Imagine that the world's superpower reduces the size of government by a quarter over the next 30 years, even as its population grows by 50%.

See In Search of Gladstonian Republicans: The liberalism of Britain's great 19th-century prime minister is a model for the next conservative revolution in today's WSJ, by John Micklethwait And Adrian Wooldridge. Messrs. Micklethwait and Wooldridge, respectively the editor in chief and management editor of the Economist, are the authors of "The Fourth Revolution: The Global Race to Reinvent the State." just out from Penguin Press. Excerpts: 

"Imagine that the world's superpower reduces the size of government by a quarter over the next 30 years, even as its population grows by 50%. Imagine further that the superpower performs this miracle while dramatically increasing both the quality of public services and the nation's diplomatic clout."

"Impossible? That is exactly what Britain, then the world's superpower and pioneer of the new economy, did in the 19th century. Gross revenue from taxation fell from just under £80 million in 1816 to well under £60 million in 1846, even as the population surged and the government helped build schools, hospitals, sewers and the world's first police force. The Victorians paid for these useful new services by getting rid of what they called "Old Corruption" (and we would call cronyism) and by exploiting the new technology of the day, like the railway."

"And they kept on cutting government for decades."

"He paid for his passion for social reform by a ruthless campaign against waste."

"this was real liberalism—the classical small-government creed of Adam Smith and John Stuart Mill (and for that matter Milton Friedman and Margaret Thatcher ). The Victorians believed in a "night-watchman state"—one that left citizens as free as possible to pursue their own ends, provided that they did no harm to anyone else."

"But Gladstonian liberalism provides a remarkable template for the next conservative revolution.

First, rip out cronyism. Between 1815 and 1870 British Liberals replaced a government based on patronage, sweeping aside the special privileges for the East India Company, West Indian sugar makers and British landowners. Today the American right's dirty secret is its love of big government, especially tax breaks for business (including sugar). The U.S. tax code has $1.6 trillion of exemptions, most of which go to the well-off."

"Having helped dismantle Britain's protectionist Corn Laws in the 1840s, he would be astonished that America still doles out $30 billion a year in agriculture subsidies and employs 100,000 people in the Agriculture Department. 

Second, concentrate the state on what it needs to do. Why does the federal government own 900,000 buildings and 260 million acres of land? Why does it continue to run utilities? Why are so many American airports still in public hands? Gladstone would concentrate money on the poor, targeting the welfare state for the rich. More money goes to the top 5% in mortgage-interest deduction than to the bottom 50% in social housing. He would set about reforming entitlements to make sure that they are fundable, for example raising the retirement age to 70 in line with life expectancy (as other countries like Sweden have done)."

"Third, simplify government, particularly the numbers. In the early 19th century, British government accounts were incomprehensible, deliberately so. The aristocrats who ran the country wanted to conceal the fact that most government spending went to support their relations in the form of sinecures, church livings, pensions and ceremonial jobs. Gladstone insisted on standing before Parliament and explaining the budget in detail:"

"America's current budget is so full of perks for vested interests that only lobbyists and their lawyers can understand it."

"Fourth, take the state seriously. This is the tea party's great shortcoming. The Victorians believed in "reform" as well as "retrenchment." It was precisely because they wanted the state to be as small as possible that they put so much effort into making it work as well as possible. They introduced competitive exams for civil servants, rewarding the good ones with money and honors while sacking the bad ones."

"The best way for the U.S. to avoid disasters like the current one in the Department of Veterans Affairs is to do a better job of hiring—and firing. 

Fifth, put yourself on the side of business creation. Visit Silicon Valley, and you'll find that Republicans are regarded as being out of touch, not least because of their approach to immigration."

"great legal reforms that allowed anybody to form a limited-liability company. American conservatives should fight to make it easier to take companies public too, partly because that spreads popular capitalism. Finally, make the state humble and dowdy. Gladstone, who even told his government to use cheaper writing paper, would have been horrified by the motorcades that sweep through Washington. He preferred to walk."