Sovietisation Revisited

A recent article in The Sunday Times (UK) discusses creeping dependency on the public sector. In previous posts we have discussed the problem of government spending in a declining economy, and the concern that government's share of the economy may go past the optimum.

It is clear that, at least in large parts of the U.K., things have probably gone well past the optimum. In Northern Ireland, for example, the state controls 77.6% of spending. We are reluctant to 'push the red', but it is looking like the U.K. is heading for economic collapse along the lines of the Soviet Bloc in the late 1980s and early 1990s.

Economies can only function properly if there are many decision makers. If economic decisions are concentrated in the hands of the state, inefficiencies are too great for the system to gainfully employ the population. One need only to look at the history of the Soviet Union to see the failure of that direction.

If these were saner and more rational times, perhaps Britain's demise could serve as a warning beacon to nations contemplating expanding their public sectors. Unfortunately, the siren song of 'stimulus, stimulus, stimulus' sounds too loudly in the ears of the citizenry.