Ahmed Imtiaz is a qualified barrister working as a legal counsel for a global insights platform in London. He was a candidate for Westminster Council in the May local elections.
Nations move through recognisable economic phases, periods of growth, stagnation, recession, or uncertainty.
These shifts never unfold in isolation.
They are shaped by geography, global political dynamics, domestic governance, social cohesion, and institutional strength. Yet among all these variables, one factor consistently proves decisive: the style of government. Across countries and regions, the pattern is remarkably clear. The bigger the state becomes, the lower the returns tend to be.
This timeless reality is being actively ignored by the British Left. I recently read The Productive State, a policy framework for “Manchesterism” written by Mathew Lawrence, a close ally of Andy Burnham. The core ideas of this paper, combined with Burnham’s clear desire to scale his municipal mayoral style to the national stage, replicating “Manchesterism” at a UK-wide level, signal a worrying consensus. We are heading toward a dramatically bigger state.
To understand the consequences of governing style, it is instructive to examine four sharply contrasting examples: Argentina and Indonesia, Texas and California, where leadership choices have produced radically different outcomes. Together, they show how coherent, disciplined governance can unlock prosperity, while interventionist instincts can erode confidence and weaken institutions. They also offer a warning for Britain as Labour embarks on a Burnham-led project of state expansion.
Argentina under Javier Milei is a case of dramatic reversal. Milei’s 2023 election victory was met with deep scepticism across much of the global political establishment. His fiery rhetoric promises to abolish ministries, and commitment to sweeping austerity led many to dismiss him as a libertarian provocateur rather than a serious reformer.
Argentina’s long history of failed stabilisation attempts only reinforced doubts. Yet Milei has delivered results that few expected. Inflation has fallen from 211 per cent in 2023 to around 31 per cent in 2025, and Argentina has recorded two consecutive fiscal surpluses, something not seen since the early Kirchner years. His government cut subsidies, opened markets to international cooperation, strengthened central bank independence, and ended deficit financing through monetary expansion. These measures restored a degree of macroeconomic credibility Argentina had lacked for decades. Argentina today stands as one of the clearest examples of how disciplined, market‑oriented leadership can reverse decline.
Indonesia under Prabowo Subianto presents the opposite trajectory. Prabowo inherited an economy strengthened by two decades of more market‑friendly governance, particularly under Joko Widodo, who maintained fiscal discipline and attracted significant foreign investment. That progress is now under strain. Indonesia long respected its statutory 3 per cent fiscal deficit ceiling, but Prabowo’s expansive spending threatens to blow through it. His flagship Free Nutritious Meals Programme, projected to cost 300 trillion Indonesian rupiah, places enormous pressure on public finances. These commitments may generate short‑term political goodwill but undermine long‑term sustainability.
Prabowo has also increased state intervention in key commodities such as nickel and ore, creating a government body to manage exports rather than allowing markets to operate. Investor confidence has weakened. Indonesia has become one of the worst‑performing stock markets globally, and the rupiah has fallen more than 7 per cent against the US dollar, making it one of Asia’s weakest currencies. It is a warning for any country tempted to expand the state without discipline, including the UK under Labour.
The same pattern plays out inside a single country.
California and Texas are similar in size, yet their governing philosophies have produced starkly different fortunes.
California remains one of the most naturally dynamic places on Earth, with world-class universities, Silicon Valley, Hollywood, ports, and outstanding agriculture. Yet it is also a case study in a rich society spending more and more to produce less and less. Since 2000, the state’s population has grown by 15 per cent, but general fund expenditure has ballooned by more than 200 per cent,, from $78 billion to $248 billion; per-person spending has risen from $2,300 to $6,300; the state workforce has grown by over 50 per cent. The result of this bigger-state model has been an exodus: roughly 1.9 million residents have left California in the last seven years alone, many for Texas, Arizona and Georgia. Despite being among the highest education spenders in the country, California ranked 43rd out of 50 states in 4th-grade maths and 36th in 8th-grade maths in the 2024 national report card. Texas has taken the opposite path, a smaller state and lower taxes.
It was America’s number one job creator in 2025, and its economy grew faster than the national average in the fourth quarter of that year, expanding at an annualised real rate of 1.4 per cent, and reaching $2.9 trillion, up from $2.77 trillion in 2024. California’s state and local revenues and spending run 60 per cent, higher than Texas’s on a per-resident basis, yet California has the nation’s highest rate of homelessness and the highest top marginal income tax rate in the country, while Texas is one of only eight states levying no individual income tax at all. California also carries the worst student-teacher ratio in America, at 23:1, against 15:1 in Texas, and it shows in outcomes, with 90 per cent, of Texas students graduating from high school compared with 85% in California. Businesses are voting with their feet too: Tesla and Oracle have both relocated their headquarters to Texas, drawn by lower taxes and lighter regulation.
These examples show a consistent pattern: bigger government does not guarantee better outcomes.
In fact, it often produces the opposite.
Burnham’s Manchesterism may speak the language of compassion, but the results of similar models abroad suggest it risks damaging the economy and weakening institutions. The danger is not abstract. Britain has been here before. In 1976, a Labour government pushed the country into a fiscal crisis so severe that the IMF had to intervene. The circumstances today are different, but the underlying temptation is the same: to treat the state as the engine of prosperity rather than the framework within which prosperity is created.
The duty of the Conservative Party is to rebuild a robust, free-market alternative. The battle lines are clear: we must choose between the stagnation of the “Productive State” and the prosperity of the free enterprise system. I fear immense economic damage will be done before the British public has the chance to make that choice at the ballot box, but we must be ready with a coherent, small-government blueprint when they do.
