June/July/Aug 2013

Cuts to the Quick

A new book argues that the cult of economic austerity demands human sacrifice

Kim Phillips-Fein

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Ordinary words can undergo strange transformations when they are used in politics. Outside of its economic context, the word austerity connotes something stern, bleak, undecorated, pared back to its elements. But the whole concept of cutting government programs during a recession—in other words, precisely when people may need them the most—seems not just strict but cruel. For example, New York City, in the aftermath of the 1975 fiscal crisis, laid off nearly a thousand firefighters—even though neighborhoods in the South Bronx and Brooklyn were in the midst of what later scholars have described as an “epidemic” of fire. The New York Times reported a few weeks ago on the rising numbers of Greek children suffering from hunger and malnutrition, as families who were, until quite recently, securely middle-class now find themselves subsisting on cabbages. So maybe the term austere is a better fit for the logic that dictates the making of such policy than for the policy proper: the studied official abstractions that place their users outside the burning buildings or beyond the struggles of the hungry children, and back in the comforting, seemingly manageable world of the budget columns in which fire stations and food aid are merely numbers on the page.

Much of the time, arguments about economic policy revolve around its likely impact on strictly economic outcomes: Will cutting taxes or increasing the minimum wage raise or lower unemployment? What impact might such choices have on GDP? But David Stuckler and Sanjay Basu, the authors of The Body Economic: Why Austerity Kills, take a different approach. While the book’s subtitle might seem melodramatic, Stuckler and Basu—public-health researchers at Oxford and Stanford universities, respectively—mean it quite literally. They make the case that shredding the social safety net in difficult economic times is not only bad for the economy, it also leads to deaths that could otherwise have been prevented.

Stuckler and Basu argue that the now-familiar tactic of eliminating government programs to resolve debt crises—making welfare benefits harder to access, closing hospitals, slashing social spending—has been a health disaster. They note that in different parts of the world austerity policies have been associated with rising rates of HIV infection, more heart attacks, and increased incidences of depression, alcoholism, and suicide. Instead of endorsing a moralistic ideology that blames alleged public excess for our economic ills, they suggest that we should pursue an “evidence-based” method of choosing policies: “We need to evaluate public policies with the same rigor that we use to evaluate new drug treatments and medical devices. Then we can make informed decisions about the tradeoffs: would you prefer a 0.3 percent lower budget deficit or 2,000 more dead Americans?” Most prescriptions for better health exhort the individual to live more righteously: Cut the corn syrup, stop smoking, and exercise! Basu and Stuckler suggest another approach: Make sure that you live in a country with a decent welfare state. Perhaps they could write a sequel—Live Longer in Canada. (Three years longer, on average.)

In the analytic framework worked out in The Body Economic, the real health risk isn’t so much economic depression—it’s how a society responds to hard times. Stuckler and Basu open with a description of the “natural experiment” of the New Deal, in which some states spent far more money on social programs than others. They then proceed to link every additional hundred dollars of New Deal spending with declines in infant mortality, suicide, and infectious diseases. (At the same time, they learn that an economic depression isn’t necessarily bad for your health: During the 1930s fewer people died in car accidents, since fewer people could afford to drive.) The authors move on to discuss the well-known decline in life expectancy in the post-Communist countries of Eastern Europe, making some claims that would have been verboten in a more anti-Communist time—for example, they offer a little praise for the social solidarity of the single-industry Soviet towns.

By contrast, the authors observe that the “shock therapy” years saw a dramatic increase in male mortality, especially from heart attacks and alcohol-related causes. This trend was especially common among unemployed youths who became heavy imbibers of odekolon—alcohols made from such tantalizing ingredients as mouthwash and aftershave. Finally, Stuckler and Basu describe the collapse of the housing boom in the United States as a public-health calamity. The mortgage meltdown meant not only more homelessness but also a sharp increase in emergency-room visits in communities with higher rates of foreclosure (these visits rose by 7.2 percent for each hundred additional foreclosures, the authors found). The mortgage crisis can even be linked to the 2007 outbreak of West Nile virus in Bakersfield, California, where mosquitoes bred in the stagnant swimming pools of abandoned homes.

