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NEO-LIBERALISM AND HEALTH CARE This thesis is submitted in total fulfillment of the requirements for the award of the degree Master of Arts (research) (Humanities and Human Services) School of Humanities and Human Services Queensland University of Technology, Brisbane, Australia, August 2007. by Anne Linda Ruthjersen Bachelor of Nursing, Grad. Dip. Social Science (Human Services)

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Page 1: NEO-LIBERALISM AND HEALTH CARE - QUT ePrints · NEO-LIBERALISM AND HEALTH CARE ... Master of Arts ... my gratitude and love go to all my family and friends in Norway, Denmark and

NEO-LIBERALISM AND HEALTH CARE

This thesis is submitted in total fulfillment of the requirements for the award of the

degree

Master of Arts (research) (Humanities and Human Services)

School of Humanities and Human Services

Queensland University of Technology, Brisbane, Australia, August 2007.

by

Anne Linda Ruthjersen

Bachelor of Nursing, Grad. Dip. Social Science (Human Services)

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Keywords: Neo-liberalism, free market, health care, philosophical inquiry

ABSTRACT

Neo-liberal political-economic ideology, theory and practice have had an immense

influence on public and private life across the world, including the delivery of health

care, and neo-liberalism has become the dominant economic paradigm. Market

practices, business management theories and practices, and private enterprise have

become increasingly significant in health care, as the welfare state and public health

services have been challenged by factors such as rising costs, economic efficiency,

globalisation and increasing competitive demands. The question of how, and to what

extent, neo-liberalism has influenced contemporary health care is, however,

deserving of more critical attention.

This thesis examines the neo-liberal approach to, and effect on, contemporary health

care, in the context of Western developed countries, and offers a conceptual analysis

of the theoretical and ideological framework of neo-liberalism, especially regarding

its ethical and moral underpinnings. Additionally, this thesis is concerned with the

moral nature of health care.

The objectives of this thesis are to articulate and analyse the neo-liberal interpretive

framework, moral values and language; and to articulate and analyse the neo-liberal

approach to, and effect on, contemporary health care. Thus, it is the intention that

this thesis will provide a framework for reflection on the context of contemporary

health care in Western developed countries and the influence of neo-liberalism. To

achieve these objectives, the research strategy of this thesis is that of philosophical

inquiry, additionally drawing on political philosophy; and the research is, therefore,

basic, theoretical research.

This thesis finds that neo-liberalism, and the neo-liberal approach to health care, is a

highly complex theory and ideology, constituted of several intricate concepts and

moral underpinnings.

I

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It is found that the neo-liberal approach affects the nature and purpose of health care,

for example by making health care part of the free, competitive market, by

commodifying health care, and by replacing the notions of the common good, social

justice and public health care with an emphasis on the rational, self-interested

consumer, individual responsibility and self-sufficiency. Another essential aspect of

the neo-liberal approach is that it emphasises the ability to pay (user-pays system),

rather than health care need, as the dominant determinant in health care.

Furthermore, this thesis finds that the neo-liberal ideology excludes the ontological

complexity and reality of the human condition, and in health care this has

consequences in relation to, for example, interdependency, interrelationships,

vulnerability and need.

In essence, this thesis finds that there are several pragmatic and moral problems with

applying a neo-liberal approach to health care, and that the complexities,

irregularities, and unpredictability of health care make a neo-liberal approach

difficult to realise in health care. The neo-liberal approach undermines the moral

purposes of health care, and it is concluded that the neo-liberal approach offers no

well-founded moral alternative to the universalistic, solidarity based approach

common in most Western developed countries (except in the United States).

This thesis seeks to add to the knowledge and literature concerning neo-liberalism,

especially as regards its moral underpinnings and normative framework, and,

furthermore, concerning the neo-liberal approach to, and effect on, contemporary

health care in Western developed countries. Additionally, this thesis seeks to

contribute to the knowledge of philosophical inquiry by documenting the method of

‘doing’ philosophical inquiry. Based on the research in this thesis, it is clear that

there is a need for more empirical research into the pragmatic consequences of

applying neo-liberal policies and practices to health care, and the analysis in this

thesis could favorably serve as a basis for empirical inquiry.

