On a fundamental level, the British and American economic systems are similar, reflecting a common heritage and a similar social and economic tradition. Both are essentially market-capitalist systems, in which most economic decision-making is in private hands, with a greater or lesser degree of competition (as opposed to official monopoly) being the general rule. Both, however, may also be described as "mixed" economies, with a significant economic role assigned to public authorities. To take an American example, the airlines are in private hands, but the air-traffic-control system (which exists almost entirely to serve airline traffic) is run by a public agency.
Within this general underlying similarity, however, the British and American economic systems had some striking differences, particularly in the half-century after the Second World War. In Britain a number of failing industries were nationalized after the war, and remained nationalized for over a generation. While the United States had a few examples of public industrial enterprise, such as the New-Deal era Tennessee Valley Authority (TVA) electrical power utility, such operations never gained the general acceptance in the United States that they had in Britain.
In no sector, perhaps, was the disparity between the two system greater than in health care. The British system was almost purely public, "socialized medicine," while the American system remained almost entirely private in the first postwar decades, and remained essentially so even after the establishment of Medicare, a limited public-payment system for persons over the age of 65. The remainder of this discussion will trace the contrasting development and structure of the British and American health care systems.
The economics of what may be called the premodern health care system -- before the Second World War -- were much the same. In both countries, the normative tradition was the physician as s...