Small government is a term generally used in liberalism, especially by political conservatives and libertarians to describe a government with minimal involvement in certain areas of public policy or the private sector, especially matters considered to be private or personal. It is an important topic in classical liberalism, libertarianism and conservatism, but one questioned by supporters of (for example) big government.
In Australian politics, the Labor Party has traditionally been perceived as the party of big government while the Liberal Party is the party of small government. Of the 34 advanced economies, Australia's revenue is the ninth-lowest and spending the seventh-lowest.
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.
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. However, 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.
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. By 1990, Hong Kong's per capita income officially surpassed that of the ruling United Kingdom.
After financial reforms beginning in 1984—first "Rogernomics" and later "Ruthanasia"—successive governments transformed New Zealand from a highly regulated economy to a liberalized free market economy. The New Zealand Government sold its telecommunications company, railway network, a number of radio stations and two financial institutions. These reforms were initially implemented by the Labour Party, which has since reverted to its social democratic and interventionist outlook; whereas the centre-right New Zealand National Party has taken up the cause of small government and continues to promote private enterprise, low taxation, reduced spending on social welfare and overall limited state interference. Small government is associated with conservatism in contemporary New Zealand politics.
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 Margaret Thatcher government's policy was privatisation, 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 privatisation harms social programs for the poor. This argument is particularly heard in connection with the railways and the National Health Service (NHS). Small government supporters, such as the British author and journalist James Bartholomew, point out that although record amounts of funding have gone into social security, public education, council housing and the NHS, it has been detrimental to the people it was intended to help and does 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 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".
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 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.
[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.
The current "small government" movement in the United States is largely a product of Ronald Reagan's presidency from 1981 to 1989. Reagan declared himself a small-government conservative and famously said:
Government is not a solution to our problem; government is the problem.
This has become the unofficial slogan of the Tea Party movement and conservative commentators like Glenn Beck and Rush Limbaugh. The Tea Party movement claims the United States used to have a small government and has turned away from that ideal. Generally, members of the Tea Party support the Republican Party and often run against moderate Republicans in the primary elections.
The libertarian-wing of the Republican Party, which includes politicians such as Ron Paul and his son Rand, is particularly strong in its support of small government in contrast with the neoconservative-wing, which favors large defense spending and the Christian right, which wants a federal government that would enforce what they see as Christian morality.
A 2013 Gallup poll showed that the majority (54%) of Americans think the government is trying to do too much.
Madrick, Jeffrey G. (2010) . "1: Government and Change in America". The Case for Big Government. The Public Square. Princeton, New Jersey: Princeton University Press. p. 10. ISBN 9781400834808. Retrieved 2018-09-23.
[...] there really is no example of small government among rich nations. The size of government grew across all the world's rich nations, particularly in the twentieth century, and the rate of economic growth only increased.
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