Do You Wanna Make Tea at the BBC? Do You Wanna Be, Do You Really Wanna Be a Cop?

Jesse Walker | January 27, 2009

The state swallows the British economy:

Parts of the United Kingdom have become so heavily dependent on government spending that the private sector is generating less than a third of the regional economy, a new analysis has found....

In the northeast of England the state is expected to be responsible for 66.4% of the economy this year, up from 58.7% when a similar study was carried out four years ago. When Labour came to power, the figure was 53.8%....

Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% -- up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.

[Hat tip: Quasibill.]

Comments

JBinMO|1.27.09 @ 4:24PM|#

"When Labour came to power, the figure was 53.8%...."

Thats probably a more significant statement.

Warty|1.27.09 @ 4:30PM|#

A whole nation of Johnstowns.

|1.27.09 @ 4:32PM|#

"When Labour came to power, the figure was 53.8%...."

Thats probably a more significant statement.

More? Why? That's like saying that the government being too big when Bush became President was automatically more significant than it getting even bigger during his eight years. In a lot of ways, the current movement is more significant in most cases.

Rationalitate|1.27.09 @ 4:32PM|#

I posted about this in my blog, but the gist is: these numbers are meaningless. State control in the economy can come in two ways - either direct spending/taxation, which shows up in studies like this, but more deviously, it inserts itself in the form of regulation, which isn't quantifiable, but in many cases can be more pernicious.

So, for example, though we might have a bureaucracy that covers the cost of highways and roads with user fees (a vaguely market-friendly solution to the alternative of everyone paying for the roads out of general tax revenues, whether we drive on them or not), there's the inconvenient fact that none of it would be sustainable without the zoning and parking regulations that force us into low-density patterns, and hence make the user fee-funded highway system appear to be self-sufficient. When in reality, it would collapse in a second if people were allowed to build as densely as they pleased.

|1.27.09 @ 4:35PM|#

Career opportunities, the ones that never knock
every job they offer you is to keep you at the dock!

Old Bull Lee|1.27.09 @ 4:40PM|#

So their economy is like our current health care system. And what the rest of our economy will be like in a decade or two.

Hogan|1.27.09 @ 4:45PM|#

Rationalitate,

As an urban planner and zoning bureaucrat, I have to disagree with the argument that it's zoning regulations that force people out of the dense cities they yearn for, and that (via your link) the main consideration against heightened density comes from municipal administrators concerned about keeping pace with infrastructure. In my experience, restrictions on density in rural or suburban districts are primarily driven by the political will to appease their residents (who, broadly speaking, loudly and energetically oppose increased density or land use intensity in rural and suburban districts). Far from being the force behind density restrictions, municipal planners and infrastructure providers tend to be the most vocal (and often, only) champions of removing them.

robc|1.27.09 @ 4:53PM|#

Im not sure people want to live in dense cities.

Some do, but it seems to me the regulations preventing new neighborhoods are at least as bad as the ones preventing dense living. Maybe 20-50 years ago it was the other way around.

Rationalitate|1.27.09 @ 4:54PM|#

Hogan,

I never said that infrastructure was the reason that we have anti-density regulations, just that the infrastructure wouldn't be possible without them. (Indeed, you are correct in saying that local residents are the biggest proponents of zoning. Though, the cause and effects become blurred when you look back in time, and see that government-funded roads to a large extent precipitated the land use regulations, not because residents didn't think they'd be able to pay for the roads, but because they just didn't like the mobility that they afforded to less wealthy citizens.)

And by the way, you mention local residents clamoring for restrictions in the suburbs and rural areas, but I think that this is a pretty pronounced phenomenon even in urban areas, where height restrictions and minimum parking regulations abound.

Rationalitate|1.27.09 @ 4:59PM|#

Im not sure people want to live in dense cities.

This isn't the proper way to look at it - rather, the question should be: where would people want to live if they had to incur the full cost of their decisions? Sure, everyone would like to live on a private island and be connected to the world by private jet, but this is very expensive. Similarly, it's very expensive to demand that all the land around you be low density - essentially you'd have to buy it all up to ensure this. Unless, of course, you've got the government going around threatening your neighbors with guns if they build more than you want (i.e., modern land use regulation in action).

