As a production system, the NHS as a whole can be regarded as a black box, with inputs into one end, outputs from the other and a mystery in the middle. What happens inside this black box we call process – all the extremely complex chains of decision and intervention that somehow transform inputs into outputs. This is a generally agreed metaphor for all modern industries, in which production processes have become too complex for non-specialists to understand in the ways that earlier and simpler processes, for example production of coal, steel or cars, could be understood in the past. I hope to show that the nature of what goes on in the black box producing health gain and its social byproducts is qualitatively different from what goes on in black boxes producing commodity goods or services. Health gain is always an addition to national wealth, but it need not be a commodity – and has never in fact functioned only as a commodity, in any modern economy.

To analyse the functions of this box for any theory of political economy, old or new, we have to make some simplifying assumptions. Most health economists assume that within the NHS black box a hierarchy of professionals provides a range of services for patients, first creating, then transferring these services as commodities to patients as consumers, but with the price of sale met in full or in part by the state. Health economists recognise that unlike other transactions in the ideal world of classical economics, consumers of health care in all state systems, whether based on taxation or insurance, are so hugely less informed than providers, so shielded from immediate cost penalties and so vulnerable to abuse by providers through sometimes desperate fears, that major modifications of classical theory are necessary and inevitable. However, they still retain classical theory as their core belief. For most health economists, patient-to-professional encounters remain transactions, conveying applied medical science as a commodity from professional producers to patient consumers, with satisfaction of consumer wants as its most visible and measurable product, not health gain. Wants can be defined by one person alone, the archetypal consumer of classical economics.