Tuesday, 8 July 2014

Social policy and public finance: Are possibilities for health equity shrinking?

Posted by Ted Schrecker, Professor of Global Health Policy, Durham University

With the publication of Thomas Piketty’s massive book Capital in the Twenty-First Century, the acceleration of economic inequality has belatedly begun to receive the attention it deserves. His is, in fact, just one of several indispensable recent treatments of the topic. Another, which has received less publicity, is Hard Times: The Divisive Toll of the Economic Slump, by Guardian editorial writer Tom Clark and sociologist Anthony Heath – a meticulously researched treatment of how the recession has affected the United States and the United Kingdom. Readers too impatient to read Capital’s elegantly written 655 pages can find a highly condensed summary of much of Piketty’s work in the 23 May 2014 issue of Science. The summary is especially valuable for a conclusion that comes through more emphatically than it does in the book: ‘Inequality does not follow a deterministic process. …. There are powerful forces pushing alternately in the direction of rising or shrinking inequality. Which one dominates depends on the institutions and policies that societies choose to adopt’.
This is not new to those of us concerned with the social determinants of health; consider the WHO Commission on the topic and its focus on ‘the inequitable distribution of power, money, and resources’. Against this background, what are we to think of a new report on The Condition of Britain from the Institute for Public Policy Research? Since it was released in the same week as initial findings from the Project on Social Exclusion indicating that the proportion of British households living with multiple forms of material deprivation has doubled in the past three decades, one might have expected recommendations for a frontal assault on the elements of economic inequality that are most destructive of health to be the centrepiece of the IPPR report.
Not so. Instead, we get prescriptions for a ‘richer version of equality [that] is more complex than one focused purely on the distribution of material resources’ (p. 16) and the priceless statement that: ‘Like many other countries, Britain has experienced an unwinding of the postwar compression of market inequalities, and its tax and benefit system has had to work increasingly hard to reduce disparities in wealth and income. Fiscal constraints will limit the scope for post-tax redistribution in the years ahead, while tendencies towards greater wealth inequality may intensify (Piketty, 2014)’. This goes on for almost three hundred pages.

Crisis, what crisis?
In a jurisdiction that taxes huge incomes and accumulations of wealth as lightly as the United Kingdom, talk of fiscal constraints and the limited scope for post-tax redistribution is, to put it politely, nonsense. I prefer a stronger term, but Fuse probably doesn’t. The imperative of eliminating the deficit cannot be ignored, but as George Monbiot recently pointed out, on the revenue side the options include financial transactions taxes, wealth taxes and ‘a progressively banded council tax’. The most straightforward option is a return to much higher marginal tax rates on the personal incomes of the ultra-wealthy, which were the norm in many countries until quite recently. Thomas Piketty and his long-time collaborator Emmanuel Saez have themselves suggested this. (All these observations are also relevant to the proliferation of nonsense about the crisis of financial sustainability supposedly facing the NHS, now being regurgitated even by people who should know better.) On the expenditure side, massive welfare programmes for the propertied and the arms traders like HS2 and Trident replacement could be rethought.  

None of this would matter much – the IPPR report could be dismissed as an uninformed and unfortunate reprise of the discredited Third Way – except that the report apparently will shape much of the Labour Party’s agenda for 2015, and if elected thereafter. In other words, it represents the current limit of permissible official discourse, what one might call the frontier of political possibility for reducing inequality, and the message is clear: too bad, it can’t be done.

A week is a long time in politics, and the location of the frontier could change – not least in response to spirited advocacy for considering public finance and its equity implications as a public health issue. In the absence of such change, Johan Mackenbach’s gloomy 2010 conclusion that ‘reducing health inequalities is currently beyond our means’ will turn out to have been spot-on. We must be very clear, in private and in public, about the implications: the best that can be hoped for is a reduction in the pace at which health inequalities are growing, and even that is uncertain. Harsh words, but the times demand them. To quote Bob Dylan, ‘let us not talk falsely now, because the hour is getting late’.

All views expressed are exclusively those of the author.

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