The NHS: A Libertarian Perspective

Sean Gabb

Note: An old article, but possibly worth republishing. SIG

The National Health Service:
A Libertarian Perspective
by Sean Gabb
(18th August 2009)

During the past week, much of the English speaking world has been drawn into a debate on the merits of the National Health Service. For those unaware of this debate or its subject matter, I will say that the NHS, established in 1948, provides health care free at the point of use for everyone legally in the United Kingdom. It is paid for by the British State out of general taxation, and no account is taken, in treating patients, of how much they have paid or are likely to pay in taxes. The new American Government has proposed changes in the provision of health care that will move the American system to some extent in the direction of the British. This has been denounced by many Americans as a step towards an inherently sinister and inefficient system.

The debate has been joined by Daniel Hannan, one of the Conservative members of the European Parliament for the region in which I live. Speaking in America, he has said that to copy the British system would lead America towards bankruptcy “where we are now.”. He said further: “We have a system where the most salient facts of it you get huge waiting lists, you have bad survival rates and you would much rather fall ill in the US…. How amazing to me that a free people. . . should be contemplating, in peacetime, burdening themselves with a system like this that puts the power of life and death in a state bureaucracy.” [“Conservatives turn on MEP Daniel Hannan
for anti-NHS tour in America
, The Times,
London, 14th August 2009]

These comments have, with some mild dissent, united the British political media and political classes in denunciation. The Labour Government of Gordon Brown has leapt to defence of the NHS. The Conservatives have joined in. Mr Hannan finds himself an isolated figure, facing accusations that range from a lack of patriotism to something that approaches blasphemy. Indeed, except no one has yet issued a fatwa, he is almost the secular equivalent of Salman Rusdie in his gleeful sneering at what many in this country regard as an object of veneration. Now, I am sure that he can do without my support. Even so, the scandal that his behaviour has raised in this country gives me the opportunity for speaking, as a libertarian, on the legitimacy and on the merits of the NHS.

At the most fundamental level of analysis, legitimacy and merits have no connection with each other. The NHS is funded by compulsion. I am forced, as a taxpayer, to contribute to a system that provides health care of a kind and at costings that, given any choice in the matter, I would never accept for myself and those who look to me. I am also forced to pay towards the health care of strangers. I have no objection to charity. I try to be generous to those I know. I am prepared to be moderately generous even to those I do not know, and whom I might dislike if I did know them. But so far as I am compelled, paying for the health care of others cannot be described as charitable. It is as much an act of theft as if I were to be robbed in the street. The whole present system, therefore, is illegitimate. If it were, as we are continually assured, the “envy of the world”,my opinion would not alter. It is in itself unjust. I resent its existence in my country. I join with Mr Hannan in warning the Americans not to accept it for themselves.

This, however, is the most fundamental analysis, and no discussion can be regarded as complete without some examination of its merits. And in examining these, I fell an obligation to be as fair as possible. I will begin with the quality of health care provided by the NHS.

Here, I must dissent from much of the American condemnation. There is no doubt that the NHS is inefficient, and that it rations health care by waiting list and by explicit refusal to provide certain kinds of treatment to anyone, or by refusal to provide certain kinds of treatment to those deemed unlikely to benefit from them given their cost. But rationing in one form or another is inevitable to any system of health care. The demand for health care is unlimited. There is almost no one so ill that his life could not be prolonged, or his condition while alive not improved, by some expensive treatment. The problem is always at what cost. In a broadly private system, demand will be rationed by price. In the British system, it must be rationed by cost and benefit analyses undertaken by the doctors. It is easy for American critics to point to how long someone over here must wait to have his haemorrhoids cut out, or that he may be denied some drug that will put off or ease his death from cancer. But their own system is hardly perfect.