II

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III

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TABLE OF CONTENTS

STATEMENT OF ORIGINAL AUTHORSHIP

PREFACE AND ACKNOWLEDGEMENTS…………………………………..p. i

CHAPTER ONE: INTRODUCTION AND LITERATURE REVIEW…………p. 1

Neo-liberalism…………………………………………………………………....p. 1

Neo-liberalism and the welfare state……………………………………………..p. 3

Neo-liberalism and contemporary health care…………………………………...p. 5

Previous studies in neo-liberalism and health care……………………………....p. 11

Contemporary notions of health and health care………………………………...p. 14

Research questions and objectives……………………………………………….p. 23

The structure of the thesis………………………………………………………..p. 25

CHAPTER TWO: RESEARCH STRATEGY…………………………………..p. 28

Philosophical inquiry…………………………………………………………….p. 28

Articulation…………………………………………………………….p. 34

A return to ontology and human engagement……………………….…p. 36

Political philosophy and theory………………………………………………….p. 37

Analysis strategy…………………………………………………………………p. 39

Research strategy reflection……………………………………………p. 40

Concluding remarks……………………………………………………………...p. 42

CHAPTER THREE: NEO-LIBERALISM………………………………………p. 43

The historical context…………………………………………………………….p. 43

From industrialised capitalism to consumer capitalism………………...p. 44

The post World War 2 era………………………………………………p. 45

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The rise of neo-liberalism………………………………………………p. 49

Neo-liberalism as an economic and political theory……………………………..p. 53

Economic aspects ……..………………………………………………………....p. 53

Fundamental ideas……………………………………………………...p. 54

The free market, competition and commodification……………………p. 54

Political aspects………………………………………………………………… .p. 57

The role of the state, government and the free market…………………p. 57

Individual rights………………………………………………………...p. 61

The neo-liberal ideology………………………………………………………....p. 62

Individual freedom and choice…………………………………………p. 62

Material well-being and individual responsibility……………………...p. 63

Competition and inequality……………………………………………..p. 64

Contemporary, global neo-liberal influence……………………………………...p. 65

The WTO……………………………………………………………….p. 68

Other institutions…………………………………………………….....p. 69

Information and communication technologies

and global competition………………………………………………….p. 70

Neo-liberalism and contemporary globalisation………………………..p. 73

Concluding remarks……………………………………………………………...p. 78

CHAPTER FOUR: REFLECTIONS ON NEO-LIBERALISM…………………p. 80

Critique of neo-liberalism………………………………………………………..p. 80

The free market………………………………………………………....p. 80

The role of the state…………………………………………………….p. 87

Economic growth……………………………………………………….p. 89

The accumulation of capital and material goods,

and its consequences……………………………………………………p. 93

The ethics of neo-liberalism……………………………………………………...p. 96

Ideology and ethics in neo-liberalism…………………………………..p. 96

Individualism, the good life and human relationships………………….p. 98

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Rational choice and the consumer…………………………………….p. 104

Freedom……………………………………………………………….p. 110

Power………………………………………………………………….p. 113

Equality, justice and social justice…………………………………….p. 116

Concluding remarks…………………………………………………………….p. 121

CHAPTER FIVE: THE NEO-LIBERAL APPROACH TO HEALTH CARE p. 123

The neo-liberal approach to health care……………………………………….. p. 123

The welfare state and universal health care

in Western developed nations…………………………………………p. 124

The neo-liberal response to the welfare state

and universal health care………………………………………………p. 126

Individualism, responsibility and the natural rate of inequality……....p. 131

Commodification, commercialisation and autonomy…………………p. 133

Comments on the neo-liberal view on health care…………………….p. 134

The manifestation of the neo-liberal approach in contemporary health care…...p. 135

Private health care and private health insurance………………………p. 136

Public-private partnerships……………………………………………p. 137

New public management……………………………………………...p. 140

Other management theories and practices, and managed care………..p. 141

Concluding remarks…………………………………………………………….p. 145

CHAPTER SIX: CRITIQUE OF THE NEO-LIBERAL APPROACH TO HEALTH

CARE………………………………………………………..p. 147

Problems with the notion of the free market in health care…………..p. 150

Health care as a commodity…………………………………………..p. 156

Individualism, vulnerability and dependency in health care…………p. 158

Social justice and equality……………………………………………p. 163

Empirical evidence…………………………………………………...p. 168

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Critique of the manifestation of neo-liberal approaches in contemporary

health care……………………………………………………………………….p. 170

Problems with private health insurance……………………………….p. 170

Public-private partnerships……………………………………………p. 174

Market and business management theories and practices

in health care………..............................................................................p. 175

