Austerity, civil society and statistics
From The lancet
Remarkably, 8 years after the onset of the global financial crisis, the consequences for health are still being debated, even in Greece, the country most severely affected by the economic downturn. There can be few better indications of the low priority accorded to health within governments than the difference between the concerted efforts dedicated to understanding the state of the economy and the apparent scarcity of concern about the health of populations. Economists are still divided about the causes of the crisis and how to respond to it, although many view austerity as a mistake.
There are several possible reasons for this scant discussion of health consequences of the recession. First, health issues rarely attract much political or media attention unless they threaten privileged elites. For example, the emergence of SARS in east Asia posed a clear threat to the global business community and thus an immediate, coordinated response occurred. By contrast, many months passed before the world paid any attention to the emergence of Ebola virus in west Africa. Only in the past decade have global leaders accepted the need to respond to the increased burden of non-communicable diseases in low-income and middle-income countries whereas the horrendous toll of death and disability from road traffic accidents in those countries remains largely unacknowledged.
Second … we still do not have timely data on mortality from many countries. Consequently, although financial data were available within days or weeks of the onset of the financial crisis, several years passed before corresponding mortality data were published. This delay keeps the effect on health from getting onto the political agenda, and reinforces its low priority. Because of the difficulty in obtaining data about what was happening to health in Greece, dismissal of the early signs of a crisis was easy. In 2011, echoing many reports by journalists, we reported what we considered to be “omens of a Greek tragedy”, describing a rising unmet need for health care, increasing suicides, and an HIV outbreak among injecting drug users.Yet others dismissed our concerns, arguing, for example, that “there is no evidence that it has affected health” or that budget cuts were “a positive result of improvements in financial management efficiency”.
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Gerson Lima / Maria Alejandra Madi
Edward Fullbrook and Jamie Morgan
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Maria Alejandra Madi / Jack Reardon
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Edward Fullbrook and Jamie Morgan
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Real-World Economics Review Blog 
The excerpt is from a 7-part series on “Financial crisis, austerity, and health in Europe.” It’s purpose and conclusion:
The financial crisis in Europe has posed major threats and opportunities to health. We trace the origins of the economic crisis in Europe and the responses of governments, examine the eff ect on health systems, and review the effects of previous economic downturns on health to predict the likely consequences for the present. We then compare our predictions with available evidence for the effects of the crisis on health. Whereas immediate rises in suicides and falls in road traffic deaths were anticipated, other consequences, such as HIV outbreaks, were not, and are better understood as products of state retrenchment. Greece, Spain, and Portugal adopted strict fiscal austerity; their economies continue to recede and strain on their health-care systems is growing. Suicides and outbreaks of infectious diseases are becoming more common in these countries, and budget cuts have restricted access to health care. By
contrast, Iceland rejected austerity through a popular vote, and the financial crisis seems to have had few or no discernible effects on health. Although there are many potentially confounding differences between countries, our analysis suggests that, although recessions pose risks to health, the interaction of fiscal austerity with economic shocks and weak social protection is what ultimately seems to escalate health and social crises in Europe. Policy
decisions about how to respond to economic crises have pronounced and unintended effects on public health, yet public health voices have remained largely silent during the economic crisis.
Amazing how current economic orthodoxy frames health and health care. Particularly how it inserts economic inequality and excludes health care from “economic utility.” Very convenient. And disturbing. If economic shocks combined with fiscal austerity and weak societal protections creates health and social crises in Europe, imagine how much more dangerous such crises are in the US, where austerity is more severe and social protections more limited. We should not depend on economic orthodoxy to recognize or effectively address health and health care concerns.
It should be somewhat evident that, as income rises or falls and there are no changes in the prices of goods/services, there are shifts both in the composition of consumption and in the range of goods and services that people can spend upon even when prices are stable.
In other words, the uses of money income to realize mainly objective benefits from specific uses of goods and services are a rising function of disposable incomes.
But what is disposable income?
Put very simply, it is what is left over from income after some basic set (or increasing sets) of human needs is met. We need not get into what constitutes a rising set of human needs, for, among other matters, these shape and are shaped by human physiology, individual psychology, social relations, cultural and traditional ‘norms’ and laws governing production and consumption activities, the state of technology and technological delivery of utility goods and services (water, heating, electricity, communications, learning, and the like — a non-exhaustive list).
