Monday, March 7, 2016

Austerity, health, and lessons from history

1929
On ‘Black Tuesday’ October 29th the US stock market crashed beginning an economic crisis known as ‘the Great Depression’. In the 1930s the great depression put millions of Americans out of work; business and industry were heavily affected. Hundreds of Americans found themselves homeless, and began congregating in shantytowns (Hoovervilles) that began to appear across the country. Citizens lived in difficult sanitary conditions. The total debt of the country was over 200 per cent of GDP and suicide rates increased markedly among the unemployed between 1929 and 1933.

The newly elected of the day, President Roosevelt, closed all the banks only reopening them only after they were stabilized. The US Congress created the Federal Deposit Insurance Corporation to insure deposits up to US$5000. President Roosevelt started programs that came to be known as the ‘New Deal’. Major objectives included putting people back to work and re-housing those who had lost their homes, however he also pushed for the creation of the 'Social Security Act'. It established a system of old-age benefits for workers, survivor benefits for victims of industrial accidents, unemployment insurance, and aid for dependent mothers and children, the blind and the physically disabled.
The money expended in New Deal programs was well invested, as every additional $100 per capita reduced suicides by 4 per 100000 and reduced infant deaths too. Not all States of the US implemented the New Deal with equal rigor. Thus, differences can be observed: States that fully implemented the programs had better health outcomes. 

1948
NHS

A second historical example appeared after World War II. The United Kingdom (UK) mounted an ambitious plan to bring good health care to everyone. It created a National Health Service (NHS) in 1948. For the first time, hospitals, doctors, nurses, pharmacists, opticians and dentists were brought together to provide services free for all at the point of delivery. The central principles are clear: the health service will be available to all and financed entirely from taxation; people pay into it according to their means . When the UK created the NHS, it was still struggling with effects of World War II. Its economy had yet to recover, having lost huge amounts of absolute wealth. The winter of 1946–1947 proved to be very harsh; it curtailed production and led to shortages of coal, that again damaged the economy. At the time, the currency (British pound) was over valued – and subsequently devalued. The US initiated Marshall Plan grants (mostly grants, also a few loans) thereby pumping $3.3 billion into the European economies. The health conditions for British people were as difficult as in all other European post-war countries.

1873
One final historical case here is creation of the Germany social insurance program – the first in the world. In 1873, Germany and much of Europe and America entered an economic slump – the so called ‘Long Depression’ or Gründerkrise. This downturn was the first to hit the German economy since industrial development began to surge in the 1850s. The states of the German Reich had waves of emigration of their population – primarily for economic reasons and primarily to the US. In 1870, German-born farmers outnumber native born in the state of Pennsylvania who were born native to the US.

In this setting that a socialist movement developed in Germany – and the founding of Germany’s Social Democratic Party. As a result of a major depression’ that swept Europe and the US in the mid-1870s, Bismarck initiated economic policy change in 1878–1879. He tried to constrain the rise of social democrats by any means. While undergoing economic, social and political unrest, Germany (Prussia) became the first country in Europe to offer compulsory social health insurance (1883), accident insurance bill (1884) and an old-age and disability bill (1889). It was chancellor Bismarck who introduced them, usually after serious debates in the Reichstag and much opposition from the liberals. Despite his impeccable right-wing credentials, Bismarck would be called a socialist for introducing these programs, as was President Roosevelt 70 years later (see New Deal above).

Read more here:

www.palgrave-journals.com/jphp/journal/v35/n2/full/jphp20147a.html

www.ourdocuments.gov/doc.php?flash=true&doc=68
www.nhshistory.net/shorthistory.htm
www.historyhome.co.uk/europe/bisdom.htm

1 comment:

  1. Me ha gustado este post porque me recuerda cómo, ante situaciones de emergencia nacional, tres diferentes países actuaron de forma distinta pero con una misma finalidad: paliar la situación económica, social y sanitaria de una población muy empobrecida...Te recomiendo la genial película española "Bienvenido Mr. Marshall", de los años cincuenta, en donde con grandes dosis de ironía se retrata nuestra pobre situación sociopolítica bajo la era de Franco.
    Saludos.

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