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The Body Economic - reviewed

Austerity kills - what policy prescriptions can heal? Stephen Watkins, a Director of Public Health, reviews The Body Economic.

Steve Watkins
19 July 2013

The Body Economic - Why Austerity Kills, David Stuckler and Sanjay Basu, Allan Lane

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A pharmacist sets fire to himself at the Greek Parliament because he cannot survive on his reduced pension. A diabetic attempts to treat her own infected leg to avoid medical costs and in consequence suffers septicaemia from which she almost dies and which causes brain damage that renders her totally dependent. A man kills himself the day before an assessment for withdrawal of disability benefit.

These emotionally compelling anecdotes give depth and reality to hard epidemiological evidence in The Body Economic. They remind us of the human tragedies behind the statistics that public health professionals analyse - and that it is our duty to seek to avert.

Stuckler and Basu's book sets out to establish that austerity is economically damaging, that it is damaging to health, and that this health damage can be averted by maintaining social protection such as welfare and public healthcare.

On the first two points - which make up about two thirds of the book - the authors succeed magnificently, combining popular science with serious scholarship. 147 pages of readable text are accompanied by 57 pages of notes and references, resulting in a serious scientific work as well as a valuable contribution to public debate.

We are introduced to four natural experiments. The authors compare American states which enthusiastically took up Roosevelt’s New Deal with those which did not. They compare the Eastern Bloc countries which underwent rapid privatisation post-1989 - Russia, Hungary and most of the former Soviet Union - with those that did not (Czechoslovakia, Poland and Belarus). Indonesia and Thailand - which accepted IMF prescriptions during the East Asia financial crisis of 1997 - are compared with Malaysia which refused. The Greek and Icelandic responses to the current crisis are compared. In each case economic success recovered more rapidly in the countries which eschewed austerity. Those countries also experienced better health.

The arguments are made all the more compelling by the admission of the austerity advocates that those countries that had ignored their prescriptions, proved them wrong. There is something both satisfying and convincing in Milton Friedman’s statement that his advice to Russia was erroneous, or Moody’s grudging announcment that Iceland’s economy had regained its investment grade status, saying that its way of getting there had been unconventional but effective.

Reading the impressive marshalling of evidence, one asks oneself, why do so many people still believe this austerity nonsense, which has about the same credibility as belief in a Flat Earth? Why are our economic policies based on something no more well-founded than witchcraft?

This question is addressed, briefly, in a short passage on the difference between the meaning of money to an individual and to an economy. To an individual it is their personal share of society’s resource. Not spending it is an act of prudence which conserves it for future use. To a liberal economy money is the means of exchange, determined not only by the amount in circulation but also the speed with which it’s circulating through trade. When the economy says it is short of money what it means is that trade is not taking place. This is a sign of failure not of prudence. Not spending only makes it worse. As an explanation of Keynesianism this makes more sense to me than any amount of study of elegant equations.

The last part of the book argues that it is social welfare and healthcare provision that is key to avoiding the damaging health impacts of austerity - and its withdrawal that is so damaging.

There are some convincing examples. In Thailand HIV exploded after cuts in a flagship HIV programme. Californian foreclosures led to an epidemic of West Nile disease caused by mosquitoes breeding in the swimming pools of abandoned houses.

This is austerity carried to the level of flagrant irresponsibility. But is it social welfare and healthcare provision alone that is the necessary policy prescription, or is there something else going on that the authors miss?

It’s well known that the United Kingdom maintained health during the severe austerity of wartime by meticulous attention to the fair distribution of nutritious food, going on to establish the National Health Service and the Welfare State at a time when its debt to GDP ratio was 400%.

But how do we separate the impact of such social protection measures from the effect during the war of strong community spirit in shared adversity? After the war how do we distinguish it from the psychological effect of the country having succeeded against all the odds in winning a war against evil? The same question can be asked about Cuba. Does it outperform the US in life expectancy due to its healthcare system - or due to the powerful community spirit and the sense of national determination to preserve its revolution all the more strongly because it is being told not to? Interestingly Cuba gets barely a mention.

The book uses examples of Russian communities which have succumbed terribly to an epidemic of alcoholism. Strangely however, though references to Public Health Professor Martin McKee’s work are widely peppered throughout the book, there is no reference to McKee’s finding that the impact of alcohol on communities in the former Soviet Empire is inversely correlated with the number of clubs and societies that people belong to.

A major blind spot, in other words, is the books failure to disentangle the impact of social protection from the impact of community support. They are hard to separate precisely because the two tend to go hand in hand - societies which promote the one will be the same societies that promote the other. The political prescription must include both – not sacrificing culture and fellowship for health and welfare, or vice versa.

The Body Economic does point out that recessions have some beneficial effects on health, including on alcohol consumption, road accidents and active travel. However it does not use this information to build an argument about the optimal balance of activity in an economy. It would have been good to see discussion of the work of Thomas, who showed that recessions in the 19th century improved health, or Eyer who attempted - in my view unsuccessfully - to extend this analysis into the 20th century. It seems unlikely the 19th century improvements were due to strong social protection, so perhaps there were other explanations, such as the slowing of urbanisation.

A further weak point is the discussion of unemployment. The authors miss out most of the 1930s thinkers – Mariental isn’t here - and skimming over the 1980s literature – the debate between Brenner and Kasl are missing. Writers from these eras showed that the health damage of unemployment and the health damage of poor quality work fall successively on the same people.

Despite the gaps, however, I was in awe of this book. It lays the groundwork for a public health analysis of economics, marrying considerable scholarship with a popular style. The message is a simple and undeniable one. Austerity kills and social protection helps.

This book should help to drive the baseless case for austerity away in a hail of informed and coherent derision. Read this book. Tell your friends about this book. Tell your colleagues and online contacts about this book. Compose a letter to your local newspaper. Write to your MP. As many people as possible should read this book. Everybody should know about it. 

 

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