Concluding remarks…………………………………………………………….p. 179

CHAPTER SEVEN: CONCLUSIONS AND DISCUSSION……….…………p. 180

Research questions and main findings………………………………...p. 181

Implications for practice and ideas for future research………………..p. 193

The contribution of the thesis to existing knowledge

and understanding……………………………………………………..p. 195

Final remarks………………………………………………………….p. 196

REFERENCES………………………………………………………………….p. 198

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The work contained in this thesis has not been previously submitted to meet

requirements for an award at this or any other higher education institution. To the

best of my knowledge and belief, the thesis contains no material previously

published or written by another person except where due reference is made.

Date:13.08.2007

Signature: Anne Linda Ruthjersen

© Anne Linda Ruthjersen, 2007.

All rights reserved.

This work may not be reproduced in whole or in part, by photocopy or other means,

without the permission of the author.

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PREFACE AND AKNOWLEDGEMENTS

This thesis is the result of many years of thinking, experience and development. The

interest in the conflict between the moral nature of health care and business and

market influences in health care was raised in 2003 when I was working as a nurse at

a major public hospital in Denmark. During the nearly two years of experience as a

nurse, I frequently felt the pressure of economic efficiency, restructuring, and the

downsizing of staff, and I was constantly forced to make difficult priorities in the

care for the patients. I finally decided that it was time for a change, and commenced

post-graduate studies in Australia, which led me to undertake this research project

that gave me a unique opportunity to investigate the nature of health care, and what I

came to know as the political-economic theory and ideology of neo-liberalism. Over

the past few years, I have also developed an interest in political, ethical and

philosophical issues. This thesis, therefore, satisfies a personal, professional and

academic inquisitiveness.

I have many people to thank, who have encouraged and supported me throughout the

process. I would like to thank my parents for their continuous support and

reassurance, and my brother for much good advice and good humour. In addition,

my gratitude and love go to all my family and friends in Norway, Denmark and

Australia – you are the foundation. A special thank you and adoration go to my

‘editor-assistant’ and partner, who continuously enriches and inspires my life.

Principal supervisor, Dr. Peter Isaacs, at the School of Humanities and Human

Services, Carseldine, Queensland University of Technology (QUT), has been of an

immense importance to this thesis. His guidance, kindness, patience, encouragement

and enormous knowledge base have made this thesis possible.

Furthermore, Dr. Ross Daniels, associate supervisor, also at the School of

Humanities and Human Services, Carseldine, QUT, has offered crucial advice in

i

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understanding the details and complexities of the economics and politics of neo-

liberalism, and contributed with important comments on the final draft.

This research project could not have been completed without the aid and

contribution of many fellow scholars. I would like to thank Professor Gavin Norman

Kitching at the University of New South Wales, Sydney, Australia, for contributing

(vitally) to my perspective on neo-liberalism and globalisation by kindly sending me

information and references to literature on theories of the global market and their

critics. Additionally, Professor Francis Castles, at the Research School of Social

Sciences, Australian National University, Canberra, kindly sent me the draft of the

book chapter “Testing the retrenchment hypothesis: an aggregate overview”, and

engaged in an interesting discussion about the welfare state at the ‘Social Change in

the 21st Century Conference’ at Carseldine, QUT, November, 2006. I would also like

to thank Dr. Mark Brough, at the School of Humanities and Human Services,

Carseldine, QUT, for helping me understanding the intricateness of writing a

research project (‘Logic of Social Inquiry’), and later aiding me in understanding

social determinants of health. Additionally, thank you to all my research colleagues

at the School of Humanities and Human Services, Carseldine, QUT, Brisbane for

company, aid and discussions. Finally, thank you to course coordination, Dr. Barbara

Hannah, for making it administratively possible to complete this thesis.

