In this guest post, Krycia Cowling introduces a webinar organized by Katie Hirono and Fiona Haigh, from the Centre for Health Equity Training, Research, and Evaluation, at the University of New South Wales. The webinar, presented to the APHA Trade and Health Forum, discusses the health impact assessment their team conducted on the proposed Trans-Pacific Partnership. Krycia is a doctoral student in health policy at the Johns Hopkins Bloomberg School of Public Health.
Last week, negotiators agreed on a final draft of the Trans-Pacific Partnership, a twelve-nation trade agreement whose members collectively represent 40% of the global economy. In the coming months, the final draft has to be approved by all members’ governments; once in force, it will be the largest regional trade agreement to date.
Throughout negotiations, health advocates and researches have raised concerns about threats to public health posed by particular provisions in the agreement. In particular, attention has focused on the implications of extended intellectual property rights for the price of medicines and the power given to corporations to challenge health legislation through special forms of arbitration. But there are many other possible pathways through which an agreement this expansive may affect health.
Health Impact Assessment (HIA) is a tool to examine the likely health effects of a forthcoming policy or program and to develop recommendations to adapt the policy or program to maximize potential benefits and minimize potential harms for health. Many experts have suggested that HIAs be conducted on new trade agreements, and recently, a group of researchers in Australia conducted what may be the first HIA of a trade agreement while under negotiation.
In this presentation, Katie Hirono and Fiona Haigh, two members of the HIA research team at the Centre for Health Equity Training Research and Evaluation, at the University of New South Wales, describe the process for conducting an HIA of the TPP and their key findings. They focus on the implications for the health of the Australian population, through impacts on the cost of medicines, tobacco control, alcohol control, and food labeling. As Australia is only one of twelve countries set to join the TPP, and the agreement is now entering its final phases of approval, HIAs from the perspective of other potential member countries would be welcome inputs to debates around passing the TPP.
In a provocative and recently published article, philosophers Adina Preda and Kristin Voigt question policy recommendations which call for more equal distributions of social factors as a means of reducing social inequalities in health. The article has already been commented on from a variety of angles. In this blog post, I’ll briefly outline the authors’ arguments and then highlight some areas of the authors’ analysis which I find additionally problematic. I conclude that public health professionals should continue to advocate for more equal distributions of social resources.
Broadly speaking, the authors first question the normative assumptions about the fairness of health inequalities as described in the social determinants of health (SDH) literature, particularly in high-profile publications such as the Marmot Review. The specific normative assumptions identified are that (1) only avoidable health inequalities are unfair and (2) only socially caused inequalities are avoidable. The authors move to illustrate why natural/biological inequalities might also be unfair, an argument which, to me, seems sound and which I’ll leave aside here. The authors then identify two possible reasons why health inequalities resulting from social inequalities are unfair either because (1) social inequalities are themselves unjust or (2) health inequalities themselves are unjust.
The authors, while conceding that they themselves believe inequalities in the distribution of SDH are unjust, dismiss those that would appeal to the first reason. They argue that if social inequalities are unjust, then “[they] ought to be redressed because (social) justice requires it, rather than because of their effects on health”. The authors “do not deny that showing the effects of social inequalities on health may strengthen the argument for redistribution” but argue that “this cannot be put forward as the main reason for such redistribution” (p30).
In a challenge to the second reason, the authors ask whether “there is any reason to claim that health inequalities are unfair when they result from a fair albeit unequal distribution of social goods” (p30). Here, two philosophical accounts of social justice are reviewed, Rawlsian and luck egalitarian, but neither are found to offer an adequate answer to this question.
Finally, the authors argue that “even if it is the case that health inequalities are unfair, it does not follow that they ought to be redressed by altering the distribution of SDH” (32). This is argued primarily on the basis of empirical uncertainties about the effectiveness of redistributive policy interventions. For example, the authors point to evidence that health inequalities have persisted in countries where the state has otherwise reduced inequalities in income and wealth. The authors also draw attention to evidence that shows that improvements in peoples’ socioeconomic conditions are unlikely to result in immediate improvements in health.
It is hard to argue with the authors’ concluding call for greater theoretical development about the ethics of health inequalities. This is something also called for in public health literature. Moreover, greater collaborative attention to these issues between philosophers and public health researchers is, as they suggest, much needed. Overall however, I find important shortcomings with the authors’ conclusion that we should be weary of public health calls for more equal distributions of social resources.
To begin with, I wonder whether claims about the unfairness of health inequalities, which are based on the recognition that social inequalities themselves are unjust, can be dismissed so easily. While the authors acknowledge that such claims can add strength to petitions for social justice (p30) they also argue that they can detract from such claims (p34). But in what scenario would we see appeals for social redistribution on the basis of health inequalities detract from social justice appeals? It seems to me, any effort which focuses on social injustices (regardless if it is through a lens of health equity) is strengthening attention to those issues.
Here the authors might reply that attention to social justice may be detracted if redistribution does not actually lead to more equal health outcomes. Indeed, they source evidence which questions the link between redistributive policies and health. However, their choice of evidence in this regard seems problematically selective. For example, the authors point to evidence which shows that social inequalities in health have persisted in Scandinavian countries, where social policies are typically more redistributive than in other countries. The authors fail to point out however, that the same literature base which has supported this finding has also shown that countries with more redistributive social policies have better overall population health. As such, redistributive policies seem to explain, in large part, the inequalities in health we see between countries. Since the authors themselves suggest that “the most dramatic figures cited in the SDH literature relate to differences in life expectancy across different countries”, it’s not clear why they would disregard this important dimension of the literature.
The authors also draw on evidence from the UK where they claim “there has been perhaps the most sustained effort to reduce social inequalities in health through large-scale social interventions” (p33). They note that such “efforts have had disappointingly small effects on social inequalities in health, with inequalities in some indicators not only stagnating but in fact widening” (p33). However, towards this end they cite work by Mackenbach (2010) who, in the very article they source, acknowledges that a potential reason why health inequalities have persisted in the UK is precisely because efforts were not aimed at broader redistributive policies. In other words, the large-scale social interventions the authors highlight were in fact not interventions involving broader redistributive policies. Mackenbach states: “One possible analysis of the causes of the failure of the English strategy to reduce health inequalities…then is that this failure is due to the fact that inequalities in income and wealth in England have remained unchanged or even widened” (p1252).
