The problem with healthcare

Some of you might have noticed that there is a lively debate going on in the US Supreme Court over the so-called Obama-care Programme. Whilst the wife has been avidly reading the transcripts—with some interest, outrage and amusement—we have been debating the more general point of how healthcare is delivered.

It's a tricky subject—not least because it is emotive and, as such, tends to give rise to bad headlines for politicians when the inevitable rationing happens. Because the really big problem with all healthcare systems is that there simply isn't enough money to pay for what is desired (if not absolutely required).

All of these debates about the actual delivery and payment of healthcare—both here and in the US—simply doesn't address the basic problem of healthcare being massively expensive. I would like to posit some reasons, and put forward some hopes of solutions.

The first pressing problem is that healthcare services are extremely prone to Baumol's cost disease.

In line with the government’s 2% inflation target, the Treasury’s assumption is that productivity in the economy as a whole will rise at 2% a year and pay at an average of 4%. Hence, if pay in the public services is to remain competitive with that outside, it must rise on average by about 4% a year. So to be able to afford the same number of staff in any particular service, expenditure also needs to go up by 4% a year – a “real increase” of 2%. The problem for services, such as health and education, and for the armed forces, is that they need such a “real increase” to keep the same number of staff to maintain existing standards, because there is little or no room for improving productivity.

As Timmy points out, there are ways to mitigate for this—particularly in how services are delivered.

The reason being that productivity in services is merely more difficult to improve, not impossible. Only if you say that a near monolothic organisation of 1.4 million people is the most efficient manner of delivering health care to 60 million people can you say that the NHS productivity cannot be improved. And that certainly ain’t an argument I’m going to try and make.

One obvious method of improving efficiency would be to abolish national pay bargaining... but no one has the balls to try that as yet unfortunately.

There were rumours that Osborne was going to do so in this budget and certainly is seems that the government is moving that way. And there is no doubt that the NHS could be run more efficiently—especially if the providers were not run by the government and thus had some efficient way of measuring quality.

One of the biggest goals in healthcare service delivery must be to adopt the strategy of manufacturing and remove, as far as possible, as many people from the delivery as possible. Now, there are many ways to do this, but one of the most exciting is to harness new technologies as much as possible—like, for instance, being able tobuild new organs or even print new kidneys (truly amazing video)!



Just think: although it's still a prototype (both printer and organ), that machine can print a new kidney in seven hours. And that kidney can be printed from the recipient's cells.

Just consider the cost reductions over conventional treatment—no cost of keeping the patient on dialysis for months or years whilst waiting for a donor; no surgical teams required to remove the organs from the donor; no need to go through the whole thing again to replace the organ after ten years; no drugs required to deal with rejection nor having to treat the patient for the panoply of diseases inevitable with immunosuppressant therapies.

We are on the cusp of a healthcare revolution—where technology really can start to make healthcare delivery cheaper.

One of the other big costs is drugs, and this is largely a political problem. To make you marvel and to illustrate this point, I'd like to introduce you to bexarotene. Bexarotene is a cancer drug that has been approved by the US Food and Drug Administration for a decade (this is important later on).

Now, bexarotene has been shown to be immensely effective in the treatment of Alzheimer's disease—not only can it slow it, but it seems likely that the drug can actually reverse the effects.

In the study described below, the cancer drug Bexarotene quickly and dramatically improved brain function and social ability and restored the sense of smell in mice bred with a form of Alzheimer's disease.
...

Within hours of taking the drug, amyloid plaques began to clear out of the mice’s brains. After three days, more than 50 percent of the Alzheimer’s plaques had disappeared, and the mice regained some of the cognitive and memory functions typically lost in Alzheimer's disease.
...

Neuroscientists at Case Western Reserve University School of Medicine have made a dramatic breakthrough in their efforts to find a cure for Alzheimer’s disease. The researchers’ findings, published in the journal Science, show that use of a drug in mice appears to quickly reverse the pathological, cognitive and memory deficits caused by the onset of Alzheimer’s. The results point to the significant potential that the medication, bexarotene, has to help the roughly 5.4 million Americans suffering from the progressive brain disease.

Sounds pretty cool, yes? Alzheimer's is not only an incredibly expensive disease to treat, it is extremely distressing.

When I worked as an Auxiliary Nurse in a medical centre, I saw people with progressive brain disorders such as Alzheimer's. One woman was nothing more than a still moving shell of a human being—no thinking human being existed inside her. She simply wandered about making a soft ululation day after day: when she got to a wall, like a wind-up toy, she just kept walking and walking against the wall.

Another time, I had to comfort a twelve year old boy because his father no longer recognised him. These patients had been there for years—at a cost of more than £1k a week—and would be there for years more.

A drug that could stop all of this would be amazing. But there are a couple of problems.

First, bexarotene is pretty expensive.

How much does Targretin (Bexarotene) cost?

Targretin is a tier 5 drug, this means it is very expensive. An Internet search indicated that 30, 75mg capsules cost $1,156.64.

Now, we might guess that this is probably still considerably less than £1,000 a week (minimum) in a nursing home but actually we don't know—and herein lies the rub.

Despite being approved for the treatment of cancer at specified doses, bexarotene, and the dosage, would need to be re-approved by the FDA for the treatment of Alzheimer's. And, as we all know, that kind of testing costs a lot of cash.

Will the drug company stump up for it? No. Why? Because bexarotene is about to come out of patent.

Unfortunately, the drug is going to have to go through several rounds of clinical testing before the drug is approved for Alzheimer's. This will takes years.

Will the drug ever get tested and get approved by the FDA for Alzheimer's? The current drug Targretin is scheduled to lose its patent in 2016. So, in order for Targretin to be financed into a Phase 3 clinical trial it will need to be re-engineered and re-patented to make the numbers work. In other words, it is unlikely that anyone is going to step up and finance the testing of a drug that is likely to be an available generic by the time it is approved for Alzheimer's patients.

And there we have the big problem with drug development.

It takes something like 8 years and $600 million to get a drug approved by the FDA for the treatment of humans. Those are big numbers, and it is why we have Big Pharma. I know a couple of people in Edinburgh who run small drug research labs; when they find something promising, they sell the patent to Big Pharma because only big corporations have the colossal amounts of cash required to get a drug to market.

And the patent life for a drug is, if I recall correctly, about 14 years. So, you spend 8 years bringing a drug to market and then you have about 6 years to recoup over half a billion dollars. As the Americans would say, you do the math.

This problem is only going to get worse as we move towards personalised treatments; if the regulatory agencies insist that every drug tailored to an individual—because that is the kind of breakthrough that we are looking at—need to go through this kind of approval process, then we may as well kiss tailored treatment goodbye.

There needs to be a fundamental rethinking of drug regulation: either it needs to be relaxed, or the patent life needs to be extended.

So, both technology and relaxed regulation can play a part in ensuring that we—the customer—get more healthcare for our limited resources, i.e. cash. But, you can bet that these innovations will be fought tooth and nail.

