Hans F. Sennholz, “Class War—American Style” (1993)

This short polemical essay is a libertarian commentary on the Clinton administration’s 1993 health-care reform proposal, framed as a broader diagnosis of the American welfare state. Sennholz treats the health-care debate not as an isolated policy dispute but as another episode in a long “entitlement” struggle beginning with the New Deal. Its central claim is that programs promising security by redistributing costs necessarily divide society into contending classes of beneficiaries, payers, and administrators.

The entitlement society is a conflict society.

From this opening sentence, Sennholz’s conceptual move is to redefine welfare politics as organized predation. Entitlements do not produce solidarity; they institutionalize rivalry over who receives benefits and who is compelled to finance them. The essay’s compressed structure follows this logic: first, it states the general theory of conflict; second, it narrates federal health-care intervention from Kerr-Mills to Medicare, Medicaid, catastrophic care, and Clinton’s universal-coverage plan; third, it analyzes the proposal through three features common to entitlement programs—expanded benefits, enlarged bureaucracy, and employer mandates.

There is no social peace, only temporary armistices.

The work’s historical section presents intervention as cumulative. Each reform is said to create deficiencies that become arguments for the next reform. Thus the failure or incompleteness of one program becomes the political justification for broader control. Sennholz makes this escalation the essay’s governing economic law: intervention does not solve the crisis it invokes, but creates the conditions for “ever more radical intervention.”

Political intervention breeds comprehensive control, that is, the economic command system.

The Clinton plan is then read as evidence for this tendency. Sennholz emphasizes its promised “health security cards,” broad guaranteed benefits, and expanded medical demand. He predicts that such promises will raise federal spending, deficits, and medical-sector incomes, thereby provoking still further regulation. The point is not merely fiscal; it is institutional. Once government guarantees claims, it must also supervise prices, services, eligibility, and professional conduct.

His second major criticism concerns bureaucracy. The proposed National Health Board becomes, in Sennholz’s account, the emblem of a transfer of authority from patients, doctors, and markets to appointed regulators. The board would define benefits, monitor compliance, set spending ceilings, judge quality, supervise alliances, and discipline prices.

To force compliance with their findings, the seven men and women will apply not only the corrupting power of the federal purse but also the brute power of federal judges.

The essay’s third element is its incidence argument: employer mandates cannot make benefits costless. If employers are required to pay premiums, Sennholz argues, workers ultimately bear the burden through reduced wages, higher prices, or lost jobs. This is one of the essay’s core economic claims, aimed at the political fiction that law can assign costs without altering employment and compensation.

In the end, every worker will pay one hundred percent of his insurance costs.

The closing question therefore returns to the essay’s opening thesis: health-care reform is not mainly about compassion or efficiency, but about coercion in the service of redistribution. Sennholz’s relevance lies in how sharply he captures the free-market critique of early-1990s health policy: universal coverage appears to him as the next stage in a century-long expansion of federal power, justified by crisis language and sustained by class conflict. Whether persuasive or not, the essay is a compact example of Austrian/libertarian political economy applied to the welfare state, arguing that entitlement politics converts social problems into permanent struggles over government force.