The Spectator reports:
On 26 October last year, the Spanish government shut up shop in preparation for a general election. This duly took place in December but then a strange thing happened: after all the build-up, the arguments, the posters and the television coverage, the result was… nothing. The various parties were so balanced, so mutually distrustful and ill-assorted that no government could be formed. Since last October, therefore, there has been no government in Spain.
One can imagine that the average political correspondent would think this a terrible problem, maybe even a crisis. The Financial Times has referred to Spain ‘enduring’ months of ‘political uncertainty’. This is assumed to be a matter requiring furrowed brows and grave tones. But the economy seems to be taking a different view of the matter. It is bowling along more breezily than in a long time. The growth rate during the final quarter of last year was an annualised 2.9 per cent, which, in these days of dismal Euro-growth, is a star performance — easily beating the pants off Italy, France and even Germany.
I think Belgium once went an entire year with no Government, and did quite well also.
Switzerland probably has the weakest central government in all Europe. It is so puny that it does not even have a minister of education. Yet Switzerland is the most successful of all the European economies if one leaves out small tax havens and oil-rich Norway. Its GDP per capita is £52,000 compared with Britain’s modest £28,000.
Governments generally do not create economic growth, they just inhibit it to varying degrees. Sure they do some good stuff with their tax revenue, but they don’t create the economic growth. Private firms do.
If governments were boyfriends, you would call them control freaks. The controls and regulations are always ostensibly for the good of the people. But the unintended damage is extraordinary and vastly underrated.