The Costs of Collectivism

New Statesman (1996), June 12, 2000 | Go to article overview

The Costs of Collectivism


Mention the nationalised railways, the BBC, the town halls, the old gas and electricity boards, and the British always groaned and sneered. But mention the National Health Service, and people use the language of a fundamentalist religious sect: the political historian Peter Hennessy has called it "one of the finest institutions ever built by anybody anywhere"; a health policy pundit, Professor RudolfKlein, calls it "the only service organised around an ethical imperative"; Aneurin Bevan himself thought it made society "more wholesome, more serene, and spiritually healthier". All Labour politicians live in the shadow of Bevan's towering achievement. Nothing they do can ever match it. The Third Way will not produce anything comparable to this triumph of old Labour collectivism.

But in a society of instant gratification and consumer power, modern politicians neglect to spell out the costs of collectivism. First, the NHS has to be paid for. It is a peculiar weakness of the British that they expect both health and food to be cheap, while being willing to pay ridiculous sums for houses. It is well known that the UK spends a lower proportion of its GDP on health than almost any other industrialised country, and this is usually attributed, with some justice, to the superior efficiency of the NHS, which doesn't incur the administrative costs of a private insurance system or the medical costs of unnecessary treatments. But this is only part of the story. The British deficit in health spending isn't purely the result of higher private spending elsewhere; it is also the result of lower public spending here - lower (again as a proportion of GDP) even than the notoriously non-collectivist United States. We now know some of the results: comparatively low survival rates, for example, for people suffering lung or breast cancer.

Second, the NHS needs to ration resources. Quite apart from the capacity of expensive technology to keep alive those who would otherwise die, nobody ever considers themselves in perfect health: there is always a wart to be removed, an irritable bowel to be explored, a back pain to be relieved, a sex drive to be restored. It is a law of economics that individuals will consume a product until the costs of additional consumption exceed the benefits. Since there is no charge for hospital treatment in the NHS, the costs must be incurred in time: waiting to get on a waiting-list, waiting to get into a hospital, waiting for a bed or a doctor's time once you get there. …

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