Podcast Summary

The Peter McCormack Show

Episode #127: Ewen Stewart – The Leviathan State, Civilisational Decline & the Way Back

Date: November 11, 2025
Host: Peter McCormack
Guest: Ewen Stewart

Episode Overview

This wide-ranging conversation between Peter McCormack and financial commentator Ewen Stewart explores the explosion of the state in Britain, the resulting economic, cultural, and moral decline, and offers hard-hitting arguments for radical political and economic reform. Stewart paints a grave picture of Britain’s "leviathan" state — overgrown, sclerotic, and hostile to innovation — and calls for a peaceful 'counter revolution' to restore incentives, growth, and individual liberty before it’s too late.

Key Discussion Points & Insights

1. The Growth of the State and Its Consequences

• Out-of-Control Welfare State:
  Stewart opens by arguing that the welfare state's expansion has eroded personal responsibility and liberty. He believes the UK faces a stark choice: counter-revolution (peaceful) or a slide into an all-controlling state.

  "What has happened is the welfare state has gradually grown out of control...and it's broken the will for people to do their own thing. And that has now reached...a tipping point." – Ewen Stewart (00:00)

• Explosion in Public Spending and Debt:
  Stewart gives historical context, comparing public debt from the Napoleonic Wars up to the present day. Debt has ballooned by nearly a factor of ten since 2000, while tax burdens and the state's share of the economy have surged.

  "Between the Napoleonic wars and the Millennium Bells, Britain's accumulated debt was about 350 billion... today, a generation later, it's almost up tenfold." – Ewen Stewart (02:45)

• Misplaced Notion of Austerity:
  The conventional wisdom of 'austerity' is, according to Stewart, a myth as far as the public sector is concerned; if anything, only the private sector has faced austerity.

  "The only austerity has actually been in the productive private sector." – Ewen Stewart (05:27)

Timestamps:

• [00:00–05:18] — Opening arguments, growth of state, personal responsibility, welfare expansion

2. Britain’s Economic Malaise: Stagnation and Decline

• GDP Stagnation:
  Stewart highlights that, historically, the UK grew robustly post-Industrial Revolution. Since 2008, growth has plummeted.

  "Since 2008, [GDP] has grown at half a percent. And since COVID it hasn't grown at all. That is absolutely unprecedented." – Ewen Stewart (06:00)

• Public Sector Bloated, Private Sector Struggling:
  Public sector growth continues unchecked, with over a million new jobs added since COVID while the private sector stagnates.

• Addiction to Spending and Structural Traps:
  The state is "addicted" to spending and is now trapped by the costs of debt, high interest, and institutional complexity. Outsourcing to quangos has created layers of unaccountable bureaucracy.

  "We've got to have a complete reset here... almost line by line go through each and every item and pull it back." – Ewen Stewart (09:42)

Timestamps:

• [05:18–10:33] — Economic decline, failure of GDP growth, structural state expansion

3. Institutional Hostility to Prosperity and Innovation

• Parasitic Bureaucracy:
  Stewart characterizes state apparatus as 'institutionally hostile' to prosperity, ever-expanding into new realms with little accountability or impact on outcomes (e.g., five major financial regulators, ever-growing NHS and welfare budgets).

  "I think it's institutionally hostile to prosperity. I think it is basically organically hostile. It's almost like a pathogen." – Ewen Stewart (10:40)

• Welfare & NHS Scale:
  The NHS employs 500,000 more people than a decade ago with no improvement in outcomes; one in four working-age people are on benefits, which Stewart calls a 'social bad'.

• Regulation and Stifled Enterprise:
  High regulation and costs have made Britain and Europe globally irrelevant for business innovation compared to the dynamic US tech scene.

  "Our biggest companies are BP, Shell, Unilever...We've utterly failed to create new exciting businesses." – Ewen Stewart (15:10)

Timestamps:

• [10:33–18:49] — Bureaucratic growth, NHS/welfare, lack of dynamism, US v. UK innovation

4. The Brain Drain, Tax Flight, and the Global Market for Talent

• Loss of Talent:
  Stewart laments the modern brain drain — not just millionaires but enterprising young people leaving for places like Dubai, Singapore, or the US, attracted by appreciation for success and tax certainty.

  "It's not just the fabled millionaires leaving... there are a couple of hundred thousand bright twenty-somethings off to Dubai, to Singapore, to America if they can get their green card." – Ewen Stewart (18:50)

• Unfriendly Environment for Startups:
  Regulatory uncertainty, tax unpredictability, and frequent retrospective policy changes deter investment and business formation.

  "Everything is against you. It's not just tax, it's regulation and it's actually uncertainty." – Ewen Stewart (20:08)

Timestamps:

• [18:49–24:17] — Brain drain, tax and regulation-induced business flight, comparison with Ireland/Italy/Eastern Europe

5. Positive Examples Abroad & Possibility for Reform

• Learning from Others:
  Stewart contrasts failing 'Old Europe' with dynamic Ireland and rising Eastern Europe. He praises their conservative fiscal policies and moral coherence.

