Thinking Small Is How You Stay Small

<A response to Brian Easton’s post “It Aint Easy Being Small” on Point of Order>

Brian Easton is right about one thing: New Zealand is small. Where he goes wrong—consistently, and consequentially—is in treating smallness as a justification for lower ambition, weaker competition, and heavier regulation.

Smallness does not doom a country to mediocrity. Some of the most formidable performers in global markets are small nations that chose exposure over insulation.

Consider Switzerland. It is world-leading in dairy, chocolate, pharmaceuticals, precision engineering, and banking. Firms like Nestlé, Roche, and Novartis did not emerge because Switzerland “thought small.” They emerged because Switzerland embedded fierce competition, export discipline, and technical excellence into its institutions. Swiss dairy succeeded not by shielding farmers from global markets, but by forcing them to meet them—on quality, efficiency, and innovation. Regulation followed success; it did not create it.

Or take Ireland. A small island with no natural advantages in technology, it became a global centre for pharmaceuticals, medical devices, and advanced manufacturing. Companies like Pfizer, Intel, and Medtronic built major operations there not because Ireland designed “bespoke small-country regulation,” but because it offered openness to capital, talent, and competition—combined with a relentless focus on productivity and skills. Ireland did not protect incumbents; it invited challengers.

Then there is Singapore—small, resource-poor, and globally exposed. It is a world leader in logistics, port operations, advanced manufacturing, finance, and biomedical sciences. Its success rests on ruthless standards, ease of entry, and intolerance for underperformance. Firms thrive or fail quickly. Regulation exists, but its purpose is clarity and speed, not protection. Singapore does not confuse “small” with “fragile.”

What these countries share is not scale, nor a preference for regulation. They share a refusal to soften discipline because replacement is hard. In fact, they do the opposite: they make replacement easier, faster, and less political.

Easton rightly observes that small societies risk monopolistic gatekeepers. But his remedy—more discretion, more tailored regulation, more official judgement—would entrench those gatekeepers further. The countries that escaped this trap did so by opening systems, not closing them.

The familiar examples of electricity and milk are often invoked as evidence that competition “failed.” But competition was never a guarantee of lower prices everywhere, always—an impossible standard never applied to regulation. What it delivered was choice, innovation, and adaptation. That some legacy services disappeared is not evidence of failure; it is evidence of change responding to consumer preference.

Small countries cannot afford complacency. Large countries can hide mediocrity in scale; small ones cannot. Their only durable advantage is excellence—and excellence does not survive protection.

Thinking for ourselves is hard. But the lesson from the world’s most successful small economies is clear: thinking small is not prudent. It is fatal.