Preda and Voigt also flag evidence which shows that improvements in peoples’ socioeconomic position might not result in immediate improvements in health. But such evidence does not question the effectiveness of redistributive policies as the authors suggest; one could argue it rather highlights the pervasive damage poor socioeconomic position can have on health and the importance of using appropriate time-scales when evaluating interventions.
Even though the choice of evidence the authors focus on seems problematic for these outlined reasons, the authors do suggest that there may be more to the story. For instance, they recognize that “[o]ne possibility is that we simply have not yet seen large-scale social changes of the sort envisaged by proponents of the [health equity] model” (p33). In doing so, they leave room for uncertainty regarding the relationship between redistributive social policies and health. They also recognize that this relationship is complex and difficult to assess using standard medical standards of evidence. However, all these issues are framed problematically as well.
First, this uncertainty is used to argue against policy recommendations for a fairer distribution of social factors. However, how we treat uncertainty in public health is itself, a matter of public health ethics. As has been argued elsewhere, we need not rely on evidence of the sort generated by medical models of health. More importantly, the authors seem singularly concerned about the impacts of incorrectly advocating for redistributive policies (in the case that health inequalities will not improve as a result) but do not recognize the potential health dangers of not advocating for redistributive policies (in the case that such policies are necessary for reducing health inequalities). In epidemiological terms, the authors are more concerned about a type I error, a false positive, than a type II error, a false negative. This focus on type 1 errors, with little consideration of errors of the second kind, is often found in arguments claiming that more evidence is needed to take action on the social determinants of health.
If we consider the risks involved in each of these scenarios however, we find that what we risk in one case is worse than what we risk in the other. In the first case, if we advocate for redistributive policies, but are mistaken in our belief that health inequalities will be reduced, there is almost no evidence to suggest that a more equal distribution of social factors will harm anyone’s health. Health inequalities may indeed widen when everybody’s resources improve (since the better-off are often better able to take advantage of these resources), but again there is no evidence that makes us think that health would worsen for anyone because of a more equal distribution of social resources (it just may not improve as fast for everyone). Furthermore, if redistributive policies fail to reduce health inequalities, we are still left with greater social justice. This is an important consideration since, as the authors concede, current distributions of social resources are undeniably unjust.
In the second scenario however, if we fail to advocate for redistributive social policies (in the case that reducing health inequalities depends on this), not only is there the risk that social injustices persist, but here we have evidence which suggests that health inequalities may indeed widen and overall levels of health may decrease. Studies have for example, pointed to the damaging health impacts of current austerity agendas which serve to further increase unequal distributions of social factors.
Preda and Voigt are correct in that public health scholars do need to engage with philosophical debates surrounding health inequalities and the normative assumptions implicit in their work. For the reasons outlined above however, public health scholars should continue their calls for more equal social policies in the name of health equity.
In this guest post, Ronald Labonté moves from describing the impact of income inequality on health to the implications of this relationship for both the Canadian and global context. He presents two sets of policy reforms necessary for acting on these contexts and illustrates the scope for Canadian engagement with national and global policy options. This post is based on an invited presentation given to the Liberal Open Caucus, Senate of Canada, March 11, 2015.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.
Concern about the health effects of income inequality are not new. Considerable attention was paid to the low life expectancies and deprived lives of the poor and the working class throughout the era of industrial capitalism, stretching from the late 18th through to the late 19th centuries. The reasons then were simple. The material contexts in which many of the non-rich lived during this period were the determining factors:
unsafe working conditions
lack of potable water or sanitation, and
little opportunity for social mobility to a better life apart from petty crime
The reasons today are more complicated, but derive from the basic findings that life expectancy across the income spectrum in countries such as Canada (and indeed, globally) follow a gradient. Those higher up the income ladder have longer, healthier lives; and the pattern holds for each step up the gradient. This pattern has led to contentious efforts to explain these findings, especially since many of those slightly lower on the income ladder are not living in materially deprived circumstances, nor are they necessarily leading unhealthier lifestyles.
The Income Inequality Debate
Sir Michael Marmot, who designed the British Whitehall Studies that first brought international attention to the gradient effect, argued that these life expectancy differences, apart from those explained by proximal behavioural risks, were caused at least in part by negative social comparison, leading to a loss of self-esteem, psychosocial stress and poor health. This later became known as the ‘relative income’ or ‘income inequality’ hypothesis, which essentially stated that health inequalities were worse where income inequalities were greatest. Richard Wilkinson and Kate Pickett in their book, The Spirit Level1 became the most famous proponents of this argument, finding that for each of eleven different health and social problems outcomes are significantly worse in more unequal rich countries:
trust and community life
Many epidemiologists, however, were and remain skeptical of their use of co-relational data. An earlier 2004 systematic review of the literature concluded that there was little evidence that the size of income inequalities in itself explained differences in health within and between affluent countries, at least so far as the social comparison explanation is concerned.2 These findings are consistent with a larger literature that finds that it is not the scale of income inequality per se that is responsible for these health differences, but rather that those with different levels of income experience different levels of advantage and deprivation and psychosocial stress which is tightly related to their actual conditions or material conditions of life. As the authors of this 2004 study conclude:
“Although we found little evidence to support a direct effect of income inequality on health, this should not be interpreted to mean that factors that drive unequal income distribution at the system level are not important to individual and population health. Reducing income inequality by raising the incomes of more disadvantaged people will improve the health of poor individuals, health reduce health inequalities, and increase average population health (p.83)2.”
Why the Income Gap Still Matters
In other words, it is not so much the size of the gap between top and bottom income groups that accounts for health inequalities, but the fact that there is a gap in the first place. Reducing that gap remains a public health imperative. Moreover, one of the reasons why income inequalities in some countries do not lead to the same health inequalities as in others has to do with how that gap is reduced through the tax-funded provision of public goods (such as accessible quality education and health care, income transfers, even public transportation and active labour market policies).
