Reflections on the Human Condition - Api-fellowships.org

DESPERATELY SEEKING MARKETS
If market-driven healthcare is unpersuasive on efficiency
grounds, let alone on equity grounds, what might
explain the continuing enthusiasm for market-driven
healthcare?
The neo-liberal stance begins to make more sense if one
looks at it from the perspective of an over-accumulation
of capital (and its corollary, demand deficit).
Beginning in the late 1990s, production overcapacity
in the global economy received increasing attention 8
including prominent coverage in the pages of the New
York Times (November 16, 1997), the Financial Times,
London (November 1997), Business Week (November 10,
1997), and the Economist (November 15, 1997):
Business executives and international investors who
built today’s global economy now fear that it might
backfire…The Asian financial turmoil may be the first
stage of a developing worldwide crisis driven mainly
by a phenomenon called overcapacity: the tendency of
the unfettered global economy to produce more cars,
toys, shoes, airplanes, steel, paper, appliances, film,
clothing and electronic devices than people will buy
at high enough prices…“There is excess global capacity
in almost every industry.” Jack Welch, chairman of
General Electric, said in a recent interview in The
Financial Times of London.
Louis Uchitelle
New York Times (November 16, 1997)
By late 1997, there was little dispute over the existence
of these gluts although views differed as to whether these
were cyclical downturns and transient disjunctures; or
more chronic manifestations of deep-seated instability
and systemic dysfunction. 9
This imbalance between accumulation and consumption
arguably is a major factor underlying the desperate
search worldwide for new arenas for circulation and
accumulation:
As profitability in manufacturing has declined because
of international competition, corporations have turned
to services as an alternative source of profit. According
to the European Commission; “The service sector
accounts for two thirds of the [European] Union’s
economy and jobs, almost a quarter of the EU’s total
exports and a half of all foreign investment flowing
from the Union to other parts of the world.” In the
USA, more than a third of economic growth over the
past 5 years has been because of service exports. The
CHANGING LIFESTYLES AND HEALTH
189
World Bank has calculated that in less-developed
countries alone, infrastructure development involving
some private backing rose from US$15.6 billion in
1990 to $120·0 billion in 1997 ...With the backing of
powerful coalitions of transnational and multinational
corporations, the race is on to capture the share of gross
domestic product governments currently spend on
public services.
David Price, Allyson M Pollock, Jean Shaoul
Lancet 354:1889-92 (November 27, 1999)
Hence we might consider globalization in these terms:
technology-enabled, continuing outward impulse of capital,
driven by saturated mature markets (overcapacity,
declining rates of profit) and the search for competitive
advantage (in production and in control of natural and
human resources), and for emerging markets.
And privatization as: the inward impulse, cannibalizing
the welfarist state, market creation and market deepening,
extending the circuit of capital into a hitherto non-commercial
public sector domain.
In its ceaseless search for opportunities for profitable
deployment and redeployment, globally mobile capital
has contributed to the undermining of the welfarist
state through these modalities:
• globally mobile capital in search of low-cost
labor, competitive tax regimes and tax havens,
which foster a “race to the bottom” and thereby
reduce the fiscal capacity of states. Besides lower
corporate taxes, runaway firms also leave behind
unemployed workers and reduced income tax
receipts, even as the need for unemployment
benefits rises;
• neo-liberal trade policies which reduce custom
duties as a source of state revenues;
• an overriding concern of globally mobile finance
capital with inflation and balanced budgets in
the countries where it circulates. Wary of activist
Keynesianism, it imparts a deflationary bias10 to
national economies, demanding fiscal discipline
to reduce public spending and budget deficits
through its threat of withdrawal and flight; and
• widening imbalance between accumulation
and consumption, manifested as overcapacity
and demand deficit. To cope with the excess
accumulation, pressure builds up to extend the
circuit of capital into new arenas for accumulation,
encroaching into a hitherto non-commercial
public sector domain, i.e. privatization and
dismembering the welfarist state.
Ref lections on the Human Condition: Change, Conflict and Modernity
The Work of the 2004/2005 API Fellows