Paul Krugman: America’s Greatest Public Health Champion?

Last week the New York Times reported on a study which documents a reversing trend in life expectancy for the least educated whites in the US. The study shows that since 1990, life expectancy for white Americans without a high school diploma has fallen by five years for women and three years for men. Reading […]

How Not to Think About Social Determinants of Health: A cautionary tale from Canada

In this guest post, Ted Schrecker critically discusses the results of a recently published public health study in Canada. Illustrated are the hazardous implications of de-contextualized conceptualizations of health.

From the Social to the Ultimate Determinants of Health

The notion that health is influenced by society, and the politics governing it, has been around for generations. The contemporary uptake of this idea can be found in the increasingly popular concept of ‘social determinants of health’. But should all social determinants be treated with equal concern? Or are certain determinants more important than others in influencing the health of populations?

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‘But they just can’t kill the beast’: the ongoing neoliberal plague

In this guest post, Ronald Labonté traces the history of neoliberalism through structural adjustment programs, the Great Recession and into current Austerity Agendas. Labonté examines why neoliberalism continues to dominate economic agendas and what types of policy messages are needed to combat the resulting health plagues. This post is cross-posted at Global Health Watch in support of the latest alternative world health reportLabonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in the Faculty of Medicine, University of Ottawa; and in the Faculty of Health Sciences, Flinders University of South Australia.

The opening line comes from a classic 1977 song by The Eagles, ‘Hotel California.’ It’s a prescient line, since it was crafted just before the dawn of the neoliberal era (1980 and ever onwards), and emanated from the American heartland that helped spread the gospel of neoliberal economics around the world.

The Eagles were not singing about the 2008 Global Financial Crisis and its subsequent Great Recession and Global Austerity Agenda, but they may as well have been. The 2008 crisis was thought by many at the time to herald the final disgrace of a beastly neoliberal orthodoxy that deserved to die. But, in testament to capitalism’s resilience and the capture of the state by global elites (the 1%), the Occupy and other progressive social movements worldwide have so far been unable to kill the beast.

The Austrian-born economist, Von Hayek, is credited with first defining the essential contours of neoliberal economics in the 1940s: free markets, strong property rights, sovereign individuals and minimal government interference. It was not until the elections of Reagan (US), Thatcher (UK) and Kohl (Germany) in the 1980s that this marginal economic theory came to dominate what were then the world’s leading economic powers. Keynesian economists writing at the same time as Von Hayek summarily dismissed his ideas as ‘the belief that the nastiest of men for the nastiest of motives would somehow work for the benefit of all.’

The impetus for neoliberalism’s ascendency can be traced to the episodic crises of modern capitalism, where overproduction and under-consumption lead to declining rates of profit. These ups and downs in the business cycle were aggravated in the 1970s by the oil price shocks, which led to ‘stagflation’ in advanced economies and large international debts in developing nations having to front the rapidly rising costs of oil imports. The corresponding shift to the right in politics in the US and UK, and the threat of developing world debt defaults, gave neoliberal apostles a massive window of opportunity. This was seized upon in the first neoliberal wave, the structural adjustment programs (SAPs) imposed by the IMF and World Bank on indebted developing countries as the price for loan guarantees and bailouts. SAPs may have helped to keep the global financial system afloat, but did little for the economic recovery of those regions most under their yolk (Latin America, Africa). The health plague SAPs engendered was quickly evident, as structurally adjusted states spent less on health, education, social protection or other measures, imperiling the health of the poor, and particularly women and children. By the 1990s, income inequalities and health inequalities, after decades of shrinking, began a reverse trajectory. SAPs generally failed to achieve the economic growth their privatization, liberalization, de-/re-regulation and state minimalism agenda had promised. Although the term fell out of favour, its neoliberal economic platform did not.

That platform also led to neoliberalism’s second major iteration: the financialization of the economy. Stated simply, investors found it was easier and faster to make money from money than to build the ‘real economy’ of production and consumption. Aided by the repeal of banking regulations, central bankers’ belief in the beneficence of unfettered global capital and new digital technologies capable of creating a potpourri of new gambling ‘instruments’, the growth in what some have called ‘funny money’ speculation began in the 1990s and soared to stratospheric heights in the early 2000s. The global value of ‘derivatives’ (highly leveraged gambles in underlying assets such as stocks, bonds, currencies, and market indexes) still outstrips the value of the global economy by a factor of 10, despite the travesty of the 2008 Global Financial Crisis they helped to create.