This finding is similar to an argument made by the Princeton health economist, Angus Deaton3, whose own reading of the literature on income inequalities as a health determinant concluded that “childhood inequalities are the key to understanding much of the evidence, and that public interventions would do well to focus on breaking or weakening the injustice of parental circumstances determining child outcomes.” A more recent study, however, suggests that the income inequality and health hypothesis is still not entirely resolved. Using 31 years of panel data (1975 – 2006) from 21 OECD countries, the analysis found that, as income inequality increased, life expectancy decreased for both men and women, largely the result of excess mortality for children (aged 1 – 14).4
The study could not disentangle the reasons, but suggested that this was probably the result of under-investments in services for low-income parents, working poverty, long work hours and high household debt burdens, all leading to poorer living conditions and diets and high familial stress. Although the study used mortality data only, where there is high childhood mortality there is almost certain to be high childhood morbidity, creating an unhealthy start that accumulates over a lifetime; and demanding a focus on “on breaking or weakening the injustice of parental circumstances determining child outcomes,” as Angus Deaton expressed it.
These findings were underscored further by a comparison in changes in child well-being between 2007 and 2013 in the same 21 wealthy OECD countries5, a period during which income inequalities had risen in many of these countries subsequent to the 2007/2008 financial crisis. Child well-being (an index comprised of measures of health, education, behaviours, housing and environment and safety) improved in some countries but declined in others, including Canada. The declines were greatest in those countries that had experienced the largest increase in income inequality. The causal pathways, once again, were linked to a decline in material resources, maternal stresses creating epigenetic impacts in pregnancy and early childhood, precarious employment and reduced access to health and other public goods and services.
What Can We Conclude from This?
Income inequalities in themselves are likely not the best explanation for health inequalities
Within and between countries, however, there are stark health differences between people at different income levels
Part of this difference can be explained by different lifestyles (e.g. smoking rates, poor diets, lack of physical exercise), but not all of the difference
Lifestyle differences themselves are socially constructed and relate in many ways to affordability of healthier foods, more secure housing, opportunities for recreation and other ‘social determinants of health’
Psychosocial stresses associated with income inequality may account for some of the differences in health outcomes, but are more likely the result of material deprivations or shortfalls, and changes in employment or economic conditions that create greater precariousness and insecurity
Early childhood experiences (from pregnancy onwards) set the table for later life inequalities: both in income, and in health
Children are not born poor; they are born into poor families, and supports to reduce poverty by raising income levels of the bottom 40 percent of households become one of the most important policy levers that governments can use to create greater health equity over the lifespan
It is finally important to emphasize that it is generally the same economic policies and public policy responses that give rise to income differentials between people, and to the widening income inequalities that still appear to have an influence on the material conditions affecting peoples’ health opportunities.
How Well Is Canada Faring?
Since 1991, at least, Canada hasn’t made much progress in shrinking this income and health gap. Differences in the remaining years of life expectancy at age 25 for men in highest compared to the lowest income quintile was 7.1 in 1991. In 2006 it was still 7.1. For women the differences were 4.9 in 1991 and, well, in 2006: still 4.9.
How do these average individual differences stack up when the whole population is considered?
In 2013, Statistics Canada published the most comprehensive look at income differentials in mortality. The study examined cause-specific mortality rates by income adequacy among Canadian adults, using data from the 1991 to 2006 Canadian census mortality and cancer follow-up study. This study followed 2.7 million people aged 25 or older at baseline, 426,979 of whom died during the 16-year period. Age-standardized mortality rates (ASMRs), rate ratios, rate differences and excess mortality were calculated by income adequacy quintile for various causes of death.6 The result:
“If all cohort members had experienced the age-specific mortality rates of those in the highest quintile, the all-cause ASMRs would have been 19% lower for men and 17% lower for women. Extrapolated to the total non-institutional adult population, that amounts to an estimated 40,000 fewer deaths per year (25,000 fewer among men and 15,000 fewer among women)—the equivalent of eliminating all ischemic heart disease deaths (p.17)6.”
Two colleagues of mine, Dennis Raphael and Toba Bryant rather sensationally described these findings in this way:
“The health effects of income inequality in Canada are like 110 passenger jet falling out of the sky every day, 365 days a year.” 7
This led to some ridicule in a Financial Post blog 8, for which I have some sympathy. Describing the airplane analogy as “junk science,” the author, Peter Taylor, correctly points out that these figures are not about income inequality, which would require a measure of the size of the gap between rich and poor. Rather, it is about the fact “that people at the bottom of the income ladder tend to die earlier than those at the top.” As Taylor goes on:
“Why this is so is cause for vigorous debate. It could be a simple lack of resources. Low income Canadians might lack the ability to successfully navigate the complexities of Medicare. It might also reflect the fact lifestyle risk factors such as smoking, drinking and lack of exercise are more prevalent among lower incomes. Whatever the reasons, however, there’s a world of difference between acknowledging a link between poverty and health, and indicting income inequality as the cause of 40,000 deaths a year.” 8
Fair enough, and Taylor is pretty correct in identifying the proximal causes of some of these gradient differences in health as they relate to one’s level of income. But we seem to be much more complacent in making similar claims that compare the mortality risks of smokers vs. non-smokers. Is it so misleading to describe the life expectancy differences between the richest 1/5th and the rest of Canadians as an inequality? More to the point: Taylor is wrong to ridicule public health’s concerns with these differences as “junk science”, arguing that public health should stick to vaccinations and steer clear of economics. The causes of these income differences in Canadian deaths are located within the economic and political policy choices that affect income distributions, and the social and environmental contexts that in turn affect poorer lifestyles, poorer living conditions and poorer opportunities for health.
That makes them a public health concern, just as the impoverished circumstances of early European industrial capitalism were the incubator of modern public health and its concerns with the conditions that create infectious and other diseases.
The Global Context
To put these findings into a larger global frame, since that is where most of my work is now focused:
Income inequalities are at the highest level amongst OECD nations since 1985 – incidentally a period not only of economic recession, but also of the global diffusion of neoliberal economic models and market de-regulation.
These inequalities are not just in relative income, but also in absolute income, including Canada.