The medical establishment and the unions will fight to the bitter end to protect their own interests—as we have seen with the Healthcare Bill in this country. After all, the bastards of the BMA were happy to destroy the Friendly Societies and oppose the NHS because they believed that each of them were opposed to doctors' interests—they couldn't care less about patients and never have. The same applies to all of the other trades unions.

And governments love their regulation, oh yes. And so do big corporations because they are set up to deal with them. The people who lose out are... well... we poor idiots who pay for it all.

Technology will make us freer, happier and richer than ever before: the forces of conservatism will stop that if they can...

Great minds, and all that...

Back in December, the wife wrote the following in a short post musing on the Welfare State...

Seriously? No, seriously?

Just cut out the middleman and let rich people sponsor a poor person. There would be less waste in the long run, jobs for council workers (the OKCupids of wealth patronage!), and a powerful social impact.

After all, why give your money to charity when you can give it to your own impecunious client?

... and today, Blue Eyes posts one of his increasingly infrequent missives.

I’ve got an idea.

Instead of running an entitlement-based welfare system where Parliament decides the rules and then makes up taxes to pay for it, how about a sponsorship system. The system should match up contributors and recipients in, say, a local area and provide information for the sponsor. The sponsor would get to see how the people he/she is funding are getting on and the sponsored might be encouraged to persuade the sponsor that he/she is getting value for money. Sponsors might even want to give advice to their mentorees to help them get on in life.

Those wanting to receive money from benefactors should have to provide certain information in return for their money: what is the money going on, how are the children getting on at school, how is the job hunt going?

If all this sounds quite intrusive to you then that is the idea. It’s about time the relatively small number of people who pay for the huge all-encompassing welfare machine got a little bit of influence on it.

Sounds good to me.

One of the biggest problems with the Welfare State is that the recipients truly believe that their money comes to them—not as charity, nor as pay-outs on insurance payments that they have made—but as of right.

Which, of course, partially it is. The idea that one should be ashamed of living off the hard work of others has long gone; similarly, as politicians have sought to bribe ever larger and more biddable swathes of the electorate, the idea that one should first have to pay into the system in order to get anything out of it has become similarly redundant*.

Long-time readers will know that I consider the National Insurance Act of 1911 to be—as viewed over the long term—one of the stupidest and most evil acts ever passed by a British government. (Had it remained as it was intended—that is, buying Friendly Society memberships for those who could absolutely not afford them—then its consequences might have been mitigated.)

As it turns out, that Act simply started the rot.

Because the doling out of subsequent monies to those who have never paid a penny into the system—and which often rewards them for doing the most perverse things, such as having myriad children which they can neither afford nor properly care for—must be some of the wilful, stupidest and downright evil acts in history. Especially, I say again, the bit about encouraging them to have children.

So, as an alternative to simply stopping these payments overnight, perhaps we should consider Blue Eyes's and Bella's proposals...

* Unless, of course, you do actually pay in—in which case you must prove you have done so in order to get a brass farthing of your insurance. Especially if you are freelance.

Destroy the medical profession

As regular readers will know, your humble Devil is no fan of the medical profession: sentences such as , and "when will these fucking medical types shut their fucking cakeholes and get on with their job of patching people up?" might have led viewers to conclusion that I think that doctors are a total bunch of fuckers who should be beaten to death with their own stethoscopes.

And said viewers would be correct. But it's nice to see my view validated by Sam Bowman at the Adam Smith Institute.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public"—Adam Smith

As usual, Adam Smith was right. Today I can think of no trade about which the above is more true than the medical profession. I don’t just mean doctors’ use of occupational licensure laws to keep their prices artificially inflated. Politically active groups of doctors are possibly the greatest single threat to personal freedom that there is in the UK today. Their motivation isn't necessarily their wallets, but their egos. Bullies like to use the state to push people around so they feel powerful.

As I outlined in my commentary on Working Class Patients And The Medial Establishment: Self-help in Britain from the mid-nineteeth century to 1948, David Green states very clearly that the medical profession are actually motivated by both "their wallets" and "their egos".

The organised medical profession had long resented the dominance of the medical consumer, and particularly resented working-class control of medical "gentlemen". The BMA were equally anxious to obtain more pay and, above all, higher status for doctors.

As regular readers will know, the combination of the BMA and the private insurance companies led directly to the destruction of the Friendly Societies—social corporations that provided primary care and unemployment benefits for the working classes—through the lobbying of MPs involved in the 1911 National Insurance Act. [Emphasis mine.]

The essence of working-class social insurance was democratic self-organisation: amendments to the Bill obtained by the BMA and the Combine [the private insurers' trade association] undermined it. Doctors' pay had been kept within limits that ordinary maual workers could afford: under pressure, the government doubled doctors' incomes and financed this transfer of wealth from insured workers to the medical profession by means of a regressive poll tax, flat-rate National Insurance Contributions.

I have said it many times, and I shall say it again—doctors are not your friends and the medical profession couldn't give two shits for anything other than big, fat pay-cheques. And, as I said back in June 2010, ...

...whilst the doctors continue to run our medical services, and continue to bribe, bully and poison our rulers—and whilst our rulers still have the power to force us to obey these bastards—we will never be free...

They medical profession are a bunch of thugs, driven by self-importance, conceit and greed, whose only motivation for existence is to bleed you dry and then present you—or someone near to you—a massive bill. But, they are also suffer from an almost incredible arrogance in that they believe their every prognostication to be gospel, every utterance to be truth and every opinion to be law. They are cunts of the very first water.

So, since we have now established this principle, let us see what has driven the ASI's Sam Bowman to attack the bastards on this occasion.

There’s a sad example of this in today’s call in the Lancet, a medical journal that is often used as a political mouthpiece by campaigning doctors, for the government to introduce a “fat tax” to curb obesity.

Of course, the proposal is utterly specious. It's pretty dubious whether the "obesity epidemic" claims are true or not. And which diet plan should be implemented? Is it bacon, sugar, bread or something else that makes us fat? Will political parties of this fat tax utopian future be divided between the Low-Carb Party and the Low-Fat Party? And what if fat people's early mortality rates mean that they actually save the government money in pension and care home bills?

The doctors err even by their own logic. As Will Wilkinson has pointed out, if fat taxers thought things through, they would favour a tax on fat people themselves, not on the food they eat. Taxing food punishes people who exercise so that they can enjoy Big Macs, but not people who are so lazy that they balloon out while eating a balanced diet.

Of course, to the average doctor—who has coddled and protected, in importance and financially, by the state for a century—corporations must automatically be evil (otherwise they wouldn't actually sell things, right? They'd do it out of charidee); not only that, but the Ordinary People, the hoi polloi, are too stupid and bovine to make their own choices.

Of course, this should be no business of the doctors': their job should be to shut the fuck up and do their job of patching people up (and charging a suitable fee, of course). And in a free society, that is precisely what would happen.

However, we do not live in a free society: we live in a Welfare State*. And in the Welfare State (and particularly this one), the health service is administered by the state and the doctors are the gate-keepers. It is the hoi polloi, who pay for this health service, of course, but—since we are given no choice about it—we are (as I have said many times) in hock to the state.

