Churchill and the Welfare State

George Watson, via the Dish:

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.

I think that a capitalist system needs a welfare state to moderate the predation inherent in the capitalist state.  If inequality becomes too great, the choice is between capitalism and something unstable.  The welfare state provides stability and balance to the capitalist economy.  It is a necessity and not a hinderance.