I have been reading some posts about "small government". Of course, a look at any industrialized (or for that matter most developing) countries today will show that small government is a myth in the sense that all modern governments have enourmous bureacratic structures designed to manage just about every aspect of essential economic and social services. In most industrialized countries the government is the biggest employer and in North America millions of people earn a living working for the government. Many people who don't work for the government work in companies that have contracts providing products or services for the government.

I noticed that people who take a stand against "big government" sometimes do it because they want to see the government shrink and provide citizens with "tax breaks". Sarah Palin is a good example. In some of her speeches she lauds small government and tax breaks. I will not generalize about Republicans (or Conservatives in Canada and the UK) but sometimes I hear similar rethoric from "right wing" parties.

I have been looking for statistics that clearly show whether smaller government indeed is more efficient. I think the problem is that "small government" is a relative term. Most western governments today have more cumbersome bureacracies than governments 50 or 100 years ago, and comparing rates of economic growth might not be possible. A more fair comparison might be "economic stability", meaning how well our modern, larger governments cope with an economic crisis.

As for Socialism, it is a relative term. Today we have a centralized banking system with laws and regulations enforced by a central government agency that imposes interest rates and controls the money supply. If you had told people 100 years ago that we would have an agency like the Federal Reserve, they would have said that you were a Communist of some kind. It would have been an unacceptable "Socialist" idea, as would have been economic planning over an entire presidency term. Soviets had "5-year plans", and western governments now have similar long-term economic plans. Ideas that were "socialist" become acceptable, out of economic necessity.

I can think of examples where "small" government has succeeded and failed. Perhaps a better government is one that is "efficient" and "balanced". You can cut taxes and reduce bureacracy. It might seem good, as long as you are not leaving thousands unemployed and slowing down the economy. Then you can increase government size and try to improve services. It might seem good as long as you don't go into deficit and increase public debt. In a perfect world, the government would balance spending and improve the efficiency of services provided. Of course, the world is not perfect!