In attacking the British system, these critics seem to argue that their own is based on individual choice and free from any taint of collectivism. I am not an expert on the American system, but it does strike me as so heavily regulated and cartellised as to have little connection to a free market. The professional associations have worked to limit the numbers of doctors and nurses, even as they have obtained the exclusion of the unqualified from the provision of medical services. The drug companies benefit from patent laws and trade protections that raise the price of medicines far higher than in neighbouring countries. The insurance companies are regulated in the interests of medical suppliers. I am told that forty million Americans cannot afford health insurance premiums, and that millions more cannot afford what most would regard as appropriate cover. These people, I accept, are not denied all treatment. But the treatment they receive is often rather poor. Even those who can afford to pay as they go find that it can take years for new medicines or medical procedures to be allowed by the authorities. In particular, I am told that many dying of cancer cannot obtain adequate pain relief. It is legal for opiates to be prescribed in America. But the regulatory framework is so ferocious that many doctors are frightened to write out the prescriptions they otherwise would.

If I contrast what I am told about the American system with what I know from personal experience about the British, the NHS is not really that bad. In December 2007, my wife needed an emergency caesarean. This was performed by the NHS. At all times, we were kept informed of our options and our legal rights. I was allowed to stand beside my wife in the operating theatre. I was then allowed to sit with my wife and daughter until gone midnight. My wife spent the next few days in a room of her own, and was left to make as many calls from her mobile telephone as her work and family duties required. While there were visiting hours, I was allowed to come and go as I pleased. The quality of treatment was first class. Apart from the flowers and chocolates and bottles of wine that I chose to lavish on the medical staff when we left, there was no final bill for any of this. About ten years ago, the father of my best friend died of cancer. There may be more effective cancer treatments than the medical establishment prefers to see provided. But within the terms set by the medical establishment, he had excellent treatment. When all else had failed, he was allowed to die in peace under a broad umbrella of opiates. Another of my friends was diagnosed with prostate cancer about seven years ago. He is a university lecturer with a good enough knowledge of statistics to discuss his chances on an equal basis with the doctors. He remains well and has no complaints about the NHS.

Perhaps these cases are exceptional. I am discussing the experience of articulate, middle class people. We know what we should ask for and how to ask for it, and we know how to show gratitude when we get it. Perhaps I should think of the newspaper reports of people suffering needlessly in filthy, open wards. On the other hand, perhaps not. Those who get bad treatment from the NHS are mostly poor and ignorant people. I pity them. But they are the sort of people who would also suffer in the American system. I do not think the American critics are comparing like with like. They are holding up the best aspects of their own system with the worst of ours. They also do not seem to have noticed that increasing numbers of middle class people over here do have private health insurance. This gives us the ability to switch back and forth to the NHS as we find convenient. I am writing this article on a railway train. If there is a crash and I must be cut from the wreckage, I shall be taken to an NHS hospital and be stitched up and reset as well as anywhere in the world. If, on the other hand, there is no crash, but, somewhere between Tonbridge and Charing Cross, I suspect the beginnings of heart disease , I can use my insurance and be looked at by an expert within two days. If it turns out that I need an operation, this can be arranged within a few days more. If, on the other hand, I need continuous medication, I can present myself and my private case notes to my NHS general practitioner, who will then prescribe the relevant drugs at a heavily subsidised price.

I will add that the NHS is probably not unsustainable in the long term. It costs about £90 billion a year to run. But this is about eight per cent of gross domestic product, and is about half the American level. There are more doctors per head of population in Britain than in America. British life expectancy is higher than American. [Facts: “The brutal truth about America’s
“, The Independent,
London, 15th August 2009] And much of this budget is spent in ways that even slightly better management could reduce. I recall attending a speech that Madsen Pirie of the Adam Smith Institute gave in 1986. For reasons that I no longer recall, but found convincing at the time, he predicted that the NHS would collapse under its own weight within three years. That was not far off a quarter of a century ago. And the NHS is with us still.

This should not be taken as a defence of the NHS. I am simply pointing out that is is no worse on balance than the American system. They are differently organised and differently funded. Each has specific advantages and disadvantages. neither has much connection with a free market. In both countries, however, the middle classes are able to get very good health care. In both, the poor and ignorant do not. The NHS is not a bad institution relative to the American system. It is bad for other reasons – and these may be bad reasons that apply in some degree to the American system.