ii

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CHAPTER ONE: INTRODUCTION AND LITERATURE REVIEW

This thesis discusses the theory and ideology of neo-liberalism and its application to

the provision of health care. Neo-liberal political-economic ideology, theory and

practice have had an immense influence on public and private life across the world,

including the delivery of health care. As well as having practical and economic

consequences for health care, its normative ideology has also redefined how we

identify clients (consumers) and health care providers, and challenged the

fundamental moral values underlining health care practice. Ollila (2005) states that

there has been a substantial change in the content of global health policy rhetoric,

from holistic policies based on universal social rights to policies emphasising

results-based interventions which aim at maximising health gains and ultimately a

gain in the productiveness of populations (p. 187). Furthermore, as emphasised by

nurse and philosopher Kari Martinsen (2006), health care is today dominated by a

strategic and economic rationality, which demands that health professionals must

prove their value in the name of efficiency (p. 161). A growing network of

professionals and advocates have, however, drawn attention to how new policies and

conditions, based on economic considerations and global trade, have had an impact

on health care services (Jasso-Aguilar, Waitzkin & Landwehr, 2005, p. 49).

Nevertheless, the question of how, and to what extent, neo-liberalism has influenced

contemporary health care is deserving of more critical attention.

Neo-liberalism

Neo-liberalism is not uniformly determined in the existing literature. It is a rather

complex ideology used in various meanings and contexts. Some describe neo-

liberalism as a political-economic philosophy that has had major implications for

government policies worldwide since the 1970’s (Hartman, 2005, p. 59; Richardson

in Slaughter, 2005, p. 35). Additionally, neo-liberalism is described as a policy

paradigm that is a political application of liberal economic-based thinking

(Holmsten, 2003, p. 24; Roy, 2000, p. 32). Larner (2000) stresses that the analysis of

1

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neo-liberalism generally has taken three directions: neo-liberalism understood as an

ideology, policy framework or governmentality (p. 3). Yet, neo-liberalism not only

incorporates political and economic considerations, more importantly it incorporates

a social philosophy, as it promotes a specific type of society, a libertarian society

(Nevile, 1997, p. 15).

In the literature, neo-liberalism is given various names, for example:

• economic rationalism (an Australian term)

• market justice

• the ‘New Right’

• trade liberalisation

• the free market

• economic globalisation

• economic/market liberalism

• neo-liberal globalisation or global neoliberalism

… and others. Although there are several terms for this theory and ideology, scholars

largely agree on its content.

Neo-liberalism can generally be referred to as a political-economic

theory, practice and ideology, which promotes: a view of the good life

emphasising individualism, material well-being, economic growth,

efficiency and profit; the competitive, free market; global trade

liberalisation; individual freedom and choice; and deregulation and the

downsizing of the state/government in favor of private investment and

incentive.

(Based on Bell & Head, 1994, pp. 37-39; Chorev, 2005, p. 320; Edwards, 2002, pp.

4, 38-41; Harvey, 2005; Hartman, 2005, pp. 58-59; Holmsten, 2003, p. 24; Larner,

2000, p. 2; Le Grand, 2003, pp. 11-16; Neoliberalism, n.d. ¶ 1; Quiggin, 1997;

2

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Richardson in Slaughter, 2005, p. 35; Roy, 2000, p. 32; Scholte, 2005, pp. 38-40;

Slaughter, 2005, pp. 2, 5, 35.)

In this thesis, I shall use the term neo-liberalism (meaning ‘new-liberalism’). I shall

offer a more comprehensive account of neo-liberalism in chapters three and four. I

shall, however, now give a brief outline of how neo-liberalism has become

increasingly influential in Western developed countries.

Neo-liberalism and the welfare state

In recent decades, neo-liberalism has been disseminated globally, influencing both

political and economic thought throughout the Western world and beyond (George

in McCabe, 2004, p. 179). An interest in the place of the free market in health care,

as opposed to the role of the government/welfare state, has become prevalent these

last few decades, as cost pressures in relation to health care in the welfare states have

become problematic in several countries (Callahan & Wasunna, 2006, p. 9). Market

ideas and practices have since grown in force, most visibly in the United Kingdom

and the United States, as well as through the work of organisations such as the

World Bank and the World Trade Organisation (WTO) (see chapter three). Yet, in

Western European countries, market influences have been less ideologically

compelling, because there is still a dedication to solidarity and to the central role of

the government for public financing and administration of welfare coverage

(Callahan & Wasunna, 2006, pp. 9, 12, 90). This has led to a more limited role for

the market in health care in these countries than for instance in the United States.