The center of the book is the comparison of Iceland and Greece, which were both rocked by the financial crisis of 2008—and wound up pursuing dramatically different remedies to revive their economies. When Iceland’s financial system collapsed, the country turned at first to the International Monetary Fund, which proposed austerity measures—including a 30 percent cut in public-health spending—to bail out the banks. In a voter referendum, Icelanders rejected this plan, instead choosing to maintain their public services. Remarkably, health measures actually improved in the years that followed the crisis: Icelanders seemed to drink and smoke less, and to eat less fast food, and there was no significant rise in depression, alcohol-related deaths, or suicides.

Meanwhile, Greece has hewed to the austerity playbook—at the behest of the European Union, which has orchestrated a series of bailouts for the debt-ridden nation. The Greek government has cut social spending of all sorts—slashing its public-health budgets alone by 40 percent. And for anyone following Stuckler and Basu’s argument, the results are grimly predictable: Not only have suicides spiked in Greece (by 20 percent), but malaria cases are also rising, and the country has seen a dramatic outbreak of new HIV infections. There’s a more grinding, emotional quality to austerity in the midst of a recession: It feels like a profound betrayal, a social desertion. The result in Greece has been politicized suicides such as that of seventy-seven-year-old Dimitris Christoulas, who shot himself at the steps of the Greek Parliament after losing his pension, saying: “I am not committing suicide. They are killing me.”

The obvious model for The Body Economic is Steven D. Levitt and Stephen J. Dubner’s Freakonomics. Stuckler and Basu are clearly much more liberal in their politics than Levitt is, but like him they wear their expertise and statistical knowledge lightly, opting to deliver their research findings in a jazzy, casual tone. At times, there’s an odd contrast between their grim subject matter and their cheerful explorations as they walk the reader through their research process. (For instance, they report that one Cambridge University expert on emotional depression was moved to praise some of their surveys on mental health in Iceland thusly: “These are beautiful data!”) In other ways, though, the population-wide lens of public health can feel fatalistic, and some readers may find the causal connections in the book unconvincing. Can economic policies really be held responsible for driving a specific person to suicide? Can you really pin a particular heart attack on a benefit cut? The real power of the book lies in the epidemiological insight that it’s possible to think about medicine not in the exclusive terms of the individual patient’s life, but by tracking the conditions that affect health throughout society.

Yet the thoroughgoing empiricism of The Body Economic also makes for one of the book’s central limitations. Stuckler and Basu’s gee-whiz, look-at-the-data style is oddly divorced from political, historical, or intellectual analysis. We don’t get much of an indication of why some people would push for austerity economics, what the history of the ideas that undergird this policy approach might be, or how and why it is that they have come to be so widely accepted. What’s more, the authors convey little sense of the dual character of austerity measures. Cutting social spending might be bad for some—the unemployed, the socially marginal, the poor—but it might actually be in the interest of other groups, such as creditors. Finally, there are few specific examples of alternative policies: What should Greece have done to resolve its problems, other than not cut spending so quickly?

Stuckler and Basu recommend the creation of an “Office of Health Responsibility,” which would be charged with analyzing the impact on health of different economic policies. (Imagine the disclaimers: “This tax cut may be hazardous to your health.”) It’s a refreshing, if wonky, idea—but economic policies are not forged in a scientific vacuum in which “clinical trials” can be used to determine what we do. They are inextricable from ideology and from politics itself.

And this is perhaps the most notable aspect of The Body Economic: The book itself seems part of a rising political movement. Austerity economics has lately suffered some hard knocks, especially the now-infamous Excel coding error by Harvard economists Carmen Reinhart and Kenneth Rogoff that caused them to dramatically overstate the extent to which public debt reduces economic growth. Tentatively, perhaps, a new philosophical and political approach toward government spending is starting to emerge. The political edifice that supports austerity will not collapse quickly or easily. But the appearance of The Body Economic suggests that a new intellectual space is being carved out, however slowly. Austerity, after all, is not only a policy agenda but a mind-set—a decision to limit the social imagination. After several decades in its thrall, maybe the world is starting to open up again.

Kim Phillips-Fein teaches American history at the Gallatin School of Individualized Study at New York University and is working on a book about the New York City fiscal crisis of the 1970s.