Has neoliberalism imperiled our health? Could Basic Income be the remedy?

By Roderick Benns

Opinion

In a recent 2015 paper, Ronald Labonte and David Stuckler argue that the rise of neoliberalism has led to bad economics which in turn has imperiled population health.

They argue that cuts to health and social protection systems under neoliberal nations (like Canada and the US) pose major health risks. As well, structural changes to a new globalized labour market has led to precarious work and rampant under-employment.

Analyses show, say the authors, that the reduction in “social protection spending” by governments were found “to be the main cause of increases in poverty and inequality” in affected countries. By increasing or failing to reduce inequality, they write, any earlier health gains were slowed down or reversed earlier gains. This affected vulnerable populations such as “the poor, rural populations, women, and children.”

Labonte and Stuckler (from the University of Ottawa and University of Oxford, respectively) argue that there are four policy reform areas that can be made to stop this decline and improve health outcomes.

1)      Re-regulating global finance

2)      Reject austerity measures

3)      Restore and increase progressive taxation

4)      Tax financial transactions at a global level (for instance, bond and share sales alone, taxed at just .05 percent would yield $410 billion to $8.63 trillion for global health, social development, and climate change initiatives.)

It is their second point, on rejecting austerity, where it is obvious that a basic income could be of global help and consequence, even though the authors themselves do not make this point. The authors note that the International Monetary Fund (IMF) discovered that for “every dollar in new government spending, up to $1.70 in economic growth would occur.”

A basic income would put more money into the hands of more people. The cost of this is clearly outweighed by the fact that people with low incomes must spend all the money they earn each month, making it an obvious win for the economy. Wealthier people hang on to more of their money, or, in many cases, even move it offshore where there is less taxation.

Labonte and Stuckler write that government spending in health and social protection not only “improves health equity and contributes to social stability but also boosts economic growth.”

Countries that increase social spending during economic recessions recover much faster. Austerity in hard times make things “worse for the poor, but better for the rich.”

Clearly, Canada and other neoliberal nations must make seismic shifts in economic and social policy. One of the best things governments could do is institute a basic income guarantee which would serve not only to mitigate poverty, but also stimulate economic growth for the country.