IT’S over. The West’s big government way of doing things is coming to an end. For six years, the financial crisis has rumbled on. The longer it does so, the clearer it becomes that we are not watching a global crisis, but a Western one. From Spain and Greece to Britain and America, we are witnessing the death of the idea that you can run a burgeoning welfare state on the back of a shrinking wealth-producing base.
In every Western democracy, over the past century, government grew. Officialdom expanded because officials slowly but surely discovered how to live beyond their tax base. Manipulating the money and over-borrowing allowed Western elites to subvert democratic constraints and spend without taxing.
As a consequence, limited government has been replaced by Leviathan. In many Western countries, the state sector has now reached a size that would have seemed unthinkable to mainstream politicians just a generation ago. Many supposedly free market countries now have larger state sectors than those nations that spent most of the past century following Marx.
But the financial crisis repudiates the notion that government can forever live beyond its tax base. Greece might be the first modern Western state to discover that you cannot indefinitely borrow to sustain a lifestyle you do not earn. It will not be the last.
Showering the economy with cheap credit might have created the illusion of prosperity for a while. The short-term boom might have generated enough additional tax revenue to make it seem sustainable. But ever stronger doses of cheap credit cannot ultimately hide the decline in competitiveness that Western welfarism has produced.
Across Europe, Britain and America, we have only managed to maintain living standards by borrowing off the dynamic, productive non-Western world. Within the space of a generation, the West has gone from a position of global economic pre-eminence to bailout beggar.
Should we despair? Are we doomed? Actually, no. At the precise moment that maths makes our big government model unsustainable, technology means we can do without it.
This year, public officials will spend something like £30,000 per family buying public services for you. Just imagine if you could purchase services bought in your name for yourself?
Instead of having to stand in a line to wait for what you are given, imagine if you could manage your family’s own health account, with all your medical records stored on your own iPad? Rather than having your child’s education shaped by catchment areas, imagine if you could tailor-make a personalised curriculum, funded from an individual learning account?
The constant justification for more officialdom is that we need other people to decide things for us. Left to our own devices, claims the man in Whitehall, we would not know what to do.
Thanks to the internet, no one needs to be left to their own devices at all. It puts each of us at the centre of a vast, sprawling web of collective knowledge. It will enable us to make collective choices and take collective action, but without the state directing us.
The digital revolution will do to government planners in the West what the collapse of Communism did to Soviet planners a generation ago. It is not just that the political economy will change. The technocratic elite that preside over it will be displaced, as we manage with less officialdom.
“But,” I hear you protest, “turkeys don’t vote for Christmas”. Indeed they do not. But when did that stop 25 December from coming round?
Greek politicians might not have run for office promising less officialdom in Athens. Yet the Greek state is still shrinking fast. The laws of maths always prevail against the laws of politicians. And Britain, I am sure you know, is on course to have a larger deficit as a share of GDP than Greece. It is not what the political classes say that counts. It is debt and the digital revolution that will determine our future.
Besides, what is it that makes you assume leaving things to big government is quite so popular? Is it because that’s what the politicians tell you? Wouldn’t you prefer to run your own life instead?
Be happy. Less government might be bad news for politicians. It will good news for everyone else.
Douglas Carswell is Conservative MP for Clacton. His book The End of Politics and the Birth of iDemocracy (Biteback) is out now.