Does larger government always equal government involvement in the economy?

[Joe S]

It's hard to imagine a government offering universal health care while leaving other parts of society alone. At a minimum, it must raise considerable amounts in taxes. Alternatively, it may have nationalized some industries (such as oil in many countries). But it should be recognized that the profits of these industries could have remained in private capital markets and have been put to other uses. This is a hidden tax.

I don't know much about the governments of either Australia or Ireland. What makes you think that Australia is laissez-faire? And can you say whether Ireland does not make up for low business taxes somewhere else?

More fundamentally, government can not be large without having a significant impact on the economy. As they say, nothing is ever free. No, no human action comes without a cost. At the least, there is the opportunity cost represented by actions that were rejected. If government is large and active, that means that it is changing the nature of activity within society. This has economic consequences even if they are hard (or even impossible) to quantify.