ABSTRACT
One of the strongest arguments against the private provision of insurance which is currently provided by the state is that, without it, millions of people would be uninsured and receive sub-standard services as, it is alleged, happened before the 1948 National Assistance Act. This argument is flawed. It is based on a misreading of history. Before the Second World War, millions of people, even on quite modest incomes, obtained insurance benefits from friendly societies, other types of insurers, unions and voluntary organisations: see, for example, Seldon et al. (1996). However, to compare insurance provision before the war with state provision now is not to compare like with like. The quality and variety of all goods and services have improved since the war beyond all measure. If the state had nationalised the production of refrigerators, some advance in technology and market coverage might have occurred since the war; people might then have argued that it had happened because of the control of production by the state. In fact, we all know that the product has improved beyond all measure because the state has not been involved in its production. We should not assume that, because the state has provided social insurance, and because the quality and coverage in some areas have increased, that they have increased because of the role of the state rather than despite the role of the state.
