Covid triggers fear of ‘big state’ politics

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. KeywordsNanny state - A pejorative phrase associated with the view that governments should not interfere unduly in ordinary people’s choices.