Saturday, 28 September 2013

More Democracy, More Socialism?

Douglas Carswell MP argues against the notion that more democracy means more socialism in his book "The End of Politics and the Birth of iDemocracy". He looks at the history of emancipation in a number of countries and examines the effect on government spending:
"Look at America. Almost every white adult male American had the vote since the era of Jacksonian democracy in the 1830s and 1840s. Yet throughout the whole of the nineteenth century, federal spending as a percentage of GDP never once rose above 3% of GDP during peacetime."
Carswell argues that this is because taxes were relatively flat and, as the many paid them, they voted to keep government small and/or cost effective. Yet in a full direct democracy the electorate can also vote on taxes, introducing the concern for some that they will plunder the wealthy. Switzerland, renown for its long history of direct democracy, has had referenda on taxes and may well do so again. But it turns out that they have a relatively small government, further disproving that more democracy leads to bloated government. Swiss government spending as a percentage of GDP is less than most western countries. For comparison here are the 2011 figures:

UK 47.3%
USA 38.9%
Switzerland 32%

(2011 Index of Economic Freedom[9] by The Heritage Foundation and The Wall Street Journal, reported here.)

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