If you have a concern for global health, then you should be paying close attention to who has control over the world’s economic levers, suggests health economist, Professor Gavin Mooney.
Public health focus should be on who runs the economic show
Gavin Mooney writes:
Readers might wonder why the question of who might be the next president of the World Bank appears here on Croakey. Again the name Larry Summers possibly does not mean much to Croakey readers.
Before getting to this, however, let me jump first to a new report out in the UK looking at the impact of the economic downturn on health in that country.
As we examine what happened economically in the global financial crisis and what has been happening more recently in the US and Europe, there must be adverse effects on the health of the populations involved. Yet (and I may have missed it) I have not seen much by way of analyses to assess these effects. Until now.
A group in the Liverpool Public Health Observatory has just published a report on the health impact in Merseyside in the north west of England. They draw attention to some reasons why in the UK the period from 2008 is different from earlier recessions.
There is a diminished safety net for the unemployed and a fall in net income of 3.5%. Living standards are forecast to continue to fall over many years to come. There is greater long-term sickness absence and disability pension receipt. Work has become much more precarious with increased shift work and casual employment creating higher risks of being made unemployed.
The authors add: “A daily existence of low paid, high-strain, temporary employment will result in ill prepared people who are minimally resilient in the face of the additional negative health impact of unemployment”.
Fundamentally, as they document, the negative health impacts, for these reasons and others such as a widening gap in health inequalities, are falling mostly on those already disadvantaged.
Two clear messages: First such recessions need to be avoided at all costs – and on that front we are rather fortunate in Australia.
Second, there needs to be special care for the disadvantaged in society and on this front here in Australia we do rather badly. Why? Well a number of factors but let me mention just two.
Income inequality is growing in Australia and the evidence from the social determinants of health literature suggests that is bad for health.
Secondly we are doing poorly in our ability to provide protection for the disadvantaged by way of income support and services. This has to be done through tax revenues and in Australia the tax take is low – only 27.1 per cent of GDP compared to an average for the OECD of 34.8.
But what has all of this to do with the fact that Larry Summers is in line to become the next head of the World Bank?
Well the policies of that organisation and its sister the IMF have enormous impacts – or can have – on the world economy as we can see today in Greece and Europe more generally.
These global economic policemen did not foresee the GFC but should have. It is they who control what is happening now to Greece. It is also they who have been pursuing neoliberal economic policies that push for small government and low taxes to allow markets greater freedom – freedom to bring the world to the edge of economic chaos, again. And these policies exacerbate the already massive inequalities across the globe and hinder the prospects for improving global health.
As controllers of the global economy, the World Bank and the IMF have the potential to create massive improvements in global health but their records to date on this front are abysmal. They have fiddled while the global poor have burned – and starved and died.
Oh yes, there have been minor improvements but they are tiny in comparison to what might have been and what should have been. Why? Largely because these global institutions are driven by the ideology of neoliberalism and a blind faith in markets. And this is despite the chaos such fundamentalism brought to the planet at the GFC.
They would seem to argue that the fact that the austerity measures in Greece are not working but plunging that society into more and more poverty is neither here nor there. If these austerity measures are not working, it must be because they are not sufficiently austere!
Yet as Mark Weisbrot, the head of the Center for Economic and Policy Research, Europe’s leading economic think tank, has remarked: “The bottom line is that you can’t shrink your way out of a recession – you have to grow your way out.” (Pls see correction to Weisbrot’s title at bottom of post).
We can note too that after the former head of the IMF was forced out for his sexual misdemeanours, his successor (who by custom had to be a European just as the head of the World Bank has to be an American – how democratic!), Christine Lagarde, had to sign a new ethical agreement which – paraphrasing somewhat – means that ethically she must not screw chamber maids in her hotel bedroom. She is as head of the IMF, however, allowed to continue to screw the world’s poor.
Who head up the World Bank and the IMF matter. They can make a difference and, as the BRICS nations – Brazil, Russia, India, China and South Africa – are suggesting, given the control these organisations have over the economies of the planet and in turn global health, would it not be more democratic to stop this nonsense of the monopoly of these top jobs by the US and Europe?
Can we afford to have the man in charge at the World Bank believing, as Summers has argued, that “the laws of economics are like the laws of engineering. One set of laws works everywhere”. He has also suggested that some kinds of ideas have become too ‘passe’ – for example that big spending is the way to stimulate an economy. He is generally reckoned to be an arch neoliberal and for example has argued that legislation could not regulate the derivatives market.
It is not surprising then that Naomi Klein states on Summers’ economics policies and beliefs: “He has been spectacularly wrong again and again”.
Is it not time for Australia to give support to the BRICS nations in their desire for a more democratic and healthful approach to the running of the world other than this US and European neoliberal folly?
If Australia joined this BRICS movement, might we not be able to help to put brakes on this unhealthy nonsense?
The Liverpool report tells us that we cannot afford economically and in the interests of the public’s health to leave global economic policy in the hands of people like Larry Summer.
• For more related news on the World Bank president appointment
Correction (8 March) from @Dan_Beeton, International Communications Coordinator for the Center for Economic and Policy Research (@ceprdc).