoint governments to serve our best interest in a manner that would be much more difficult for separate individuals. The bigger the state, the more capability it has to serve these interests. The idea that the smaller the government the greater the freedom is a myth – as the tyranny of Singapore demonstrates. And troubling cases such as Nigeria show that small states can fail to provide the most basic securities to their populations.

You Decide

  1. You visit a restaurant with your friends. Would it be fairer if each person paid for the food they consumed, or if the cost was divided equally?
  2. Do laws and regulations always curtail our freedom, or can they enhance it?

Activities

  1. Imagine you have been given £100 by the government to help you through the pandmic. Write a letter of thanks, explaining how you would spend it.
  2. You have been given a year’s government budget to spend on healthcare, education, defence, justice, foreign relations and transport. In groups, choose how to divide the budget, create a diagram illustrating your choices, and present and explain your decision to the class.

Some People Say...

“Experience hath shown, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.”

Thomas Jefferson (1743 - 1826), Founding Father of the United States

What do you think?

Q & A

What do we know?
It is generally agreed that the Covid-19 pandemic has necessitated greater degree of public spending. Growing the state is the only way to begin to absorb the shocks felt to the economy during the crisis. This has taken different forms in different countries, but it often includes allowances for those made unemployed, grants for struggling businesses or institutions and increased healthcare spending to stifle the disease.
What do we not know?
One main area of debate concerns what should happen after the initial shock of the pandemic is absorbed. For some, in particular conservatives, the enormous increase in government debt must be eventually counterbalanced with a programme of austerity. Others believe that the increased public spending represents a chance for a new model of government spending, which could help meet future challenges such as automation and climate change. “Rather than rolling back the state,” says Guardian economics correspondent Richard Partington, “the time now is for longer-term support”.

Word Watch

Despatch box
A box used to transport important government documents. In Britain and Australia, ministers traditionally stand in front of them while making a speech.
Chancellor
The Chancellor of the Exchequer is the minister in the British government responsible for economic policy, conventionally regarded as second in importance to the Prime Minister.
Deficit
The amount a government spends above their tax revenue in a given year.
GDP
Gross domestic product, the total monetary value of all goods and services provided in a country. It is one of the most common methods of assessing a nation’s economic health.
Nanny state
A popular phrase used by British Conservatives, particularly associated with former Prime Minister Margaret Thatcher.
Gilets jaunes
A disparate, ongoing protest movement that emerged in France in 2018, motivated in part by tax cuts for big businesses. Named after the high-vis “yellow vests” which protestors wear.
Interminable
Seemingly endless. In the northern extremities of Finland, the sun sets in November and rises in January.
Night-watchman state
Coined by German socialist Ferdinand Lassalle in 1862, this refers to a government so limited that it does little more than protect citizens from crime.
Censorship
The suppressing of speech, text and media that is considered politically unacceptable by a government. Derived from “censor”, an Ancient Roman magistrate responsible for overseeing public morals.

Subjects

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