ABSTRACT
It is a familiar and now well documented fact that governments expand as societies grow richer. Even the economic recessions of the 1970s and early 1980s can be seen as only a hiccup in this general trend, at any rate unless the depression proves permanent. The reasons for this fact are not difficult to find. Depression involves government in higher social security and welfare payments, and in job creation schemes for the unemployed. While welfare payments may become more stingy under the taxpayers’ backlash, there is still the problem that a fall in the gross national product (GNP) makes it harder to reduce the share of that product absorbed by the rather inflexible requirements of government; indeed the proportion of total (measured) wealth going to government may actually increase, even if total public expenditure in terms of constant prices is held steady or is slightly reduced.
