As Eugene McCarthy, of all people, observed: “The only thing that saves us from the bureaucracy is inefficiency. An efficient bureaucracy is the greatest threat to liberty.”
Luckily the United States is blessed with one of the most incompetent governments in the developed world. It isn’t simply that the Americans have a bloated government, it’s that they have a bloated government that accomplishes far less dollar for dollar than the bloated governments of other leading nations.
This is why Americans should have no fear of Canadian style socialized health care being imposed on them, their government isn’t smart enough to run it. That said Obamacare is turning out to be something that makes Canadian Medicare look like the Swiss Army. I grimly await the flood of American health care refugees trickling north of the 49th. That’s bad news for them and worse news for us. What kept the Canadian system semi-functional was the American escape hatch. If upper middle class Canadians can no longer sneak across to Buffalo, Burlington or Seattle for treatment, that puts more pressure on our system.
From time to time I’m asked why government is so incompetent. It’s such a truism among conservatives, libertarians and classical liberals that it’s rarely reflected upon. February is cold in Winnipeg, governments are generally incompetent. We accept these things perhaps too readily. The truism is true, but in assuming it so blithely we fail to communicate its importance to reasonable people who are uncommitted.
Richard Anderson, “The Incompetence of Evil Government”, The Gods of the Copybook Headings, 2014-02-20
February 21, 2014
November 28, 2013
You’ll have guessed from the tone of my Obamacare links and comments that I didn’t think it was a good idea from the start and it’s been a great example of how not to implement a major government initiative. That said, it’s a sure bet that Obamacare will have influence on other countries as they consider their own health programs. Colby Cosh is surprised that the scandal-addled Canadian media hasn’t been paying more attention to the Obamacare train wreck as the wheels fall off in all directions:
Obamacare isn’t going to make major systemic change in either direction look more appetizing to Canadians. That’s an important Canadian angle right there. Not long ago it looked as though national pharmacare was likely to become an election issue here, quarterbacked by the NDP and perhaps the Liberals, too. The concept has plenty of support among economists and other health policy experts—the same class of kindly boffins that, in the U.S., lined up almost unanimously behind the Affordable Care Act.
For better or worse, nationalizing prescription-drug insurance seems likely to be a much tougher sell here in the immediate future. Any large, complex health care experiment will be. The more wise heads support it, the easier it will be for supporters of the status quo to shout, “Unintended consequences! Ivory-tower tomfoolery!” Indeed, political strategists may already be saying it to themselves.
American commentators are already starting to wonder if Obamacare’s difficult start and increasingly troubled prospects may end up as a victory for small-government conservatism. The problems for the program do not end with the calamitous state of the federal insurance-exchange website, or even with the nasty surprises handed to the self-employed and freelancers in the “individual market” who were falsely promised: “If you like your plan you can keep your plan.” Some Obamacare buyers are finding themselves shut out from their preferred doctors and hospitals; employers are junking non-compliant health plans; and many in the middle class who liked the Obamacare concept are facing sticker shock.
The redistributive aspects of Obamacare were undersold, and possible pitfalls obviously not foreseen. The neoliberal Democrat Walter Russell Mead put it neatly the other day: “President Obama may be the Democrat who ends up convincing millions of American millennials that Ronald Reagan was right, and that the progressive administrative state is neither honest nor competent enough to solve the problems of the American people.” If that is the case, the effects cannot be confined to the U.S.
October 18, 2013
[W]hen negotiating with other governments, pharmaceutical companies operate at a severe disadvantage, not because the governments’ buying power is so vast (the national health-care systems of Canada and many European countries cover fewer people than Aetna), but because the people you’re negotiating with can change the rules under which your product gets sold. At any point they can say, like Lord Vader, “I am altering the deal. Pray that I do not alter it any further.”
But if Canada started paying more, that wouldn’t mean we’d pay less. Drug companies are charging what they think we will pay. The result of Canadians and Europeans paying less is not that we pay more for drugs; it’s that fewer drugs get developed. To the extent that they are harming us, it is in hindering the development of cures or better treatments that we are missing, and don’t even know about.
