Where is the welfare state today?

11/04/2018 - Felix Rigoli

Recently, a roundtable held at Chatham House brought together several world leaders, including Helen Clark, former Prime Minister of New Zealand and Director of the United Nations Development Program until 2017. She pointed to a very important, but often forgotten fact. When asked if universal health systems were a luxury only rich countries could afford, Ms. Clark recalled that most of these systems, as well as the great social architecture built under the name of Welfare State, was created when the countries were poor or were recovering from the tragedies of war. They were created to foster more cohesive societies and allow them to rebuild their infrastructure and social capital. Therefore, according to Clark, it is likely that universal health systems are a cause rather than a by-product of these countries’ wealth. In 1961, Canada introduced its first universal health service in one of the poorest provinces, Saskatchewan, which served to boost significant economic growth.

Currently, most of these initiatives use some of the European models, as envisioned between the end of the 19th century and the first half of the 20th century. Before the Second World War, countries had hospitals and doctors scattered in many configurations, but basically as charitable and religious organizations, in some countries with centuries of tradition of charity towards the sick and poor. Anyhow, back then disease generally led to poverty.

In 1919, the newly created Ministry of Health in the United Kingdom commissioned a report on the state of health in the nation. Lord Dawson chaired a Council that produced an “interim report” (the final version was never approved), which began with this definition of its mission: “To consider and make recommendations as to the scheme or schemes requisite for the systematized provision of such forms of medical and allied services as should, in the opinion of the Council, be available for the inhabitants of a given area” For many academics, this report was the first organized conceptualization of a universal health system. It established the principles of the National Health Service of the United Kingdom that would be finally created 28 years later. After a century, the document lays out proposals that are quite advanced to this day. In fact, perhaps Lord Dawson would be irritated to see that 100 years were not enough to fully implement the Committee’s recommendations (or even how various aspects of the report are being reversed).

Back in those days, the Soviet Union put a physician named Semashko in charge of reorganizing healthcare in Russia, so the country could properly respond to epidemics sparked by the war (at the time, Lenin coined a battle cry “Lice or Socialism!”). In the following decades until 1931, Semashko organized the first centralized state health system in modern history, but for many years it was basically aimed at public health measures. Only after the Second World War it became a “health system” in the modern sense.

In the United Kingdom, at the end of the Second World War, these efforts bore fruit as a set of laws and regulations originated in the Beveridge Report. It created a series of social programs, financed with taxes, aimed at addressing what today we would call “social determination of health”, as it was conceptualized in 1948.

Today, challenges have changed a lot. At the end of the second war, the services were of a medical nature and aimed at episodic problems, which were often classified as “health misfortunes”. In the 21st century, urbanization, the rise of chronic conditions and the progressive aging of the population set new challenges. At the same time, the growth of informal and temporary employment, the so-called precarious work or “uberization” create challenges for health systems based on formal employment.

Welfare state structures are being eroded by significant increases in inequality and concentration of income among a reduced group of people, affecting power and influence distribution. This concentration, in some countries of other continents, can be translated into tax exemption laws and cuts in state functions. By threatening the tax base of universal health systems, it basically reinforces and perpetuates these inequities. In both rich and poor countries, the influence of the top 1% through mechanisms of pressure on politicians is expressed as a resistance to pay more in the form of transfers to those who need more. This resistance undermines the basis of the welfare state. The internationalization of a growing group of people who do not pay taxes anywhere opposes the interests of the so-called 99% of the vast majority of people who live off their work and receive few public services.

In South America, these challenges are enormous. The first decades of the 21st century saw an incipient expansion of the welfare state, which was created at the same time with the onset of the modern demographic and epidemiological challenges. These challenges (urbanization, aging, chronic conditions) can mislead to the belief that it is better to restrict accessible services to all and thus save the State expenses. The lessons of recent history tell us about the virtuous effect of the universalization of health and education services, not only for the reduction of poverty and inequality, but also to promote social cohesion and democracy. Maintaining the commitments of the States with a common citizenship of rights will ensure our consolidation as a free, prosperous and peaceful region, and to use the shared experiences of our countries to overcome such challenges.

Read the other articles of Health to the South – April issue

Felix Rigoli, ISAGS Specialist on Health Systems & Services

References

  • Chatham House. The Case for Universal Health Care https://goo.gl/czJusC
  • Lord Dawson’s Interim report on the future provision of medical and allied services https://goo.gl/DjWmbT
  • The lice that almost defeated socialism https://goo.gl/zVEa6A
  • OXFAM. For an economy for the 99% https://www.oxfam.org/en/research/economy-99
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