There is a negative and statistically significant impact between the scale of income inequalities and economic growth9. Income inequalities thus have a bearing on health due to any of the health-positive ‘trickle down’ effects of economic growth.
The negative effect of income inequalities on growth is greatest when the gap between lower and median income households rises. Although the ‘breakaway’ wealth of the 1% is unrelated to economic growth (whether positive or negative), this breakaway wealth nonetheless correlates with decreases in the share of economic product going to labour (vs. to capital) and to a disproportionate control over politics and policy by a very small economic elite.
Globally, wealth inequalities are even more extreme, as groups like OXFAM have been challenging much of the world on. Just 67 individuals (some estimate 72, but what’s another 5?) now have more wealth than the bottom 3.5 billion of the world’s population.10 10 individuals in Africa have more wealth than bottom 50% of that still impoverished continent.11
Why wealth inequalities matter: globally we cannot eliminate life-threatening poverty without shifting economic policies to greater redistribution, both pre- and post-market. And certainly not if we are concerned with the ecological limits of growth, since as the 2009 UK Sustainability Commission noted, “there is as yet no credible, socially just, ecologically sustainable scenario of continually growing incomes for a world of nine billion people.”12
Acting on these global contexts and the national level requires two interrelated sets of policy reforms:
Pre-market: elimination of low pay and precarious employment conditions through strengthened core labour rights, high minimum wages and strengthened collective bargaining to establish or re-establish a social contract between capital and labour; and changes in working hours and remuneration allowing employment opportunities to be more equitably shared.
Post-market: redistribution through progressive taxation of incomes, inheritance, and rents; improved royalties on resources especially in low-income countries; capital controls to prevent legal or illicit capital flight; closure of tax havens; and a financial transaction tax or other systems of global taxation.
Most of the OECD nations, however, have been going in the opposite direction in both of these policy areas. Respecting taxation and globally, the picture is even more pronounced, with net global taxation in the past 10 years (2002 – 2012) on a steady decline, resulting in USD 30 trillion more in untaxed wealth floating around the world now than just a decade ago (author calculations based on the World Bank data set). Yet OECD and IMF studies generally conclude that low income inequality is robustly associated with better economic growth, and that redistribution through progressive taxation that lowers income inequality “is benign in terms of its impact on growth (p.4).”13 Several recent studies have affirmed this:
A US review of econometric studies that concluded that raising the marginal tax rate from its present low 35% to its historic high of 68%would have no impact on factors driving economic growth, but would reduce poverty, inequality and stimulate growth through public spending.14
An IMF study that more cautiously suggest that capping the marginal rate at 60% would have little or no effect on growth rates.15
Emmanuel Saez and Thomas Piketty, although never believing this would be achieved, have argued that there is no economically justifiable reason why the marginal rate shouldn’t be at 80%.16
More recently, a paper drawing on the concept of economic optimality concluded that a 90% marginal rate tax on incomes > $300,000 may lead to some declines in GDP and aggregate wealth, but would also lead to greater overall well-being and happiness.17
This leaves unchallenged the fact, from an environmental vantage, we need to abandon the concept of growth as a measure of prosperity and develop other metrics that capture the capabilities and social interactions that are the bases of health and happiness.12
Not a Crisis of Scarcity, but a Deficit of Fairness
But what these bases nonetheless tells us is that, in Canada, and in much of the rest of the rich world, we do not have a problem of scarcity; we have a severe deficit of fairness, whether we frame our social justice remedies as increasing equal opportunity or improving equal outcome. This deficit, in turn, still diffuses globally, characterizing differences within and between nations.
With respect to the pre-market reforms mentioned above, and in the words of Henry Ford a century ago:
“I have to pay workers enough that they can afford to buy my cars.”
With respect to post-market conditions we need to enhance, and in the words of the American jurist, Oliver Wendell Holmes, expressed at another time when income and wealth inequalities were racing out of control:
“Taxes are the price we pay for a civilized society.”
Repeated opinion polls find that the majority of Canadians would agree to paying higher taxes, if such revenues went into the health and education, environmental protection, and other public good programs that most Canadians value – all investments that would lower market inequalities perhaps even better than income transfers or tax credits alone (the market has a way of stealing new dollars from the pockets of the poor, through higher food, housing or other commodity or service prices).
For Canadians, we should heed the caution of an OECD cross-national study that suggests that once a nation’s Gini income co-efficient rises above 0.3 there will be as much as a 9.6% increase in adult mortality (15-60 age group).18 In Canada, we are now considerably above the 0.3 Gini threshold, even after taking account of our (now slightly less generous) post-tax and transfers.
As a country, Canada is unlikely to proceed alone in making dramatic policy shifts in our taxation, minimum wage or social protection policies. To do so would put us in a competitive disadvantage with our Anglo-American economic neighbours and, with open global financial markets, risk capital flight (licit or otherwise) by corporations and high-income earners. Compared to many northern European countries, however, we could embrace much higher marginal taxes than we levy at present. But we would also need to engage in changing the rules of the global economy such that the growing gap between the tops, bottoms and most of the in-betweens is stopped, and then shrunk. Reducing inequalities, and not just eliminating absolute poverty, is now on the global Sustainable Development Goals agenda, which will be normatively binding on all nations if approved at a special UN General Assembly this September. There is renewed global discussion of global financial taxes of one form or another; and on the need to levy a social protection pool based on countries’ abilities to pay, to be drawn upon based on needs.
Indeed, there is no shortage of potential policy initiatives that can address income inequalities and remedy the negative health externalities these create, if not by their scale so much as simply by their existence. It is unlikely that the present Canadian government will embrace these new global policy discussions with any earnest, since it has had a long-standing political platform of going in the opposite direction.
But at the very least these policy options need national debate and a healthy re-kindling.
Can the Canadian Senate add more fuel to this important policy fire?
1. Wilkinson, R. and Pickett, K. (2010) The Spirit Level: Why More Equal Societies Almost Always Do Better, London: Penguin.
2. Lynch, J., Smith, G.D., Harper, S., et al. (2004) “Is Income Inequality a Determinant of Population Health? Part 1: A Systematic Review,” Milbank Quarterly, 82(1):5-99.