Unfortunately, this is a classic case of Bastiat’s dilemma. It is easy for each country’s government to see the high prices that people are paying and intervene to lower them. It is hard for each country’s government, much less its citizens, to envision the new medical treatments that they might get if they paid more for drugs. So their incentives are heavily skewed toward controlling the price here and now, even if that means losing future cures.
Drug development is essentially a giant international collective-action problem. The U.S. has kept it from being a total disaster because we don’t have good centralized control of our insurance market, and our political system is pretty disorganized and easy to lobby. If that changes — and maybe we just changed it! — we’ll knock down the prices of drugs to near the marginal cost using government fiat, and I expect that innovation in this sector will grind to a halt. Stuff will still be coming out of academic labs, but no one is going to take those promising targets and turn them into actual drugs.
Megan McArdle, “U.S. Consumers Foot the Bill for Cheap Drugs in Europe and Canada”, Bloomberg, 2013-10-14
October 4, 2013
Jonah Goldberg on what sets the current US government “shutdown” apart from all the others in recent memory:
Obama has always had a bit of a vindictive streak when it comes to politics. I think it stems from his Manichaean view of America. There are the reasonable people — who agree with him. And there are the bitter clingers who disagree for irrational or extremist ideological reasons.
In his various statements over the last week, he’s insisted that opponents of Obamacare are “ideologues” on an “ideological crusade.” Meanwhile, he cast himself as just a reasonable guy interested in solving America’s problems. I have no issue with him calling Republican opponents “ideologues” — they are — but since when is Obama not an ideologue?
The argument about Obamacare is objectively and irrefutably ideological on both sides — state-provided health care has been an ideological brass ring for the Left for well over a century. But much of the press takes its cues from Democrats and sees this fight — and most other political fights — as a contest pitting the forces of moderation, decency, and rationality against the ranks of the ideologically brainwashed.
What’s unusual is the way Obama sees the government as a tool for his ideological agenda. During the fight over the sequester, Obama ordered the government to make the 2 percent budget cut as painful and scary as possible.
When Republicans vote to fund essential or popular parts of the government, the response from Democrats is, in effect, “How dare they?” Nancy Pelosi calls the tactic “releasing one hostage at a time” — as if negotiators normally refuse to have hostages released unless it’s all at once.
In the 17 previous government shutdowns since 1977, presidents have worked to avoid them or lessen their impact. Obama has made no such effort out of an ideological yearning to punish his enemies, regardless of the collateral damage.
September 30, 2013
Mark Steyn explains just how big the effective nationalization of the US healthcare system really is:
No one has ever before attempted to devise a uniform health system for 300 million people — for the very good reason that it probably can’t be done. Britain’s National Health Service serves a population less than a fifth the size of America’s and is the third-largest employer on the planet after the Indian National Railways and the Chinese People’s Liberation Army, the last of which is now largely funded by American taxpayers through interest payment on federal debt. A single-payer U.S. system would be bigger than Britain’s NHS, India’s railways, and China’s army combined, at least in its bureaucracy. So, as in banking and housing and college tuition and so many other areas of endeavor, Washington is engaging in a kind of under-the-counter nationalization, in which the husk of a nominally private industry is conscripted to enforce government rules — and ruthlessly so, as Michelle Malkin and many others have discovered.
Obama’s pointless, traceless super-spending is now (as they used to say after 9/11) “the new normal.” Nancy Pelosi assured the nation last weekend that everything that can be cut has been cut and there are no more cuts to be made. And the disturbing thing is that, as a matter of practical politics, she may well be right. Many people still take my correspondent’s view: If you have old money well managed, you can afford to be stupid — or afford the government’s stupidity on your behalf. If you’re a social-activist celebrity getting $20 million per movie, you can afford the government’s stupidity. If you’re a tenured professor or a unionized bureaucrat whose benefits were chiseled in stone two generations ago, you can afford it. If you’ve got a wind farm and you’re living large on government “green energy” investments, you can afford it. If you’ve got the contract for signing up Obamaphone recipients, you can afford it.
