| Book Review | The American Historical Review, 110.2

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| Book Review | The American Historical Review, 110.2 | The History Cooperative

Book Review

Comparative/World

Peter H. Lindert. Growing Public: Social Spending and Economic Growth Since the Eighteenth Century. Volume 1, The Story. New York: Cambridge University Press. 2004. Pp. xvii, 377. Cloth $65.00, paper $24.00.

Peter H. Lindert. Growing Public: Social Spending and Economic Growth Since the Eighteenth Century. Volume 2, Further Evidence. New York: Cambridge University Press. 2004. Pp. x, 230. $70.00.

Peter H. Lindert's two-volume study has aroused interest beyond the circle of academic historians, because its conclusions, stated forcefully, repeatedly, and with a wealth of data, so contradict public policy and assumptions in the United States. Most important is the author's demonstration that high social spending does not lead to lower economic growth. Indeed, this is the central point of the entire two volumes. Lindert is not the only one to make this point, but he does so very convincingly. This conclusion is true, he maintains, so long as taxes and benefits are well designed. He concludes that heavy reliance on a flat tax, VAT (Value Added Tax), although regressive, is pro-growth and seems to work politically, as does universalism of benefits. "Broad universalism in taxes and entitlements fosters growth better than the low budget countries' [which include the United States] preference for strict means testing and complicated tax compromises" (v. 1, p. 20).

Somewhat less noticed, but as important to historians, is Lindert's conclusion that the rise and nature of social spending was clearly a function of what groups had "political voice" in each nation. There are many other conclusions, among them that welfare states like Sweden are not in decline, that greater democracy leads to more public schooling rather than that more schooling engenders democracy, and that the pension crisis in places like Italy and Japan is much more severe than in the United States.

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