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Where would you rather live: small-government Somalia or big-government Sweden?

Critics of “big government” talk as if it’s beyond question that the state’s involvement with our lives is a bad thing.

Whisper it quietly, but I quite like big government. These days, it’s unfashionable to say so. From New Labour to Blue Labour, from compassionate conservatives to neoconservatives, the consensus is that big government is bad government: slow, inefficient, intrusive, bureaucratic, overbearing, anti-democratic and anti-growth.

“The era of big government is over,” President Bill Clinton (Democrat) declared in January 1996. Conservatives rejoiced. But guess what? By September 2008, big government was back. “We must act now,” announced President George W Bush (Republican), as he unveiled his $700bn bank bailout plan. This champion of free markets went on to bail out the auto industry and, in effect, nationalise the mortgage lenders Fannie Mae and Freddie Mac.

Here in the UK, as the former chancellor Alistair Darling revealed in his memoir, it was big government that prevented cash machines from being switched off and cheques being torn up. Banks were nationalised; multibillion-pound loans and guarantees were offered.

So, why this disconnect between rhetoric and reality? Why this constant railing against the positive power of collective action? The public doesn’t like big government, say fans of . . . small government.

Yet how else to explain our ongoing love affair with the (scandal-ridden) National Health Service, which in its structure and funding is big government pure and simple? Why else are so many of the people whom voters tell pollsters they admire most – doctors, nurses, teachers, soldiers, the police – usually employees of big government?

Not yet convinced? Polls also show significant public backing for the renationalisation of the railways. And not just the railways: a 2009 poll found two out of three voters supported taking the electricity, gas, water and telecommunications industries back into public ownership. (Come back, Michael Foot – all is forgiven.)

Small-government supporters claim that countries with high levels of public spending grow more slowly. Yet, as the Columbia University economist Xavier X Sala-i-Martin concluded in his 1997 study I Just Ran Four Million Regressions, “no measure of government spending . . . appears to affect growth in a significant way”.

In his 2004 book Growing Public, the University of California economist Peter Lindert agrees – countries with high levels of government spending don’t perform any worse than countries with low levels of government spending.

But doesn’t big government crowd out the private sector? Stifle free enterprise and innovation? Not necessarily. Consider the arguments of Mariana Mazzucato, the Sussex University economist and author of The Entrepreneurial State. “Where would Google be today without the state-funded investments in the internet, and without the US National Science Foundation grant that funded the discovery of its own algorithm?” she wrote in the Guardian in April 2012. “Would the iPad be so successful without the state-funded innovations in communication technologies, GPS and touchscreen display?

“Where would GSK and Pfizer be without the $600bn the US National Institutes of Health has put into research that has led to 75 per cent of the most innovative new drugs in the last decade?”

Critics of big government say it crushes community spirit and civic engagement. Again, the empirical evidence suggests otherwise. “Among the advanced western democracies, social trust and group membership are, if anything, positively correlated with the size of government,” the Harvard academic Robert Putnam observed in his acclaimed book Bowling Alone (1995). “[S]ocial capital appears to be highest of all in the big-spending welfare states of Scandinavia,” he wrote.

Ah yes, Scandinavia. Despite having, I accept, much smaller and more cohesive societies than the US or the UK, the highspending, high-growth Nordic nations continue to baffle and frustrate Anglo-Saxon small-staters. Take the UN’s first ever World Happiness league table in 2012: Denmark, where government spending accounts for 58 per cent of national income, topped the list, followed by Finland (54 per cent) and Norway (44 per cent).

Here in the UK, public spending may have peaked at 50.8 per cent of GDP in 2009, in the wake of the bank bailouts, but since 2010 the austerians of the Conservative-led coalition have been cutting spending year on year. Using the latest IMF figures, Peter Taylor-Gooby, a professor of social policy at the University of Kent, has calculated that by 2017 government spending, as a proportion of GDP, will be lower in the UK than in the United States – 39.1 per cent to 39.3 per cent – for the first time since records began. “I was astounded,” Taylor-Gooby tells me. “Even after the First World War, and the round of cuts then, we didn’t go this far.”

Meanwhile, those who pine for a leaner, meaner, smaller state cannot answer the simplest question: how would small government have paid for the bailout of RBS, Lloyds and the rest? The Treasury has coughed up roughly £850bn to prop up the UK’s financial sector, according to the National Audit Office. Can small government tackle the threat of runaway climate change and the rising costs of adaptation and mitigation? It is forecast that the global warming bill will run into trillions of pounds. It may be fashionable to want to roll back the state, but ask yourself this: where would you rather live, “big-government” Sweden or “small-government” Somalia?

Mehdi Hasan is a contributing writer for the New Statesman and the political director of the Huffington Post UK, where this column is crossposted

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.