But out there beyond the islands of privilege most Americans don’t have the same comfortably padded margin for error, and they’re hunkering down. Obamacare is something new in American life: the creation of a massive bureaucracy charged with downsizing you — to a world of fewer doctors, higher premiums, lousier care, more debt, fewer jobs, smaller houses, smaller cars, smaller, fewer, less; a world where worse is the new normal. Would Americans, hitherto the most buoyant and expansive of people, really consent to live such shrunken lives? If so, mid-20th-century America and its assumptions of generational progress will be as lost to us as the Great Ziggurat of Ur was to 19th-century Mesopotamian date farmers.
September 15, 2013
Megan McArdle is a fan of the TV show Breaking Bad, but she also is fairly well informed about the US healthcare system. This means that the idea that the TV show’s Canadian counterpart would look like this…
…depends on the audience for the real TV show not actually knowing much about the US system.
The series starts with Walter White, a high school chemistry teacher in Albuquerque, New Mexico, who is diagnosed with lung cancer. His lousy health maintenance organization won’t cover a decent doctor, or treatment. So Walter is forced to turn to crime just to pay his medical bills and … whoa, wait a minute. You know who has excellent benefits, compared with basically everyone else in the country? Teachers, firefighters and cops. Maybe they’re overworked and underpaid, but the one thing that you cannot say about them is that they’re forced to endure shoestring health-care plans. According to the Internet, Albuquerque school district employees are eligible for
Medical, Dental, Vision, Basic and Additional Life Insurance, Long Term Disability, Pre-tax Insurance Premium Plan (PIPP), Flexible Spending Accounts, Long Term Care Insurance, 403(b) and the 457(b) Deferred Compensation Plans.
That’s a generous package. Moreover, the Albuquerque school district self-insures, so any complaints about benefit levels should be directed at the city government, not your “lousy HMO.”
Later, after Walt’s actions accidentally result in the shooting of his brother-in-law, a Drug Enforcement Agency agent, Walt’s wife takes a bunch of the meth money to pay for Hank’s treatment. On his government salary, Hank can’t possibly afford the treatment he needs, because, of course, his lousy insurance policy won’t cover more than a few visits to the physical therapist … and whoa, we just went from “unrealistic” to “ludicrous.” You know who has even better benefits than employees enjoying a compensation package collectively bargained with a local government? Federal employees in a low-cost state such as New Mexico. Moreover, extra benefits are available to people injured in the line of duty.
In short, a number of key plot points hinge on the improbable assertion that people who actually enjoy some of the best health insurance in the country actually suffer some of the worst — so bad that we are expected to believe that Walt had no choice but to cook meth to cover the gaps. For an otherwise great show, this is incredibly silly.
September 14, 2013
“I’ve lived in Washington now for 44 years, and that’s a lot of folly to witness up close,” says Washington Post columnist George Will. “Whatever confidence and optimism I felt towards the central government when I got here on January 1, 1970 has pretty much dissipated at the hands of the government.”
“In part, I owe my current happiness to Barack Obama,” continues the 72-year-old Will, who “so thoroughly concentrates all of the American progressive tradition and the academic culture that goes with it, that he’s really put the spring in my step.”
Branded “perhaps the most powerful journalist in America” by the Wall Street Journal, Will received the Pulitzer Prize for commentary in 1977 and is the author of numerous books, including Statecraft as Soulcraft: What Government Does, Men at Work: The Craft of Baseball, and One Man’s America: The Pleasures and Provocations of our Singular Nation. A regular panelist on ABC’s This Week, Will has the distinction of having been attacked in the pages of Doonesbury and praised in an episode of Seinfeld (for his “clean, scrubbed look”).
More recently Will has become a champion of libertarianism, both in print and on the air. “America is moving in the libertarians’ direction,” Will wrote in a 2011 review of The Declaration of Independents, “not because they have won an argument but because government and the sectors it dominates have made themselves ludicrous.”
