The UK state spent only about 12 percent of GDP by 1914 despite growth

Evidence

The so-called Treasury view expounded in this policy paper was really the latest iteration of the same classical liberal ideas we have encountered already. As the world’s largest economy in the nineteenth century and the anchor of the gold standard, which facilitated international adjustments between surplus and deficit countries through movements in domestic money supplies tied to gold, the United Kingdom was a firm believer in free trade, free capital movements (very important for the City of London as a financial center), free labor (that is, no regulation thereof), and a limited liberal state. Although that limited liberal state had been growing rapidly and acquiring new responsibilities during the prior two decades, it still accounted for only about 12 percent up until the eve of the First World War. — Mark Blyth, Austerity, 329

Categorization

• DEFINE: Defines the ‘Treasury view’ as the iteration of classical liberalism that anchored pre-WWI British policy.