The United States gained much of its famous self-reliance and can-do spirit from its Anglo-Saxon heritage, and much of its skepticism of big government from its British origins to boot. So it should horrify Americans to learn just how much the motherland has forgotten its proud tradition of self-sufficiency and pride in being self-reliant.
In fact, readers of a sensitive disposition may need to brace themselves for the following statistic: over half of British adults—52.1%—now depend on the state for their livelihood. This nauseating discovery is the product of the Adam Smith Institute’s (ASI) new State Reliance Index.
The ASI was founded in the 1970s as part of the last fightback against the British Leviathan state. Margaret Thatcher and her allies came to power against a backdrop of huge, unprofitable nationalized industries, utterly sclerotic growth, rampant trade union power, and unchecked inflation that had seen the United Kingdom forced to receive a bailout from the International Monetary Fund. It was rightly known as the “sick man of Europe.”
Today, decades after Thatcherism rolled back the frontiers of the state, Britain is back in dependency mode. She is all the weaker for it.
The State Reliance Index measures those who are social security recipients (known in the UK as universal credit), state pensioners, students and staff at higher education institutes, public sector workers, and even those rent-seeking forces in private sector roles who exist purely because of state regulation, like HR and planning roles.
This last point is instructive—it isn’t just direct, obvious welfare, but a web of indirect dependency through pointless jobs and services tied to government. And it isn’t just an economic millstone—it’s a cultural rot. The US risks the same fate unless it heeds the warning.
The sheer scale of state dependence among a majority of British adults explains so many of the country’s current ills, as well as the inability of Conservative governments between 2010 and 2024 to either achieve much, or shrink the state at all.
Economic Woes
It is hard to use the sort of rhetoric against the perils of big government that proved so effective in the 1980s on both sides of the Atlantic when so many now feel vulnerable. 11% of British adults are public sector employees, and nearly a quarter receive the state pension.
These state and public sector pensions are a complete Ponzi scheme. Contributions paid by workers do not go into a real fund—they’re spent by the government of the day. An absurdly generous hypothetical return is calculated for them, and the cash is then also disbursed from day-to-day spending. Job security that would make a nepo baby blush compounds to make public sector roles comfortable and inefficient.
No wonder public sector productivity has barely moved in 25 years, despite huge waves of digitization in that time. Far too many people and resources are locked in low-value, inefficient areas. For many, voting against the status quo feels risky and contrary to their interests.
This massive state dependence imposes a disproportionately heavy burden on the private sector. Under Britain’s highly progressive tax code, the top 1% of earners pay around 30% of all income tax. For that, they face public opprobrium rather than praise, and their endeavors are choked by the highest energy costs in the OECD and growing regulatory burdens. No wonder that Britain is projected to lose more liquid millionaires over this next Parliament than any other country on Earth, bar China.
For those who stay, the burden will continue growing. Masses of low-skilled migrants bring more dependents and are rarely net contributors, while the population faces the same demographic problems as every other Western country.
Just when timing would be ripe for a Thatcher or Reagan to swoop in and save the day, 14 years of ostensibly conservative rule have been replaced by the socialist Labour Party. A party led by people who have lied on their resumes about their private sector experience and are now asking the nation’s regulators ideas on how to promote growth. This is as likely to succeed as contracting foxes to design henhouse security.
And none of it can be fixed without undoing the growth in state power that has accompanied the growth in state dependence.
The Dependence Mindset
All of these challenges are confronted by a state where the power of elected politicians has plummeted against the rise of what James Burnham called the managerial revolution. Various bodies now hold statutory powers over their areas, with fewer looking at the economy, or the country. QUANGOs like the Climate Change Commission and Natural England meddle in other sectors to push their policy ends, free of accountability or concern for the trade-offs and penalties those decisions incur.
At the same time, the instinctive response to every issue is what the central government’s response will be. This has paralyzed multiple governments’ abilities to prioritize and focus on the pressing concerns of no growth and a disintegrating social fabric.
The expectation that Government must provide has gone hand in hand with a European, continental-style aversion to independent actors for contravening regulations. In the UK, locals are forbidden from filling potholes for fear of violating some health and safety code. Only the state can do it—except of course it doesn’t.
This loss of resilience fuels a brain drain, and demoralizes those who stay.
Lessons for the USA
Churchill once talked about the New World, with all its power and might, coming to the liberation and rescue of the Old. That would be sorely welcome today, but at the very least, Americans should heed the warnings that the Old World of Western Europe shows.
Failure to reform entitlement programs like Social Security and Medicare could lead Americans down the same path of growing state dependence. The Trump administration appears unwilling to touch these entitlements, but leaving welfare in the hands of the undeserving is no act of kindness. Ronald Reagan was right: the best welfare program is a job. Britain has encouraged generations to remain poor and weak on welfare, rotting the soul out of entire families.
This immiserates and undermines those who are genuinely in need, and a blanket refusal to ask who is receiving what is dangerous. DOGE should be allowed to spread to these areas. As Douglas Carswell of the Mississippi Center of Public Policy puts it: there’s no such thing as “non-discretionary spending; you fought and won a war to make sure that ALL spending is discretionary!”
AI and biotech advances could see America on the cusp of wondrous advances that could liberate millions out of state dependence; that is the nobler, free market path forward.
So the British population’s appalling over-reliance on the inefficient, useless state burdens its economy, dulls its spirit, and acts as a salutary warning to the US of what is at stake if the government continues to grow.
Tennyson once wrote that “tho’ much is taken; much abides.” This is still true for both nations. But just as they did with Thatcherism and Reaganomics, both will need to act boldly in order to restore Britain, and keep America from suffering such a fate.