Some do, but it seems to me the regulations preventing new neighborhoods are at least as bad as the ones preventing dense living. Maybe 20-50 years ago it was the other way around.

We can go back and forth forever about which is "worse," but it's pretty undeniable that traditional density-limiting regulations (height maximums, parking minimums, density maximums, etc.) are far more pervasive than the New Urbanism regulations that you're talking about (urban growth boundaries, maximum parking regulations, limiting greenfield development, etc.). At least in the United States.

Jesse Walker|1.27.09 @ 5:02PM|#

these numbers are meaningless. State control in the economy can come in two ways - either direct spending/taxation, which shows up in studies like this, but more deviously, it inserts itself in the form of regulation, which isn't quantifiable, but in many cases can be more pernicious.

I don't see how the first sentence follows from the second.

|1.27.09 @ 5:07PM|#

Where is Ragnar Danneskjöld when you need him?

ed|1.27.09 @ 5:11PM|#

Socialism with a toothless face.

Rationalitate|1.27.09 @ 5:18PM|#

I don't see how the first sentence follows from the second.

This number only quantifies direct spending, and says nothing about the unquantifiable regulations that skew economic activity one way or the other. So I guess the number represents something, but it certainly doesn't come anywhere close to encapsulating the amount of state meddling in the economy.

If you've got an economy that only taxes and spends (say, 10% of GDP) and doesn't regulate, then you'll get a number of 10%. However, let's say you have an economy that doesn't tax, but regulates a lot - bans illegal drugs, licenses doctors, regulates the size of buildings, regulates labor, sets production quotas, etc. They're going to show up with a number of 0% despite heavy government intervention in the economy. This is what I'm trying to get at.

TallDave|1.27.09 @ 5:39PM|#

No wonder the UK is so much poorer than the U.S.

|1.27.09 @ 5:43PM|#

Rationalitate:

Another way of putting it is that ignoring the cost of regulation is like saying that a military draft is "cheaper" because the government doesn't pay the draftees as much. But that ignores not only the value of freedom, but also that the draftees are not doing whatever they would be doing otherwise, presumably more productive.

Or, TANSSAAFL.

|1.27.09 @ 5:45PM|#

We can go back and forth forever about which is "worse," but it's pretty undeniable that traditional density-limiting regulations (height maximums, parking minimums, density maximums, etc.) are far more pervasive than the New Urbanism regulations that you're talking about (urban growth boundaries, maximum parking regulations, limiting greenfield development, etc.). At least in the United States.

The tricky part being that even places that claim to be New Urbanist or smart growth or whatever end up opposing high-density zoning, often trying to rename "don't build anything new near me and transform our neighborhood" as "smart growth." This ends up with the "build mass transit near us in the charming city center, but don't build the density to support us." See DC, for example.

Mike Laursen|1.27.09 @ 6:00PM|#

So I guess the number represents something, but it certainly doesn't come anywhere close to encapsulating the amount of state meddling in the economy.

If I understand your criticism, you're just saying that there could be more meddling than measured by this metric. So, we can say that the number represents a minimum estimation of the amount of state meddling in the economy.

Invisible Finger|1.27.09 @ 6:16PM|#

That just goes to show you - their stimulus packages were far too small.

Jesse Walker|1.27.09 @ 6:33PM|#

it certainly doesn't come anywhere close to encapsulating the amount of state meddling in the economy

Is it supposed to encapsulate everything? I see it as one of many areas to examine. I certainly don't think it's meaningless.

Jordan|1.27.09 @ 6:47PM|#

It's like looking into a crystal ball. Hope and Change!

Paul|1.27.09 @ 7:08PM|#

Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6%

UK Newspapers reported this as:

Private Spending Soars to Dizzying 12.4% in Northern Ireland.

|1.27.09 @ 8:07PM|#

UK Newspapers reported this as: Private Spending Soars to Dizzying 12.4% in Northern Ireland.

Really? So they're innumerate as well as utterly dependent on the state? Or maybe there's something magical going on with the missing 10%. Maybe that's where the rest of the EU comes in?

Jesse Walker|1.27.09 @ 8:21PM|#

I believe Paul was making a funny.

TallDave|1.27.09 @ 8:47PM|#

Meh. If Obama were running the UK, it'd be worse