What is so fundamentally bad about the British system – its compulsory principle aside – is that it nearly abolishes individual control over health care. Compared with the system with which we entered the twentieth century, all real power is centralised into the hands of the professional bodies. A hundred years ago in this country, the market in medical services was decentralised and diverse. The professions themselves were lightly regulated. Most doctors lived on the fringes of genteel poverty. Many sold their services directly to clients – rather as lawyers and accountants do still. Others worked for charitable institutions. A few worked for the State, looking after the inmates of the workhouses. These were the two extremes of the market. The British population of a hundred years ago was about thirty million. Those who could afford to buy medical services directly numbered a few million. Those who relied on private charity or the workhouse numbered perhaps another few million. Those in between relied on private insurance. This was provided sometimes by employers, but mostly by friendly societies and trade unions. These were strongly working class organisations. They were autonomous of the State, and prized their autonomy. Their elected officials had the job of picking and choosing among doctors and other health professionals, and stating the conditions on which they would do business. By modern standards, it was a very basic system. Most people died in their fifties, and of conditions that are often no longer listed in the medical textbooks. Then again, medicine itself was only just into its really scientific phase, and England was, by our standards, a very poor country. But the system worked and was improving.

The growing state involvement in medicine that began with the National Insurance Act 1911, and culminated in the establishment of the NHS forty seven years later, was largely a power grab by the medical professions. Doctors were relieved of having to do business with ordinary working class people, and could deal instead with officials and politicians of their own class. These officials and politicians had their own status enhanced by the ability to spend large amounts of the taxpayers’ money. For the rich and for increasing numbers of middle class people, choice remained – if at a cartellised price. For ordinary working people, however, medicine became something that was doled out by their betters. This was attended by a great increase in the quality of health care – though this was improvement felt in all other countries regardless of how it was financed. But the result here was a growing apathy among the working classes. Where health care was concerned, they were no long active clients, able and willing to negotiate for what they wanted. They were passive recipients. They paid through their taxes for what they received. But their only input was to vote for politicians who promised better funding or better management of a system that was now insulated from direct pressure.

This contributed immensely, I think, to the decay of free institutions in England. Freedom owes much to historic evolution and to paper guarantees. It owes far more to a people who are accustomed to take responsibility for their own lives. The main difference between us and our free ancestors is that, unlike them, we find ourselves trapped within a system that provides the amenities of life but over which we have no personal control. If we want light or heat, we must rely on vast networks of energy distribution that interlock with other vast networks of energy extraction and transport. If we want our life and property to be secured, we must rely on agencies that claim a monopoly of force and that are only formally accountable to us. And for most people, it is the same with health care. Whether public or private – and there may be little real difference behind the names – these vast, impersonal networks do encourage passivity in the face of authority. When everything but housing and food shopping is provided in this way for most or all of a population, it is no surprise if these people stop being sturdy, self-sufficient individuals, suspicious of the claims of government.

Add to this the fact that the NHS employs over a million people. It is not the only bureaucratic mass-employer in this country. But it is the largest. These institutions impose values of hierarchy and obedience on those within them that are hostile to liberty. People who are regimented in their working lives – and who do not rebel against this – will tend to accept regimentation in their private lives. They will accept it for themselves. They will vote for politicians who promise it for everyone. They will spread these values directly to others so far as they have contact with the public as providers of services.

This may be a sufficient explanation of the mess we are in. But there may be a further consideration that has to do with the whole system of state welfare and with the heavy taxes needed to pay for it. If I am not an expert in these matters, I can at least state my opinions. These are that intelligence and general ability seem for the most part to be inherited. Clever people can have stupid children, and stupid people can have clever children. But inheritance does seem to be very important. Now, if there is reasonable social mobility, those with ability will move into the higher classes. If, for any reason, these higher classes have a lower birth rate than the rest of the population, there will, over time, be a decline in the average quality of the population. Wars that disproportionately kill the braver and more enterprising, and that deprive the world of the offspring of the brave and enterprising, will cause damage that is almost immediately obvious. But high taxes that discourage the middle classes from having children, and welfare policies that subsidise the less able, will have a more subtle, longer term effect. It may be that state welfare has damaged the English by changing our habits of thought. It may also have damaged us by changing us as a people. We may not be more stupid in ways that can be measured by IQ tests But we may have become more like the clever but unidividualistic Asiatics our ancestors despised and so easily conquered.

