Book News: September 5th, 1998

Arthur Sheldon – Institute of Economic Affairs

Over-government is now a serious problem in many countries, says Arthur Sheldon in a new IEA Hobart paper. Instead of accounting for about 40 per cent of GDP,government spending should decrease to nearer 20 per cent. Then citizens would be less inclined to try to escape from government control, as they are now doing in big numbers, because government activity far exceeds what they would freely have chosen.

The author, for many years the Institute’s Director, says that false arguments have been used for governments to take control of activities – such as education, health services, some housing provision and some insurance – which the private sector would have provided much better (and indeed in many cases was already providing before the state takeover). For a hundred years or more – the ‘lost century’ the state has been encroaching in these areas and crowding out private initiatives.

People are escaping by many routes from what they perceive to be over-government. Sheldon shows how people can escape to personal service, to the parallel economy, by electronic money, by barter, by the Internet or to other countries (without moving because of the expansion of free trade and impact of better communications). He puts forward his own radical agenda in which the state retreats, cutting its share of national income from around 40 per cent to nearer 20 per cent. In his view, if the state does not voluntarily decide to reduce its activities, it will anyway be rolled back by the will of the people.

ISBN 0-255 36417-2. pp117. ?10.