• Britain’s Enduring Assets:
  Despite decline, Stewart contends the UK retains world-leading universities, cultural vibrancy, and the City of London — making recovery possible if radical action is taken soon.

  "We're on a knife edge. We still have those assets, we still have that creativity...but they're being crushed." – Ewen Stewart (24:44)

• No Quick Fix:
  Reform, if it comes, will be a 15–20 year project.

Timestamps:

• [24:17–31:53] — International comparisons, glimmers of hope, necessity of long-term vision

6. Prescriptions for Radical Reform

• Immediate Spending Cuts & Tax Reform:
  Stewart argues for cutting public spending by £100–150 billion immediately, targeting welfare and quango budgets. The triple lock on pensions, welfare cliffs, and featherbedding must be addressed.

  "We have got to get to a situation where we get back to a much more normalized number of people on benefit...it cannot be that people on benefit can get more than the minimum wage." – Ewen Stewart (30:44)

• State Re-engineering:
  Requires structural reforms: civil service headcount cut, civil service accountability to government, use of explicit manifesto powers, and bringing in ideologically aligned advisors.

  "There's a convention that ministers cannot sack civil servants. An act of Parliament needs to be passed to ensure that they can." – Ewen Stewart (34:00)

• Tax System Overhaul:
  Favors abolishing stamp duty and slashing corporation tax for small companies; smarter taxation is key to growth.

Timestamps:

• [31:53–41:59] — Reform blueprint, spending and efficiency, structural overhaul

7. The Cultural-Moral Dimension & Need for Education on Economics and Liberty

• Freedom and Fairness:
  Both host and guest emphasize that free markets enforced via freedom, not coercion, ultimately benefit all, especially the poor.

  "Capitalists aren't mean, they just understand economics and incentives. Capitalism is enforced via freedom." – Peter McCormack (37:11)

• Generational Divide, Disillusionment, and Education:
  Stewart links cultural malaise, alienation of youth, and leftist ideological capture in education to a lack of understanding about economic tradeoffs.

  "It kind of feels like we do have a job to educate young people...to educate young people about the facts of how the economy works." – Peter McCormack (46:12)

Timestamps:

• [41:59–50:29] — Equality v. freedom, education failures, generational fairness, need for new economic narratives

8. Innovation, Entrepreneurship, and Lost Incentives

• Hostility to Entrepreneurs:
  Both Peter and Ewen describe a UK climate where incentives for entrepreneurial risk-taking have all but vanished.

  "It's always been the case that small and medium sized companies drive the growth...that incentive is dissipating and it's getting a lot worse." – Ewen Stewart (52:52)

• Meritocracy and Excellence Languishing:
  Stewart laments the 'prizes for all' university culture, which impedes merit and real economy growth.

  "It'd be far better setting up a small business...we have created that culture and we need to uncreate it." – Ewen Stewart (54:42)

Timestamps:

• [50:29–56:13] — Entrepreneurial stagnation, incentives destroyed, hollowing out of meritocracy

9. Policy Cycles, Energy, and the Regulatory Death Loop

• Net Zero as Economic Straitjacket:
  The UK's unique zeal for net zero, unshared by major competitors, is seen as destroying the industrial base and hurting the poorest.

  "America is not interested in net zero. Russia's not interested in net zero. China...India certainly isn't...we are 1% of the world's emissions and declining...and it is destroying our industrial base." – Ewen Stewart (61:02)

• Specific Tax Proposals:
  Advocates targeted tax cuts (e.g., scrapping stamp duty, zero corporation tax for small companies).

  "Any company, corporate structure that makes profits of less than £250,000...pays no corporation tax. Zero." – Ewen Stewart (62:05)

Timestamps:

• [56:13–65:57] — Policy missteps, energy folly, practical radical reforms

10. Cultural Wars, Loss of Freedom, and the Threat of Authoritarian Drift

• Erosion of Liberty:
  Stewart describes how centralization, unchecked welfare, and DEI/woke agendas have chipped away at personal freedoms. He warns of a “dark period.”

  "We either have a counter revolution...or we are entering really quite a dark period where the state will dictate virtually every aspect of our lives." – Ewen Stewart (00:00 & 38:05, 41:02)

• Failed Education on Economics:
  State orthodoxy and Keynesian economics dominate, while classical and Austrian perspectives are marginalized; thus, rational debate and policy alternatives wither.