Suffice it to say that those who are ‘better off’ are more able to provide for their needs and wants through a rising hierarchy of needs and wants. They are also more able to be psychologically and socially ‘satisfied’ with how they realize what amounts of objective benefits they realize, for they are more able to purchase what they would like to in the amounts they need or want.
By objective utility, I never mean psychological satisfaction with a benefit. I mean rather (and always) defined and measurable benefits arising from the use of goods in different ways.
If, on the one hand, I buy, for instance, foods for myself or my family to eat, I am seeking nutritional benefits needed for health and survival, and I am seeking to realize these nutritional benefits in ways that are psycho-socially ‘satisfying’. Though I get objective benefits from any digestible food goods, my preferences shape what I would ‘like to’ consume, not what I ‘can afford to’. In trade-offs between what I would like to eat versus what I can afford to, my money income sets what I can afford to budget for to realize my nutritional needs as well as for my other needs and wants.
If, on the other hand, I buy foods for resale (assuming I have sufficient income to do this after meeting broadly defined essential needs), then the objective benefit I seek to make more money — an amount above all of my costs in buying and selling. Whether I realize what I seek to make has no bearing on the nature of the objective benefit I am seeking by using money to buy food for resale.
So objective benefits-from-the-use-of-money-or-goods depend upon what these monies and/or goods are used for, whereas satisfaction with what one can do with income depends upon the range/multiplicity of uses I can put my monies to and whether the aims I have are realized in the amounts I need or expect. In short, satisfaction with realized benefits from the use of money expands with the amounts of money one can use to realize different aims.
This relates to health in many different ways. If I am buying food to eat, the nutritional benefits per unit of specific foods are constants. If a time-period sensitive level Hn for required protein intake is, say, 80000 units over 1000 days, and if Hr where Hr is realized benefits during that time, then measured objective utility will be (Hr-Hn)/Hn, which will range from negative whenever HrHn [in a range up to Hn, where excessive proteins (or some other nutrient) cause health deficits].
There is a need for objective measures of benefits from use in economics, if only to recognize that ‘utility’ can have negative values.
For long periods in which Hr<Hn, mainstream economic models assume a person will be 'satisfied' with the benefits they get until they die of starvation, disease or physiological and psychological stress. That some will decline in health, experience physiological and psychological stress making them susceptible to disease, or starve is, in mainstream models, quite irrelevant to their being ‘satisfied’ with what they get. Stress, starvation, and disease have no bearing on ‘being satisfied’ in mainstream economics [largely because ‘utility’ is defined positively for any level of consumption].
‘Nuff said.
If anyone would like me to elaborate on anything I have said here, just let me know.
larrymotuz, your examples about food are consistent with the structure you establish. The benefits of food in terms of nutrition and survival are not always socially or psychological satisfying. The foods can be the wrong foods (e.g., not kosher), foods to which I or my family are allergic, or foods whose cultivation harms the Earth. But I think your separation of “objective utility” from psychological satisfaction as a general principle is untenable. As the Beatles note, “Money Can’t Buy Me Love.” Yet, love has clear benefits and satisfactions, some measurable (e.g., longevity) while others are not (e.g., calm, and peaceful feelings). Although, I guess speaking from the perspective of social sciences all feelings and emotions can be at least scaled if not measured directly. Also, as the Bible notes great wealth diminishes one’s chances of getting into Heaven. Heaven is a great benefit, that denied to one can lead to emotional turmoil. If assured to one can lead to emotional satisfaction. Finally, satisfaction with realized benefits from the use of money does not necessarily expand with the amounts of money one can use to realize different aims. Wealth can lead to feelings of isolation and rejection by other members of society. This, in turn can lead to depression, thoughts of suicide, and failure to care for one’s health properly. Sometimes the poor are satisfied despite poverty. Recognizing, of course that certain minimum nutritional, exercise, and sociality needs must be met for survival. So, it is possible that starving people, people with deadly diseases can consider themselves satisfied with their lot. Of course, that’s different from rigging the economic system to ensure that certain people are condemned to poverty, starvation, and premature death. All people must be given the opportunity to reach that level of physical, psychological, and social satisfaction that benefits them in ways interpreted as satisfactory by society at large, and in ways that people feel they have not been denied fair and just treatment.