If [UK Government] spending since 1997 had risen no faster than inflation, we would be spending a third less than we do now, and could abolish income tax, VAT, and council tax entirely.
– Eamonn Butler, writing in the Daily Telegraph on what I am relieved to discover the Adam Smith Institute has renamed Cost of Government Day.
What, pray tell, do you get for that? (Apart from duck ponds, trips to Brussells, etc. I know ducks need their ponds, but you can’t have built that many of them!)
Immediately before that quote:
It would be a start, I guess. I’d like to be a little more ambitious.
This is as a good a point as we’ll ever get to start our own ‘long walk’ through the cultures. I’ll call it a walk because I think we’d prefer to leave marching to the socialists.
The first pragmatic step we can take to roll back the state is to cut its funding. By limiting its ability and indeed desire to coerce and consume what we produce, the hydra will start to wither.
It will then be necessary for a government with a commitment to sound money to gradually, humanely, roll back the state. Step by step, progressively smaller government must be made to work. Demonstrably. People must understand the connection between economic freedom and social freedom.
The cultures will follow.Then we start decapitating that hydra.
We’re at a point in this economic supercycle where the public are finally becoming aware that government borrowing and spending cannot be sustained at this rate. That it might not even be desirable!
It’s time to educate, inform and start that long walk. I’ve made a start here:
DebtBombshell.com
I’d be interested on the Samizdata response to this left wing (?) take on corporate welfare:
Two very contradictory stories about British capitalism are told today. The first is that the State is eating up more and more of the private sector. … The other story is that the British government has inherited its predecessor’s mania for privatisation. … How is it possible to reconcile these two accounts? Is the State being privatised in Britain, or is it taking over the private sector? The answer is that both are true, and neither. What we have is not a new private sector boom, but a growing state-dependent economy of concessions. Companies like Qinetiq and Capita only exist because of the way the state contracts out its services. … At the same time as it abandons responsibility for delivering public goods, the State penetrates more and more of private life. … All the time the established boundary between ‘state’ and ‘civil society’, between ‘public goods and private benefits’, is being redrawn, or broken down altogether. What emerges is neither an enhanced private sector, nor coherent state provision, but rather a hybrid, dependent on public finances to survive, and increasingly operating according to a mixture of political, administrative and business models that makes little sense.(Link)
What is the libertarian account of why this tendency has been so persistent through the twentieth century (as I would argue it has)? In the end we have to deal with ‘actually existing capitalism’, in which the private sector has turned more and more to state support. When that has continued even under Thatcher and Reagan isn’t there more to be said than that ‘real capitalism’ has never been tried, we have the wrong leaders, etc?
Indeed. This could have well been written by Ian B.
I think IanB’s preferred term is leftist.
Otherwise, you’re right 🙂
JK: Whoa there. The constant leftist whinge that “real socialism has never been tried” is quite different from the current protest that what we have now isn’t real capitalism.
While we can quibble about details, I don’t think it would take most of the Samizdatistas long to come up with a few examples of successful real capitalism – or close enough to it – in history.
His numbers aren’t right though, income tax + vat + council tax is about 45% of expenditure.
http://www.hm-treasury.gov.uk/d/public_finances_databank.xls
“The British state has developed over centuries into a powerful entity charged with delivering important goals.
– To protect its citizens from internal and external threat.
– To redistribute wealth from the richest to the poorest.
– To ensure public services – education, healthcare, welfare – are there for all who need them.”
Note in particular 2 and 3. Is this a first step, or intended to be the whole journey?
[h/t Guido.]
botogol:
Thanks. Casting around for statistics I come up with this.
Total Managed Expenditure 1996/97: GBP 317,200,000
Total Managed Expenditure 2008/09: GBP 617,800,000
Standardised RPI Apr 97: 156.3
Standardised RPI Apr 09: 211.5
TME expanding in line with RPI would therefore be
GBP 429,200,000 approximately, leaving GBP 188,600,000 available for fantasy tax cuts, or approximately 30.5% of the tax base. One could get rid of personal income tax – which is very nearly the worst tax of all, for reasons I set out here – and a whole bunch minor burdens that distort business and private life and provide lots of excuses for official interference: Aggregates Levy, Climate Change Levy, Landfill Tax, Betting Duty, Air Passenger Duty, Insurance Premium Tax, Customs Duties, Wine, Beer & Cider Duties, Inheritance Tax and Stamp Duties – but you would have to keep VAT. Council Tax is one of the least intrusive and complicated taxes, even with the Valuation Office running wild, so given the choice you’d keep that over lots of others. Tax Credits complicate the picture, but clearly they do have to go alongside income tax (being even worse).
Of course that’s assuming you could start again from 1997 other things being equal. (Which would mean never introducing a number of items in the foregoing list.) You can’t do it starting from here. But attacking taxes on the basis of burden and intrusion is the way to go.
Sam Duncan – yes.
For example, when I visited the Isle of Man it was clear to me that, whilst not free market, the place was less statist than the United Kingdom is.
And, in turn, Sark is less statist than the Isle of Man.
And Guernsey is a bit less statist than Jersey (an nearby island of similar size and history).
The “socialism has never been tried” types can not do what I just did above – they can not grade places like that.
For example saying North Korea is “state capitalism” is silly. Although not as silly as saying there is no fundemental difference between North and South Korea.
Still back to Guy Herbert’s post:
Dr Butler is quite correct – his mathematics is accurate.
However, let us be clear – the increase in spending has not gone to “duck islands” and other such (in fact no money was spent for a duck island).
The vast sums of money talked about have gone into the Welfare State.
Mostly into education and the government health service.
“School and hospitals” as the (not entirely correct) mantra puts it.