Elsewhere again

So, I’ve got back into the paying part of The Times again:

Gross domestic product is the value of everything done by everyone in Britain in a year. In 2020-21, the government will take 34.3 per cent of this to spend via taxation. The richer pay more than the poorer, as should be the case, but there is no economic reason why the total should be this large. It doesn’t cost that much to run a country.

Taiwan and Singapore run entirely reasonable places to live on 10 to 20 per cent of their GDP. Perhaps more comparable are the US on 26 per cent and Ireland with 31 per cent. Then at the other end of the scale there’s Denmark on 51 per cent, or France, 48 per cent. Take your pick.

31 thoughts on “Elsewhere again”

  1. But do Taiwan or Singapore have great universities hosting political economists the like of the erudite Professor Murphy? I think not.

  2. Can’t recall exactly. In the 8 – 11 % range, around there at least. £150 billion -ish of a £1.8 trillion GDP is another way of looking at it. Not accurate as it depends how you count etc, but roughly right.

  3. Bloke in North Dorset

    “What percentage of GDP is the NHS?”

    I looked in to this recently, off the top of my head we’re on just over 9%, which is marginally below the OECD average of just under 10%. Scandis are around 11%, Germany just over 10%.

    However it is difficult to compare as some parts of social care, especially for the elderly, are in health in some countries and welfare in others. I didn’t get round to adding welfare and health together in any formal way, but a quick scan of the numbers led me to believe that if you add welfare and health it’s much closer, except for Scandis.

  4. But don’t you economists evaluate spending by government as contributing to GDP on a £ by £ basis? In which case much of this spending pays for itself.

  5. bis +1

    No idea what the discount is after discounting all the crap / diverstity and everything else, but yep, sure as hell overstating it in nominal terms whatever the number is.

  6. A truth there, but not relevant to this particular point being made. How govt spending contributes to GDP is interesting. But this point is about how much of GDP flows through government, a slightly different point.

    BTW, the underlying point I’m making is about the difference between “government spending” and “redistribution by government.” It is only that spending part, not the redistribution part, which has the GDP contribution you point to. In the GDP equation “G” is such spending, not redistribution.

    But, still, no, that GDP effect doesn’t mean such spending pays for itself. Even when we worry about it the effect is more subtle. Some (and the point is very much *some*) G more than pays for itself. A criminal justice system, keeping the Frog hordes at bay, that sort of thing. Some is a complete deadweight – diversity advisers.

  7. Bloke in North Dorset

    Just opened my desktop, here’s the 2016 numbers:

    United States 17.2
    Switzerland 12.4
    Germany 11.3
    Sweden 11.0
    France 11.0
    Japan 10.9
    Canada 10.6
    Netherlands 10.5
    Norway 10.5
    Belgium 10.4
    Denmark 10.4
    Austria 10.4
    United Kingdom 9.7
    Australia 9.6
    Finland 9.3
    New Zealand 9.2
    Spain 9.0
    Portugal 8.9
    Italy 8.9
    Iceland 8.6
    Slovenia 8.6
    Chile 8.5
    Greece 8.3
    Ireland 7.8
    Korea 7.7
    Hungary 7.6
    Israel 7.4
    Czech Republic 7.3
    Slovak Republic 6.9
    Estonia 6.7
    Poland 6.4
    Luxembourg 6.3
    Mexico 5.8
    Latvia 5.7
    Turkey 4.3

    Average 9, median 8.9 (my calculations)

    I misremembered Germany, getting old 🙁

    The numbers are a mixture of estimates and provisional.

  8. See people? One only has to quote from the Joy of Tax & one gets taken as making a serious economic point.
    invaluable tome.

  9. @BinD

    From memory, the NHS is only less than perfect because evil Tories starve it of cash.

    The Americans spend more on their health system.

    Therefore the US system is better than the NHS


  10. I read somewhere recently that the combined government spend on culture, arts, sport and overseas aid was over £50bn, a colossal sum, but I cannot remember the source.

    More than £50bn on this!! And people are claiming Austerity?

  11. “Spending vs distribution”

    Interesting, but how on earth can one calculate redistribution (genuinely). Isn’t that the amount that you are provided (NHS, education, etc) that is different from what you pay in tax towards that. Some receive / some pay.

    Take education. There is a massive “Department of Education”. And then there are schools etc. The schools bit could be redistribution (voucher system plus a few accountants / cash clerks?).

    But how does one calculate that? Say you contribute £8K of tax for a £5K voucher and the next person contributes £2K for the same voucher? Is the “redistribution” £3K or £5K?