The state is the provider of a service: the National Health Service in this case. Because the state provides and "pays" (through taxes, of course) for this service, it has the power to dictate to the population.

Obesity costs money over and above a "normal" person's treatment. Even if the obese person has private medical insurance, they cannot opt out of the NHS because they are forced to contribute to the NHS through their NICs. And, in fact, because of various laws—an ambulance can only take you to a state A&E;, all GPs are employed by the state—no one can opt out of the state-provided system entirely.

In this way, everyone is in debt to the state. And as long as everyone is in debt to the state, the state, fundamentally, has the right to tell the population how to behave. And this debt can never actually be discharged: you are in debt to—and thus subject to the whim of—the state from the moment that you are born until the moment that you die.

And, remember, there is no actual contract to sign (or not sign) so the government can—and does—keep on shifting the terms of this agreement as and when it likes. It's a little like Lando Calrissian's bargain with Darth Vader in The Empire Strikes Back: "This deal just gets worse..."

As such, no one in this country owns their own body; no one in this country owns their own life. Everyone is effectively in hock to the state because you can never, ever opt out of state provision.

Once again, it seems that Sam Bowman agrees with me on this...

The justification for pushing people around like this is the NHS. Shouldn’t people have to pay for their own illnesses? Well, yes – that’s how personal responsibility works. But having an NHS removes the personal responsibility, and artificial attempts to inject it into the system are doubly illiberal and wrong.

The government (and the electorate, for that matter) forces people to be in the NHS. You have no choice in the matter, and you can’t opt out of it. Jamie Whyte put it well: "first the do-gooders conjure up the external costs by insisting that no one should have to pay for his own medical care, then they tell us that they must interfere with behavior that damages our health because it imposes costs on others." This is perverse and illiberal.

Yes, and the doctors—and their spiritual buddies, the politicians—love it: this way, they can all feel important, and all line their pockets.

The tax would only affect the poor—rich people's spending habits wouldn't be dented. How easy it must be for doctors to pontificate about the need for a fat tax, knowing that such a tax would hardly affect them at all.

Indeed, what with doctors having to take on the treatment of all of these extra obese people, surely it must be time for another contract "negotiation"**—trebles all round!

This creepy, controlling paternalism has plenty of fans in politics on both sides of the partisan divide. Doctors are the politicians' enablers, lending the weight of their “expertise” to the nanny instinct of the political class in exchange for the feeling of being important.

Which is precisely the same relationship that the government has with Fake Charities—many of which are also run by doctors and their creepy little acolytes.

No amount of expertise – medical or otherwise – should give somebody the right to interfere with another adult’s choices. Nor should democracy be used as an excuse to violate the sovereignty of the individual. If fat people are costing the NHS money, that's a mark against having an NHS, not against having fat people.

Quite. And all of this relates to the conclusion of my June 2010 post linked to above...

Most of you will have seen—in the newspapers and, in particular, on blogs written by members of the medical profession—claims that doctors should be allowed to run the NHS, because they know what they are doing. Of course they do: they want to run your lives and giving the medicos control of the NHS would give them the ultimate tool to do so. That would ensure a much "higher status for doctors" and the edict would be simple—obey us or be left to die.

If you doubt this, just take a long at some of the news stories around, especially as regards the medical profession's urgings to deny healthcare to smokers, drinkers and fat people. True, the BMA tend to side with Fake Charities more than the insurance companies these days, but the process is the same; government-funded "medical advisers"—no less effective or poisonous than Grima Wormtongue—whisper into politicians' rights ears, whilst government-funded "charities" bolster the message from the left.

Our New Coalition Overlords™ promised to take on the vested interests but, narrow-minded as they are, they seem to mean only the bankers and other huge commercial interests whose establishment status flows from the rules and regulations imposed by government.

But no mention has been made of those other vested interests: those—like the medical profession—whose power, privilege and money is propped up by the government and funded by the blood of taxpayers. There are so many of them that a stupid person might find it difficult to know where to start.

But, actually, it is really very simple: if we want decent welfare for all, affordable medical care and freedom, we need to return to "democratic self-organisation". And if we wish to do that, we have to smash and utterly destroy the organised medical profession, and grind it into the dust.

We need to return these arrogant doctors, and their associated scum (a category in which I include politicians), to beings servants of the consumer, not the masters. But whilst the doctors continue to run our medical services, and continue to bribe, bully and poison our rulers—and whilst our rulers still have the power to force us to obey these bastards—we will never be free, and we will never have a proper, functioning society.

To paraphrase P J O'Rourke, when the legislators can decide what can be bought and sold, the first thing for sale are the legislators. And the medical profession bought them a hundred years ago.

Destroy the power of the BMA and the medical profession and we can begin to struggle towards freedom. Leave them in place—poisoning public debate and raping the freedom of ordinary people in order to gain money and prestige—and we will always be slaves.

All of the above continues to be true—nothing has changed. So every time that you see a doctor warning of some dire consequence of anyone's lifestyle, don't condemn their victims—that is the precise reaction that these fuckers want from you, the better to divide and conquer.

Imagine, instead, how much you would like these bastards to stop hectoring you and bossing you about—and think, therefore, about how best to damage and destroy the entire medical profession. Think about how best to humble the arrogant, dictatorial doctors who urge the government to ban and tax your pleasures, how to put the lazy, hoity-toity nurses who starve their patients to death back into their proper place and, most important of all, how to blast apart all of their evil bloody trade unions.

And try not to laugh too much whilst you do so...

* Not for much longer, of course, because the Welfare State is utterly bankrupt across the world.

** Where the doctors tell the politicians how much cash they want and how little actual doctoring they want to do, and the politicians agree. After all, it's not their money, eh?

How do you fancy an 8% rise in National Insurance?

For some years now, your humble Devil has been pointing out that National Insurance is a colossal, £110 billion per annum Ponzi scheme: there is no NI fund, and old "investors" are paid from the funds of new subscribers.

Of course, many Ponzi schemes are able to carry on for many years—the scam run by Charlie himself continued quite successfully for a time, as did Bernie Madoff's. The trouble is that these frauds always collapse eventually (otherwise no one would bother prosecuting the fraudsters): eventually, there are simply too many old subscribers and too few new ones.

In the UK, the NICs Ponzi scheme is creaking partly because the birth rate has been rather below the replacement rate for a few decades now: put simply, there are too many old subscribers and too few new ones.

Further, with medical costs and life expectancies soaring (this latter unaccompanied by longer pay-in times) the old subscribers are demanding ever greater pay-outs.

With more and more of those who should be new subscribers actually being beneficiaries of the scheme—I refer, of course, to the large numbers of working age people in receipt of benefits—the whole edifice has become unsustainable.

In other words, whilst National Insurance is supposed to cover unemployment benefit, your health treatment and your pension, there simply isn't enough money in the kitty. Although actually, as I said, there never was a kitty, just the income from new subscribers.

This is why the government has, for some years now, been mooting a number of ideas that would reduce the required payouts. These "solutions" generally fall into two categories: those that will save money and those that will rake money in.

