The NHS was always rationed. What matters is whether it is done rationally or haphazardly, nationally or by postcode, in public or secretly. Entering its greatest ever cash crisis, it matters more than ever how its shrinking funds are spent.
Indeed, something free at the point of use and also highly desirable will need some form of rationing. Which is why we want to have markets in the health care industry.
For there\’s something we learned in the short 20 th century, that period betweem 1917 and 1991.
Market based systems improve total factor productivity better than centrally planned systems.
Agreed, the socialist insistence at the start of that period was that planning would do better than that wasteful nonsense of competition, repetition, reinventing the wheel and profits. It didn\’t quite turn out that way and the socialists are reduced to arguing that economic growth, \”hunh!, who wants it anyway?\” as an argument for the very same socialist planning. Indeed, there are those who insist that as we cannot afford to have growth then we must have socialism.
Leave aside all of the technical arguments for a moment: that change in the justification for the very same policies is all we need to see that the 20th century did indeed teach us something about productivity growth.
And rationing is a product of the constraints imposed by that productivity we\’re discussing. If we can improve tfp by, just as an example, 2%, then that means that we can have 2% more health treatment for the same resources we expend on providing health treatment. If 10% then 10% and so on.
Which is why we want markets in that health care stuff. Because it means that, over time, we can improve tfp and thus we need to less rationing. Because we\’re able, through that increased tfp that markets work towards, to provide more health care for the same ingoing resources.