Wednesday, 9 June 2010

The Safety Net: the Poor, the Unfortunate, the Feckless

In the previous post, I said that the argument for the minimal state was hard to beat.

Traditionally, the expansion of state activities has been most strongly defended where it seeks to provide a social safety net. No one will go to the wall because they are too poor, too afflicted or too stupid to climb out of difficulty unaided.

This is a powerful argument. If you are poor and healthy, to take out medical insurance may cost you no more than if you are rich and healthy. The snag is that as a proportion of your income, the health insurance costs you a lot more. An insurance policy is like a flat tax, a poll tax.

To this there are two possible responses.

One would suggest that the real task is to eliminate the poor by such means as (high) minimum wage legislation and by progressive taxation which takes the poorest out of the tax net altogether. This way, even the poor are not so poor that they canot fend for themselves in the way they think best.

The other response suggests that the sensible thing is to nationalise health care and make it free (or nearly free) at point of use. In this way, income is no bar to accessing doctors and hospitals. Everyone can get the (best) care, though that will not be the case if a parallel private health sector is permitted.

The second response has been the one most commonly adopted in Europe. But it has drawbacks. Free services can be overused and misused. In the UK, for example, the over 60 age group do not pay for prescriptions. Evidence suggests that, partly as a result, this age group is overprescribed drugs, some of which they do not use and some combinations of which, if they do use them, are toxic. Both doctors and patients behave irresponsibly. As another example, consider that Saturday night in a city centre Accident and Emergency department is often dominated by the needs of the feckless - those who have drunk too much and drugged too much. It may be that the drunks and druggies should not be asked for their credit cards at point of use; but there is a case for saying that they should be sent a bill after they have been stomach pumped and sent away.

In the light of such considerations, the pursuit of a more egalitarian income distribution - the first response I listed - may have more to recommend it than Statist and Nannying thinking allows.

Statist or Nannying thinking always has a strong streak of paternalism about it which assorts badly with a supposedly democratic society. To stay with the example of health, it says to people: This is the kind of health care we think is good for you. It removes the element of individual choice.

The Safety Net argument is only one line of response to the minimal state argument. There is another, which I will consider in my next Post

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