The proximate causes of the 2008 crisis are now well known, explained in large measure by real estate sub-prime mortgages, the diffusion of ‘toxic debts’ marketed as sound investments throughout a globally integrated financial system, and the collapse of the real estate bubble on which the sub-prime debt-financed consumption of America’s declining middle-class was based. The rapid ripple effect in global supply chains led to the Great Recession (statistically now over for many countries though even most mainstream economists consider another one just around the corner) and the highest worldwide unemployment numbers on record. Recessions can sometimes bring health benefits; people use their cars less, and have less discretionary money to spend on tobacco or alcohol. But recessions can also lead to consumption of cheaper, unhealthier foods and bouts of binge drinking. Rising unemployment that is recession’s inevitable wake is strongly associated with negative health impacts. What employment that remains (or is newly created) in the wake of the 2008 crisis is often insecure, part-time and impoverishing in pay, creating considerable mental (and hence physical) distress. That’s for the rich world. For the poorer world, and as before with SAPs, women, children, rural populations, and informal workers are hit the hardest. Even in regions claimed to be growing rapidly despite the crisis and global recession (i.e. Africa), most of that growth is jobless and based upon the exploitation of that continent’s mineral, oil or ‘land-grabbing’ wealth.

Neoliberalism’s modern plague persists most perniciously in the Austerity Agenda. Wealthy countries around the world, faced with the imminent and chaotic demise of global finance and (hence) global capitalism in 2008, magically came up with trillions of dollars to bailout, shore up and/or socialize the debts of the egregious greed of a handful of the 1%. Rediscovering the ameliorative wisdom of Keynesian economics – that when private markets fail, governments should intervene – those countries that could pumped billions more into countercyclical public spending in an effort to jumpstart the sluggish global economy. It worked, at least a little bit and for a very little while. But within 18 months of public life support to their economies, governments were under pressure to rein in their spending to avoid debts that were believed by some economists (incorrectly, it later turned out) to dampen economic growth. Austerity became the catch phrase for a return of the same package of discredited neoliberal ideas as SAPs, but now on a global scale and in rich countries as well as poor. As with SAPs, the disease-generating fallout is becoming more manifest: from cuts to health, education and social protection; to user fees creating barriers to entitlements; to a slow down in poverty reduction or in the great achievements in reducing infant mortality and increasing life expectancies that the world’s governments committed to continuing in the 2000 Millennium Development Goals.

Of course, not all have had to tighten their belts. Indeed, as neoliberal globalization weakened labor rights, freed capital of most border constraints and turned a blind eye to tax evasion or avoidance schemes available only to transnational corporations and economic elites, the rich got obscenely richer and everyone else started sliding down the income and wealth gradients. These dramatic shifts in wealth, power and inequality may not show up immediately in health inequalities, but the evidence on what we now call the ‘social determinants of health’ portends for a rather sickly and dismal future for much of the world’s population.

Why has such an empirically vacuous set of economic practices continued to hold sway over most of the world’s governments? (Note ‘most,’ not ‘all’).

There are several potential answers, but the most compelling is the simplest: That many governments actively want to shrink the state. Their political leaders (or campaign financiers) are committed neoliberals, but their voting publics may actually like some of the programs that public revenues make universally accessible. There’s nothing like a claimed (and in most cases faked) fiscal crisis to sell citizens on the need for deeper cuts and more privatization, echoing Thatcher’s famous comment when first implementing such measures in the 1980s: There Is No Alternative. Almost forty years of this domineering message has indeed made it difficult for alternatives to gain a credible, media-prominent place in the economic playbooks of most political parties – a challenge that progressives must confront head on and which, more optimistically, does seem to be gaining a bit more space in public discourse. Social media helps here but so, too, do the organized mobilizations of resistance that have sparked around the world since 2008. Although not yet a singularly coherent political voice (and some might argue that a globalized world confronting multiple crises demands a politics of multiple voices driven issue by issue), the worrying decline in formal political participation in many countries is counter-balanced by a surge in the space for participatory democracy afforded (at least for now) in the digital world.

The policy messages that must occupy this participatory space, and to begin crowding out the neoliberal refrain across more conventional media, are fairly simple.

We need to put global finance back on a tight regulatory leash. There are little steps being taken to do so, but nothing as yet substantive enough to fundamentally alter the rules of the funny money game, or to prevent another financial collapse from occurring. (For those disappointed that 2008 didn’t kill the beast, don’t get too depressed. There will be more crisis opportunities.)

We need to rebuild the progressive and redistributive tax systems that wealthier nations enjoyed in the post-WWII era, and that shrunk the disparities that precipitated the 1930s Depression and, indeed, WWII itself. And we need to build such tax systems in today’s low- and middle-income countries saddled with decades of advice to keep their taxes low to attract foreign investment. (I set aside for now the further challenge of reducing institutional corruption – both public and private – that requires strong civil societies, greater financial transparency and justice systems free of elite capture.)

