Is capitalism good for our health?

by Fran Baum
Director, Southgate Institute for Health, Society and Equity, Flinders University
and Co-Chair Global Steering Council, People’s Health Movement

Why bother to pose such a question? Our health system focuses almost entirely on dealing with illness. Any effort towards disease prevention is invariably about telling people to change their behaviour. Yet, there is little evidence that telling people what to do is effective - unless the options available to them are changed. Take a look at the current health debate in Federal politics. Nearly all the airplay from politicians is about hospitals and providing more beds (in a country that has more beds per capita than any comparable country) with barely a mention about care in the community. If politicians discuss prevention it is usually about the need for people to change their unhealthy behaviour. Consideration of what makes and keeps us healthy just doesn’t make it to the health policy agenda in Australia. This particularly frustrates me since I spent three years serving on the Commission on the Social Determinants of Health which was established by the World Health Organisation in 2005. Our report, Closing the Gap in a Generation. Health Equity through Action on the Social Determinants of Health (2008) provides the evidence to show that if we are serious about promoting health then attention has to be paid to the way we organise the economy and society. So here I want to point to some of the ways in which our economic system shapes the pattern and distribution of health in Australia and overseas.

Capitalism has been given a harder edge in the last few decades by the effects of neo-liberal policies. This neoliberalism is characterised by the continued growth in power and influence of trans-national corporations (TNCs), deregulation by governments in the interests of greater market profitability, cut backs to, out-sourcing of and adoption of market models for public services, and weakening and greater conditionality of social services. This period has also seen the emergence of a virulent consumerism which is promoted by a huge advertising industry and a shift in the tax burden from companies to individuals. The expansion in size of TNCs is shown by the fact that the annual revenue of the largest exceeds the Gross Domestic Product (GDP) of many nation states. Thus in 2004 Exxon Mobil’s revenue was $220,000 million compared with Turkey’s GDP at $200,000 million and Wal-Mart annual revenue $199,000 million compared with Indonesia’s GDP at $155,000m (Lee, 2005, p. 67).

The position of TNCs has been strongly supported by the bodies that govern the international economy – especially the International Monetary Fund and World Bank. Their advice to government has strongly favoured the privatisation of what were previously public services. Governments have been urged to privatise essential services including water, in favour of these privatisations are that they would result in lower prices and increased efficiencies. Evidence suggests that in fact prices have generally increased and the market has not been more efficient (Labonte and Schrecker, 2006). Privatisation has generally required expensive regulation which means less public funding for other public goods, it has seen environmental costs externalised and the companies put profit before social, health and equity concerns. The health effects of these privatisations are significant and have only been imperfectly monitored and evaluated. Wherever there has been evaluation, health and equity have been shown to suffer (People’s Health Movement et al., 2008; Homedes and Ugalde, 2005). This is nowhere more true than in the poorest countries of the world where the mantra of privatisation and running down of public services coupled with the HIV/AIDS epidemic has had a devastating impact on health and resulted in falling life expectancies for many sub-Saharan countries. Privatisation meant that health systems were weakened and unable to respond effectively to the epidemic (Sanders, 2006).

Consumerism has been a key feature of neo-liberalism. Citizens are increasingly cast as consumers and offered a dazzling array of goods. The advertising industry that supports this consumerism holds out the promise of greater life satisfaction, happiness and contentment. Yet the reality in the past two decades has been that in the most affluent countries the rates of mental illness, especially depression and anxiety, have been increasing. The economist Richard Layard has noted “as western societies have got richer, their people have become no happier” (Layard, 2005 pp. 3-4). A number of authors have studied this paradox and noted that consumerism itself appears to threaten our collective mental health (Hamilton and Denniss, 2005; James, 2008; Stavropoulos, 2008). The competition to have the latest gadget, constant comparison with others and adopting material objects as the central meaning and source of satisfaction in life are not conducive to mental well-being. James argues that capitalism promotes a “set of values that increase our vulnerability to emotional distress” (2008). Thus we are shopping ourselves into anxiety, depression and loneliness.

The past decades of neo-liberalism have also seen a growth in inequity both between rich countries and other countries and within countries. Within countries there is substantial evidence that countries with higher levels of inequalities also do worse on a range of measures of health and wellbeing. Richard Wilkinson and Kate Pickett’s The Spirit Level documents this effect and show that more unequal countries generally have worse mental health, are more likely to be obese, have higher rates of homicide, more people in prison, score worse on an index of health and social problems and have a lower life expectancy than in countries that distribute their income more equally (2009). These correlations don’t explain why this is the case but Wilkinson and Pickett suggests it is because in unequal societies people feel less secure, there is more crime, people have higher social evaluative anxiety and there is less social cohesion. It is also true that more equal societies are also those which offer strong social services and have fairer social policies.

Space precludes me saying much about the impact of a deregulated capitalism on our natural environment and the chances of achieving sustainability. However, it is clear that the current pattern of economic growth is simply unsustainable. Jackson in Prosperity without Growth makes the case very clearly and convincingly. He writes of the need to “fix the illiterate economics of relentless growth” (2009 p.204). From a health point of view there is little point promoting the health of individuals if the planetary system that supports life on earth is increasingly compromised. The good news is that the changes that are good for our planet are also those that promise to be good for our physical and mental health – less rampant consumerism, more emphasis on local economic activity, on conservation and thrift and on developing communities to be convivial and supportive places to live. The focus shifts from continually growing the quantity of economic production and consumption to growing the quality of life and society.

