Small government

Hong Kong has followed small government, laissez-faire policies for decades.

Small government is government which minimizes its own activities. It is an important topic in libertarianism and classical liberalism.

Small government by country


In Australian politics, Labor has traditionally been perceived as the party of big government and the Liberals the party of small government.[1] Of the 34 advanced economies, Australia's revenue is the ninth lowest, and spending the seventh lowest.[2]


The former Prime Minister of Denmark, Anders Fogh Rasmussen, wrote the book From Social State to Minimal State (Danish: Fra socialstat til minimalstat) in 1993, in which he advocated an extensive reform of the Danish welfare system along classical liberal lines. In particular, he favors lower taxes and less government interference in corporate and individual matters.

However, since then, Rasmussen has repudiated many of the views expressed in the book,[3] moving towards the centre-right and adopting environmentalism.[4]

Hong Kong

Hong Kong has followed small government, laissez-faire policies for decades, limiting government intervention in business. Milton Friedman described Hong Kong as a laissez-faire state and he credits that policy for the rapid move from poverty to prosperity in 50 years.[5] While some argue that since Hong Kong was a British colony and Britain was not a free market, Hong Kong's success was not due to laissez-faire policies,[6] it should be noted that during its colonization of Hong Kong, Britain implemented the policy of positive non-interventionism in regards to Hong Kong, which led to its economic success.[7]

A 1994 World Bank Group report stated that Hong Kong's GDP per capita grew in real terms at an annual rate of 6.5% from 1965 to 1989, a consistent growth percentage over a span of almost 25 years.[8] By 1990 Hong Kong's per capita income officially surpassed that of the ruling United Kingdom.[9]

Since 1995 Hong Kong has been ranked as having the world's most liberal capital markets by the Heritage Foundation and the Wall Street Journal.[10] The Fraser Institute concurred in 2007.[11]

United Kingdom

The idea of small government was heavily promoted in the United Kingdom by the Conservative government under the Premiership of Margaret Thatcher. There are differing views on the extent to which it was achieved. It allowed the stock markets and industries to compete more heavily with each other and made British goods more valued in world trade.

An important part of the Thatcher government's policy was privatization, which was intended to reduce the role of the state in the economy and allow industries to act without government interference. Supporters blamed excessive government intervention for much of Britain's economic woes during the late 1960s and 1970s.

Opponents argue that privatization harms social programs for the poor. This argument is particularly heard in connection with the railways and the National Health Service. Small government supporters point out that, although record amounts of funding have gone into transport and the NHS, they are both sub-par and do not represent value for investment.

In the 20th century, small government was generally associated with the Conservative Party and big government with the Labour Party. In the 21st century, both parties have embraced similar economic policies, leading both to be associated with big government.

In addition to opposing government intervention in the economy, advocates of small government oppose government intervention in people's personal lives. The Labour government during the Premiership of Tony Blair was criticized on this score, e.g., by giving unwanted advice about eating, drinking and smoking. This has been dubbed as the 'nanny state.'

United States

The United States is a constitutional republic. At the time the nation was founded, there was disagreement between the Federalists, who supported a strong federal government, and the Anti-Federalists, who wanted a loose confederation of independent states. In adopting the United States Constitution, the states agreed to accept a strong federal government. In The Federalist Papers, Alexander Hamilton, James Madison, and John Jay explained why a strong federal government was necessary. Hamilton wrote, "Not to confer in each case a degree of power commensurate to the end would be to violate the most obvious rules of prudence and propriety, and improvidently to trust the great interests of the nation to hands which are disabled from managing them with vigor and success."[12] The third President, Thomas Jefferson said, “[A] wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”[13]

The current "small government" movement in the United States is largely a product of Ronald Reagan's presidency from 1981–89. Ronald Reagan was a small government conservative. He famously said, "Government is not a solution to our problem; government is the problem.".[14] This has become the unofficial slogan of the Tea Party movement, and conservative commentators like Glenn Beck and Rush Limbaugh.[15] The Tea Party movement claims that the United States used to have a small government and that it has turned away from that ideal. Generally members of the Tea Party support the Republican Party, and in primary elections often run against the mainstream Republicans. The libertarian wing of the Republican Party, which includes politicians such as Ron Paul and his son Rand Paul, is particularly strong in its support of small government, in contrast with the Neoconservative wing, which favors U.S. military might to settle international conflicts in the interest of the United States, and the Religious Right, which wants a federal government that will enforce what they see as Christian morality.

The Libertarian Party has been the most principled and vocal advocacy group for small government in the United States since its founding in 1971.

A 2013 Gallup poll showed that the majority (54%) of Americans think the government is trying to do too much.[16]


  1. Martin, A (2011). "Partisan identification and attitudes to big versus small government in Australia: Evidence from the ISSP". Australian Journal of Political Science. 46.
  2. Colebatch, Tim. "Two new taxes are on the way, but we shouldn't complain". The Age. Retrieved 26 June 2012.
  3. East, Roger; Thomas, Richard (2003). Profiles of People in Power: The World's Government Leaders. London: Routledge. p. 140.
  4. Thompson, Wayne C. (2008). Nordic, Central, and Southeastern Europe. Harpers Ferry: Stryker-Post Publications. p. 72.
  5. The Hong Kong Experiment by Milton Friedman on Hoover Digest accessed at March 29, 2007
  7. Hanson, Daniel. "Positive non-interventionism: The policy that unleashed Hong Kong". American Enterprise Institute. Retrieved 2 June 2013.
  8. Rowley, C. & Fitzgerald, R. Managed in Hong Kong: Adaptive Systems, Entrepreneurship and Human Resources Routledge, UK, 2000. ISBN 0-7146-5026-9
  9. Yu Tony Fu-Lai. (1997) Entrepreneurship and Economic Development of Hong Kong. United Kingdom: Routledge. ISBN 0-415-16240-8
  10. "2008 Index of Economic Freedom". Heritage Foundation and Wall Street Journal.
  11. Economic Freedom of the World Report Economic Freedom Network (Fraser Institute) 2007
  12. Hamilton, Madison, and Jay, The Federalist Papers, p. 151, Signet Classics, 2003
  13. First Inaugural Address, given at the Capitol Building, Washington, DC, Wednesday, March 4, 1801
  14. Reagan’s First Inaugural: “Government is not the solution to our problem; government is the problem.”. Retrieved July 15, 2013.
  15. Don't add Reagan's Face to Mount Rushmore by Dr. Peter Dreier, The Nation, April 3, 2011
  16. Newport, Frank. "Majority in U.S. Still Say Government Doing Too Much". Gallup. Retrieved 2 June 2013.
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