We need progressive and redistributive taxation to become global, since a globally integrated economy needs globally integrated means of redistribution. Two such measures would include a financial transaction tax (which could raise for the public good as much as $8 trillion annually), and the effective closure of tax havens and end to transfer pricing by which the rich keep most of their riches to themselves (bugger the public good!).

But we also need to change how incomes are earned in the first place. There are too many people competing for too few jobs in a highly unequal and bifurcated labor market. We need jobs to be shared more equitably, pay to be substantially more equalized and unions/labor rights to be strengthened, not ‘flexibilized’ in the name of global competitive advantage. Rather than governments negotiating more ‘free’ trade and investment treaties that lock in the privileges of investors and the oligopolies of transnational corporations (the same privileges that has led to the greatest wealth inequalities the world has likely ever seen), our governments should be creating more democratic and participatory forms of global governance in which the survival demands of creating a new economic order and a new way of sharing the diminishing natural resources of our planetary commons are the focal concerns. High on their issues list has to be the survivability of our planet, and a clean break with our fossil fuel, growth driven economic irrationality that is rational only if long-term human wellbeing is excluded from conventional economic equations.

In the immediate term, we need to refute the Austerity Agenda – now holding almost 80% of the world’s population in its grip – for what it is: an ideology devoid of theoretical or empirical support, that dampens rather than promotes economic growth, and that only fills the coffers of those already so rich that, as Oxfam reminds us, the wealth of the richest 85 people alone is more than that of the bottom 3 billion half of humanity.

If the scale of that inequality isn’t the single most outrageous global health issue of the day (well, alongside climate change, and they’re not unrelated) I don’t what is.

So let’s get on with shouting out the alternatives. After all, that is what Global Health Watch 4 and its three predecessors are all about anyway.

Global

Global Health Working Group Promotes Ebola Open Letter

Last week a Workshop was held at the Centre for Global Health Policy at the University of Sussex which brought together a number of scholars, primarily UK-based International Relations scholars, to discuss the current Ebola crisis and the international response to it. From this workshop arose an open letter on what the field of International […]

Global

Global Health Watch 4: Critique and Hope for a Healthier World

In this guest post, Ronald Labonté announces the release of Global Health Watch 4. Labonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in the Faculty of Medicine, University of Ottawa; and in the Faculty of Health Sciences, Flinders University of South Australia. Today marks the release […]

Health Inequalities

The Scottish Referendum and Health Equity

In this guest post, Beth Thomas discusses what the Scottish Referendum means to her as a medical student and as a citizen of Scotland. Beth is currently a final year medical student at the University of Glasgow who has been working with Medsin UK for the past 5 years. She is currently the Scottish and Northern Irish Coordinator […]

Bangladesh

Global Trade and Health: Rana Plaza, One Year On

Last Thursday marked the one year anniversary of the Rana Plaza tragedy in Bangladesh, which left more than 1100 dead and many more injured. The disaster has been described as one of the worst industrial accidents in modern history. In the year since the accident, we have witnessed a number of initiatives aimed at providing compensation to […]

Canada

Canada and the post-2015 world: Part II

In this post, guest blogger Ronald Labonté concludes a two-part blog series about post-2015 development goals. Discussed are their relationship to health and specific steps Canada could take to encourage a healthy and progressive transition. Labonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in the Faculty […]

Canada

Canada and the post-2015 world: Part I

In this post, guest blogger Ronald Labonté introduces a two-part blog series about post-2015 development goals. Discussed are their relationship to health and specific steps Canada could take to encourage a healthy and progressive transition. Labonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in […]

Global

Healthcare spending and health: looking beyond the money

This graph was posted on the Atlantic last week and illustrates the striking relationship between healthcare spending and life expectancy.  There are many important and interesting aspects to this relationship, which has been documented for some time, but there is one aspect which is seldom discussed when the topic surfaces in mainstream media outlets. One […]

Canada

Canada’s Austerity Agenda: It’s About the Taxes

Austerity policies pose major threats to the public’s health. In this guest post, Ronald Labonté argues that the austerity agenda in Canada stems not from a crisis in finances, but from a crisis in fair taxation. Labonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in the Faculty of Medicine, University of Ottawa; and in the Faculty of Health Sciences, Flinders University of South Australia.

Take Action

#StandingwithDNLee

Readers of Healthy Policies will know that inequities in health are very much rooted in inequities of power. Recent posts by Ted Schrecker have outlined how political trajectories shape landscapes of health disparities. A defining feature of these trajectories is that in addition to being determined by unequal distributions of power, they also perpetuate the […]

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