Healthier futures

What measures might see the current neo-liberal economic policies change in a way that that would be more supportive of health and well-being? In the wake of the global financial crisis it did briefly seem that there might be some fundamental change to the global economic system but that hope seems to be fading as the world returns to the status quo albeit ironically resting on a massive injection of public funds. Some argue for the usefulness of corporate social responsibility. The Commission on the Social Determinants of Health noted that social responsibility is voluntary and that a more meaningful concept would be corporate accountability which could, for instance, call on companies to pay a fair rate of tax and to stop tax avoidance practices. In Australia from 1962-3 to 2002-3 the ratio of revenue from individual and other withholding tax to company tax changed from 2:1 to 3.8:1 (Treasury 2008). This means there is less public revenue to spend on public goods and on services that would promote health and equity. Thus a major focus of advocacy should be for taxation reform and promotion of the value of taxation as the means to provide governments with the ability to create fairer and healthier societies.

The trend towards deregulation also needs to be halted. In one of his last speeches before he died Don Dunstan made this point forcefully when he noted “. . . we will intervene to regain our right to a say in our future, to temper the marketplace by action, to provide services and social justice, to retain institutional safeguards and provide needed development in the community interest, for we know that we intervene or we sink” (1999). He might also have said that we intervene or we will be unhealthy.

Around the globe there is a steadily growing civil society movement that is arguing against neo-liberal economic globalisation. Part of this movement focuses directly on health. The People’s Health Movement was formed in 2000 and adopted the People’s Charter as a statement of its philosophy. The Charter is very clear on the threats TNCs offer to global health:

The world’s resources are increasingly concentrated in the hands of a few who strive to maximise their private profit. Neo-liberal political and economic policies are made by a small group of powerful governments, and by international institutions such as the World Bank, the International Monetary Fund and the World Trade Organisation. These policies, together with the unregulated activities of transnational corporations, have had severe effects on the lives and livelihoods, health and well-being of people in both North and South. (People’s Health Assembly, 2001)

This movement has grown and has chapters in many countries around the world. It is aimed at building solidarity between rich and poor countries and argues for human publicly funded, free at the point of use and which are based on primary health care in the community that provides care and promotes health.

Capitalism has created societies which offer some people lots of choice in their life. It has created aggressively consumerist societies which hold out great promise of self-satisfaction. Yet under this system inequalities have increased and much of the world’s population continues to live in poverty with incomes of less than US$2 per day. In rich countries the styles of life that capitalism has encouraged has seen people become no happier and indeed, suffering increasingly high levels of mental illness. Evidence suggests that equality is good for population health and in and of itself leads to healthier societies. All this suggests that the current model of capitalism is not serving us well and we need to moderate our economic system so that the public good is more prominent and to do so, we must intervene to a much greater degree in the operation of the market. Our health depends on this intervention.

References

• Commission on Social Determinants of Health (2008) Closing the gap in a generation: Health equity through action on the social determinants of health. Geneva: World Health Organisation
• Dunstan, D. (1999) “We intervene or we sink.” In Spoehr, J. (Ed.) Beyond the contract state. Adelaide: Wakefield Press.
• Hamilton, C. and Denniss, R. (2005) Affluenza, Sydney: Allen & Unwin.
• Homedes, N. and Ugalde, A. (2005) “Why neoliberal health reforms have failed in Latin America.” Health Policy, 71, 83-96.
• Jackson, T. (2009) Prosperity without growth: Economics for a finite planet, London: Earthscan.
• James, O. (2008) The selfish capitalist, London: Vermilion.
• Labonte, R. and Schrecker, T. (2006) “Globalization and social determinants of health: Analytic and strategic review paper.” Commission on Social Determinants of Health Knowledge Network on Globalisation Conference Ottawa: University of Ottawa.
• Layard, R. (2005) Happiness: Lessons from a new science, London: Penguin.
• Lee, K. (2005) “Introduction to the global economy.” In Lee, K. & Collin, J. (Eds.) Global Change and Health. Maidenhead: Open University Press.
• People’s Health Assembly (2001) People’s Health Charter. Available from: http://www.phmovement.org/files/phm-pchenglish. pdf Accessed 4th April 2010
• People’s Health Movement, Medact & Global Equity Gauge Alliance (2008) Global health watch 2: An alternative world health report, London: Zed Books Ltd.
• Sanders, D. (2006) “A global perspective on health promotion and the social determinants of health.” Health Promotion Journal of Australia, 17, 165-7.
• Stavropoulos, P. (2008) Living under liberalism: The politics of depression in western democracies, Boca Raton, Florida: Florida Universal Publishers.
• Treasury (2008) “Architecture of Australia’s tax and transfer system“, available from: http://taxreview.treasury.gov.au/ content/Paper.aspx?doc=html/publications/papers/report/ section_4-03.htmhttp://taxreview.treasury.gov.au/content/ Paper.aspx?doc=html/publications/papers/report/section_4- 03.htm Accessed 4th April 2010.
• Wilkinson, R. & Pickett, K. (2009) The spirit level: Why more equal societies almost always do better, London: Penguin Books.

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Source: Australian Options, Issue 61, Winter 2010, pp. 14-17.