While the chart is depressing to a libertarian, it’s nonetheless instructive because it confirms my argument that the Western world became rich when governments were very small and redistribution was tiny or even nonexistent.
For instance, nations in North America and Western Europe largely made the transition from agricultural poverty to middle-class prosperity during the “golden century” between the Napoleonic wars and World War I. That was a period when redistribution spending basically didn’t exist, and most nations didn’t even have income taxes (the U.S. didn’t make that mistake until 1913).
Even as recently as 1960, welfare states were very small compared to their current size. Indeed, redistribution spending in Western nations averaged only about 10 percent of economic output, about half the size of today’s supposedly miserly American welfare state.
These points are important because some folks on the left misinterpret Wagner’s Law and actually try to argue that bigger government is good for growth. 