F. A. Hayek on social insurance
The Road to Serfdom
By Friedrich A. Hayek
Quote from the condensed version as it appeared in the April 1945 edition of Reader’s Digest:
There is no reason why, in a society which has reached the general level of wealth ours has, (the certainty of a given minimum of sustenance) should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.
http://www.iea.org.uk/files/upld-publication43pdf?.pdf
The Road to Serfdom
http://www.press.uchicago.edu/presssite/metadata.epl?mode=synopsis&bookkey=206047
Comment:
By Don McCanne, MD
“The Road to Serfdom,” the work of Nobel Laureate F. A. Hayek, has been one of the most influential books of the last century. It has been an inspiration to those who are opposed to socialism and who support free markets and libertarianism. The teachings of Hayek are frequently cited by those opposing government involvement in health insurance markets. But what did Hayek actually say?
He acknowledges that there are “common hazards of life against which few can make adequate provision.” All other nations have decided that the potential need for health care is one of those common hazards.
He recognizes that such hazards can be provided for by “a comprehensive system of social insurance.” Although the specifics of social insurance programs for health care can vary, they have in common a fund that provides for the payment of health care, an equitable source of payments made into that fund, and automatic inclusion of the individuals for which the fund was designed. It appears from his statement that Hayek would include all members of a society except perhaps those who are capable of making adequate provision for themselves.
He recognizes that the state should help organize such a comprehensive system of social insurance. Hayek was quite familiar with social insurance since his country of birth, Austria, had social insurance programs dating back to the nineteenth century.
Although an avid supporter of free markets, Hayek understood that even in a wealthy society the state should help organize a comprehensive system of social insurance.
Perhaps we should ask the free market advocates opposed to comprehensive social insurance to retrieve from their libraries their copies of “The Road to Serfdom,” and read them again. Although they don’t listen to us, just perhaps they may listen to Friedrich Hayek.