Churchill And The Welfare State

Some may think this is ironic; Churchill creating Britain's first welfare state. After all, he's best remembered for his role in World War II.

"In 1908, when Asquith became prime minister, there were almost no models of state welfare anywhere on earth. The exception was Bismarck’s Prussia, which to the dismay of German Social Democrats had instituted compulsory health insurance in 1883. That created a sudden panic on the left. Karl Marx had died weeks before, so the socialist leader August Bebel consulted his friend Friedrich Engels, who insisted that socialists should vote against it, as they did. The first welfare state on earth was created against socialist opposition."

The forgotten truth about health provision is that socialism and state welfare are old enemies, and welfare overspending is a characteristic of advanced capitalist economies. Nobody doubts that California is capitalistic, and its public debt is notorious; the People’s Republic of China, by contrast, is a major creditor in international finance. When the two Germanies united after 1990, the social provision of the capitalist West was more than twice that of the socialist East, and the cost of unification to West Germany proved vast. Talk of socialized medicine was always misleading if socialized implies socialist, and the very word probably guarantees that confusion. The British National Health Service of 1948, like the Canadian version that followed it 20 years later, always allowed for a flourishing private sector—a sector that has tended to grow with the years. It neither banned private medical care nor discouraged it. Only a competitive economy, what is more, is likely to generate a tax base big enough to maintain public hospitals, pensions, and schools. In short, a free economy needs state welfare, and state welfare needs a free economy."