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Government In Retreat
Notes
1 This study is based largely on Richard B. McKenzie and Dwight R. Lee, Quicksilver Capital: How the Rapid Movement of Wealth Has Changed the World (New York: Free Press, 1991). back2 Bureau of the Census, Historical Statistics of the United States (Washington, DC: U.S. Government Printing Office, 1975), p. 770; and Bureau of the Census, Statistical Abstract of the United States (Washington, DC: U.S. Government Printing Office, 1989), p. 593. back
3 Statistical Abstract of the United States (1989), p. 545. back
4 Steve Lohr, "The Growth of The ‘Global Office’," New York Times, October 18, 1988. back
5 Water B. Wriston, "On Track with the Deficit," Wall Street Journal, January 6, 1989, p. A10. back
6 McKenzie and Lee, Quicksilver Capital, p. 69. back
7 David L. Birch, Job Creation in America: How Our Smallest Companies Put the Most People to Work (New York: Free Press, 1987), p. 14. The Small Business Administration estimates of growth in "small" business employment are not nearly as large as Birch’s. Still, the SBA found that in the 1980-86 period more than half of the nation’s new jobs occurred in firms with fewer than one hundred employees (U.S. Small Business Administration, The State of Small Business: A Report to the President [Washington: U.S. Government Printing Office, 1988], p. 38). The growth of small firms has also accelerated in other countries, most notably Great Britain. In Britain, the number of self-employed people expanded by 59 percent between 1979 and 1987, reaching 2.0 million in 1987. The number of businesses registered for tax purposes in Britain grew by an average of nine hundred a week in 1987, a rate triple the 1980 growth rate. This gave rise to claims that Britain was going through an "entrepreneurial renaissance," as much a change in attitude as a change in statistics (Steve Lohr, "A Small-Business Boom in Britain," New York Times, November 29, 1988, p. 31). back
8 Robert Reich, "Corporations and National," Atlantic Monthly, May 1988, p. 79. back
9 Linda M. Spencer, American Assets: An Examination of Foreign Investment in the United States (Arlington, VA: Congressional Economic Leadership Institute, July 1988), p.12. back
10 Martin Tolchin and Susan Tolchin, Buying into America: How Foreign Money Is Changing the Face of Our Nation (New York: Times Books, 1988), pp. 6-8. back
11 As reported in "The Soaring Payoff from Higher Education," The Margin (January/February 1990), p. 22. The same article notes that estimates of the high school-college earnings gap differ but generally show an increase in the 1980s. For example, University of Maryland economist Frank Levy estimates that in 1979 male college graduates aged 25 to 34 earned 18 percent more than their high school counterparts did. However, by 1986, the estimated earning gap had more than doubled to 43 percent. See also Marvin H. Kosters, "Schooling, Work Experience, and Wage Trends," American Economic Review (May 1990), pp. 308-312. back
12 McKenzie and Lee, Quicksilver Capital, p. 53. back
13 See William Baumol, Sue Anne Batey Blackman and Edward Wolff, Productivity and American Leadership: The Long View (Boston: MIT Presss, 1989). back
14 Murray Weidenbaum, The Business Response to the Global Marketplace (St. Louis: Center for the Study of American Business, Washington University, March 14, 1991), p. 3. back
15 David L. Littmann, "States Tax Constituents Away," Wall Street Journal, March 8, 1991, p. A10; and David L. Littmann, "High-Tax States Are Low-Growth States," Wall Street Journal, August 6, 1990, p. A12. back
16 Richard McKenzie is currently the Hearin/Hess Professor of Economics and Finance at the University of Mississippi. Beginning this fall, he will be the Walter B. Gerken Professor of Enterprise and Society in the Graduate School of Management at the University of California, Irvine. He has written or edited more than eighteen books and monographs. The latest book coauthored with Dwight Lee is Quicksilver Capital: How the Rapid Movement of Wealth Has Changed the World (Free Press 1991). His most widely recognized and used book is The New World of Economics (with Gordon Tullock), which has been adopted in most of the country’s major colleges and universities and has been translated into four foreign languages.
Dwight Lee is the Bernard B. and Eugenia A. Ramsey Professor of Economics and Private Enterprise at the University of Georgia. He has written more than 70 articles in professional journals including several with James Buchanan, the 1986 Nobel Prize winner in Economics. He has also published a large number of editorials and articles aimed at the broader audience beyond the academic community. He has written six books besides Quicksilver Capital.
