The Guardian July 5, 2000


Globalisation a health hazard

Stephen Bezruchka

When asked about globalisation, Margaret Thatcher, the former Prime 
Minister of Great Britain, replied, "There is no alternative." Her reply 
was shortened to "TINA," which some people think is a newly discovered law 
of nature. Yet, public resistance to this new corporate-centred trade is 
increasing.

Many think about the health effects of modern global trade as involving 
increased pollution as corporations strive to limit environmental 
restraints or global warming caused by the increased reliance on cheap 
fossil fuels. Others focus on the changes in diet produced by genetically 
modified foods or the increase in the tobacco market penetration. 

The expansion of global cigarette exports is a dramatic example, totaling 
223 billion cigarettes in 1975 and rising to 1.1 trillion cigarettes in 
1996 (a five-fold increase). Others might consider globalisation to be the 
health of child labourers in Pakistan who produce many of the disposable 
surgical instruments that are increasingly used in US hospitals. 

Or they might consider deaths from toxic exposures in poor countries as US 
corporations evade environmental restraints at home. One such example 
occurred 15 years ago in Bhopal, India, where five tonnes of poisonous 
methyl isocyanate gas leaked into the air from a Union Carbide pesticide 
plant, killing more than 3,000 people.

These effects are real, but they pale in comparison with globalisation's 
effect on increasing inequality, the most powerful factor affecting 
population health and responsible for perhaps 14 to 18 million deaths a 
year (18 percent of total deaths) worldwide.

Hierarchy in health

To understand this factor, we need to recognise that the health of the US 
population is disgracefully poor compared with that of other rich 
countries. In the ranking of countries by life expectancy in 1997, the 
United States stood 25th, behind all the other rich countries and even a 
few poor ones. 

The country that has won the gold medal in this "health Olympics" every 
year since 1977, Japan, is also tied for the gold medal in the "smoking 
Olympics." That is, the prevalence of smoking in Japan is tied with that in 
China as the highest in the world and three times that of the United 
States; yet, the Japanese do not die of smoking-related diseases to the 
extent that Americans do. 

Lung cancer mortality rates in Japan are one half to one third of those in 
the United States. How does Japan do it? The answer is simple. The health 
of populations in rich countries is determined primarily not by the health 
care system  the US has the most sophisticated and expensive, so it 
cannot be that  or by individual risk factors such as smoking, but 
rather, by the gap between the rich and the poor. 

Many recent studies show that populations with a greater income hierarchy 
are less healthy, and specifically have shorter lives, than populations 
that are more equitable. These studies have looked at mortality and income 
distributions among countries, within countries such as each of the 50 US 
states, and within 282 standard metropolitan areas (US cities). They have 
also looked at homicide rates, teen births, and specific diseases.

Independent investigators have studied many different populations using 
different methods, and all agree: the strongest factor affecting health is 
the size of the gap between the rich and poor.

The wealth gap

The United States has the greatest wealth and income gap of any rich 
country, which is the main explanation for its dismal health ranking among 
developed countries. We did not always fare so poorly: in 1960, the US was 
13th. 

Most countries in the world are poor, with most people subsisting to 
produce their own food, often supplementing their income by sending family 
members to cities to work in factories or abroad and sometimes by engaging 
in illicit commerce. 

In some countries, such as Nigeria with its oil riches, immense wealth 
lines the pockets of only a few people. In poor countries, the evidence 
suggests that equitable development that focuses on providing basic needs 
is the route to improving the population's health.

Corporate-centred trade

In the past couple of decades, world trade could be more accurately 
described as trade that is corporate-centred. This change began in the mid-
1970s and was boosted by the economic policies of Thatcher in Great Britain 
and Ronald Reagan in the United States. Today the dogma governing 
economic activity, deemed the "Washington consensus," is founded on the 
principle that the market knows best and should govern the world. 

The implicit assumptions are that economic transactions involve a buyer and 
a seller who are on an equal footing and that the price accurately reflects 
the cost. The influence of indirect subsidies in tipping the scales is 
overlooked, as shown by countless examples. 

In 1995 Boeing, one of this country's largest exporters and most successful 
corporations, received a tax credit of more than $33 million. In 1999 
Microsoft, another highly successful company, increased profits by 71 
percent over the previous year, yet paid $226 million less in federal tax. 

"Flexible taxation" is just one of the many ways in which the public 
subsidises economic activity. Of the world's 100 largest corporations, 20 
would have gone bankrupt without such assistance. 

This so-called free trade in poor countries has produced great wealth for 
multinational corporations and provided low-wage jobs that keep many people 
in poverty. Among countries, the gap between the richest and the poorest 
fifth was three to one in 1827, rising to 30 to 1 in 1960, to 60 to 1 in 
1990, and to 76 to 1 in 1997.

Global greed

Recent studies have shown that where there is increased penetration of 
foreign investment in poor countries, slower economic growth and greater 
inequality result. Global economic greed is the problem. 

But what of the effects of global trade in rich countries? In the past 25 
years, during which globalisation has become common parlance, most people 
in the United States have seen a decline or stagnation in incomes after 
adjusting for inflation. This has come during a period of record profits 
for corporations and a booming stock market.

According to economist Edward Wolff, 95 percent of American households had 
a decline in their net worth from 1983 to 1995. The United States has begun 
to look more and more like a third world economy, with a fabulously wealthy 
elite few surrounded by a mass of people not sharing in the globalised pie. 
The top one percent of families in this country holds more than 40 percent 
of the wealth.

What are the population health effects of corporate-centred economic 
policies? In rich countries, capital (material wealth, monetary, and other) 
is abundant, whereas in poor countries, labour is plentiful. 

Production moves to poor countries where labour is cheapest. Free trade in 
goods and services leads businesses to produce goods that are capital-
intensive in high-wage countries but labour-intensive in poor ones. 
Benefits from trade and investment generally flow to the rich countries 
rather than to poor ones, and thus, income inequality among countries is 
increased. 

Displaced

Within poor countries, more people have been displaced from their 
subsistence economies than have been able to find jobs in the manufacturing 
sectors in overcrowded cities. In poor countries, as an elite profits 
immensely from this shift, the income gaps in those countries increase. 

In rich countries, the demand for labour is lowered, wages become 
relatively depressed, and income inequality increases. For most of the 
world's people, it is a lose-lose situation.

Alex Carey, an Australian sociologist, remarked that the 20th century will 
be remembered for three developments: the growth of democratic processes, 
the growth of huge corporations, and the creation of ways in which 
corporations could ignore democracy. 

An alternative to corporate-centred trade requires re-thinking economic 
policies whose major effect has been to increase inequality worldwide. 

Calling it the "free market" hides extensive indirect subsidies to 
corporations. The size of the economic gap is the critical factor affecting 
population and policies that increase that gap limit health improvements.

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