Obviously, the idea that one should deny treatment to those whose lifestyles the government doesn't like falls into the money-saving category, whilst those schemes that will force people pay yet more for their old age care or for their pension fall into the money-grabbing category.

Obviously, all of the above examples mean that the government has made promises that it cannot keep; and, whilst the venal bastards who rule us insist that we abide by the "social contract", they are merrily refusing to keep their side of the bargain.

And I am afraid, despite all of the thousands of words that I have written about this subject, that your humble Devil took his eye off the ball because I had not realised that at least one of these schemes has now been made law. Yes, indeed—starting from next year, we are all going to have to start paying into a compulsory pension scheme.

(Well, I say "all"—but, of course, it only applies to those who have jobs. People who have never worked in their lives can continue merrily to pay fuck all.)

The Pensions Regulator has just issued a reminder (PDF) that all employers will have to provide a pension arrangement to all employees, beginning in October of 2012 on a widening basis until 2016. This requirement calls for a minimum total contribution to an approved pension scheme of 8% of salary, of which at least 3% must be contributed by the employer and the rest by the employee. Employers may choose to introduce a more generous scheme if they wish but the 8%/3% is the minimum requirement.

Alright, so I exaggerated slightly in the headline: the employee will only pay a minimum of 5% into this "approved" pension scheme. However, anyone who thinks that the 3% employers' contribution (plus the costs of administering the scheme, of course) will not adversely affect wages is a total idiot.

Of course, the whole thing seems so sensible—yes, we do need to save for our retirement and, yes, too few people save anywhere near enough (especially when they are younger). And yet...

This is, effectively, the government admitting that it is unable to meet its pension obligations despite already taking 11% from the employee and 12.8% from the employer—money that is supposed to cover these obligations.

Plus, the government is also adding 1% to each set of contributions for 2011–2012: that is, you will pay 12% of your salary and your employer 13.8%.

Let's try to put some figures on this, shall we?

In 2010, the median wage for a full-time employee was £499 per week = £25,948 per annum.

In 2010, the total tax taken (directly) on that median wage of £25,948 was...

£3,894.60 Income Tax + £2,225.08 Employee NICs + £2,589.18 Employer NICs = £8,708.86 (NICs total = 4,814.26)

Now, let's try and work out the cost with the new figures (I don't have a fancy website to do the figures for me, so I'll try to show my workings)...

Income Tax: (£25,948 - £7,475 PTA) × 0.2 = £3,694.60

Employees NICS: (£25,948 - (52 × £110)) × 0.12 = £2,427.36

Employers NICs: (£25,948 - (52 × £110)) × 0.138 = £2,791.46

Total tax take on median wage of £25,948 = £8,913.42 (of which NICs = £5,218.82)

[Trying to match up the NICs figures to the ones given on the ListenToTaxman site, I would say that the above are a little high—but I have no idea why. I followed HMRC's advice for the above.] Fixed. Thanks to Adam Schlumberger in the comments.

Now, this seems like a substantial proportion of anyone's wages: and, please remember, that NICs is supposed to pay for healthcare, unemployment benefit and a liveable state pension.

+++ UPDATE +++
Although the end figure for 2011–2012 is only £200 higher than that for 2010–2011, it's worth noting how the distribution has changed between Income Tax and NICs. Whilst Income Tax has dropped by £200, NICs has increased by £400—and that split roughly 1:1 between employee and employer.

This has allowed Nick Clegg, for instance, to put out a good press story about raising the Personal Tax Allowance whilst, in fact, the £200 is clawed back in National Insurance. In the meantime, the employer is saddled with a further £200 rise but, in terms of sheer numbers of votes (if you know what I mean) there aren't as many employers as there are employees, eh?
+++ UPDATE +++

And yet successive governments have pissed our money up the wall with such abandon that they now feel the need to force us all to pay another 8% of our salaries into a private pension scheme. Why? Because the government knows that, in a few years, it will not be able to afford to provide a state pension at all.

The government is going to keep our money, of course: there will be no rebate because it cannot deliver the service that it promised. No, the solution is simply to force us all to pay more. And more. And more.

How lucky we all are.

In practice, the impact will fall mostly on the lower paid since larger companies already have pension arrangements that meet minimum requirements. The greatest impact will be on the smallest companies like local traders where salaries are lower or on companies using a fluctuating workforce like restaurant chains where, again, the salaries are lower.

For employees of such companies, this pension requirement will mean an immediate cut in take-home pay of 5% if the employer chooses the minimum 3% contribution for itself. To be sure, the employee doesn’t “lose” that money; it’s just not available until retirement.

Oh joy. The Adam Smith Institute carries on its assessment...

We’ve already warned here of the dangers from government meddling in NEST, a cheap’n’cheerful pension scheme being set up by the government for those companies who can’t be bothered to set up their own. The 8%/3% rule will also be vulnerable to political manipulation by successive Chancellors, just like NI has been.

Yes, of course it will. And, of course, as soon as a big pension fund goes bust, then the government will insist that—in fact—it would be far safer if we all just paid that extra money to the state. You know, for safekeeping.

Britain, like all modern economies, must significantly increase retirement savings so, on the surface, a mandatory regime may seem justified. However, compulsion seldom delivers the desired result. After all, wasn’t the original National Insurance scheme supposed to deliver a proper pension?

Yes. Yes, it was. And what happened? That's right: the government pinched the money and spent it on shiny baubles—or, more likely, bribing its client state in time-honoured fashion.

Once again, politicians have proved that the only interests that they serve is their own; although, of course, they do also serve to prove the point that governments do everything very badly—if not actively fraudulently—and, as such, they should do as little as possible.

Leave aside Gordon Brown's profligacy! This country is suffering the effects of many, many decades of financial mismanagement, utter incompetence and outright fraud.

And, as usual, it is the productive members of society who have to pick up the slack and work even harder so that they can pay through the nose—so that benefits (that the productive themselves are not entitled to) can be doled out to the indolent, the corrupt and the rent-seeking.

Across the entirety of Western civilisation, social democracy is bankrupt—financially and morally. This cannot go on.

It is time to look to the past to find the answers for the future.

Quote of the Day...

... comes from a stirring article by James Delingpole—a piece which I heartily recommend that you read in full.

Wherever you go, even if it’s somewhere run by a notionally “conservative” administration, the malaise you will encounter is much the same: a system of governance predicated on the notion that the state’s function is not merely to uphold property rights, maintain equality before the law and defend borders, but perpetually to meddle with its citizens’ lives in order supposedly to make their existence more fair, more safe, more eco-friendly, more healthy.

And always the result is the same: more taxation, more regulation, less freedom. Less “fairness” too, of course.

The reason that I pick out that section, rather than any one of the other excellent paragraphs, is because it neatly sums up what I, as a minarchist libertarian, believe are the legitimate functions of the state: to...

... uphold property rights, maintain equality before the law and defend borders

And I believe that the state should do these things not because I am ideologically a minarchist—for I am not—but because I don't believe that humanity is yet ready for an anarchist state. And, as always, I am interested not in pure ideology (although it informs my practical advocacy) but in the best possible outcome.

