Читать книгу A U-Turn on the Road to Serfdom - Grover Norquist Glenn - Страница 4

The IEA was honoured to host Grover Norquist, president of Americans for Tax Reform, for the 2014 Hayek Memorial Lecture. Norquist took as one of his main themes the observation that we are on the road to serfdom, as predicted by Hayek in his book The Road to Serfdom. Norquist laid out an action plan, grounded in political economy, to suggest how the US could do a U-turn and return to being a low tax and low regulation economy.

Grover Norquist expressed optimism that the tide could be turned in the US. There were a number of reasons for this. Firstly, there is a large coalition of people with different priorities but who believe that the state should ‘leave them alone’. There is little in common, for example, between those who wish to have the right to bear arms, those who home-school their children and those who are trying to start small businesses. However, they all wish to be left alone by government to pursue their different interests and their well-being. At the same time, the coalition of people who wish to increase the power of government is becoming harder to hold together. Secondly, in the US, there is a well-thought-out plan – the Ryan plan – for reducing government spending at the federal level to more sustainable levels. There is also competition between states. States – many of them in severe financial trouble as a result of high spending, low economic growth and large future pension commitments – have an incentive to reduce taxes and regulation to attract business.

The future of the US economy is certainly relevant to the UK. However, not all the analysis of our Hayek lecturer could be applied directly to the UK’s political and economic situation at the present time. It is necessary to draw lessons from the analysis in order to create the sort of momentum that Grover Norquist described in the US. For that reason, we asked three economists to comment on the lecture and provide some further European context.

In his chapter, David B. Smith discusses the empirical evidence that shows just how far we have moved down the road to serfdom. In countries such as the UK, the government is spending about as much as the people. A peace-time economy is being run with war-time levels of government spending. The levels of taxation necessary to finance government spending also have a serious impact on economic growth. In order to effect the change discussed by Grover Norquist, it is necessary to educate opinion formers about the damage done by current policies.

Matthew Sinclair’s commentary deals with the important issue of fiscal decentralisation. In the UK we have one of the world’s most centralised taxation systems which contrasts starkly with the situation in the US. As Matthew Sinclair explains, this not only makes it more difficult to reduce the size of the state, it also leads to less efficient service provision. Sinclair details a plan to take the UK system of local government finance closer to that in the US.

Finally, Nima Sanandaji develops Grover Norquist’s observation that it is necessary to build a coalition of people who have a strong belief in – and interest in – economic freedom. Drawing on his experience of Sweden, Sanandaji shows how radical reform can create interest groups that wish to promote further reform as well as wish to protect the reforms that have already happened. Sanandaji has two other observations. The first is that entrepreneurial activity can undermine entrenched government interests in unexpected ways. The second is that taxes should be made as visible as possible so that people understand the true costs of government spending.

The 2013 Hayek lecture, together with the commentaries, form an important contribution to the discussion of the role of government in economic life. As government spending and taxation have increased in recent years, it is important to discuss both the economic consequences of this and the political economy mechanisms that might lead to a change in policy. As such, the IEA commends this collection.

Philip Booth

Editorial and Programme Director

Institute of Economic Affairs

Professor of Insurance and Risk Management

Cass Business School, City University

March 2014

The views expressed in this monograph are, as in all IEA publications, those of the author and not those of the Institute (which has no corporate view), its managing trustees, Academic Advisory Council members or senior staff.