If it were so then the symptoms of social breakdown would be less pronounced in a country where government spending on welfare had expanded enormously along with regulation on business activity. Once again the American experience refutes McGregor's anti-market prejudices. Let us start with federal spending. From 1959 to 1995 individual incomes increased by 121 percent but government taxes and fees paid per head jumped by 155 percent in the same period. The actual share of national income taken by all levels of government rose from 32 percent in 1965 to about 40 percent in 1994.
Regulations are also a form of taxation whose costs to the American economy are now being estimated.
Though the estimates vary widely they all show that these costs have been increasing and have become more onerous. Harvard economist Robert Leone discovered in 1975 that water 'pollution' regulations slashed the number of factories in the metal and finishing industry from 70,000 to 5,000. He also found a similar fate had befallen tissue-paper manufacturers. These regulations now make operating American refineries 33 per cent more expensive than in Canada or Western Europe. And these are just a few examples of what is happening across the country.