If only Owen Jones knew a little economic history

The world’s going to pot and Owen Jones is here to tell us why:

The rise of the “free market”, we were promised, would unleash endless prosperity. But while the much-demonised age of strong trade unions, nationalisation and expansive welfare states delivered the greatest improvement in living standards in history, our current economic model is decomposing all around us: the stench is becoming harder to ignore. On both sides of the Atlantic, economic growth has fallen since the frontiers of the state were rolled back, and that more limited growth is more likely to be sucked into the bank accounts of the gilded rich.

It’s certainly exciting rhetoric but how useful is it as an analysis?

Not very is the answer there. Even, entirely wrong. For in that grand sense that Jones means there has been no rolling back of the State. Valiant attempts to move some things out of state control, yes. Preventions of matters getting even more state orientated, yes. But actual rolling back of the state not so much.

The numbers are here. How big that state is is a function of how much of all economic activity - GDP that is - flows through the state. The current amount is higher than the 1950s and 60s, only a fraction less than the peak reached for a year or three in the late 1970s.

So, Owen tells us that the difference between those glorious post-war years and today - the higher growth then and lower now - is a function of the size of the state. OK - given that the state is larger now than then we’d better get on with shrinking it then, no?