Nonetheless, since the mid-1980’s the Western welfare state has been challenged by

the expansion of neo-liberalism and its favouring of the free market and private

enterprise (Vivekanandan & Kurian, 2005, p. 3). As market ideology has become

more prominent, it has been increasingly applied in health care, leading to a wave of

reforms. Callahan and Wasunna (2006) note, however, that in Western European

countries, market ideologies were most influential in the 1980’s and early 1990’s,

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and by the beginning of the twenty-first century there was much less optimism about

market power in health care (pp. 110-113). Nevertheless, rising health care costs,

globalisation and increasing competitive demands have kept a market option

attractive (Callahan & Wasunna, 2006, pp. 110-113).

At present, rising health care costs are putting the welfare states under great

pressure. Health care expenditures are often rising due to factors such as ageing

populations, rising public demands, the emergence of costly new medical

technologies, and the more intensified use of technologies, and costly new

pharmaceuticals (Butler, 2002, p. 209; Callahan & Wasunna, 2006, pp. 112, 251).

Most Western European countries are today struggling in various degrees to contain

health care costs, which has spurred a desire for health care reforms to manage this

‘crisis’. This situation has led to the consideration of market practices as a possible

solution (Callahan & Wasunna, 2006, pp. 87, 109-110).

Contrary to the above, some scholars maintain that the welfare state is far from being

endangered, and that empirical OECD data show that the welfare state, and public

health expenditure, in most OECD countries have not retrenched significantly (see

e.g. Castles, forthcoming; Kite, 2004, pp. 213, 231; Navarro & Shi, 2003, p. 202). In

fact, health care expenditure, and the percentage these take up of the GDP in most

OECD countries, has increased steadily over the past decades (undoubtedly due to

increasing costs associated with expanding and expensive technology and

treatments) (Folland et al., 2007, pp. 3, 15; Rosen in Folland et al, 2007, p. 16).

Moreover, Castles (forthcoming) and Kite (2004, p. 231) claim that increasing

market practices and trade liberalisation have not forced states to reduce overall

spending; rather, trade liberalisation has been associated with higher levels of both

social and total public expenditure (OECD figures 1980-2001).

Nevertheless, the environment within which health care services in Western

developed countries is delivered has changed radically in recent decades, and I shall

discuss this in more detail below.

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Neo-liberalism and contemporary health care

Neo-liberalism has had an increasing influence on health care in Western developed

countries. The neo-liberal agenda for health care has included cutting costs to obtain

a higher level of efficiency, and viewing health care as a commodity rather than a

public good (McGregor, 2001, p. 83). Furthermore, deregulation and withdrawal of

the state from health care have been common in many countries since the 1970’s,

and privatisation in health care has increased worldwide (Harvey, 2005, pp. 2-3;

Labonte, 2003, p. 485).

There has additionally been a rising factor of ‘consumerism’ in health care (Craven

& Hirnle, 2007, pp. 6, 8), and during recent times, health care has developed into an

attractive market for medical technologies, management, and health and consultant

services (Ollila, 2005, p. 199). Health care services today are also heavily influenced

by business approaches to health care management, and by factors such as global

trade and globalisation, privatisation and a focus on economic efficiency and profit.

Moreover, neo-liberal language has become increasingly dominant in health care; for

example in the form of management theories and practices which include notions

such as ‘the consumer’, ‘private health care’, and ‘consumer choice’. Language

reflecting the neo-liberal ideology now prevails in much of the public and private

dialogue, including in health care (McGregor, 2001, p. 83). Isaacs (2006d) notes that

there has been a change in the discourse of health care practice, now encompassing

terms like ‘service’, ‘provider’, and ‘consumer’, replacing terms like ‘practice’,

‘patient/client’ and ‘professional’ (p. 10). This change in language reflects the

growing influence of neo-liberal ideology and theory, and its power to alter our

conceptual frameworks of interpretation by using specific forms of language. (This

point will be elaborated on in chapter two.)

