3 ms·

When I googled "list of countries by size of government" to see if I could spot some trends, I found this very interesting article as the 4th hit: http://anepig

by mike429 11y ago

When I googled "list of countries by size of government" to see if I could spot some trends, I found this very interesting article as the 4th hit: http://anepigone.blogspot.ca/2008/03/government-spending-as-percentage-of.html http://anepigone.blogspot.ca/2008/03/government-spending-as-... It essentially confirms my temporary conclusion, what I've been reasoning in my comments on this page so far. Socialist policies at worst won't hurt the economy, and at best will contribute to it. In any case the neo con / libertarian position that Molyneux defends is flawed, indeed based on nothing (I wonder how he gets his data, besides from the economic freedom index which comes from the Wall Street Journal). Here are the highlights from the article, below (marked with ). Now I really wonder how come Molyneux gets such a beautiful correlation between government size and growth output in his slides. Is it possible that his data is ... purposely altered or coming from biased sources? I don't see any other explanation. It'd be great if the author of that article (Audacious Epigone) and Molyneux had a good debate, so we can see who's right. Quotes from the article: There is a modestly positive correlation [of government spending as a percentage of GDP by country] of .25 with per capita wealth. To the extent that is of any importance, it is another reason why those on the left should favor policies that boost average IQ and by extension national wealth. Over time, as the economy grows, the government grows as well, generally at a slightly greater rate, then? But if European countries are removed from the analysis, the relationship loses statistical significance (p=.34). (...) * On its face, there doesn't appear to be much to validate the libertarian view that minimizing the size of the federal government, and suffering the consequent economic distortions its continued growth will otherwise cause, should be the primary goal of a society wanting economic prosperity (and a high quality of life). Ceteris paribus perhaps, but there are clearly a host of other demographic and cultural variables that are more important. Who would rather operate a business--or live--in Haiti instead of in Denmark? Conclusion: For me it's not looking good for the neo con / libertarian ideology. I'm not sure I can identify even one pertinent spot on thing they say at this point. Could it be that most of that ideology and all its arguments really is 100% flawed and was manufactured by elites in their own short-term, near-sighted interest repeatedly in history? Or is there at least some good stuff in it? Any thoughts welcome.

Futurebot 11y ago
Hi Mike, I wanted to respond to all your comments, but they're blog-post level and I'm in the middle of writing a book so I can't properly do them justice. A very short answer to just some of your questions on government size and the innovation/social support question: 1) The Scand. model shows that larger (and more importantly well-run, and smarter) government is completely compatible with innovation and business creation (as well as high social mobility.) Stronger social supports mean more risks, which means more innovation and businesses. Size is a red herring, as I'll discuss below, though. 2) The "Freedom indexes" aren't wrong per se, in that they show what they purport to show, but the way they've been interpreted / designed is to always support the ideas that less regulation always and everywhere equals growth, even "good" growth. The cultural environment they were created in doesn't allow for much else. That doesn't mean they're useless; it just means that they have to be interpreted contextually. 3) Culture matters. A lot. A society that has a baseline of good infrastructure (broadly construed, not just physical, but social and technological) plus a culture of entrepreneurialism is likely to produce more innovation even with 50% marginal tax rates. I'd add for all of the above is that the environment for innovation can be thought of like the range of temperatures compatible with life; there's a margin where innovation will likely go down at either end of the spectrum: - If your MTR is too high, people might actually move or decide its not worth it to start a business. The issue is that the actual level and the level pushed by the economic right are very far apart. Scand. / France / Germany shows that 50-60% MTR works just fine, but we could easily imagine that a 90% rate would have the opposite effect. - If your MTR (and hence ability to fund the aforementioned infrastructure [in this case everything from university tuition to public transportation to government grants for businesses to social welfare to allow people more freedom / privation protection]) is too low, you can lose innovation potential because too many people spend heir time and energy just trying to survive or get to the "baseline" of innovation (like working survival jobs instead of studying.) Even small-scale cash handouts in many developing countries to would-be entrepreneurs can bolster innovation and growth, as a number of previous and extant experiments have shown. - Regulation and government size are often explained in terms of "number" or "size", but these should be considered complete red herrings. What's more important are good design, responsiveness to changing circumstances, good administration, hard-to-corrupt regulators, and understandability. Many of the Scand. countries, NZ, and especially Singapore (for all its faults) show that regulation can be done in a way that protects people and does not squash business. The proper way to frame this is not to think about "too many" or "too big" but "bad" and "stupid." Bad/stupid regulation can kill business, but good/smart regulation can actually support it (one way is to allow certain kinds of businesses which lines to color inside AND to let them know that they are not being undermined when their competitors cheat - standard regulations means a level playing field for businesses in many cases, particularly ones in well-trodden industries.) The other thing I'd say, which is very interesting, is that even though there's some disagreement on the causes and the extent of many of the inequality issues, the solutions are weirdly convergent. Left-wing intellectuals with a technological bent, realistic right-wing intellectuals who have given up on a complete dismantling of social welfare provision, and technologists of the techno-libertarian (both left and right) variety have spoken in favor of the GBI, which would kill several birds with one stone: With a proper GBI, you wouldn't need TANF, SNAP, WIC, social security or any of those. You would still need a proper UHC, and would probably need top ups for those with disabilities, but we could get to the "post-Scandanavian" model of social democratic capitalism if it was done on a large scale. Politically unlikely for another half-century, in my estimation, but a far better solution than most of the others. The "standard" list of suggestions (like not gutting SS) takes into account political likelihood, even though I consider many of them second-best solutions.