9. Cingano, F. (2014), “Trends in Income Inequality and its Impact on Economic Growth”, OECD Social, Employment and Migration Working Papers, No. 163, OECD Publishing. http://dx.doi.org/10.1787/5jxrjncwxv6j-en
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 report. 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.
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.
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 Relations offers in terms of learning the lessons from the Ebola response:
The Ebola outbreak in West Africa has brought to light some important issues and tensions in global health, ranging from the institutions that have been created to service the international community – such as the World Health Organization (WHO) – to the role of governments, politics and ideas in determining how, where and what health issues are addressed. Failings in the management of and response to the Ebola outbreak have sparked a debate about the efficacy of the system of global health governance. This is a necessary debate for the global health community to engage in. When the time comes, we believe that analysts of global health politics and international relations have several valuable insights to help ‘learn the lessons’ from the 2014 Ebola outbreak.
First, on institutional reform: The Ebola outbreak has been an exceptional event. It should not be assumed that lessons drawn from this single event can provide a template for redesigning the everyday workings and agenda of an institution such as the WHO. The WHO has certainly made mistakes in the Ebola response, and these need to be recognized and addressed. However, the efficacy of its Ebola response is not the only metric by which this institution should be judged, nor should Ebola be used politically as an opportunity to further undermine the WHO.
Second, on institutional innovation: We have observed recent calls for the creation of a new international ‘rapid response’ agency for health emergencies. Clearly in some cases rapid response is of the utmost importance, and enhanced rapid response coordination and capacity is needed. However, emphasising rapid response to the detriment of other solutions is problematic, inasmuch as the former is by its very nature ill-suited to building long-term solutions to deep-seated problems. The international community must also be careful that creatingsuch a body may be counterproductive, by shifting attention away from the important task of strengthening in-country health systems which are best-placed to be first line responders to health emergencies.
Third, on the relationship between global health governance and national health systems: Any investigation into institutional failings in the response to Ebola in 2014 must be cognizant of the wider system of global health governance that has dominated questions of African health reform since 2000. A knee-jerk “blame game” of “who did not do what when they should” will only provide a veneer of accountability. Instead, we need a systematic unravelling of why health systems were so poorly developed in Guinea, Liberia and Sierra Leone. Here, reflecting on the impact of the goal-oriented mentality underpinning the Millennium Development Goals agenda cannot be avoided. We must also consider the roles of the actors (state and non-state) that have supposedly been responsible for supporting these health systems, and what they could have done better. The results of such analyses could go some way to providing the basis for thinking about how to build a more sustainable model of global health governance.
Fourth, on the centrality of politics to all institutions: Attempting to separate politics from the technical workings of institutions is a useless exercise – and a potentially dangerous one. All global health institutions are engaged in the management of resources, expectations and the interests of a myriad of state and non-state actors. They have to engage in political brokering, negotiation, leadership and policy design and implementation. The idea that international institutions can or should be “apolitical” has only contributed to limiting their agency, whilst obscuring the real politicking that occurs within and between these institutions. ‘Politics’ is not the problem, and it must be part of the solution.
Fifth, on power and inequalities: Contrary to a much-repeated refrain, disease does know borders. These borders may be those that separate nation-states from one another, but they can also be cultural, racial, economic, or gendered. Access to information and adequate healthcare, as well as exposure to health risk, are not equally shared but rather are dependent on a multitude of local, national and international divisions – not least inequalities in power and wealth. These need to be acknowledged, understood and deconstructed if we are to finally make good on the promise of delivering ‘health for all’.
The recent Ebola outbreak in West Africa – the latest in a depressing series of outbreaks in this region in recent decades – has highlighted the extent to which global health policy has become reactive rather than proactive. A failure to take bold political action in addressing the concerns we have highlighted in this letter will mean that the global health community will remain ill-equipped to respond to future outbreaks, still less to prevent them occurring.
Should you or any of your colleagues wish to sign this open letter please email Sophie Harman (email@example.com) by Midday UK time on Monday 8th December with: ‘Please add my name to the open letter, *name and *institution’.
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 of the 4th ‘Alternative Health Report’, widely seen as the critical voice for a more health equitable future. This fourth edition joins three previous ones released in 2005, 2008 and 2011; and readers new to the GHW and its family of reports should consider perusing these for their many still contemporary and important insights. All three earlier editions are available for free download from the Global Health Watch website (www.ghwatch.org), as will be the new 4th edition sometime in late February or early March 2015, by arrangement with its publisher, Zed Books.
Global Health Watch 4, like its predecessors, has been a collaborative effort by activists and academics from across the world, coordinated by the People’s Health Movement, Asociacion Latinoamericana de Medicina Social, Health Action International, Third World Network and Medact. All four editions of the reports are intended to provide health activists with the knowledge tools and mobilizing ideas to challenge the pathologies of a persisting neoliberal political economy. Indeed, unpacking that political economy has been a recurrent theme in all four editions, and the first section of the new report is build around a detailed account of the health crises of neoliberal globalization and the health damaging fiscal policies of austerity in Europe. Rather than see the financial crisis of 2008 and its subsequent ‘Great Recession’ as a regrettable ‘one-off’ of contemporary capitalism, these early chapters regard these recent events as extensions of a 40 year uncontrolled global experiment in neoliberal economic orthodoxy, an orthodoxy once described “as a belief that ‘the nastiest of men for the nastiest of motives will somehow work for the benefit of all’” (p. 12). There are signs of hope on offer, by way of evidence-informed policies that, if chosen, could steer the toxic ship of finance capital and rampaging inequalities around through re-regulation of global finance, rejection of austerity, increases in progressive national and global taxation, a clean break with the fossil fuel economy and continuous efforts to reclaim public discourse. There is some movement in all of these areas. Even austerity’s fiscal contractions, by no means restricted only to Europe, are increasingly under attack on both empirical and ethical grounds. But public health activists need to keep the pressure on.