Certainly, we are lied to and oppressed in ways that English men and women before about 1940 would have thought unimaginable. Let me return to the NHS. Last month, while in Slovakia, I was called by the BBC to comment on the case of a young man denied a liver transplant on account of his drinking. I was supposed to denounce this as more NHS fascism. When the details were explained to me, I had to give a less forthright response. Apparently, this young man needed a liver transplant if he was to live. However, the doctors had told him that the transplant would have little chance of success unless he could stop drinking for six months. Because he was not able to give satisfactory guarantees, the doctors decided to give the liver to someone else. Undoubtedly, this was not a pleasant choice. Even so, there is a shortage of organs for transplant. And given that the NHS does not ration health care by price, this was the most rational use of resources. For all I know, private insurance companies in America make similar choices by way of setting premiums or authorising treatment.

But this is not the limit of how the NHS is coming to ration health care. Superficially analogous arguments are being used to regulate general lifestyle. For a generation now, the anti-smokers have been arguing that smokers place heavy additional costs on the NHS. The reply has always been easy. Whatever inflated figures are fabricated to show how much smokers cost, they never match the amount of extra taxes paid by smokers. And there is the alleged fact that smokers die younger, and so save on pensions and long term care. But facts never get in the way of an argument for oppression. And what began as an argument for higher taxes on tobacco has insensibly changed into an argument for the creeping prohibition of cigarettes.

Smoking bans are being justified on the grounds of saving money. And assuming the facts are as we are told – they are not, but let us assume they are – the argument may be a valid one, given the system we have in this country. The NHS involves a coerced pooling of risk. Given that the costs of the NHS are high and rising – and assuming that costs cannot be controlled by better management – it makes sense for those who spend our tax money to insist that those most likely to call on large amounts of that money should be required to change their lifestyles. Of course, by the same argument, homosexual acts should be recriminalised to reduce the incidence of AIDS and hepatitis, and all women over the age of forty should be sterilised to save on the costs of treating pregnancy complications. Equally, the athletic should be prevented from taking vigorous exercise, and Asians should be forced to give up on spicy food. For the moment, political correctness stops these arguments from being put. But lifestyle regulation is a valid secondary principle to be derived from the primary principle of the NHS. Let there be a compulsory pooling of risk, and those who place themselves at higher than average risk become fair targets for oppression. Smokers and drinkers and the obese are current targets. It is only a matter of time before an increasingly degraded political culture allows other targets to be found.

I believe that similar calls for lifestyle regulations are being made in the United States. Many companies that contribute to the insurance premiums of their employees are already insisting on contractual agreements not to smoke or to drink excessively. Given that American political culture is hardly less degraded than our own – if for slightly different reasons and in different ways – this is a consideration for those Americans who oppose the changes currently proposed by their government.

Now, I have said what I, as a libertarian, dislike about the NHS. It should be plain what I am not proposing. But since misrepresentation of opinions is so common in any discussion of health care, let me be explicit. I believe that the NHS should be dismantled and replaced with a more diverse, private system. This does not mean that I want to cut off health care for millions of older people who have made no alternative arrangements. It also does not mean that I want to cut off state funding and leave the current system of cartellised and regulated health care otherwise unchanged. I believe in a radical attack on all state involvement in health care, and this includes an attack on all state-created and state-upheld monopoly in health care.

I believe that all drug patent laws should be repealed. These do nothing to encourage innovation, but are simply a means by which well-connected drug companies extract huge rents from the rest of us. I believe that there should be no controls on who can practise medicine. State regulation does less to weed out medical incompetence and fraud than to guarantee high incomes to middle class graduates who have learnt the approved techniques of medication. The common law of contract and torts is enough to deal with incompetence and fraud. I believe there should be no controls on the development and provision of medical products. The existing laws did not prevent Vioxx and Prozac from coming to market. Again, the common law is enough to ensure some standards of propriety. I believe there should be no controls on the advertising of medical products or services. The present restrictions simply prevent ordinary people from learning what options may be available to them. Again, the common law is all we need to deter inflated and fraudulent claims. I believe that everyone should have the right of self-medication. This means the right of any adult to walk into a pharmacy and, without showing any prescription, to buy whatever medical product he desires. If many people will buy and use recreational drugs, they can do that already if they know the right street corner – and it is not the business of the State to tell us how to live. Most people will have enough common sense to take some advice before swallowing or injecting their medications. The rest should have the right to experiment. If they fail, they will have themselves to blame. If they stumble across some truth so far unknown, they will deserve our thanks.

