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  • Britain, the U.S., and the End of Local Government

    Earlier this week, we pointed out that, under President Barack Obama, the dependency of the states on the federal government has reached a threatening and historic high. As USA Today sums it up, “In a historic first, Uncle Sam has supplanted sales, property and income taxes as the biggest source of revenue for state and local governments.”

    There are lots of reasons to oppose this, ranging from its inevitable inefficiency to the unaccountability it fosters. But the most basic reason of all was one President Reagan understood well: the U.S. is a federal union. When Washington DC comes to set the policies of all the states – and whoever provides the money will indeed ultimately make the rules – the U.S. will have lost a basic part of its history, and of the liberties it was founded to secure.

    But the U.S. will not be alone. If you want to get a sense of how far the process of centralization can go, take a look at Britain. There, local authorities rely on the Treasury for far more than 50% of their expenditures. Depending on how you define the terms, English local authorities receive between 68% and 75% of their funding from central government. And just as President Reagan reduced state dependency in the U.S. in the 1980s, Prime Minister Margaret Thatcher did the same in Britain in the same decade.

    But in both the U.S. and Britain, this was a temporary victory. From the late 1940s through the mid-1970s, the value of locally raised revenue declined from about 50% of expenditures to less than 40%. Many accounting and funding changing since then make precise comparisons difficult, but the fact that locally raised revenue is now no more than 32% shows that the slide towards nationalized finance resumed after Lady Thatcher left office in Britain, just as it did in the U.S. after Reagan.

    The justification offered for this in Britain is that less-well-off areas need extensive central grants if they are to maintain ‘essential’ services. But even the well-off South East of England raises only 30% of its revenue locally, while the worst-off North East raises 22% locally. In short, English local finance is nationalized no matter where you look; it’s just a question of whether it’s 70% or 78% national.

    The idea of trying to equalize services is, in any event, a dangerous one, because what it means is that, no matter how badly a locality does, no matter how ridiculous its policies, it will never have to pay a price for its failings. That simply encourages economic inefficiency, and financial and political irresponsibility.

    True, Britain – unlike the U.S. – is not a federal state. But Britain did once have a great tradition of local government. Sidney and Beatrice Webb, English socialists and – later – supporters of the Soviet Union thought enough of English local government to devote no less than ten volumes to it between 1906 and 1929.

    The Webbs obviously had their own prejudices and preferences, but at least they took the subject seriously. When local government has three-quarters of its money supplied by the central state, it no longer matters all that much. And that is as inefficient and as dangerous in Britain as it is in the United States.

    Posted in First Principles [slideshow_deploy]

    10 Responses to Britain, the U.S., and the End of Local Government

    1. Angela, Newport News says:

      You've said it all. Whoever controls the purse strings controls policy. Welcome to the world of Big Brother, which is exactly what this administration wants.

    2. Wormcreek, Utah says:

      Åre all our politicians brain dead?? Kick them all out and get get over the Obamania that is sweeping the country. We need well considered, well thought out policies and practices implemented by people interested in doing the right thing for the country, not just in their own political career. History teaches great lessons to those who are not too arrogant to be taught.

    3. Dennis A. Social Cir says:

      This is up obamas alley, he wants all of us to depend on the "guvernment" for all we have. No more days of working for ourselves, just work for the "guvernment" as it will supply whta we need. What a joke!!!!

    4. bill wilson cartersv says:

      people wake up!this is george sorros plan to destroy america. he has funded the democratic party( and bill clintons foundation)millions of dollars.he wants to destroy us and theyare selling our country out to him.look out side the bubble, it is happening ,and has beenfor years.

    5. David E Aldridge, Dayton, OH says:

      We currently home school 4 of my grandchildern and the difference in “state required” test scores show that it works. How about sending your kids to a DC public school Mr President. The Secret Service can’t guard them? What about the other kids, don’t they have a right to a safe school?

    6. Angel, Ohio says:

      I wrote Ted Strickland the Governor of Ohio and asked him to not take the stimulus funds. If he takes it he will be selling his and his states soul to the devil. If the federal government moves in on private companies and banks what is to stop them from taking control of the states.

      States need to take care of themselves and cut their financial ties with the federal government.

    7. Lynn B. DeSpain says:

      It is too sad and too bad that it has come to this, our once great Nation, brought to its knees, afraid to speak its mind, afraid to stand. Asking others to forgive our arrogance, our ignorance. The Eagle bowing before the mice. A pity.

      Get off your damn knees you bunch of sniveling whimps! Face it, most all of you voted the bastard in. Stop whining and start figuring out ways to fix it!

      I'm an American and damn proud of it, and appologize to no one for it. So shoot me!

      Don't go showing me pictures and graphs and numbers, telling me that we have all these problems with this that and the other in this Country, that Country and the World. Live with it!

      Life is a whole lot simpler if you just learn to live with it, or get rid of it, either way!

      I mean, do I really care about Global Warming? No! I don't believe it, but even if true, I don't care. People born then won't know the differnce anymore than I noticed things when I was born, all seemed normal. That's reality!

      Do I care about going Green? Only if it cost me more money! If it going to cost more, forget it, still with oil and natural gas and coal!

      Do I care about 'Spotted Owls? No. Never met one. Never met a Dinosauar either! I say log the trees and crate the jobs. Shoot the Sea Lions so that the Fishermen can fish and make a living for their families. The very idea that a frog is more important than humans earning a living is revolting to me, which brings me back to being an American. America was brought about through Revolution, not through compromise! Remember this if nothing else.


    8. Moose says:

      Maybe Texas Governor Perry was correct. Maybe it is time to secede from the United States.

    9. Frank from Canfield, says:

      Like the greyhound chasing the mechanical rabit, the Federal Government has the states chasing after their own money. Federal tax rates need reduced and state tax rates need increased. It cost something to be a citizen, but I am a citizen of a State that is part of a union. I am more concerned about the roads, schools, and resources here in Ohio, than I am about dams for salmon in Washington, or pig odors in Iowa, or fruit flies in Hawii. Every time the federal government takes our money they take part of our liberty.

    10. Patricia from TN says:

      this sums it up;

      The idea of trying to equalize services is, in any event, a dangerous one, because what it means is that, no matter how badly a locality does, no matter how ridiculous its policies, it will never have to pay a price for its failings. That simply encourages economic inefficiency, and financial and political irresponsibility.

      A very well written article.

      Once an entitlement is put in place, it can never be removed. We have raised a mediocre society without pride, as we taught the generation younger than 50 that "it's free, so have seconds". "It doesn't pay for me to have a second job and feed my family, as it all goes to taxes will be the future by 2010."

      The current administration is just that, current thinking liberals only worried about their next re-election chances.

      As the "Mr. Obama" administration keeps moving very quickly in getting us closer to socialism, please America wake up and demand our great leaders to review the policies and take the time

      to "think" instead of "act" immediately.

      I wonder if Utah or Wyoming has enough land to support a Tent City Community that would be booked full of reservations by 2010?

      Just read the books Mr. Obama wrote and you can see where our future is…

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