Furthermore, there has recently been a trend of ‘commercializing health care”

(particularly in developing countries) which encompasses:

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…the provision of health care services through market relationships to

those able to pay; investment in, and production of, those services, and of

inputs to them, for cash income or profits, including private contracting and

supply to publicly finance health care; and health care finance derived from

individual payment and private insurance. (Mackintosh & Koivusalo, 2005,

p. 3)

The commercialisation of health care has proved challenging for policy makers

concerned about improving access to health care for poorer groups of people (Wadee

& Gilson, 2005, p. 251). In a commercialised environment, the ‘user-pays’ principle

and private health care insurance have become predominant determinants, and the

ability to pay, rather than health care need, has become the primary criterion on

which health care resources are distributed (Wadee & Gilson, 2005, p. 251).

Due to the phenomena of marketisation, commercialisation and the neo-liberal

influence, health care has largely gone from being a public responsibility to an

individual matter based on individual choice, behaviour and habits (Hofrichter,

2003, p. 29). Yet, Kickbusch (in Kawachi & Wamala, 2007a) emphasises that

understanding health as a right of ‘global citizenship’ is essential in today’s

globalised world, and this requires challenging the dominant neo-liberal paradigm,

as well as a new focus on the principle and requirements of social justice (p. viii).

In addition, economic considerations are increasingly important to health care

decisions (Musgrove, 2004, pp. 23-25). Today, health care services are often

dominated by cost-efficiency and revenue production (Manning, 2003, p.3). As

health care is one of the biggest and fastest growing businesses (indeed service

industries are outpacing the productive industries in contributing to economic growth

(Labonte, 2003, p. 484)), health care has become vital in the neo-liberal process of

economic accumulation and trade liberalisation (Filc, 2005, pp. 180-181; Schrader,

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2005, pp. 1-2). The corporate sector’s role in health has consequently increased both

at international and national levels (Schrader, 2005, p. 33). Health care economists

and administrators have become an essential part of health care systems to enable

those systems to work in the most economically efficient ways (Callahan &

Wasunna, 2006, pp. 253-254). An example is the widespread use of the utilitarian

model of cost-benefit analysis in health care, which often requires that monetary

value be put on human life or improvements in health and well-being (Folland,

Goodman & Stano, 2007, p. 71; Little, 2002, p. 142).

The economics of health care is of great importance in the social provision of health

care, because it involves the allocation of resources (Folland et al., 2007, p. 8;

Musgrove, 2004, pp. 23-24). As stated by Folland et al. (2007), “If economics

studies how scarce resources are used to produce goods and services and then how

these goods and services are distributed, then clearly economics applies [to health

care]” (p 10). In this sense, health care economics may help bring out the highest

potential in health care services (Callahan & Wasunna, 2006, p. 254).

In contrast, neo-liberal influence and pressure on governments often result in the

implementation of economic moderation and budget cuts in health care services

(based on Gill, 2003, p. 127). This development is often underpinned by the neo-

liberal rationale that economic growth, wealth creation and profit are the means to

human well-being and fulfillment. In this view, the health and well-being of people

are assumed to benefit from economic growth; however, it cannot be assumed that

overall economic growth in itself will lead to better health (Schrader, 2005, pp. 17-

18; Koivusalo in Schrader, 2005, p. 20).

Hence, the neo-liberal discourse emphasises aspects such as profitability, economic

growth, and efficiency, rather than the notion of health care as a human need

(Hofrichter, 2003, p. 30). This view may prove problematic because factors greatly

influencing health care such as human need, vulnerability, and well-being cannot

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always be measured in economic terms. The discourse surrounding need and cost is

complicated, and there is no easy solution.

The attention to economics and free markets has created new forms of health care

provision, including mixed-form markets where for-profit, non-profit, and

government providers coexist. Many service markets, including health care, often

contain providers of all forms (Marwell & McInerney, 2005, p. 7). For instance,

contemporary health care already exists in a constellation of markets, due to the

prominence of pharmaceutical and medical technological industries. The main

concern is if the market is able to deliver health care corresponding to population

needs (Musgrove, 2004, pp. 23-25).

Moore et al. (2006) suggest, however, that rather than assuming that economic

globalisation and neo-liberal policies affect health, institutions and policies in all

countries equally, it is likely that these policies have different implications

depending on a country’s position in the global trade and political power systems (p.

