No one can delineate the precise state of affairs likely to prevail at the conclusion of the present world conflict. The drama is too kaleidoscopic, too much is hidden in the wings, and the number of acts is uncertain. The best that one can hope for is to distinguish the main threads of the unfolding mystery and to guess the probable position of the dramatis personae at the final curtain. Yet a few things are becoming increasingly apparent.

From facts already before our eyes it is clear that economic rehabilitation and reconstruction on a grand scale will be necessary before life can begin to function again in many parts of the world. Moreover economic reconstruction will be something more than the distribution of “K” rations and bowls of soup to the undernourished peoples of Europe and Asia. The physical destruction of factories, industrial plants, railways, harbours, gas and electric works, and all the rest of the means of production by which civilized peoples provide themselves a living, of course will have to be made good. Yet this is not all. Much of the world's population—in south-eastern Europe, in China, in India—subsisted at an almost unbelievably low standard of living even before the war began. To tender these peoples no better prospect than a return to the miserable pittance that was theirs before the war would not augur well for world peace and order, nor make more than a hollow mockery of the solemn promises of the United Nations. Their standards of living cannot be raised by driblets of charity and pious good wishes, but only by making available to them the capital instruments by which they themselves can raise their per capita productivity and hence their material welfare. The task of relief, rehabilitation, reconstruction, and development that will confront the world at the war's end promises to exceed anything of a similar nature that has ever been undertaken. Yet it is a task which lies inevitably before the world and one for which the penalties of inept handling are certainly severe and possibly disastrous.

Among persons unfamiliar with agricultural markets, it is not uncommonly assumed that here, if in no other area of economic activity, prices are established through the free play of competitive forces in an environment at least approaching the perfect market. To be sure, agricultural production is carried on by atomistic units and, at least prior to the inauguration of government crop-control programmes, there have been few limitations upon competition among farmers for the use of productive resources. And, in the processing and distribution of farm products, the illusion of pure competition has been strengthened by the relatively large number of firms and the fact that they frequently do not have direct control of the short-run supply of their raw material.

But those who are familiar with actual conditions in these markets know how unrealistic it may be to proceed on the assumption of pure competition. It has become increasingly evident to the agricultural economist, for example, that typically—even where the number of processing firms is large—a few firms dominate a given industry, often aided and abetted by active trade associations. Again, in the local market, where assembling and processing is done by a relatively large number of small independent agencies, differentiation of services—including that of location—may lead to non-aggressive buying policies. Finally, the fact that processor-distributors do not control the short-run supply of farm products does not preclude monopoly elements. For imperfect competition in a processing-distributing industry implies control of the supply of processing-distributing services, hence the price of these services (the margin or spread).

One of the great elements of stability in the British constitution has been the sovereignty of parliament. The fact of parliamentary sovereignty has given the British constitution a flexibility which has enabled it to serve the changing needs of different periods by modifying the inflexibility of the common law by direct changes in positive law. Even before the period of deliberately created law the fiction of the king's conscience enabled the courts of equity to introduce an element of peaceful change into the legal structure of England.

The supremacy of the will of parliament involved in the notion of parliamentary sovereignty presupposes two things. Firstly, it assumes a single supreme legislature, and secondly it assumes the superiority of legislation over the will of the courts. If, as Walter Bagehot contended, the efficient secret of the British constitution lay in the almost complete fusion of the executive and legislative functions, it equally depended upon the supremacy of the legislative branch over the judiciary. It was no abrogation of that theory that it was the business of the courts to determine whether the subject was bound by the words of a particular expression of the will of the legislature. That was merely a protective device against an administrative abuse of power. What that theory cannot logically contain is the notion that the courts could say that the legislature was or was not exceeding its powers in legislating. For by definition those powers are unlimited.

How will the introduction of health insurance influence the demand for health services? In the discussions on the reform of our health services this question has been seldom put and hardly ever answered. Expressly or tacitly the assumption is made that the present demand can be used as a yardstick for measuring future needs under a system which it is thought aims mainly at a more equitable distribution of available services.

The problem is, however, of a more fundamental nature. What health insurance would achieve is to remove the whole field of health care from the automatism of the price system. The fee-for-service system based on the individual's ability to pay for medical care will disappear. A compulsory scheme of prepayments will be introduced which will entitle insured persons to services whenever they need them or whenever they feel that they do. Economic and psychological factors about which very little is known so far will come into play, and are bound to have a profound influence on the demand for health care. Changes may be of a quantitative and of a qualitative nature. Not only may the demand increase but it may also be directed toward other types of health care than in the past.

All these factors have to be considered when the foundations of a national system of health insurance are being laid. They are, of course, decisive for the cost of the scheme and for the supply of health personnel. But the evaluation of the potential demand will also have a bearing on the type of services to be offered, on the form of organization and administration, and above all, on the methods used for making the beneficiaries of the scheme conscious of their responsibilities.