    And, of course you pay £9K and £3K respectively because of all that wonderful “value” that the DOE provide (..), so that’s £1K of “spending”?

    Or do they do it differently.

  12. Sorry. In total GDP terms, that would be: is “redistribution” £3K or £10K (2x £5K)? And of course it’s £2K of “spending” (£1K per head).

  13. We now spend more than in 2001 – but is the country better off?
    Housing is more expensive – the flat I could buy on £23k p.a. in 2001 now needs about £50k + p.a.
    Universities cost more and we have Islamic terrorism.

  14. Gah, you made me sign up for an account! Try not to write more than two articles per week.

    “much of this spending pays for itself” — when I find myself tempted to think such things it usually helps to stop thinking in terms of money and start thinking about people and resources doing activities. E.g. high government spending amounts to the government deciding what a lot of people do and what a lot of things get used for.

  15. I’ll be lucky to get two a month. Two a week there, at their rates of pay (£250 for that piece, £600 for a full column), would keep Schloss Worstall ticking over very nicely indeed. So, won’t happen.

  16. Wonder what number of employees each nations equivalent of the NHS have? Or perhaps more specifically, what number of middle management dead-weight do they have.

    That’d be a better comparison of where we are.

  17. Two a week there, at their rates of pay (£250 for that piece, £600 for a full column

    Blimey, is that what Kamm gets for his drivel on apostrophes? Nice work for some.

  18. The likelihood is that Kamm gets substantially more, as he also (anonymously) writes many of the leaders on the letters page, as well as his regular whine about low productivity in a high immigration economy.

  19. http://www.oecd.org/els/health-systems/Health-at-a-Glance-2017-Chartset.pdf
    See chapter 7
    Has UK health spending at 9.7% of GDP (so agrees with the excellent BiND ), but looking at the shading about 1.7% of that is non-NHS , or described as voluntary.
    So I guess the compulsory bit of 8.0% roughly is the NHS.

    That 1.7% is doing a lot of work though – I’m guessing this is opticians, dentists, elective stuff done privately, Slimming World participants not funded by the State and much else that is good.
    Overall we’re above the OECD average. That doesn’t matter to lefties who insist that because the NHS number is below the OECD average then tory Great Britain is shit.

  20. Comparing the UK to a city state, and none of your fans saw through the ruse. I’m sure the City of London could survive on even less than Singapore is it were free to do so.

  21. @ Dave C
    Are you aware that Taiwan is a large island? Do you care? Taiwan has a population of more than 23million of whom less than 4 million live its largest city (and capital) Taipei. That makes it reasonable comparable with the UK where between 15% and 20% of the population live in Greater London

    The City of London not only survives on less – it subsidises the people in the neighbouring municipalities (apart from Westminster) who all suffer from socialist local government.

  22. @john77. I couldn’t find figures on Taiwan to compare. I visited a couple of sites, but they don’t list Taiwan. E.g. Wikipedia tax as % of GDP page.

  23. @DaveC
    is a good site
    TW GDP is about 520bn USD a year
    TW govt spending is about 80bn USD a year ( you need to use arithmetic and the exchange rate for this, invented not by Northern Europeans so I’m guessing this process is ok with the lefty members of the panel ).
    So govt spending to GDP is around 16% in TW. It must be awful. Tax to GDP will be a little less as the govt is overspending.

  24. If it’s less than 4 million includng New Taipei City, Taoyuan, and the remaining burb not technically in Taipei then I declare my gast flabbered.

  25. Bloke in North Dorset

    “Overall we’re above the OECD average. That doesn’t matter to lefties who insist that because the NHS number is below the OECD average then tory Great Britain is shit.”

    Until you point out that the US sounds more on health then it becomes about access. However it’s never about outcomes because the NHS is shit on those measures.

    18th – http://thepatientfactor.com/canadian-health-care-information/world-health-organizations-ranking-of-the-worlds-health-systems/

    20th – https://en.m.wikipedia.org/wiki/List_of_countries_by_quality_of_healthcare

  26. @ Dave C
    Do you need Wikipedia to tell you that Taiwan is a large island? Have you never looked at an atlas?
    @ BiG
    You may know more than I since I’ve never been there but official figures say Taipei is less than 4 million and there are other significant cities (e.g Tainan with a population of nearly 2 million, Kaohsiung and Taichung each with nearly 3 million) so Taiwan is *definitely* not a Taipei city-state.

  27. @BIS…

    “But do Taiwan or Singapore have great universities hosting political economists the like of the erudite Professor Murphy? I think not.”

    Unfortunately, we have more than our fair share of such twats.

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