Ahmed Imtiaz is a qualified barrister working as a legal counsel for a global insights platform in London. He was a candidate for Westminster Council in the May local elections.
Nations move through recognisable economic phases, periods of growth, stagnation, recession, or uncertainty.
These shifts never unfold in isolation.
They are shaped by geography, global political dynamics, domestic governance, social cohesion, and institutional strength. Yet among all these variables, one factor consistently proves decisive: the style of government. Across countries and regions, the pattern is remarkably clear. The bigger the state becomes, the lower the returns tend to be.
This timeless reality is being actively ignored by the British Left. I recently read The Productive State, a policy framework for “Manchesterism” written by Mathew Lawrence, a close ally of Andy Burnham. The core ideas of this paper, combined with Burnham’s clear desire to scale his municipal mayoral style to the national stage, replicating “Manchesterism” at a UK-wide level, signal a worrying consensus. We are heading toward a dramatically bigger state.
To understand the consequences of governing style, it is instructive to examine four sharply contrasting examples: Argentina and Indonesia, Texas and California, where leadership choices have produced radically different outcomes. Together, they show how coherent, disciplined governance can unlock prosperity, while interventionist instincts can erode confidence and weaken institutions. They also offer a warning for Britain as Labour embarks on a Burnham-led project of state expansion.
Argentina under Javier Milei is a case of dramatic reversal. Milei’s 2023 election victory was met with deep scepticism across much of the global political establishment. His fiery rhetoric promises to abolish ministries, and commitment to sweeping austerity led many to dismiss him as a libertarian provocateur rather than a serious reformer.
Argentina’s long history of failed stabilisation attempts only reinforced doubts. Yet Milei has delivered results that few expected. Inflation has fallen from 211 per cent in 2023 to around 31 per cent in 2025, and Argentina has recorded two consecutive fiscal surpluses, something not seen since the early Kirchner years. His government cut subsidies, opened markets to international cooperation, strengthened central bank independence, and ended deficit financing through monetary expansion. These measures restored a degree of macroeconomic credibility Argentina had lacked for decades. Argentina today stands as one of the clearest examples of how disciplined, market‑oriented leadership can reverse decline.
Indonesia under Prabowo Subianto presents the opposite trajectory. Prabowo inherited an economy strengthened by two decades of more market‑friendly governance, particularly under Joko Widodo, who maintained fiscal discipline and attracted significant foreign investment. That progress is now under strain. Indonesia long respected its statutory 3 per cent fiscal deficit ceiling, but Prabowo’s expansive spending threatens to blow through it. His flagship Free Nutritious Meals Programme, projected to cost 300 trillion Indonesian rupiah, places enormous pressure on public finances. These commitments may generate short‑term political goodwill but undermine long‑term sustainability.
Prabowo has also increased state intervention in key commodities such as nickel and ore, creating a government body to manage exports rather than allowing markets to operate. Investor confidence has weakened. Indonesia has become one of the worst‑performing stock markets globally, and the rupiah has fallen more than 7 per cent against the US dollar, making it one of Asia’s weakest currencies. It is a warning for any country tempted to expand the state without discipline, including the UK under Labour.
The same pattern plays out inside a single country.
California and Texas are similar in size, yet their governing philosophies have produced starkly different fortunes.
California remains one of the most naturally dynamic places on Earth, with world-class universities, Silicon Valley, Hollywood, ports, and outstanding agriculture. Yet it is also a case study in a rich society spending more and more to produce less and less. Since 2000, the state’s population has grown by 15 per cent, but general fund expenditure has ballooned by more than 200 per cent,, from $78 billion to $248 billion; per-person spending has risen from $2,300 to $6,300; the state workforce has grown by over 50 per cent. The result of this bigger-state model has been an exodus: roughly 1.9 million residents have left California in the last seven years alone, many for Texas, Arizona and Georgia. Despite being among the highest education spenders in the country, California ranked 43rd out of 50 states in 4th-grade maths and 36th in 8th-grade maths in the 2024 national report card. Texas has taken the opposite path, a smaller state and lower taxes.
It was America’s number one job creator in 2025, and its economy grew faster than the national average in the fourth quarter of that year, expanding at an annualised real rate of 1.4 per cent, and reaching $2.9 trillion, up from $2.77 trillion in 2024. California’s state and local revenues and spending run 60 per cent, higher than Texas’s on a per-resident basis, yet California has the nation’s highest rate of homelessness and the highest top marginal income tax rate in the country, while Texas is one of only eight states levying no individual income tax at all. California also carries the worst student-teacher ratio in America, at 23:1, against 15:1 in Texas, and it shows in outcomes, with 90 per cent, of Texas students graduating from high school compared with 85% in California. Businesses are voting with their feet too: Tesla and Oracle have both relocated their headquarters to Texas, drawn by lower taxes and lighter regulation.
These examples show a consistent pattern: bigger government does not guarantee better outcomes.
In fact, it often produces the opposite.
Burnham’s Manchesterism may speak the language of compassion, but the results of similar models abroad suggest it risks damaging the economy and weakening institutions. The danger is not abstract. Britain has been here before. In 1976, a Labour government pushed the country into a fiscal crisis so severe that the IMF had to intervene. The circumstances today are different, but the underlying temptation is the same: to treat the state as the engine of prosperity rather than the framework within which prosperity is created.
The duty of the Conservative Party is to rebuild a robust, free-market alternative. The battle lines are clear: we must choose between the stagnation of the “Productive State” and the prosperity of the free enterprise system. I fear immense economic damage will be done before the British public has the chance to make that choice at the ballot box, but we must be ready with a coherent, small-government blueprint when they do.