I believe that a state that performs those three important functions, and only those three important functions, provides the best possible balance between freedom and security.

Like Tim Worstall, I believe that (in humanity's present state) there are some things that a government can do better than a group of individuals can: national defence is one of those things.

I do not think that the state should be providing healthcare or unemployment benefits or education or Child Benefit—and I strongly object to its National Insurance system that destroyed and continues to crowd out better, freer, more efficient, voluntary community solutions.

I certainly object to—and am horrified by—the way in which the provision of these services has enabled governments to justify quite disgusting intrusions into our private matters, our lifestyles and our day-to-day activities.

I am outraged by the way in which governments have seized control of our schools in order to brainwash generations of children with state propaganda, feeding them a one-sided story of civilisation—a story that includes the Welfare State as saviour and which mentions Friendly Societies not at all.

Dellers maintains that the Tea Party are the ones who will save us, but I am not so sure; although their grass-roots origins are laudable, they have foolishly lost the propaganda war—the Tea Partiers have allowed the leftist media to paint them as backwards, religious loons and, as such, said media has destroyed the movement's value as a motivational tool outwith the US itself.

Despite the slow-down in the libertarian blogosphere, those who are still going are now moving towards carrying out actions to minimise state intrusion. But, generally, they are doing so as a "don't tread on me", movement of their own lives off the state's books. We do not seem to have a general movement calling for the removal of the state from society as a whole.

It is the latter that I am interested in—and yet I find that this movement is no further forward under Our New Coalition Overlords™ than it was under NuLabour. As Delingpole observes, this struggle is carrying on almost all Developed Countries, and there seems to be no change in sight.

Sure there’s no comparison (well not that much) between Obama’s US and Stalin’s Soviet Union; Coalition Britain and Mao’s China; Julia Gillard’s Australia and Queen Ranavalona’s Madagascar; sure the war we’re currently fighting doesn’t involve mass destruction like that of World Wars I and II. But it’s precisely because the ideological struggle we’re currently engaged in is so seemingly democratic and innocuous that it is in fact so dangerous. With Hitler and Stalin it was easy: the enemy was plain in view. Today’s encroaching tyranny is an of altogether more subtle, slippery variety. It takes the form of the steady “engrenage” – ratcheting – of EU legislation; of the stealthy removal of property rights and personal liberty under the UN’s Agenda 21; of the eco-legislation created by democratically unaccountable bodies like America’s Environmental Protection Agency; of the stealthy encroachment of the Big Government into the most intimate recesses of our daily lives – not just under barely disguised socialist administrations like Obama’s even under notionally “Centre right” ones such as Cameron’s or Sarkozy’s. When the Enemy is as sly and insidious as that, it’s much much harder for the increasingly oppressed populace to rouse itself to the appropriate state of alarm and rebellion.

And that, I think, is the problem. And as I say, unlike James, I cannot see how the Tea Party will be of help to us in this increasingly benighted isle. After all, how can we possibly fight against the kind of attitude displayed by one of Snuffy's pupils?

She proudly announces that she’s been living in France. I’m impressed and secretly pleased because maybe I had something to do with that. I ask her what she’s been doing there. She has done a stint as an au pair and has spoken lots of French. There she is, all grown-up, all of twenty-two or -three, living abroad. So far from the little girl who thought I was hyper.

I smile. “So what are you doing now?”

“I’m going back to France, man! Can’t stay here! This country is S—!”

I’m slightly stunned by the force of her condemnation. “What do you mean? What’s so awful about it?”

Trendy hops from foot to foot. “This country is going just C–P, man! With these Tories, man, no one can afford to do anything here!”

“Is it that bad?” I wince, still somewhat baffled by her genuine anger at what Britain has to offer.

She taps her forehead to suggest I’m being silly. “Yeah, man! Look, even my mum said it, you know. She said, “Put my name down on the list, but it’s ‘long ting’, you know!” She throws her arm in the air. “Nah, man! Too long! I ain’t waiting!”

We chat briefly before Trendy leaps back into the van and disappears down the road.

I look at my friend as we trundle along. “The list?”

My friend nods. “Yeah… the housing list.”

I stop us in our tracks and grab hold of my friend’s arm. I want to scream. This country is s— because it isn’t giving out free flats? Have we all lost our minds?

No, not all of us have lost our minds—but our corrupt and ineffectual political system has meant that we have lost our voices.

Of course, those of you who have not lost your minds, but have lost your faith in our political masters, should join the Libertarian Party.

Voices of Freedom, the IEA and other stories

As some will know, a couple of weeks ago, your humble Devil took part in a Voices of Freedom debate at the IEA.

Chaired by IEA Director Mark Littlewood, the debate—titled Who Holds The Liberal Torch In 2010: Libertarians, Lib Dems or the “liberal elite”?—featured (in speaking order) myself, Brendan O’Neill (editor, Spiked!), Paul Staines (aka blogger Guido Fawkes), Julian Harris (chairman, Liberal Vision), James Delingpole (writer, journalist and broadcaster), Michael White (assistant editor, Grauniad) and Mark Pack (co-editor, Liberal Democrat Voice).

Before commenting on the debate itself (or, rather, some of the more extraordinary views exposed by it), I thought that I would post the introduction that I had written. On the day, this introduction ended up being slightly rushed, since I had anticipated having six minutes to speak whilst, in fact, being kept to five (and a minute does make all the difference): however, for the edification of my faithful readers and of those who were there, I am going to post my expanded speech—the one that I would have given had time not been short—below (although the themes will be familiar to those of you who have read posts such as this and this).

So, who does hold the liberal torch in this day and age?

In order to consider this, one needs to consider what "liberal" is. I, of course, would hold that "liberal"—in these days of the corruption of that word—really means "libertarian", and it is these terms that I frame my argument.

I have written before that there are two types of libertarian—what I call "positive" and "negative". The negative are of the ultra-individual, "don't tread on me" variety: they are often the gun nuts, and the shrillest advocates of the "all tax is theft" mantra. Of course, I agree with them: all tax is theft—in fact, it is extortion with menaces.

However, I am more of the positive libertarian persuasion. I want the greatest amount of freedom that we can possibly get—indeed, in an ideal world, I would be an anarchist—but, ultimately, I am interested in the best possible outcome. What makes me a libertarian is that, broadly speaking, I believe that the best possible outcomes are achieved through giving people the greatest possible liberty, and encouraging the free market to work its magic (in almost all things).

In other words, I am a libertarian not simply through moral or philosophical dogma, but because I believe that a libertarian state—or, if you like, liberal state—will make everyone's lives better.

Of course, given the tenets of the philosophy, the real problem is how one goes about "practical libertarianism": indeed, as the leader of the Libertarian Party, I can tell you that this is—quite naturally—the conundrum that is the basis for the majority of our internal (and external) debates.

In any case, personally I am anti-state: yes, there is the aspect of ideology (and I deplore its monopoly on force), but my real objection is that it performs its tasks so badly. Not only is it wasteful, and swayed by successive governments' ideologies, but it is so easily corrupted too.

