Universal government programs are more durable and less expensive

Photo by: Joakim Honkasalo on Unsplash

Universal programs for social welfare are more durable and less expensive.

A common myth that has permeated political discourse since the neoliberal turn in the 1970s is that with the welfare state stripped back and private capital’s being largely unencumbered by regulation, bloated government institutions and spending will go down.

The reality has been quite the opposite. 

One reason for this is extremely simple: capitalism has never truly existed. In all its societal permutations, private capital has needed a strong state to protect it and bail it out when things go wrong. The go-to example is the 2007-8 financial crisis where the big banks were “too big to fail” and had to be bailed out by the government otherwise the crash would have been catastrophically worse. Not to mention at the beginning of COVID-19, many Western states had something like communism with the government sending out checks and temporarily nationalizing certain industries like railways in the U.K. because the market was not equipped for a disaster like COVID despite its more beneficent supports such as Bill Gates, saying for years that we need better infrastructure for potential pandemics.  

One premise that flies in the face of neoliberal arguments for stripping back the government’s functions is that between universal programs and means tested programs. The argument usually runs as such: With universal programs, we don’t want to be giving extra services like child tax credits or social security checks to high income earners, that’s a waste of money. Therefore, means-tested programs, where benefits are usually calculated based on an individual’s income, will save spending that would otherwise be a waste. 

An irony in this regard is that under Margaret Thatcher, neoliberalism’s key progenitor, government spending mostly rose due to the structural unemployment of her austerity policies, as unemployment is a costly issue for the government. 

Another irony lies in simple logistics. If a program is universal, it means that you don’t need robust, round-the-clock run institutions to decide who gets what in society. This means less governmental bureaucratic bloat. In terms of the actual programs themselves, The Center for Economic Policy and Research found that in the case of the United States’ Social Security, the common retort made by billionaires like Peter Peterson that “I don’t need my Social Security checks” means that the government is handing out too much, doesn’t hold water as a critique of mismanaged government spending: 

“While the wealthy and very wealthy do claim a substantial portion of personal income, they do not account for a large share of Social Security benefits. The reason is simple: Social Security benefits are capped, so that even the richest beneficiary cannot receive a much higher benefit than what typical workers receive. And, since there are not many wealthy people, their benefits are a relatively small share of the total benefits paid out by the program.” 

Another important factor to consider is that universal programs, once they are instituted, are often hard to get rid of. Take universal single-payer healthcare in Canada, for example. All polling is unanimous in showing that the majority of Canadians support universal healthcare. In the U.S. in 2020, Bernie Sanders’ Medicare-for-All, a universal healthcare coverage plan, has increasing majority support according to polls. The main cause of bankruptcy in the U.S. is from medical debt; though America has some of the best healthcare options in the world, those options are for the few who can afford it. 

Interestingly, when what would become the blueprint for Canada’s universal healthcare plan — the first of its kind in North America — was being workshopped in the province of Saskatchewan as the Saskatchewan Medical Insurance Act, the RCMP spied on community clinic activists in the ‘60s on the grounds of the push for single-payer healthcare being a “subversive communist” plot. 

This context is important, especially as Ontario’s current premier, Doug Ford, is giving medical services over to for-profit clinics under claims that our system is like North Korea’s and Cuba’s. Aside from the fact that Cuba’s healthcare system is the envy of many nations, this kind of neo-Red Scare rhetoric, which one expects in the 1960s, is concerning considering it’s 2022—there’s no Bay of Pigs humming along in the background and anyone who says the Russo-Ukraine war fits the bill is not operating in reality. Not to mention, Ontario had a budgetary surplus of $2.1 billion in 2021 which could have been directed at improving our healthcare facilities instead of capping nurse’s wages. 

The truth is in the people; universal programs are popular and durable because they help the people. There’s a lot of truth in the quip that socialism is when the government actually does stuff

One comment

  1. While an interesting read, there are many simplifications of the current state of both healthcare and government structure.

    I would encourage anyone reading this to independently learn more about Health Care systems ( and Government systems for that matter) in Canada and around the world.

    Haytham’s opinion that “Universal programs for social welfare are more durable and less expensive” is not supported by data, but instead cold war stories, and 1 study looking the United States Retirement program that is more than 10 years old.

    There are likely many cases ( like CPP in Canada) where having a universal administration is easier and fair (CPP is self funded) , and other cases like OAS or GIS ( government funded) that are not universal but very effective.

    On the healthcare front, Canada is not a single payer system ( unless your definition of healthcare is very limited) we have a mix Single and Multi-payer like the vast majority of countries around the world. Canadians need to move past the false choice of everything being single payer or everything being privatized. Neither of these are practical, realistic or likely effective. I say likely as there are not countries in the world that we are able to compare each version against that allow for things like emigration, personal pursuit of careers or starting your own business. In Cuba for example doctors are used as a good to export and have very limited rights. While no one knows what would happen if Cuba gave citizens basic freedoms and if all of their health-care workers would continue to work in the country.

    Here are the questions Canadian’s should ask themselves

    1. If you are holding a work drug/health plan, would you be willing to exchange it for a universal program and see a similar cost removed off your income? ( could be an income tax, levy, sales tax)

    2. Should there be some sort of co-pay?

    3. Should a medical professional be permitted to run their own business outside of being a government employee if they choose.

    4. How should bargaining rights be managed if the government is the only employer

    5. If governments have the ability to utilize private corporations to deliver healthcare, but the end user are not paying, is this an ok mechanism? long-term vs short-term?

    6. How do we prevent brain drain? should compensation be higher? limit mobility? changing mechanism’s of care delivery.

    Doctors in Cuba – https://www.hrw.org/news/2020/07/23/cuba-repressive-rules-doctors-working-abroad

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