Montreal, December 6, 2003  /  No 134
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Pierre Lemieux is an economist and author.
by Pierre Lemieux
          The Daily Telegraph revealed several months ago that the British public health insurance system (the National Health Service, or NHS) is spending hundreds of millions of pounds per year to treat foreigners and illegal residents who don't have a legal right to free health care.(1) Any foreign visitor or illegal immigrant from a third-world country who, while in the U.K., is diagnosed as HIV positive, is allowed to stay because "[t]he Human Rights Act makes it impossible to return people to a country where the appropriate medical care is not available." Many Africans are jumping through this loophole. More generally, many foreign visitors, and not necessarily poor ones, take advantage of their stay in the U.K. to get free medical care, at the expense of the British taxpayer.
          Created just after World War II, the NHS is a major feature of the Welfare State. Perhaps the British public health system is more prone to abuse than similar systems in other countries, but this does not diminish its interest as a case study of the Welfare State. In the eyes of many people, the Welfare State is a benevolent agency providing a safety net that is in everybody's interest. 
          Indeed, there is a rational choice argument for the Welfare State, which goes as follows. A rational individual will choose to insure against catastrophic contingencies that cannot be insured on the private insurance market for reasons of adverse selection or moral risk. These contingencies, insurable only by the state, include catastrophic illnesses, long-term unemployment, and a host of disabilities assigned by the lottery of birth. In order to compensate for these disabilities, other social policies are needed, such as free education. This sort of theory is perhaps best exemplified by John Rawls' A Theory of Justice, but it is more or less implicit in most contemporary arguments for the Welfare State. 
          The rational-choice justification for the Welfare State is faulty if only because it does not hold for risk seekers. A risk seeker may well prefer the chance of being very rich and the risk of poverty, to expensive security. You only need one such individual to invalidate the claim that the Welfare State would be chosen unanimously by rational individuals behind a veil of ignorance – or by rational individuals at the constitutional stage, to use Buchanan's terminology.(2) But there is another, more important, reason why the rational-choice approach to politics does not support the Welfare State: even for a risk neutral individual or for a risk averter, the Welfare State has costs that will often dwarf its benefits. 
          The problem is not just that, in order to be a welfare fountain for some, the Welfare State has to be a taxing vampire for others, but also that it must monitor and control the populace in a way that necessarily imposes costs on anybody who does not like to be monitored and controlled, and that such powers increase the risk of tyranny. The Welfare State cannot, in any meaningful way, assume responsibility for the welfare of the population without knowing much about its subjects, without imposing ID numbers and papers, without systems to detect need and abuse, and without secondary laws meant to protect its wards from imposing costs on the system (like people who don't wear seat belts, who drink, who are obese, and so on and so forth). In the process of redistributing income and the pleasures of life, the state necessarily becomes more and more powerful. As Bertrand de Jouvenel puts it, "The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State."(3) 
     « The Welfare State cannot, in any meaningful way, assume responsibility for the welfare of the population without knowing much about its subjects, without imposing ID numbers and papers, without systems to detect need and abuse, and without secondary laws meant to protect its wards from imposing costs on the system. »
          What the rational-choice argument for the Welfare State mainly neglects are the enhanced control and surveillance requirements of this type of state. Many individuals, especially if they adhere to the Western tradition of liberty, will consider this a very high cost. 
          Which brings us back to the NHS as an illustration of the dangers and hidden costs of the Welfare State. For political reasons related to the English tradition of privacy and the absence of ID papers, one can obtain NHS care with virtually no questions and no form filling – and yes, however incredible this may seem to Americans, without providing anything like a social security number! Such liberal ways attract all the poor of the world and, as the Daily Telegraph investigation shows, many less poor ones who still prefer free health care to what they could get elsewhere at a cost. The same problem plagued the Canadian public health system some years ago, with many Americans crossing the border to get health care at the expense of the Canadian taxpayers; it was solved with mounting administrative controls (including medicare cards with photographs, centralized databases, etc.) to make sure that only the nationally-correct sick would be treated free. The British will also have to take this road, lest the system, or the taxpayers, go bankrupt. 
          When the Telegraph investigative reporter complains that, "Nobody entering the UK is required to take a health check," she is just saying that you can't both have the Welfare State and avoid totalitarian controls forever. A British nurse made a fabulous comment: "It's not the people using [the NHS] that are at fault. It's the system that allows itself to be screwed." Translated from Newspeak, this means that the Welfare State has to become more and more bureaucratic, intrusive, and powerful, in order to survive. 
          So far, so good, but a vexing puzzle remains. Why would the British state want to attract poor Africans with AIDS to British shores? The question remains puzzling even when one admits that the state is not a single actor but a network of related individuals and organizations in a particular environment, for state actions still reveal the preferences expressed by, or in, this network. The question remains puzzling even when one grants that the state is not completely immune to citizens' revolt, and that measures may now be taken in answer to the Telegraph's revelations. 
          My hypothesis is that the state likes docile citizens. And who is going to be more docile that this Sudanese woman who came to the U.K. with her husband and two children, all HIV positive, and who says, "In Sudan, I would be dead. My children would be dead or orphans. Now, we have a happy life." The worst revolution this woman could ever participate in would be one aimed at increasing state power. Such subjects are no threat for the state apparatchiks. Only with more administrative tyranny can the Welfare State prevent itself from being screwed. The Welfare State and the Totalitarian State are the two faces of the same Leviathan Janus. 
1. Harriet Sergeant, "The World's Sick Are Flocking to the NHS — And We Are Paying," The Daily Telegraph, May 23, 2003, pp. 20-21.  >>
2. James M. Buchanan, The Limits of Liberty. Between Anarchy and Leviathan (Chicago: University of Chicago Press, 1975).  >>
3. Bertrand de Jouvenel, The Ethics of Redistribution (Indianapolis: Liberty Fund, 1989; original edition: 1952), p. 72.  >>
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