All figures relating to government outlays as a percent of GDP were obtained from Organization for Economic Cooperation and Development, OECD Economic Outlook (December 1990), p. 179. back
17 OECD, OECD Economic Outlook, P. 180. back
18 See Lawrence Lindsey, The Growth Experiment (New York: Basic Books, 1990). back
19 Alan Reynolds, "The Case for Radical Tax Reform in Latin America," in John C. Goodman and Ramona Marotz-Baden, Fighting the War of Ideas in Latin America (Dallas: National Center for Policy Analysis, 1990), pp. 234-239. back
22 Calculations by James Gwartney and Richard Stroup. Reproduced in Yale Brozen, "The Cost of Bad Government," National Center for Policy Analysis, NCPA Policy Report No. 122, August 1986. back
23 Internal Revenue Service, Statistics of Income Bulletin, Spring 1990, Washington, DC, 1990, pp. 15-25. back
25 Statistics compiled by Bruce Bartlett based on information provided by Price Waterhouse and Coopers & Lybrand tax guides. Wall Street Journal, August 29, 1989. back
26 Joseph A. Pechman, "Introduction," in Pechman, ed., World Tax Reform: A Progress Report (Washington, DC: Brookings Institution, 1988), p. 4. back
27 Michael Cusack, "Economics in Our Lives," Senior Scholastic, October 1, 1982, pp. 6,7 and 13. back
28 See Edgar Feige, "How Big Is the Irregular Economy?" Challenge (November/December 1979), pp. 5-13; Frank de Leeuw, "An Indirect Technique for Measuring the Underground Economy," Survey of Current Business (April 1985), pp. 64-72; Kevin F. McCrohan and James D. Smith, "A Consumer Expenditure Approach to Estimating the Size of the Underground Economy," Journal of Marketing (April 1986), pp. 48-59; and Vito Tanzi, "The Underground Economy in the United States: Annual Estimates, 1930-1980," International Monetary Fund Staff Papers (June 1983), pp. 283-305. back
29 De Leeuw, "An Indirect Technique for Measuring the Underground Economy." back
30 Hernando De Soto, "The Role of the Informal Economy in Peru," in Goodman and Morotz-Baden, Fighting the War of Ideas in Latin America, pp. 23-25. back
32 Goodman and Marotz-Baden, "Editors’ Introduction," Fighting the War of Ideas, p. 117. back
34 Phillip E. Fixler, Jr., and Robert W. Poole, Jr. Privatization 1988: Second Annual Report on Privatization (Santa Monica, CA: Reason Foundation, 1988), p. 20. back
35 See Madsen Pirie, Dismantling the State (Dallas: National Center for Policy Analysis, 1985). back
36 Phillip E. Fixler, Jr. and Robert W. Poole, Jr. Privatization: 1990 (Santa Monica, CA: Reason Foundation, 1990). back
37 The numbers are approximate because of missing data on the number of state enterprises in several underdeveloped countries. According to the World Bank study, Guinea had 65 state enterprises in 1980. During the decade of the 1980s, it liquidated or closed 16 and targeted for sale 43. Brazil had 527 state enterprises in 1980, closed or liquidated 12, targeted 155 for sale, and sold 27 by 1987. Chile had 421 state enterprises and sold 133. For information on more countries, see Elliot Berg and Mary M. Shirley, Divestiture in Developing Countries (Washington, DC.: World Bank, 1987), tables 1, 2 and 3. back
38 Fixler and Poole, Privatization 1990; and Robert Poole, "The Local Privatization Revolution," Heritage Foundation, Heritage Lectures, No. 258, March 13, 1990. back
41 The page counts reported in the text are not the actual number of pages, but the number of pages that would have been included if all pages in the 1936-1987 volumes were the same in terms of words per page as the 1988 volume. The actual page count for 1936 was 2,411. The number of words per page was reduced by approximately 24 percent in 1978. back
42 See Melinda Warren and Kenneth Chilton, Regulation Rebound: Bush Budget Gives Regulation a Boost (St. Louis: Center for the Study of American Business, Washington University, 1990), p. 5. back
44 McKenzie and Lee, Quicksilver Capital, p. 177. back