176). Often, the less powerful and wealthy countries are more vulnerable to negative

effects of trade and globalisation (Moore et al., 2006, p. 176). Governments in these

countries (in many cases developing countries) are sometimes pressured to

implement economic moderation, cuts in public budgets, and remove subsidies and

trade and investment barriers (Gill, 2003, p. 127). The pressure often comes from

powerful international organisations such as the World Bank and International

Monetary Fund (IMF), or from agents representing global financial markets (Gill,

2003, p. 127). Nevertheless, in some countries (e.g. the United Kingdom, the United

States and Australia), governments are in many cases the initiators of

implementation of neo-liberal policies, for example when privatising or contacting

out health care services.

Some scholars have noted that a consequence of the present-day political-economic

environment is that health and health care are being seen as commodities (Geiger,

2006, p. 207; Schrader, 2005, p. ii), which entails that health care services are treated

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as commodities that can be bought from a provider (e.g. a private health practitioner,

private health insurance, or private hospital) chosen by the individual consumer.

There has, however, been a growing dispute regarding whether health care should be

treated as a basic human right or as a commodity (see e.g. Callahan & Wasunna,

2006, p. 34; Musgrove, 2004; Schrader, 2005). Filc (2005) nevertheless claims that

the commodification and medicalisation of everyday life are central trends in present

day neo-liberal societies (p.1). Thus, health care has become part of a commodified

environment.

Additionally, there has been a growing debate on health care provision and the

notion of social justice (see e.g. Barry, 2006; Geiger, 2006; Levy & Sidel, 2006;

Musgrove, 2004; Powers & Faden, 2006). Levy and Sidel (2006) argue that even if

there have been remarkable improvements in overall health and life expectancy

during the past century (often seen as a result of economic prosperity and rising

living standards), the start of the new century has seen unreasonable gaps in health

for several vulnerable groups of people, frequently amongst ethnic and racial

minorities, and poor people (p. 4). Levy and Sidel (2006) state

Market justice [neo-liberalism], which has created many of these disparities

and gaps, may be the primary roadblock to dramatically reducing preventable

injury and death. It has been asserted that market justice is a pervasive

ideology that protects the most powerful or the most numerous from the

burdens of collective action. An important role for public health is to

challenge market justice as fatally deficient in protecting public’s health and

to advocate an ethic for protecting public’s health - giving highest priority to

reducing death and protecting all humankind against hazards. (p. 3)

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The issues of inequity and inequality in health care have become increasingly

prevailing, mirrored by an emerging literature on these subjects (Schrecker &

Labonte, 2007, p. 299). The literature reflects an emphasis on reducing unequal

opportunities for people such as the poor, women, rural residents, ethnic or religious

groups and others (Braveman & Gruskin in Schrecker & Labonte, 2007, p. 299; see

also Barry, 2006). Pursuing equity in health care means “…eliminating health

disparities that are systematically associated with underlying social disadvantage or

marginalization” (Braveman & Gruskin in Schrecker & Labonte, 2007, p. 299).

As described, globalisation, trade and free markets are progressively more influential

in contemporary health care, which is therefore increasingly influenced by

international trade agreements, such as agreements made by the WTO (Jakubowski

& Wyes, 2000, p. 16; Koivusalo, 2000, p. 18; Schrader, 2005, p. 2). In a joint report

from 2002, WTO and World Health Organisation (WHO) examine the connection

between trade and health policies. The report confirms that WTO rules and trade

liberalistion affect various areas of public health (WHO & WTO, 2002, pp. 23, 57,

58, 144). Nevertheless, a central declaration in the report, under Article XX of the

General Agreement on Tariffs and Trade (GATT), guarantees member countries the

right to restrict services, service suppliers, and imports and exports of products when

necessary, to protect human health (Bloche & Jungman, 2007, p. 250; WHO &

WTO, 2002, pp. 30, 57). In the report, the WTO states that human health is

"important in the highest degree" (WHO & WTO, 2002, p. 31). Yet, WTO

agreements can override internal laws and regulations of any WTO member country,

including those of health care (Moore, Teixeira & Shiell, 2006, p. 176), and the

General Agreement for Trade in Services (GATS) (the WTO agreement which

concerns health care services), does not contain any agreements concerning human

rights or the right to access health care services (Schrader, 2005, p. 63). Some have

expressed concerns that the present-day focus on free markets and trade

liberalisation pays too little attention to trade-related health, as well as to social and

environmental costs (Labonte in Schrader, 2005, p. 11). Yet, “Human health is as

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least as important as trade in terms of its effects on the wellbeing of populations”

(Gostin, 2006, p. 59).

