Early 19th-century British limited government was mostly a matter of bankrupt finances.

Evidence

There was no especially complicated reason why, in the first half of the nineteenth century, the British state was domestically a “small” state. The wars of the eighteenth century, culminating in the Napoleonic Wars, all but ruined the state finances. Even if central government, such as it was, had sought widespread interference in the social and economic life of the country, it did not possess the financial means to do so. During the period 1822–1831, defense consumed 30 percent of central government resources, while debt servicing took up another 59 percent. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 389

Categorization

• XREF: Reverses the common liberal narrative that small state was ideological choice; connects to debates on why the ‘night watchman state’ arose.
• DEFINE: Clarifies that fiscal austerity of the laissez-faire era was driven by insolvency, not principled restraint.
• corroborated: 2 independent passages support this claim — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 389