The doctrine of the Welfare State is being offered in the United States as a bright and shiny new.invention. It is being accepted by some on the assumption that it is a device with inherent capacity to solve the complicated problems of mankind,-.the accumulation of the ·misdeeds of countless generations of men.
The term “Welfare State” has pleasant connotations. It carries the implication of a deep concern for the welfare of human beings and conveys the impression of a boundless’ compassion and a benevolence without limitation. Dr. Palyi, in the first chapter of his book, Compulsory Medical Care and the Welfare State, realistically points out:
“In democracies the Welfare State is the beginning, and the Police State the end. The two merge ,sooner or later, in all experience, and for obvious reasons.” He further states that “all modem dictators have at least one thing in common. They all believe in Social Security, especially in coercing people into governmentalized medicine.”
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Melchior Palyi (1892–1970) was an American citizen of Hungarian descent — a distinguished, internationally recognized educator, author, economist, and financial expert. He taught in the Universities of Kiel, Goettingen, and Berlin. In 1928 he was appointed chief economist to the Deutsch Bank in Berlin. From 1931 to 1933 he served in the capacity of scientific advisor to the Reichsbank of Germany. In the United States, he taught at the Universities of Chicago, Wisconsin, and Northwestern. He acquired a national reputation as a scientific and popular writer, public lecturer, radio commentator and consulting economist.
The 18th century proudly called itself the century of reason. The 19th boasted of being the century of progress. In the same fashion, the 20th deserves one of two titles: the century of Marxian totalitarianism or of Bismarckian social security.
Wherever the doctor is being paid by the authorities and not by the patients, the outcome of compulsion is a set of fees that does not cover the investment in expensive instruments. This has an additional effect that could scarcely have been unintended: It forces the patient into governmentally controlled dispensaries which can afford the investment — at the taxpayer's expense.
"Governmentalizing, and thereby controlling through an appropriate bureaucratic apparatus, the providing of medical, accident, and old age care and of death (burial) benefits seemed an obvious way to put the reins on laissez-faire capitalism as well as on labor."
National Institute of Professional Services, Chicago, 1949