Some of the evidence for alternatives to the dominant global economy can be found in popular struggles in Latin America, and it is not accidental that GHW4 gives considerable space to many of the health systems and broader social innovations taking place in that region of the world. But as GHW4’s second section, drilling down on contemporary debates in health systems reform, not all bodes well. Despite the new emphasis being given to ‘Universal Health Coverage,’ public health systems in many parts of the world continue to be underfunded and under attack by private capital:
The fight for a just and equitable health system has to be part of the broader struggle for comprehensive rights and entitlements. To take this struggle forward, the dominant interpretation of UHC today – weakening public systems and the pursuit of private profit – needs to be understood and questioned (p.2).
From successful primary health care roll-outs in Brazil and promised tax-funded health insurance coverage in South Africa, to ongoing efforts to roll back the heavily privatized markets in countries such as Colombia and India, to the dismal efforts of the World Bank’s International Finance Corporation to incentivize private capital and actors to provide health care to Africa’s poorest, the struggle for equitable access to quality health care that is progressively financed continues to dominate health social movement efforts. As earlier GHWs, and the chapter on the TRIPS agreement in this 4th edition, warn, these activist efforts will continue to be challenged by the expansion of intellectual property and investors’ rights through new generation trade treaties, and ongoing efforts by transnational service industries to hive off more public sector services.
These trends are becoming most apparent in the important ‘beyond healthcare’ domains of public policy that govern social determinants of health:
social protection policy: high on the radar of international agencies but lacking the necessary commitments to changes in labour markets and taxation to make pre- and post-market incomes more equitable and social protection more extensive and sustainably funded
non-communicable diseases: where public health policies to reduce the commercial vectors of transmission may run afoul of trade and investment treaties
and the persisting devastation of extractive industries: with a particular nod to the role Canada has been playing as a safe tax regime for some of the most polluting mining transnationals in the world.
Unfortunately, as GHW4’s continuation of its ongoing ‘Watch’ on the World Health Organization finds, the world’s voice on global health is still muted on these and other issues by its financial woes and “is under continuing pressure to retreat to a purely technical role and to withdraw from any effective engagement with the political and economic dynamics that characterize the global health crisis” (p.5).
As with previous editions, GHW4 concludes with stories of resistance and struggle. Latin America again is prominent, evidence of the profound social and political changes that have characterized that region as a focal point of neoliberal opposition. But resistance is global. From India’s right to food movement to Australian Aboriginal controlled health services, GHW4’s final section illustrates that popular health struggles continue, community-controlled services work, and globally linked movements represent an ‘optimism of the will’ to counter the too-often experienced ‘pessimism of the intellect’ (with apologies to Gramsci). There is no pretense that these oppositional struggles will succeed. But what GHW4 represents, in its inception, development, writing, editing and production, and in the very content it creates, is a self-conscious effort to overcome the individualization of our social, political and economic lives that has been the thrust of the 40 year neoliberal project, through a deliberately collective endeavour to re-ignite the soul of solidarity.
In the year since the accident, we have witnessed a number of initiatives aimed at providing compensation to the victims and preventing similar catastrophes from occurring in the future. As recent analyses and commentaries point out however, these efforts have been largely insufficient. Victims for instance, have thus far received little compensation despite promised assistance. The two agreements meant to hold corporations accountable for working conditions, fall short on a variety of fronts. And the market for cheap, fast-fashion continues to swell.
However, there is a particularly important issue which seems to have been largely neglected in these discussions: that garment production in Bangladesh, and its accompanying impacts on workers’ well-being, cannot be considered in isolation from the broader global trading regime within which it is situated.
Production in the textile and clothing sector is characterized by global commodity chains whereby suppliers around the world compete for contracts. This creates an imperative for suppliers to remain competitive by way of low labour costs and more flexible employment conditions. Poor working conditions in the sector are thus not unique to Bangladesh, or even less developed countries. This past December, seven workers were killed in a garment factory fire in Italy, where thousands of Chinese immigrants are reported to produce garments under conditions of squalor.
Employment in the sector is also extremely vulnerable to the type of economic shifts that are inherent to an increasingly interconnected world. In 2001, an economic recession combined with a change in US foreign policy diverted a significant amount of garment orders from Bangladesh to African and Caribbean nations. In a matter of months, almost 1,300 firms closed and 400,000 workers (mostly women) were left jobless. Job insecurity, in addition to poor working conditions, is thus a defining feature of employment in the sector.
Together these considerations suggest the need for a broader, global approach to ensuring the well-being of textile and clothing workers. Towards this end, some have suggested linking trade agreements to respect of international labour standards. However, others worry this might raise labour costs to the point that poor countries will lose a significant proportion of their employment.
At a minimum, addressing the well-being of textile and clothing workers requires recognitions of the links between global trade and labour markets, discussions of the ultimate objectives of trade policies, and more comprehensive and fine-tuned assessments of how trade interacts through international labour markets to influence health.
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 of Medicine, University of Ottawa; and in the Faculty of Health Sciences, Flinders University of South Australia.
Part I of this post commented on a number of global and intergovernmental initiatives to define new post-2015 development goals, specifically the sustainable development goals, the UN high level panel report and the health goals mooted by the World Health Organization. It also included brief analyses of the role Canada could play in each. Part II focuses more closely on Canada’s role, with some specific recommendations for a healthy and progressive stance we could be taking.
Aid, trade and health
Canada still lacks foreign policy coherence, in that we pursue trade and investment agreements that could compromise health equity globally, while committing to a charity model of international health aid. (We are far from alone in this regard.) More troubling is the trend to tie development assistance to the trade and economic interests of donor countries. The ‘trade not aid’ rhetoric has led to ever-larger sums of ODA being allocated to ‘aid for trade’. If Canada is to join in this chorus (which seems imminent with the transfer of its aid department to that of foreign affairs and trade) then the rules of trade treaties that we negotiate should clearly provide disproportionate benefits to poorer, aid-recipient countries. This is not presently the case. This lack of foreign policy coherence has salience both for UHC (where high-income countries with health financing and service industries are mobilizing to sweep the global low- and middle-income country field); and for control of noncommunicable diseases, where trade and investment treaties are posing risks to public health regulation (10).