As an illustration, I would like to use an example—that being one of the most damaging, stupid, destructive laws ever passed. It is a law whose effects have been devastating and incredibly long-lasting—the 1911 National Insurance Act.

In the 1800s and early 1900s, welfare was generally handled by the Friendly Societies: perfect examples of voluntary collectivism, of people banding together in local, organised structures to improve their lives.

By the early 1900s, Friendly Societies had branches in almost every town, almost every district of every city—and, at their peak, provided community-rooted insurance and primary medical care to some three quarters of Britain's manual workers. Parents could even buy memberships for their children so that they were insured from the moment that they left schooling.

Friendly Societies competed against one another for members, keeping costs down, and yet had reciprocal arrangements (like private gentlemen's clubs today) with other friendly societies—so ensuring the mobility of labour. You paid into your insurance fund—not some nebulous government coffer—and when you moved, it moved with you.

Friendly Societies were small, and local. They held events and regular meetings. In this way, you got to know people in your community, people in other professions. People are less likely to steal from those whom they know personally—and that went for the managers of the Societies as much as it went for the possible malingerers. Further, members could chip in extra money, or vote for extra monies, to be distributed to those who were genuinely in need and whose premiums would not cover their care.

So, when I have excoriated the state—or pointed out that the state spend only 8% of GDP in 1880 (despite fighting several wars)—and people say to me "I suppose you want to see the return of the poorhouses?", I have an answer. "No," say I. "I want to see the return of the Friendly Societies."

The Friendly Societies show what human beings can do when the state does not interfere. Indeed, the original aim of the 1911 National Insurance Act was to provide Friendly Society membership to those who could not otherwise afford it.

But the Friendly Societies' success was, ultimately, their downfall. No, they were not brought down by internal strife, or by any factor within their control. They were brought down by the power and the malice of their enemies and the corruptibility of politicians—of the state.

The Friendly Societies had two powerful enemies. The first, and obvious, was the private insurance companies which had—with little self-knowledge, it seems—organised themselves into an association with the somewhat sinister monicker of "The Combine".

The second enemy was the British Medical Association, the BMA: an organisation that, even now, is lobbying vigorously to persuade the state to remove yet more of our freedoms. The BMA disliked the idea that the lower orders should be able to give orders to "gentlemen doctors". Not only this, but these common little men often had the impertinence to vote bad doctors out of their jobs with Friendly Societies—organisations that did not, the BMA felt, pay doctors the wages that they deserved.

These two enemies of the people combined to form a temporary but unholy alliance to lobby the state—and particularly Lloyd George, who was piloting the Bill—to pervert the National Insurance Act into an instrument that would destroy the Friendly Societies.

What the insurers gained was the removal of competition. The doctors gained all that they wanted, not least a doubling of the minimum wage that a doctor could be paid. And all of this was paid for by a deeply regressive poll tax—National Insurance Contributions.

As in other things where the state starts to provide a service, they crowded out the Friendly Societies. After all, if you were a relatively poor manual worker, you could not spare your three shillings per annum to the Friendly Society and the three shillings that the government was taking directly from your pay.

And so the Friendly Societies all but vanished, along with the communities they nurtured. And with them went the libertarian model of welfare—of people getting together as a voluntary collective in order to look after themselves. And so the model of state as mater and pater—the state in loco parentis, with all the intrusive hideousness that concept has spawned—was started.

Lloyd George and the others started with good intentions, but they were perverted by powerful vested interests. As such, the liberal torch is borne by all those who fight and campaign for the removal of such vested interests—and the state is the biggest of those.

But more than that: the liberal torch is not carried by the LibDems, or any other politicos; nor is it carried by the elite who form part of the state-perpetuating establishment—all of whom are like big children playing house, putting on airs of supreme importance and throwing their weight around as if the actions of government are the most significant and serious actions of all.

It's the actions of regular people that are the most significant, serious, and worthy of respect, and they don't deserve to be treated like dolls when, in reality, the only truly and moral libertarian proposition is that they should be masters of themselves.

They did so in the past, and their aspirations were crushed by corporate whores and political shills: and in removing the ability of people to organise themselves, these evil people also removed the desire for them to try. It is this that has led to our "broken society"—the cynical ambitions of the vested interests, backed up by the monopoly of violence that a corrupt and venal state willingly brought to bear upon its people.

And so I say that those who really carry the liberal torch these days are ordinary individuals, providing for themselves and each other voluntarily, trying to live fulfilling lives according to their choice, without interference or interfering.

And that, for what it's worth, is probably the clearest mission statement that I can give, frankly. I wish that I had had the time to deliver it in full, but that is the way with these things.

Many of the others made a strong case for liberal—or libertarian—policies, with Guido concentrating on drugs (and recounting memories of a long and eventful night that we had a couple of years ago), Julian recounting a personal story, and James Delingpole concentrating on the Climate Change scandal (according to Pater Devil, James has mentioned me favourably in this week's Spectator, but I have been unable to obtain a copy of it thus far). Michael White was—whilst being moderately and unexpectedly amusing—as smug, stupid, irritating and patronising as I had imagined that he would be; still, with the Grauniad group making another colossal loss of £171 million this year, perhaps we won't have to read his witterings too much longer.

Two people are worth further commet. The first is Mark Pack, who was generally sensible until he started raising the spectre of what our old friends at The Spirit Level would call "psychosocial pathways". Mark denies it but, as far as I am concerned, his clear implication was that we should legislate against things that, to put it bluntly, hurt people's feelings.

Mark commented on Dick Puddlecote's review of the debate, leaving the following snide little comment.

Yup, mentioning some scientific research and saying we should think about its implications is a truly an attitude that strikes terror in some :-)

Unfortunately, Mark is no scientist. But, with a PhD in political history, he ought to know what happens when you start to legislate according to a few groups of people's personal morals. Let's say some "science" said that people were offended by gays and wanted them to be stoned to death; would Mark endorse that?

I presume not. So why would anyone who calls themselves a liberal be in favour of legislating against advertising or anything else that happens to hurt people's feelings—or in any other way influence their behaviour.

But it is more fundamental than that: it is not that I particularly hold a candle for advertising: it is that I strongly object to smug, superior politicos deciding that they can better judge what other people's behaviour should be. I am immediately repulsed by people who believe that they have a monopoly on sensible choices and should be able to force their opinions—by force—on everyone else.

That is not the philosophy of a liberal, but of an authoritarian scumbag: it is the attitude of the kind of idiot who believes that The Spirit Level is science and that Nudge—and all of these other books advocating "libertarianism paternalism"—are about anything other than totalitarianism.

And that is why I said that I found Mark Pack the "most terrifying person in the room": because he is a dictator clothed in the raiments of a liberal.

The second person who is worth drawing to your attention is Brendan O'Neill, the editor of Spiked!. Spiked! comes, roughly speaking, from the very left wing, and describes itself thus:

spiked is an independent online phenomenon dedicated to raising the horizons of humanity by waging a culture war of words against misanthropy, priggishness, prejudice, luddism, illiberalism and irrationalism in all their ancient and modern forms. spiked is endorsed by free-thinkers such as John Stuart Mill and Karl Marx, and hated by the narrow-minded such as Torquemada and Stalin. Or it would be, if they were lucky enough to be around to read it.

