The new leviathan: the big state is back

On both sides of the Atlantic, governments have learned to take sweeping wartime-style powers, and citizens have learned to accept it, or even demand it. This mindset will not disappear with the end of the crisis. Rather it will endure and lead to a bigger role for government for some time to come in the same way that the second world war did…

As the population gets older and richer, it wants more spent on healthcare — and, importantly, care for the elderly. Covid has accelerated this…

When Thatcher and Reagan rolled back the state, they did so after huge debates about the nature of liberty. But now, the state is expanding without any similar discussion: here and worldwide. It is hard to look anywhere in the Western world and see a major economy pursuing a small-state lower-tax strategy. We appear to be in for a decade where the frontiers of the state are rolled forward across the Western world.

This approach is not, by definition, wrong. Johnson and Biden are confronting a very different set of problems to Thatcher and Reagan. But there are obvious risks in the idea that government action is the solution to almost every problem.

One thing is for sure: the bill for all this state spending will come in eventually. Governments may be able to borrow cheaply at the moment, but the last financial crisis showed just how quickly things can change. And the biggest question of all is whether it will work. Can government spending really prompt a new wave of technological innovation and bring growth to areas left behind by the modern economy? Or will all this turn out to be as much of a fallacy as the big-state arguments of the 1970s? It is a huge gamble — and one that Johnson and Biden are betting the future of the West on.