“Where the Welfare State is on the march, the Police State is not far behind”. The quote is attributed to Melchior Palyi (1892-1970), who fled from a position as chief economist at Deutsche Bank in 1933 upon the rise of the Nazi socialists. Eventually settling in the United States he holds positions at many schools including the University of Wisconsin. Hungarian by birth he is in his early 20’s as WWI begins the traumatic transition from old Europe into the modern industrial societies.
As a capitalist banker, he is astutely aware of how money and government interact and becomes a voice of warning against the dangers of the welfare state. As universal healthcare emerges as a top priority in American political debate it is good to remember the idea has deep roots and a long historical record to defend.
Medicine And The Welfare State: The essential idea of the Welfare State is as old as known history. Its concept and mechanism—the systematic dispensing, through political channels and without regard to productivity, of domestic wealth—were at the very core of the Greco-Latin city states, of the medieval city, and of the post-Renaissance absolute monarchy. In the city republics, ancient and medieval, it meant bloody civil wars. Their constantly recurring violent quarrels about constitutional issues disguised bitter class warfare to seize the power that was dispensing all benefits. Most of them went on the rocks of their internal struggles for economic privileges.
Bismarck’s fundamentally significant role in modern history is rarely understood. … What Bismarck did accomplish was to revolutionize the old authoritarian school by giving it a quasi-democratic twist and by basing it on a superbly organized, technically well-trained, and thoroughly disciplined bureaucracy. His police-welfare (or welfare-police) state had firm roots as none had had before. The substance of a military monarchy was wrapped in a parliamentary cloak. Share-the-wealth popularity was to be dispensed legally by an all-powerful and efficient administration. … “To his mind the State, by aiding the workers, should not only fulfill the duty ordered by religion, but it should obtain in particular a claim on their thankfulness, a gratitude that was to be shown by loyalty to the government and by loyal pro-government votes in elections.”
Two basic types of governmentalized medicine resulted. The Prussian bureaucrat created the obligatory health insurance of a comparatively limited scope. What the Russian Bolshevist has bestowed might be described as compulsory health security of an unlimited medical orbit. Perhaps they should be distinguished as governmentalized vs. socialized medicine. In the one, the beneficiaries are “insured”; in the other, they are “registered.”