Brendan pointed out, quite correctly, that many so-called libertarians—on the right and the left—will shout about getting the state away from their particular likes, but call for it to come down hard on their bug-bears. The right, for instance, might shout about paying less tax, but holler for the state to crack down on people taking drugs; the Left might go on about civil liberties but insist the government crack down on free speech for terrorists.

All well and good. Brendan is right: people are very bad at being consistent in their cries for liberty.

But, bizarrely, he then went on to prove his point—by insisting that governments should get out of our lives, except where it concerned striking workers. Brendan essentially seemed to hold up the right to strike as one of the very cornerstones of liberty. And by "right to strike", as he clarified, Brendan meant the state laws that prevent companies from firing striking workers.

In other words, Brendan advocated drug legalisation, and free speech and civil liberties and all of these other good things, whilst bizarrely insisting that the law should be brought to bear on employers in order that Brendan's own bug-bear could be backed up by state violence.

In conversations afterwards, in the pub, I pointed this out to Brendan. I was consistent, I maintained, because—like him—I did not want the government propping up (and being lobbied by) business. But trades unions are just as much of a vested interest as the corporates. If one truly believes in libertarianism, then one should not support the laws against sacking strikers. In fact, there should be no government interference on either side.

The whole point of a trade union was to be able to motivate large numbers of workers so that, if an employer behaved unjustly, then they would have to negotiate because otherwise they couldn't carry out their business. This is far more true now—when most workers are skilled and require considerable training—than it was when the trades unions were first formed (when much of the work was repetitive manual labour).

In the end, Brendan appeared, at least, to agree with me that the state should be involved on neither side, although he still maintained the right to strike was one of the most fundamental. I countered that everyone has the right to strike, law or no law—they just don't have the right to remain employed if doing so.

Anyway, generally the whole event was interesting and enjoyable: let us hope that these debates continue...

Doctors do not have your best interests at heart

As the scum of the medical profession begin, once more, to flex their muscles—having realised that Our New Coalition Overlords™ have absolutely no desire to curb the BMA and their ilk—your humble Devil would like to quote an extract from a book that illustrates just how much the medical profession cares for the working man.

The book is one that I borrowed from the ASI some time ago (and will return, I promise!): it is by David G. Green and is entitled Working Class Patients And The Medial Establishment: Self-help in Britain from the mid-nineteeth century to 1948. The piece that I wish to quote comes from the Introduction to the book, and deals with the success of the friendly societies, co-operatives and other mechanisms of worker empowermen—especially as regards medical care.

It is quite long, so with no more ado, let us proceed. [Inevitably, the emphasis is mine. I have also split up some of the very long paragraphs, in order to make the piece more readable.]

Particularly striking is the success of the friendly societies, whose social insurance and primary medical care schemes had attracted at least three-quarters of manual workers well before the end of the nineteenth century. Until the 1911 National Insurance Act every neighbourhood of every town was dotted with friendly society branches, each with their own doctor, who had usually been elected by a vote of all the members assembled in the branch meeting.

In most large towns the friendly societies had also established medical institutes combining doctors' living accommodation, surgery and a dispensary. These embryo health centres employed full-time salaried medical practitioners, full-time dispensers, and nursing staff under the management of a committee elected by all the members.

The friendly societies were so successful that their arrangements for social insurance and primary medical care formed the model for the early welfare state.

As, in fact, I have recommended in the past, it should have been.

Unfortunately, of course, nothing is ever that simple—especially where vested interests are able to influence—or simply bribe—vain and venal politicians.

But this [their success], ironically, was their undoing. The 1911 National Security Act was originally seen by Lloyd George, who charted it through Parliament, as a way of extending the benefits of friendly society membership, already freely chosen by the vast majority of workers, to all citizens, and particularly to those so poor that they could not afford the modest weekly contributions. But on its way through the House of Commons the original Bill was radically transformed by powerful vested interests hostile to working-class mutual aid.

The organised medical profession had long resented the dominance of the medical consumer, and particularly resented working-class control of medical "gentlemen". The BMA were equally anxious to obtain more pay and, above all, higher status for doctors.

Working-class fraternalism also had another arch-enemy: the commercial insurance companies. They had long disliked the competition of the non-profit friendly societies and saw the 1911 National Insurance Bill as a threat to their business. They were organised into a powerful trade association, called the 'Combine'.

The BMA and the Combine formed a temporary alliance to extract concessions from the government at the expense of the friendly societies. The essence of working-class social insurance was democratic self-organisation: amendments to the Bill obtained by the BMA and the Combine undermined it. Doctors' pay had been kept within limits that ordinary maual workers could afford: under pressure, the government doubled doctors' incomes and financed this transfer of wealth from insured workers to the medical profession by means of a regressive poll tax, flat-rate National Insurance Contributions.

I am reading the rest of the book avidly, for it is, of course, rather more nuanced than the Introduction—which is, after all, essentially a summary of the exposition—but the above paragraphs give a good flavour of the whole.

The essential point to make—before one of my colleagues highlights yet more of their disgusting attempts to control us in order to gain more status—is that the medical profession have never, ever been on the side of ordinary people.

The only people that the organised medical profession give a shit about is the organised medical profession.

Most of you will have seen—in the newspapers and, in particular, on blogs written by members of the medical profession—claims that doctors should be allowed to run the NHS, because they know what they are doing. Of course they do: they want to run your lives and giving the medicos control of the NHS would give them the ultimate tool to do so. That would ensure a much "higher status for doctors" and the edict would be simple—obey us or be left to die.

If you doubt this, just take a long at some of the news stories around, especially as regards the medical profession's urgings to deny healthcare to smokers, drinkers and fat people. True, the BMA tend to side with Fake Charities more than the insurance companies these days, but the process is the same; government-funded "medical advisers"—no less effective or poisonous than Grima Wormtongue—whisper into politicians' rights ears, whilst government-funded "charities" bolster the message from the left.

Our New Coalition Overlords™ promised to take on the vested interests but, narrow-minded as they are, they seem to mean only the bankers and other huge commercial interests whose establishment status flows from the rules and regulations imposed by government.

But no mention has been made of those other vested interests: those—like the medical profession—whose power, privilege and money is propped up by the government and funded by the blood of taxpayers. There are so many of them that a stupid person might find it difficult to know where to start.

But, actually, it is really very simple: if we want decent welfare for all, affordable medical care and freedom, we need to return to "democratic self-organisation". And if we wish to do that, we have to smash and utterly destroy the organised medical profession, and grind it into the dust.

We need to return these arrogant doctors, and their associated scum (a category in which I include politicians), to beings servants of the consumer, not the masters. But whilst the doctors continue to run our medical services, and continue to bribe, bully and poison our rulers—and whilst our rulers still have the power to force us to obey these bastards—we will never be free, and we will never have a proper, functioning society.

To paraphrase P J O'Rourke, when the legislators can decide what can be bought and sold, the first thing for sale are the legislators. And the medical profession bought them a hundred years ago.