Will sat down with Reason‘s Nick Gillespie and Matt Welch to discuss his libertarian evolution (2:16), how Sen. John McCain spurred his political transformation (4:07), Ronald Reagan (4:29), the tax code (8:45), why the Republicans are becoming more interesting (19:30), what the government should be spending money on (23:14), war hawks and foreign policy (25:19), the benefits of judicial activism (34:49), gay marriage (37:55), marijuana legalization (39:04), the importance of Barry Goldwater (40:28), Mitt Romney (45:45), the 2016 election (46:37), Medicare (48:52), how Everett Dirksen’s untimely death changed his life (50:42), why President Obama makes him happy (52:06), affirmative action (53:07), and his optimism in America’s future (57:31).
September 13, 2013
The Harvard School of Public Health released a summary of public opinion on various issues surrounding the Medicare system:
As debate over the national debt and the federal budget deficit begins to heat up again, an analysis of national polls conducted in 2013 shows that, compared with recent government reports prepared by experts, the public has different views about the need to reduce future Medicare spending to deal with the federal budget deficit. Many experts believe that future Medicare spending will have to be reduced in order to lower the federal budget deficit  but polls show little support (10% to 36%) for major reductions in Medicare spending for this purpose. In fact, many Americans feel so strongly that they say they would vote against candidates who favor such reductions. Many experts see Medicare as a major contributor to the federal budget deficit today, but only about one-third (31%) of the public agrees.
This analysis appears as a Special Report in the September 12, 2013, issue of New England Journal of Medicine.
One reason that many Americans believe Medicare does not contribute to the deficit is that the majority thinks Medicare recipients pay or have prepaid the cost of their health care. Medicare beneficiaries on average pay about $1 for every $3 in benefits they receive.  However, about two-thirds of the public believe that most Medicare recipients get benefits worth about the same (27%) or less (41%) than what they have paid in payroll taxes during their working lives and in premiums for their current coverage.
Differences between experts on the financial condition of Medicare and the public can also be seen when examining the reasons for rising Medicare costs and ways to reduce future Medicare spending. Unlike many experts, the public does not see overuse of medical care and the cost of new medical technologies as among the most important reasons for rising Medicare costs. Only one in six Americans (17%) believes that “people receiving drugs and medical treatments they don’t need” is one of the most important reasons why Medicare care costs are rising, and only 6% see “new drugs, tests and treatments being offered to the elderly” as one of the most important reasons. The three reasons cited most often by the public are poor management of Medicare by government (30%), fraud and abuse in the health sector (24%), and excessive charges by hospitals (23%).
Many experts believe that one of the most important reasons for rising Medicare costs is unnecessary care provided to patients. The public, however, sees the bigger problem for people on Medicare as not getting the health care they need (61%), rather than receiving unnecessary care (21%). Many experts see capitated payments (doctors getting paid a fixed amount of money so they can manage all of a patient’s health care for the year) as a preferred way of reducing future Medicare spending. However, a majority of the public favors continuing fee-for-service payments (65%) rather than changing to capitated health care arrangements (30%). This resistance to change may be related to the fact that a majority of the public sees Medicare in some cases already withholding treatments and prescription drugs to save money, including 63% who believe this happens very or somewhat often.
June 4, 2013
An interesting bit of history on the BBC News website:
It’s a tradition that dates back to the 1930s and it’s designed to give all children in Finland, no matter what background they’re from, an equal start in life.
The maternity package — a gift from the government — is available to all expectant mothers.
It contains bodysuits, a sleeping bag, outdoor gear, bathing products for the baby, as well as nappies, bedding and a small mattress.
With the mattress in the bottom, the box becomes a baby’s first bed. Many children, from all social backgrounds, have their first naps within the safety of the box’s four cardboard walls.
Mothers have a choice between taking the box, or a cash grant, currently set at 140 euros, but 95% opt for the box as it’s worth much more.