Here, Canada could support growing public health advocacy to establish full health carve outs and strengthened health exceptions in trade treaties, starting with the detailed texts of the ‘agreed in principle’ Comprehensive Economic and Trade Agreement (CETA) with the EU, and the still to be completed 12-nation Trans Pacific Partnership Agreement (TPPA), the other major countries being the USA, Japan and Australia. There is growing support amongst some of the TPPA’s negotiating countries for a tobacco carve out in that treaty, such that no tobacco control policy could be challenged in a trade dispute. Such tobacco exceptionalism, while good for health as far as it goes, could nonetheless be problematic if we are also concerned with the global health risks posed by Big Food, Big Alcohol or Big Pharma. A more radical approach would be to ensure that such treaties include a provision requiring deference to WHO soft law (e.g. the Framework Convention on Tobacco Control) or World Health Assembly approved global actions plans (e.g. on noncommunicable diseases) whenever a public health policy or regulation is subject to a trade or investment dispute. Given Canada’s current obsession with striking trade and investment treaties with as many countries as possible – indeed, the only new foreign policy by our Conservative government commits to a ‘sea change in the way Canada’s diplomatic assets are deployed around the world’ such that all are ‘harnessed to support the commercial success by Canadian companies’ (11) – we are unlikely to lead this charge. At the same time, according to the leaked TPPA chapter on intellectual property rights, Canada has been opposing almost every effort by the USA to extend patent protection in that treaty beyond provisions in the WTO’s TRIPS Agreement (12). So there may be some room for a stronger global public health presence in Canadian trade policy.
Aid for tax reforms instead?
Aid disbursements will be necessary for many low-income countries, especially in sub-Saharan Africa, since taxation reforms are still years away in being effectively developed. But aid is no substitute for domestic economic empowerment; and taxation is fundamental to that empowerment, and to responsible state building and the social contract between well-functioning states and their citizens. Thirty or more years of advice to or obligations on developing country governments by the IMF and World Bank to keep taxes low to attract foreign direct investment have done well for the investors, but poorly for most of the countries’ citizens.
Somewhat late in the game, both the IMF and World Bank are now talking about the need for developing countries to substantially increase their taxation rates and improve their taxation systems (though still favouring regressive consumption over progressive income or corporate taxes). This is not to say that African countries have not been trying to comply, with their tax to GDP ratio in recent years rising to between 17 and 20 percent (13). But this rate is still too low to be adequate (the EU 15 countries average over 40 percent), and still inefficient and full of exemptions for imports, investors and transnational profits. As well, the continuing importance of tariffs as a form of taxation for some of these countries means that in any Canadian trade treaty involving developing countries, including those in South Asia where the tax to GDP is the lowest in the world, high tariff reductions should not be on the agenda until there is evidence of effective and transparent progressive tax systems in place. Why not aid for progressive taxation reforms, rather than (or at least in addition to) aid for trade?
Given that Canada has also become the Western world’s global mining giant thanks to the domestic tax breaks we give to mining companies, we also have a potential role to play in supporting developing countries (especially those in Africa and Latin America) in their efforts to increase their persistently low royalty rates, which were largely imposed during structural adjustment programs in the 1980s and 1990s.
We could also join with other countries in supporting innovations in global taxation. Why is Canada not supporting financial transaction taxes? Why haven’t we joined the very basic UNITAID airline tax? Why are we not doing more to close offshore financial centers, tax havens?
Canada could take an assertive role in the most recent G20 promise to develop a more transparent international tax identification system so that taxes are paid where production profits are earned, avoiding the toxic practice of transfer pricing through tax haven countries (14). In doing so it might also begin to stem the illicit capital flows, especially from Africa, which in the past 40 years has topped $1.4 trillion, more than all of the aid and debt cancellation funds that have gone to the continent, and much of it due to transnational corporate practices, and not simply criminality or corruption (15). There is a modicum of self-interest in this, as some estimates calculate that Canada is absorbing huge tax losses on the more than $160 billion in Canadian income parked mostly in offshore Caribbean branches of Canadian chartered banks (16).
Actions oriented towards such economic and taxation reforms by Canada would move us away from a charity model of intermittent, donor-driven aid to a structural model of global social solidarity and an equitable economic empowerment.
In sum, Canada in preparing for a post-2015 world could:
Continue but strengthen our commitments to maternal/child health
Promote our publicly-funded universal health system as an important model for expanding UHC
Ensure that health concerns (present and future) are fully protected in trade and investment treaties
Aid for trade – if trade treaties actually disproportionately benefit poorer people and countries
Aid for tax reform – to build the transparent and progressive tax systems developing countries need to build effective states and mobilize domestic revenues for health
Join and promote global systems of taxation to prevent tax evasion and illicit capital flight
Work with African and Latin American countries to improve their royalties on extractive industries, notably mining.
10. Friel S., Gleeson D., Thow A-M., Labonté R., Stuckler D., Kay A. and Snowdown W. A new generation of trade policy: potential risks to diet-related health from the trans pacific partnership agreement. Globalization and Health 2013, 9(46): 1-7.
11. See: Government of Canada, 2013. Global Markets Action Plan. http://www.international.gc.ca/global-markets-marches-mondiaux/
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 of the most discussed features of this relationship, and the one covered by Atlantic author Matthew O’Brien, is the isolated position of the US (in the top right area of the graph). O’Brien notes that ‘[Americans] spend much more than any other rich country, but [they] certainly don’t get more for it. [They] get less. [They] get about the same health outcomes, but don’t cover everybody like other rich countries do.’
With US life expectancy clearly positioned below 80 years, and other countries approaching levels closer to 85, I can’t agree with O’Brien that Americans ‘get about the same health outcomes’, but let’s leave that aside for now.
The obvious questions prompted here are why does healthcare cost so much in the US, and relatedly, how can this wasteful spending be eliminated? O’Brien points his finger at culprits like high doctors’ pay and patients’ opposition to having their coverage change.
A more extensive debate on this relationship is happening on the blog, The Incidental Economist, which is the original source of the graph used in the Atlantic piece. Nonetheless, the bottom line of many of these conversations is likely to be some form of O’Briens conclusion: [Americans] can’t afford [their] healthcare exceptionalism’. With an extreme and growing number of Americans underinsured, unemployed and underfed, this conclusion is hard to deny.