by mike429 11y ago

Futurebot 11y ago

Hi Mike, I wanted to respond to all your comments, but they're blog-post level and I'm in the middle of writing a book so I can't properly do them justice. A very short answer to just some of your questions on government size and the innovation/social support question: 1) The Scand. model shows that larger (and more importantly well-run, and smarter) government is completely compatible with innovation and business creation (as well as high social mobility.) Stronger social supports mean more risks, which means more innovation and businesses. Size is a red herring, as I'll discuss below, though. 2) The "Freedom indexes" aren't wrong per se, in that they show what they purport to show, but the way they've been interpreted / designed is to always support the ideas that less regulation always and everywhere equals growth, even "good" growth. The cultural environment they were created in doesn't allow for much else. That doesn't mean they're useless; it just means that they have to be interpreted contextually. 3) Culture matters. A lot. A society that has a baseline of good infrastructure (broadly construed, not just physical, but social and technological) plus a culture of entrepreneurialism is likely to produce more innovation even with 50% marginal tax rates. I'd add for all of the above is that the environment for innovation can be thought of like the range of temperatures compatible with life; there's a margin where innovation will likely go down at either end of the spectrum: - If your MTR is too high, people might actually move or decide its not worth it to start a business. The issue is that the actual level and the level pushed by the economic right are very far apart. Scand. / France / Germany shows that 50-60% MTR works just fine, but we could easily imagine that a 90% rate would have the opposite effect. - If your MTR (and hence ability to fund the aforementioned infrastructure [in this case everything from university tuition to public transportation to government grants for businesses to social welfare to allow people more freedom / privation protection]) is too low, you can lose innovation potential because too many people spend heir time and energy just trying to survive or get to the "baseline" of innovation (like working survival jobs instead of studying.) Even small-scale cash handouts in many developing countries to would-be entrepreneurs can bolster innovation and growth, as a number of previous and extant experiments have shown. - Regulation and government size are often explained in terms of "number" or "size", but these should be considered complete red herrings. What's more important are good design, responsiveness to changing circumstances, good administration, hard-to-corrupt regulators, and understandability. Many of the Scand. countries, NZ, and especially Singapore (for all its faults) show that regulation can be done in a way that protects people and does not squash business. The proper way to frame this is not to think about "too many" or "too big" but "bad" and "stupid." Bad/stupid regulation can kill business, but good/smart regulation can actually support it (one way is to allow certain kinds of businesses which lines to color inside AND to let them know that they are not being undermined when their competitors cheat - standard regulations means a level playing field for businesses in many cases, particularly ones in well-trodden industries.) The other thing I'd say, which is very interesting, is that even though there's some disagreement on the causes and the extent of many of the inequality issues, the solutions are weirdly convergent. Left-wing intellectuals with a technological bent, realistic right-wing intellectuals who have given up on a complete dismantling of social welfare provision, and technologists of the techno-libertarian (both left and right) variety have spoken in favor of the GBI, which would kill several birds with one stone: With a proper GBI, you wouldn't need TANF, SNAP, WIC, social security or any of those. You would still need a proper UHC, and would probably need top ups for those with disabilities, but we could get to the "post-Scandanavian" model of social democratic capitalism if it was done on a large scale. Politically unlikely for another half-century, in my estimation, but a far better solution than most of the others. The "standard" list of suggestions (like not gutting SS) takes into account political likelihood, even though I consider many of them second-best solutions.