Since the beginning of the Global Financial Crisis, or indeed the Great Recession as it is now often referred to, we have been witnessing not a crisis of capitalism but mainly a crisis of government: It is a crisis of governments that have grown too big, too intrusive, too taxing, and too indebted.

This is most clearly on display in Europe.

But this is not just a European problem. The growth of government is a phenomenon in most developed nations. Government has been growing since the beginning of industrialisation, and this growth has accelerated since the First World War.

Today, I would like to speak about how much government has grown. I will also go through some of the theories explaining this growth of government, mainly from a public choice perspective, and then we need to talk about the debt burden this has left behind.

Finally, I will be looking at ways in which the trend of increasing public expenditure might be reversed – that is, if it can be reversed at all.