But there is another important conversation to be had.
This conversation emerges when we look at the cluster of countries spending more than $2000 per capita on healthcare. Here the data begins to flatten out and after this point, spending on healthcare appears to buy little in terms of health improvement. This particular feature of the graph prompts different sorts of questions than those outlined above. Questions like: if healthcare spending is not buying health improvements then what is responsible for better health; and why does the US lag so far behind in international health comparisons? The bottom line of conversations centred on these questions point to a different sort of American exceptionalism.
There are several, well-documented, reasons why healthcare does not produce health. These reasons derive from population health research and generally speaking, relate health to societal structures that govern the amount of inequality in a society. In this field of work, American exceptionalism is found in graphs like this one:
In this graph, the US (again, at the top right) is isolated for its extremely high level of income inequality and high level of infant deaths.
The relationship between spending on healthcare and health illustrates the limited returns of exorbitant US spending, but it also demonstrates the limitations of medical care in producing health: a story whose time is beyond ripe.
As a follow-up to last week’s guest post, this week Ted Schrecker outlines the political trajectories which have not only shaped current landscapes of health disparities, but also continue to obstruct avenues towards achieving greater health equity. He challenges us to consider the prospects for national-level inroads and contemplates whether the future lies in more localized efforts. Ted is a Professor of Global Health Policy at Durham University.
It is now 34 years since Margaret Thatcher’s Conservatives came to power in the United Kingdom. How time flies when you’re having fun.
The election of the Conservatives, and that of Ronald Reagan in the following year, transformed not only domestic politics in the two countries but also the global political landscape. The most direct and immediate global impact was the imposition of neoliberal orthodoxy on many low- and middle-income countries by the IMF and World Bank, in order to protect the interests of creditors, including many of the largest US banks, but this was only part of a longer-term recasting of political discourse.
The Thatcher-Reagan transition marked a break with postwar policies that led directly to today’s levels of economic inequality and their consequences for health. Although forces of economic integration (globalisation) were already playing out within the economies of the high-income world, those forces were supported and in some cases driven by state actions and policy choices that could have been made differently. For example, in the United States, although the pre-tax incomes of the one-percenters started growing rapidly as a share of all incomes in the early 1980s, research from Germany’s Institute for the Study of Labour shows that even before the economic crisis of 2008, tax cuts for the rich magnified the effects of market income inequality. As pointed out in an excellent recent article on the history of neoliberalism: “In the end, neoliberalism was very much a state-directed project, but the interests represented by these same states changed, as did the central actors defining policy.”
The Thatcher-Reagan transition also provided signals about the extent to which Anglo-American electorates would tolerate the undoing of postwar understandings of social citizenship. Successor governments were quick to act on those signals. Not Thatcher but the Labour government of Tony Blair introduced tuition fees for British university students and eliminated the 10p income tax rate. Not Reagan but Democratic president Bill Clinton made good in 1996 on a campaign pledge to “end welfare as we know it,” playing to racist and sexist stereotypes while expanding the low-wage female workforce whose precarious living and working conditions were eloquently described a few years later by journalist Barbara Ehrenreich.
Both Blair and Clinton were rewarded with stratospheric wealth after leaving public office; there may or may not be a connection.
Fast-forwarding through the effects of the financial crisis and subsequent recession, which are now familiar, it should now be evident that public finance is a public health issue. (More about this in my next posting.) “Changed priorities” – the phrase taken from a road sign in my neighbourhood – are essential if health disparities are to be reduced.
What are the prospects? One possibility is that finance capital, transnational corporations and wealthy households are too powerful domestically, or too mobile, to leave governments with much room to manoeuvre. Globalisation has doubtless reduced the policy space available, but it is difficult to see that (for example) a mansion tax and a return to the 50p tax rate would lead to an economic implosion. Perhaps more important is the possibility that an electorally decisive plurality of the population now share Thatcherite worldviews and allegiances, even if the rest of us do not. (Does anyone else find the normalisation of “climbing the property ladder” – the expression and the activity – as objectionable as I do?)
This is partly a generational effect. Alex Himelfarb, who retired as Canada’s most senior public servant, recently wrote: “North Americans under 40 have never really known anything other than neo-liberal politics and governments that seem to be backing away, so many will understandably see small government and low taxes as the only option.” On this side of the Atlantic, such diffusion of neoliberal norms appears to be what Johan Mackenbach had in mind when he wrote in 2010: “[I]t is unlikely that a majority of the English electorate would have supported the substantial redistribution of income and wealth that would have been necessary” to avoid the persistence and growth of health disparities during 13 years of Labour government.
Mackenbach’s reference to a majority reflects a widespread misunderstanding of electoral arithmetic and institutions; only under extraordinary conditions is support from a majority of any electorate needed for the success and survival of a policy, or a government. If we substitute a more accurate term, he may well be correct. Thomas Mulcair, the leader of Canada’s centre-left New Democratic Party (NDP), appeared to adopt Mackenbach’s view when he rebuked a byelection candidate who has called for higher taxes on the rich by saying that “no increases in personal taxes will be in any way shape or form part of our political offer in 2015.” (Canadians, like British voters, head to the polls in 2015.) Since the NDP marks the leftward end of Canada’s political spectrum, hopes for ending a retreat from redistributive policy that has been well documented by Canada’s national statistical agency and the OECD are now a dead issue for the near future. Dead as well, as a consequence, are prospects for tackling health inequity in Canada through national-level initiatives.
Mackenbach has identified the core political question about the prospects for reducing health equity by acting on social determinants of health. Five years ago, the WHO Commission on Social Determinants of Health articulated the aspiration of closing the health disparities gap in a generation. The policies of the Coalition threaten to widen the gap, for example by imposing spending cuts that will disproportionately affect England’s disadvantaged regions while debilitating the National Health Service. If changed priorities are not ahead, then the best that we can probably hope for in jurisdictions like Canada and England is that ambitious localised interventions will reduce the speed at which the health gap grows.
A note to readers: Unfortunately, a couple of sources cited in this posting may be protected by paywalls. If you have difficulty accessing them, please contact me at firstname.lastname@example.org and I will try to arrange access.