These reforms would bring down health care costs at once. They would also clear the way for the information technology revolution to transform the market in health care. I will not try to predict how all this will be funded, though it strikes me as reasonable that it will fall into the same pattern of direct payment, charity and voluntary mutual assurance as was common before the State took over. And when I speak of mutual assurance, I mean both for-profit insurers and not-for-profit organisations. The idea that only profit-seeking organisations are consistent with libertarianism is to take a shockingly arid view of the ideology. What libertarians should like about commerce is not its taste for profit but its distaste for compulsion. What legitimises markets, in libertarian terms, is that they are structures of voluntary association. This is what brings the friendly societies and much trade union activity, and so much of what in Victorian times was called “socialism” within the heritage of the modern libertarian movement. Health care reform should not be about providing yet more money-making opportunities for state-licensed professions and state-privileged corporations. It should be about disestablishing statist structures and allowing free people to associate for their mutual benefit. If some people make a lot of money from providing services that others want, good luck to them. But the key objective should be free association. Be assured – it will be the most solid foundation on which medical progress can rest.

I will repeat – cutting off state funding all at once, and leaving in place the present system of monopoly, would be cruelty and folly. It would easily result in a step away from liberty rather than towards it. But reducing this funding over several years, as part of a general attack on monopoly, would be a blessing, the fruits of which were plain even before it was complete.

And this would apply as much to America as to England. As said, the American system is hardly the sort of free market any libertarian would recognise. But if the Americans do follow our example, I agree with Mr Hannan that they would deserve to be pitied. Worse – we adopted our system before its faults had been fully realised. Anyone inclined to copy it now deserves as much contempt as pity.


  1. The NHS is communism, as is central banking. The Conservative Party are clearly a left-wing collectivist party (the Tories are the ones who bought in all the gun bans, if you look back at the timeline).

  2. The United States does not have a health “system” – even before Obamacare (the Orwellian named “Affordable Healthcare Act”) the United States had endless and essentially arbitrary regulations, mandates and government subsidies.

    It is not a question of being a matter of being a free market purist – even in the 1950s the United States was certainly not a free market in healthcare, with doctor licensing (not for the benefit of ordinary people – but for the benefit of the doctor union or guild “association” as Milton Freidman exposed at the time as part of his general attack on occupational licensing), and the FDA medicine regulations (although this was before the terrible changes to these regulations made in 1962 – which placed a terrible burden on even the largest companies) and county hospitals and (on and on……). The system that operated in the 1950s was far from perfect – the older practice of paying doctors and hospitals directly (rather than via insurance companies) was better for some people, and the mutual aid societies were better, again for some people, than the mainly non profit hospitals and medical establishment owned (Blue Cross and Blue Shield) insurance companies of the 1950s.

    However, in the 1950s it was still possible to (in very general terms – certainly not in purist terms) talk about the United States having a free market system in health care. It is not today – even before Obamcare.

    Regulations and mandates (State and Federal) were crippling the health market (including some passed under the Reagan Administration – for example the Act of Congress that demanded that anyone who turned up to any hospital had to be given “Emergency” treatment, defined as just about any treatment, thus making a nonsense of the idea that, non county, hospitals were not part of the government – and meaning that people who bought health insurance had to pay for the “emergency” care of those people who had decided NOT to buy health insurance) , and government spending (about half of all spending on health – again even before Obamacare) on such things as Medicare, Medicaid, (1965) and SCHIP (Clinton years) pushing up private costs – in ways that even David Ricardo would have been able to predict. As with university tuition – if government subsides the cost of paying for something, the cost of that something explodes over time.

    As William Rees Mogg predicted back in the 1990s about Hillarycare (and Obamacare is essentially Hillarycare) it would be the thing that finally broke the back of the camel – already straining under the endless cost of all the other “entitlement programs”.

    Hillarycare did not pass in the 1990s – thus earning W.R.M. the title of “Mystic Mogg” for his predictions of doom and gloom that did not come to pass.

    However, Obamacare has passed – warnings such as the one by Dr Sean Gabb above were ignored. The “back” is “broken”.