The tradition dates back to 1938. To begin with, the scheme was only available to families on low incomes, but that changed in 1949.
“Not only was it offered to all mothers-to-be but new legislation meant in order to get the grant, or maternity box, they had to visit a doctor or municipal pre-natal clinic before their fourth month of pregnancy,” says Heidi Liesivesi, who works at Kela — the Social Insurance Institution of Finland.
So the box provided mothers with what they needed to look after their baby, but it also helped steer pregnant women into the arms of the doctors and nurses of Finland’s nascent welfare state.
In the 1930s Finland was a poor country and infant mortality was high — 65 out of 1,000 babies died. But the figures improved rapidly in the decades that followed.
May 12, 2013
Hard to come up with an explanation for this perverse policy:
Ministers came under fresh criticism for their handling of the NHS last night after it emerged the ambulance service will be hit with £90 million in fines — as punishment for the chaos blighting casualty departments.
Critics said the fines will simply deprive trusts of vital funds that could help tackle the deterioration in patient services.
A new penalty clause that was written into ambulance trust contracts from last month will levy fines of £200 for every patient who has to wait for longer than 30 minutes for admission to A&E, and £1,000 for each patient forced to wait more than an hour.
You can understand the desire to speed the delivery of injured people to the emergency services they need, but how does it make any kind of sense to punish the ambulance service because the emergency wards they need to get their patients into are overcrowded? Unless the ambulance service has some kind of magic ability to shift priorities in the hospitals, fining them for patients’ wait times makes less than zero sense.
But acute overcrowding in A&E departments has led to increasing ambulance ‘jams’ formed as they queue to unload, with waits of four hours recorded at some hospitals at the busiest times.
Damning new figures reveal that during the past year there were more than 265,000 occasions in England when ambulance staff took more than half an hour to deliver patients into the hands of hospital doctors.
And shockingly, more than 37,000 patients had to wait over an hour to move on to the wards.
Official guidelines say ambulances should deliver patients, clean the ambulance and be back out on the road within 15 minutes. A longer wait is seen as ‘unsafe’.
Yet the chaos in A&E departments is so bad that at one, the Norfolk and Norwich University Hospital, doctors were forced to put up a tent to act as a makeshift ward to treat patients alongside the ambulance queue.
May 2, 2013
Megan McArdle explains why a recent study’s results may be much more important than you might gather from the way it’s been reported so far:
Bombshell news out of Oregon today: a large-scale randomized controlled trial (RCT) of what happens to people when they gain Medicaid eligibility shows no impact on objective measures of health. Utilization went up, out-of-pocket expenditure went down, and the freqency of depression diagnoses was lower. But on the three important health measures they checked that we can measure objectively — glycated hemoglobin, a measure of blood sugar levels; blood pressure; and cholesterol levels — there was no significant improvement.
I know: sounds boring. Glycated hemoglobin! I might as well be one of the adults on Charlie Brown going wawawawawawa . . . and you fell asleep, didn’t you?
But this is huge news if you care about health care policy — and given the huge national experiment we’re about to embark on, you’d better. Bear with me.
Some of the news reports I’ve seen so far are somewhat underselling just how major these results are.
“Study: Medicaid reduces financial hardship, doesn’t quickly improve physical health” says the Washington Post.
The Associated Press headline reads “Study: Depression rates for uninsured dropped with Medicaid coverage”
At the New York Times, it’s “Study Finds Expanded Medicaid Increases Health Care Use”
I think Slate is closer to the mark, though a bit, well, Slate-ish: “Bad News for Obamacare: A new study suggests universal health care makes people happier but not healthier.”
This study is a big, big deal. Let me explain why.
