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Noah Smith

What Do Rich Countries Have in Common? Big Government

Weak and poor countries have just the opposite.
That's one extreme.

That's one extreme.

Photographer: Justin Sullivan/Getty Images

Today’s conservatives are almost universal in their insistence that big government is bad. Libertarian intellectuals, who drive much of the elite opinion in the conservative movement, will attack the state from any possible angle. And economists, in the past, have sometimes provided the theoretical firepower for those libertarian ideas, making models where markets handle everything in society, and government can only bog things down. My old macroeconomics teacher, Chris House of the University of Michigan, once declared that the economic facts lean to the right. 

But even if House were correct -- and I think there’s a fair amount of evidence against his claim -- there’s a big problem with his observation. It only holds locally. If you do an empirical study and you find that more government bureaucracy is bad for the economy, what you’ve found isn't that this is true in general -- only that it’s true at one particular moment in time.