    Already those drug companies and health insurance companies who SUPPORTED Obamacare are saying “this is not what we were promised – this is totally different and……”

    Oh dear, how sad, never mind.

    Those business enterprises who are stupid enough to trust the government deserve all they get. But the ordinary people do not deserve yet higher costs, and even less choice – and that is what they are getting.

    As for Britain……

    Well at least privately paying for healthcare is not illegal in Britain as, I am told, it is in Canada.

  3. On John Pate’s historical point. Compared to who?

    On firearms (and everything else) the history of the Conservative and Unionist Party is more that of what Americans would call “me to” Republicans (RINOs – Republicans In Name Only). The Democrats in the 1930s or 1960s (or …..) would come out with another leftist plan to spend more or regulate more and Republicans would either say “me to” – I am for “better health” or “better education” (or whatever) or present a watered down version of the plan (in order not to lose the “floating voter” – who supposedly votes for “moderation”).

    The left will suggest X and campaign for it – the Conservatives will then either reply with a watered down version of the plan, or resist for awhile (and then accept X after a few years). That has been a large part of Conservative party history – although not all of it. Dissenters always existed (as Greenleaf explained in his “The British Political Tradition” – the section on “The Libertarian Strand”) but they did not tend to become leaders of the Conservative party (Mrs Thatcher being a partial exception).

    After all, specifically on gun bans, who wants to be presented as the “party that supports murdering children” – as in Australia (when Prime Minister Howard gave in after the mass shooting in Tasmania) the choice is always presented as…….

    “Either we do X – or the left will come to power and they will do something even worse”.

    Although John Pate is actually correct – that is the road to certain DEFEAT over time.

    One only has to look at the different fates of the “extreme, uncompromising – out of touch” Republican party of (say) South Dakota and the “pragmatic and rational – living in the modern world” Republican party of New York State.

    Short version – if one’s aim is to please the electronic media (the BBC and so on) and the university crowd, why should one’s own supporters even turn out to vote?

    It is even true at local level.

    The siren voices of those who say “we need to increase Council Tax a bit – we look like irrational extremists who lack COMPASSION if we do not” need to be resisted.

    Following the advice of such “practical realists” is the road to extinction.

  4. The point about the time taken to approve new drugs is important. There are often people who are terminally ill who would try anything – and there has got to be a time limit on the time taken over such approvals.

    I have to say immigration has led to greater availability of dentists – and thus it is now easier to find an NHS dentist with space on his waiting list. At one time, it was difficult to find a dentist.

    I would like a specialist team to go into an average hospital, find out what each person is doing and what his salary is, work out what overstaffing there is, and what nonsense bureaucratic procedures are being performed – and then sack the pointless ones, and adjust all the salaries to reasonable levels (eg no £500,000 as head of a hospital trust, which is about 4 times the PM’s salary) – and then from that experience work out what percentage of expenditure should be devoted to staff salaries, what percentage of expenditure shoudl be devoted to staff salaries above the national average, and what the maximum salaries should be to avoid losing staff (eg a maximum of 4 times the national average, or £100,000) – and then impose the same ratios on all hospitals.

    Then – outlaw unions in the health sector, and privatise the lot, and require hospitals to keep to the same ratios of salary to total expenditure and the same caps. I know “libertarians” would claim that monopsonistic industries should be able to set their own salaries and run themselves as cartels, but in fact there will never be full competition in healthcare. Eg each hospital will never have a rival hospital next door to it. And it is 100% bang-on certain that privatisation would lead to a huge rise in troughing on the back of a privatised insurance-led system in a way that totally defeated the whole point of privatising it.

    I would institute a voucher system to pay for health insurance, so that the indigent had healthcare – but the voucher wouldn’t cover 100%. Even the poorest would have to contribute something. This would be so that, eg, the casual assumption that a single mother can have 5 children and not work, and sponge off everyone else for everything – include healthcare for her 5 children. It ought to be literally financially impossible for a woman to have 5 kids and no husband – because she couldn’t provide healthcare for her children with no visible means of support. This sort of thing would nudge people towards the gradual reconstitution of the social fabric.

    I would only give the vouchers to people to English, Scottish, Welsh or Irish descent. The others could pay for the health insurance out of their wages.

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