  "But, you know, you don't have to go far back...In America, it's a little bit different...but there still is a Keynesian orthodoxy." – Ewen Stewart (75:20)

Timestamps:

• [65:57–77:35] — Liberty under threat, economic orthodoxy, cultural and educational failures

11. Money, Inflation, and the Role of Sound Money (Bitcoin, Gold)

• Inflation as Hidden Tax:
  Stewart and McCormack discuss how inflation punishes the poor, erodes savings, and is ultimately a consequence of fiscal and monetary recklessness (echoing Austrian and Bitcoin principles).

  "Inflating your way out of an issue...is fool's gold. Of course, it creates arbitrary winners and losers...the people that win aren't your son, they are those with a lot of debt." – Ewen Stewart (78:21)

• Importance of Monetary Stability:
  The abandonment of the gold standard is cited as a crucial turning point:

  "Gold was $35 an ounce in 1971...it's 100 times that..." – Ewen Stewart (78:09)

Timestamps:

• [77:01–80:17] — Sound money, Bitcoin & Austrian economics, inflation’s harm

12. Obstacles to Reform and the Political/Cultural Landscape

• Entrenched Interests and Institutional Inertia:
  Reform will meet resistance from civil service, judiciary, media, and ideological opposition.

  "But you're right, the pushback will be huge...the judiciary...I would urge the next government that before they enter office, they need to have a detailed plan." – Ewen Stewart (33:49–34:00)

• Need for a Long-Term, Front-Loaded Strategy:
  Must signal serious change immediately upon taking office and share the 'pain' equitably.

Timestamps:

• [80:17–89:31] — Political resistance, necessity of institutional reform, need for consistent message

13. Lessons from Abroad (China, US, Eastern Europe)

• Comparison with China & US:
  Stewart notes China’s high savings, small welfare state, and work ethic as ingredients for growth (without endorsing their authoritarianism). The US is lauded for its dynamism and can-do culture. Europe is the global exception to growth among rich nations.

Timestamps:

• [68:26–73:01] — International models, comparisons, warnings about Argentina’s decline

14. Hope and the Way Forward

• Britain’s Enduring Strengths:
  Stewart expresses hope based on British ingenuity, culture, English language, elite education, and the country’s creative industries, believing recovery is possible with political courage.

  "I'm optimistic about the creativity of our people...it's still a beautiful country...there's still a feeling of fair play amongst the population..." – Ewen Stewart (102:25)

• Call for Radical, Honest Leadership:
  Emphasizes urgent need for strong, honest, and radical center-right government willing to front-load reforms and communicate the real situation — not tinker at the margins.

Timestamps:

• [102:14–104:57] — Optimism for recovery, final thoughts, hope for radical reform

Notable Quotes & Memorable Moments

On Freedom vs. State Control:

• "Do we live in a free society or do we live in a controlled society?" – Ewen Stewart (35:39)
• "You said, which is worse, is it the deficit or cutting spending? There's actually a third route and it's called growth." – Ewen Stewart (13:47)

On Young People's Disillusionment:

• "They've been convinced to go to university, get loads of debt. They can't get jobs, they can't get on the housing ladder." – Peter McCormack (41:59)

On Socialism and Economics:

• "Socialists aren't kind, they're stupid and evil. Every socialist nation enforces its ideology with walls, bullets and censorship. Choose freedom." – Peter McCormack (37:41)
• "If socialists understood economics, they wouldn't be socialists." – Podcast (65:57)

On Institutional Failure:

• "We have reached a position where...our intellectual debate has been dominated by one or two statist schools of thought." – Ewen Stewart (76:59)

On Hope:

• "I'm optimistic about the creativity of our people. This is still a really great country." – Ewen Stewart (102:25)

Conclusion

Summary Statement:
Ewen Stewart offers a stark diagnosis of Britain's decline — a result of decades of unrestrained state growth, institutional inertia, and the loss of cultural and economic dynamism. He provides a radical roadmap for renewal: shrink the state, tax and regulate less, revive the “can-do” spirit, and re-embrace sound money and free market incentives, all while calling for honest, bold leadership. Despite the litany of challenges, Stewart ultimately holds out hope for Britain’s revival if decisive action is taken soon.

Important Segment Timestamps

• [00:00] – Opening critique of welfare state and personal responsibility
• [06:00] – Historical context: GDP and debt from 1750–2025
• [10:40] – Institutional hostility and expansion into new areas
• [15:10] – Stagnation in UK innovation and business formation
• [18:50] – Brain drain and flight of young talent
• [24:44] – Britain’s remaining strengths and the knife-edge moment
• [30:44] – Radical ideas for cutting benefits and quango spending
• [37:41] – “Socialists aren’t kind... Choose freedom.” (Host)
• [62:05] – Specific tax reform proposals
• [65:57] – Effects of socialism and central planning on incentives
• [78:21] – Inflating away debt: "fool’s gold"
• [102:25] – Stewart’s closing message of hope and optimism

For listeners who missed the episode, this summary provides a thorough guide to the central themes, arguments, data, and philosophy discussed, along with the most illuminating moments in the conversation.