March 10, 2013
The defeat of the Republicans in the last US federal election has a lot of them starting to consider radical changes to the party in order to attract new voters. Some of these proposed changes are so radical that it’s hard to believe they wouldn’t rupture the party and drive away nearly as many as they hope to bring in. The farcical notion of a “conservative welfare state“, for example, would likely jettison any last vestiges of reducing the size of government:
[Matthew] Continetti is not the first conservative to argue — falsely as I note in an upcoming piece for Reason magazine — that courting new constituencies such as Hispanics, Asian Americans and other minorities will require the party to give up even its pretense of limited government. Still, Continetti’s basic point that the GOP does not have a coherent ideology that will allow it to court new constituencies while hanging on to its old ones is well taken. After all, how does the party appeal to the “millennial generation” that includes gays, young foodies and indie-music listening hipsters without losing the meat-and-potato social conservatives in, say, Charleston, South Carolina?
Continetti’s answer, dusted off from a 1975 essay by Irving Kristol, is that what the GOP needs is an authentically conservative version of the liberal welfare state. To fashion such a state, Continetti argues, would require:
Republicans to revisit some of the assumptions they have held since the end of the Cold War. Maybe the foremost concern of most Americans is not the top marginal income tax rate. Maybe you can’t seriously lower health care costs without radically overhauling the way we pay for health care. Maybe a political party can’t address adequately such middle-class concerns as school quality and transportation without using the power of government. Maybe the globalization of capital and products and labor hasn’t been an unimpeachable good.
I am all for rethinking post-Cold War assumptions, but do we have to throw globalization and trade liberalization under the bus in the process? After all, hostility to trade has become passé even among Third World anti-trade activists such as Vandana Shiva — the last ones holding their finger in the dyke to stop globalization. This is in no small part due to the debunking done by economists such as Jagdish Bhagwati who have shown that even the immediate losers of trade liberalization win in the long run. So what is the point of reviving this animus especially since Continetti offers no new (or even old) evidence of trade’s downside?
[. . .]
In short, the ideal conservative welfare state would be a libertarian dystopia of even bigger proportions than the liberal welfare state. There is less welfare and more state in it.
But what is deeply ironic is that a magazine that accuses libertarians of isolationism because they oppose American military interventionism has no qualms about recommending a restrictionist immigration policy to keep foreigners out and a protectionist trade policy to keep foreign goods out. If I had to pick a term for this foreign policy, I’d call it neo-isolationism. And maybe I lack imagination, but it is hard to see how a party that wants to engage the world through its “fearsome military” — rather than through voluntary exchange and mutual cooperation — could gain enough moral high ground to craft a winning political message, especially in a war-weary country.
February 17, 2013
The British media is doing a great job of distracting the public with the horsemeat story, and the politicians and National Health Service bureaucrats are delighted that nobody is paying attention to the real scandal:
At any given moment, there exists at least one delicate subject that all mainstream political parties would much rather not discuss. For many years the abuse of MPs’ expenses fell into this category. After this was exposed by a Telegraph investigation, everyone joined a tacit agreement to keep quiet about the criminality inside the Murdoch newspaper empire.
Now the subject which nobody wants to talk about is the National Health Service. It is just over a week since the publication of the Francis report into Stafford hospital, where some 1,200 patients died in appalling circumstances. Had any other institution been involved in a scandal on this scale, the consequences would have been momentous: sackings, arrests and prosecutions. Had it involved a private hospital, that hospital would have been closed down already, and those in charge publicly shamed and facing jail.
Astonishing to relate, nothing has happened. Politicians have made perfunctory expressions of concern, while agreeing that there must be “no scapegoats”, and that Sir David Nicholson (the senior figure responsible) must remain in his job.
Then, almost at once, the political class turned its attention to a far more lively subject: horse meat. Few “scandals” in living memory have carried less significance. And yet few stories have dominated the press quite as comprehensively since rival teams of crack reporters from The Sun and The Star pursued Blackie the Donkey across Southern Spain in 1987, in the wake of some dubious allegations of mistreatment by his Spanish owners.
Misdirection is a vital tool in the arsenal of the magician — and it can be even more valuable in the political arena. If they can fool you into watching the hand that isn’t hiding the coin, they can get away with a great trick (magicians) … or a great evil (politicians).