Destroy the power of the BMA and the medical profession and we can begin to struggle towards freedom. Leave them in place—poisoning public debate and raping the freedom of ordinary people in order to gain money and prestige—and we will always be slaves.

Social Security Assurance

In commenting on this rather sensible article about pensions, Timmy illustrates a very simple—but absolutely crucial—point about state welfare.

How and when you retire on your savings or private pension arrangements is of course entirely up to you. But the State pension should really be seen as a form of social insurance. Insurance against living longer than your savings.

When the various systems came in (Bismark in Germany, Lloyd George here, FDR in the US) the age at which you got your state payments was around and about the average age of death. For good reason too.

As a rational 20 year old (just as an example) you could expect to live a further 45 years (again, just an example). Of course you don’t really know what your lifetime earnings are going to be but you can at least make some assumptions and plan for that expected lifespan in your savings habits.

But what happens if you hit 68 and are still going? You’ve acted rationally and responsibly but now you’re skint. In comes the State pension. Insurance against outliving your savings.

However, average lifespan is now something like 78 for men. The retirement age is still 65. Far from the State pension now being social insurance it is now social assurance. It’s gone from being a payment against a risk of outliving your savings, something unlikely, to being a method of paying for something which is likely, your living past that state retirement age.

The old age pension should therefore be returned to what it originally was: that social insurance. The pension age should be set at the average lifespan. Yes, we don’t know what the average lifespan of the current cohort is, so we’ll use the cohort before. But that would mean that the state pension age rises to 78. And as lifespans continue to lengthen, it will rise further.

As Timmy points out, this is a difficult thing to do politically but it desperately needs to be done—not only to get us out of our current financial bind, but to ensure that we never get into this position again.

But, further, we need to have this attitude to all state benefits: they should be methods of social insurance, not assurance, i.e. an absolute last resort when you have no personal resources to fall back on. This is what the state safety net was intended to be when it started—to provide a method of protection for those who had no other protection.

The unintended consequences, of course, was that the universality of the National Insurance levy crowded out other suppliers of these services—most notably, as I have pointed out before, the Friendly Societies (which only covered about half the population by the time NI was introduced).

Before the introduction of NI, people bought insurance from mutuals, or kept savings or relied on families to help out. After the introduction of NI, the state became the de facto supplier of assurance, not insurance.

The result is the bloated and, quite frankly, unaffordable Welfare State that we now have.

One of the reasons that it is unaffordable, of course, is that the state is so desperately bad at spending money. And why is it so bad? Well, I used to quote the following quite frequently at the old place, so I'll resurrect it here.

It's always worth, at points like this, reminding ourselves of the four ways of spending money, as espoused by Milton Friedman and summarised by P J O'Rourke in All The Trouble In The World.

1. You spend your own money buying something for yourself—you therefore try to get the best possible product for the best possible price.


2. You spend someone else's money buying something for yourself—you still try to get the best possible product, but you are not so concerned about the price.


3. You spend your own money buying something for someone else—you are deeply concerned about the price, but you are not nearly so worried about the quality of the product.


4. You spend someone else's money buying something for someone else—in which case, who gives a shit?

The government spends under category 4, and so value for money—and, remember, that every single penny represents someone's hard work—is absolutely dismal. The general estimate, I believe, is that of every pound that goes into the Treasury, only about 30p makes it to the famous "front line services".

Or, to put it in terms of the new TPA video, whilst you may work five hours and twenty-one minutes of every day in order to pay the taxman, everything that you earn from 9am until a bit before noon is pissed up the wall.

Any monopoly is bad, and government is the biggest monopoly of all—not least because it has a monopoly on force. If you don't like Tesco's service, attitudes or prices, then you can stop shopping there; you don't even have to shop at another superstore (yet). If you don't pay your taxes, then you go to prison.

But it is worse than that, because the government is, so often, both payer and provider of services. And this is where the big mistake was made, in your humble Devil's opinion.

To bring it back to the original point (and back onto one of my hobby-horses), the government should never have introduced the National Insurance Contributions, for a few reasons:

• NI crowded out other service providers. You are a poor man and you can only afford to put away 5p a week; up until now, you have been conscientiously paying that 5p to your Friendly Society but, now that the government is taking it directly from your pay packet to pay for your NI—whether you want to use the government's service or not—you can no longer afford to pay your FS contributions.


• Those other service providers were often more efficient, more humane and more responsive.
  

  As insurance-assurance co-operatives, Friendly Societies fulfill our desire for voluntary collectivism. As local societies, they also help to provide some cohesion to communities; many Friendly Societies provided a social function as well as an economic one.
  
  Most societies allowed their members to choose their level of pay-in; how much was paid out was determined by numerous factors, but criteria usually included how much you had paid in, how long you had been a member and your actual need.
  
  This last is important, for our current Welfare State is not based on need—it is based on an inhuman, box-ticking system. Learn how to play the system and you can get more than a living wage; but this system is not based on need. (The one time that I have been starving, I was unable to get any help because I was employed as a company director—the fact that the company had almost no money to pay me was irrelevant.)
  
  As such, Friendly Societies address the issue of self-reliance too; you are responsible for ensuring that you pay in and, should you fall on hard times, your pay-out is related to what you paid in.
  
  Friendly Societies also address the issue of fraud. People are far less likely to steal from those whom they know personally; further, knowing you personally, those people will also be able to check whether you are, in fact, stealing from them. And this applies, of course, not only to benefit claimants but also to those running the Society.



• NI placed the state not only in loco parentis, but in place of people's responsibility to themselves and to others.


• The funds were misappropriated and, instead of forming a genuine insurance fund, the government simply amalgamated the insurance contributions into general spending. In practical terms, you have no National Insurance Fund of your own; your needs are paid for out of general taxation.

But we cannot deny that NI was introduced to deal with genuine problems: first, that the Friendly Societies (though growing rapidly) simply didn't cover all of the population and, second, that some people simply could not afford even 5p a week.

Now, in theory, NI does not address the latter problem at all, since you were supposed to pay in before you could get any money out. NI did address the first problem but at the expense of destroying other providers who were doing the job better.

So, what should the government have done?

The first thing would have been to encourage faster growth of Friendly Societies and other assurance mutuals through tax breaks and other such schemes.

The second would be to provide a temporary state social insurance fund in areas without a Friendly Society, run by local workers, with an aim to signing this over to the fund owners once properly up and running. In other words, the government would provide a financial incentive to start new Friendly Societies. This could have been paid for, initially, by slightly increasing general taxation on the rich (if necessary—these funds should swiftly become self-sustaining).

The third would be to continue to encourage charities and other aid organisations to address the need to help those who—in not earning at all—were unable to benefit from either Friendly Societies or NI provision.

For what it is worth, and at a very high-level, this would be my preferred way of addressing the Welfare State reforms that we so desperately need right now. Whether we should force workers (and employers) to pay a certain percentage of their wages into a Friendly Society (for yes, there must be competition)—or not is one point of debate, and I am sure that there are others.

However, at the end of it, we would have a more efficient system and, I believe, a better, more humane one too.