Sunday, July 25, 2004

Yet another nail in the coffin of right-wing dogma

Last week I mentioned that New Zealand had placed third on the Economic Freedom of the World Index. An important part of this index - and an important part of the right-wing definition of "economic freedom" - is "small government". The idea is that states where government expenditure as a percentage of GDP is low are free-er (in an economic sense) than states where it is high. Unfortunately, it's not true.

I particularly like the way the right-wing idealogues have been hoist by their own petard here. It's their index, they're the ones handing out the scores, and yet it says the exact opposite of what they want it to say: larger government (on average) equals greater economic freedom.

Needless to say, this rather undermines the National/ACT/BRT dogma of reducing government expenditure as a percentage of GDP. If the goal is to increase economic freedom (rather than simply redistribute income from the poor to the rich via tax cuts), then reapplying the "sinking lid" and starving government services isn't the way to do it.