January 28, 2013
The Guardian reports on recent comments by the new finance minister in Japan:
Japan’s new government is barely a month old, and already one of its most senior members has insulted tens of millions of voters by suggesting that the elderly are an unnecessary drain on the country’s finances.
Taro Aso, the finance minister, said on Monday that the elderly should be allowed to “hurry up and die” to relieve pressure on the state to pay for their medical care.
“Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government,” he said during a meeting of the national council on social security reforms. “The problem won’t be solved unless you let them hurry up and die.”
Aso’s comments are likely to cause offence in Japan, where almost a quarter of the 128 million population is aged over 60. The proportion is forecast to rise to 40% over the next 50 years.
[. . .]
To compound the insult, he referred to elderly patients who are no longer able to feed themselves as “tube people”. The health and welfare ministry, he added, was “well aware that it costs several tens of millions of yen” a month to treat a single patient in the final stages of life.
Cost aside, caring for the elderly is a major challenge for Japan’s stretched social services. According to a report this week, the number of households receiving welfare, which include family members aged 65 or over, stood at more than 678,000, or about 40% of the total. The country is also tackling a rise in the number of people who die alone, most of whom are elderly. In 2010, 4.6 million elderly people lived alone, and the number who died at home soared 61% between 2003 and 2010, from 1,364 to 2,194, according to the bureau of social welfare and public health in Tokyo.
The government is planning to reduce welfare expenditure in its next budget, due to go into force this April, with details of the cuts expected within days.
Sadly, expect more of this kind of comment from hard-pressed governments as the baby boomers move out of work and into retirement.
November 28, 2012
In sp!ked, Rob Lyons looks back at the 1942 Beveridge Report and what it led to:
On 2 December 1942, the UK government published the Report of the Inter-Departmental Committee on Social Insurance and Allied Services, usually referred to as the Beveridge Report after its chair, the social reformer (and eugenicist) William Beveridge. The report is commonly regarded as a watershed in the development of the welfare state in Britain, a sign that we were becoming a more civilised and humane society. But the seventieth anniversary of the report on Saturday will no doubt prompt much handwringing about the system that the report helped to create.
[. . .]
The fact that the report’s recommendations were largely implemented by a Labour government, elected after the Second World War ended in 1945, has led to the creation of a myth that these were somehow ‘radical’ or ‘socialist’ policies. In fact, the general assumption that the state had to step in to reorganise and manage large swathes of society had been broadly accepted both before and particularly during the war. Compulsory national insurance had been introduced in a limited way in 1911 and state pensions had been enacted, for the very few people who lived past the age of 70, in 1908. The first call for a national health service came from the distinctly un-radical think tank, Political and Economic Planning, in 1937 — a call which was backed by the British Medical Association a year later.
[. . .]
Beveridge also built his belief in social insurance on another idea: that it was the function of the state to ensure full employment. Beveridge was inspired by the establishment’s new ideologue-in-chief, John Maynard Keynes; ideas about planning and state management of the economy started to become all the rage. The welfare bill would never become too large, Beveridge assumed, because the government would never let unemployment get out of hand. Individuals suffering temporary unemployment would be covered by their insurance contributions. In any event, it was widely assumed that people would, by and large, be too proud and independent to abuse the system and would choose work over welfare.
Yet as the decades passed, the welfare state expanded. The notion of a connection between national-insurance contributions and entitlements has pretty much disappeared. Now there is an amorphous sense of entitlement to welfare, regardless of one’s contributions. The state has positively encouraged this sentiment even as politicians have attacked ‘scroungers’ rhetorically.
For example, incapacity benefit has been expanded, so that millions of people who could work but are not currently employed are effectively told not to bother looking for jobs. This suited politicians when it became abundantly clear that full employment was gone, never to return. Taking those who might struggle to find work off the dole figures, and putting them on benefits that are not reliant upon them looking for work, might seem like a humane or generous thing to do. But in truth, the incapacity system effectively disabled them, by officially branding them ‘incapable’ — a label which many of these people have now internalised.