In addition to the challenges posed by globalisation, trade, markets and economics to

contemporary health care services, the relationship between practitioners and

patients has also been contested. The availability of the Internet has enabled clients

to gather information about illnesses, treatments, complication rates and alternative

cures (Cline & Haynes, 2001, p. 671; Freckelton, 2006, p. 41). Patients have become

consumers with the right to receive what they, or the community, are paying for, and

there has been a growing focus on information and the notions of ‘informed consent’

and patient autonomy (English, Mussell, Sheater & Sommerville, 2006, p. 117;

Freckelton, 2006, pp. 40-41). Hence, individual wishes and choices are now the

foundation for most healthcare decisions (English et al., 2006, p. 118). Autonomy is

often perceived to be sovereign among ethical principles in medical practice today,

and autonomy is frequently combined with terms such as patients’ rights and

consumer choice (English et al., 2006, p. 117).

It can be concluded, then, that neo-liberalism has had a very real impact on

contemporary health care in Western developed nations, for example through trade

liberalisation, commercialisation and commodification, business management

approaches, language, economics and political decisions. Neo-liberalism has

emerged as an alternative to the welfare state and the notion of universal health care,

and in some ways, it has subtly redefined the meaning and purpose of health care.

Previous studies in neo-liberalism and health care

As per the above, there already exists a quite extensive base of literature which

discusses how neo-liberalism and political and economic changes of the last few

decades have influenced health care around the world. There have additionally been

several studies investigating the consequences of the adaptation of the neo-liberal

orthodoxy across the globe, frequently with a focus on developing countries (mostly

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in Latin or South America, Africa or South-East Asia) (see e.g. Ahmed, 2005;

Armada, 2002; Bovill & Leppard, 2006; Chan, 2004; Eisler, 2004; Kim, 2005;

Muntaner, Salazar, Benach & Armada, 2006; Peschard, 2003; Robison, 2006). There

is no doubt that market forces have had a huge impact on health care services in

developing countries. Additionally, many of these nations struggle with instability,

poverty, and a high level of morbidity and mortality due to infectious diseases (e.g.

HIV/AIDS, malaria and tuberculosis), malnutrition, maternal conditions and poor

living conditions, which contribute to worsened health conditions and lower life

expectancy (Callahan & Wasunna, pp. 117-118). The improved health of the

population in these countries is obviously not only in their own interest, but also of

interest to the rest of the world.

For the purpose of this thesis, however, the focus will be on the influence of the neo-

liberal approach on health care in Western developed countries; a topic which is less

examined in the existing literature. In this thesis, I shall investigate this specific topic

in a philosophical, ideological manner (see chapter two). Furthermore, even if the

general literature has proved to be extensive regarding neo-liberalism, only a few

studies have investigated the specific neo-liberal approach to health care in detail.

McGregor (2001) has investigated some basic assumptions of the neo-liberal

paradigm (individualism, the free market and decentralization) and how this

paradigm has shaped health care reforms in Western developed nations such as the

United Kingdom, Canada, the United States, Australia and New Zealand.

Other works have dealt with aspects of neo-liberalism and health care. In her

doctorate thesis, Helen McCabe (2004) has examined the ethical implications of

incorporating managed care (a practice deriving from the neo-liberal ideology) in the

Australian health care context, although in this thesis, neo-liberalism is described

very briefly, and not analysed as an ideology in itself. Additionally, some scholars

have examined the concept of ‘commercialization of health care’ by exploring how

the recent wave of commercialisation has affected health care services throughout

the world (Mackintosh & Koivusalo, 2005). Furthermore, Callahan and Wasunna

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provide an analysis of medicine, global health care systems and the place of the

market (2006). This work explores how market ideologies, from Adam Smith’s

theories on liberty and free markets to influential market forces today, have made an

impact on global health care.

Other scholars have investigated how trade and market practices have affected health

care services in various countries (Koivusalo, 2000, pp. 18-20; Moore et al. 2006;

Schrader, 2005). Additionally, Filc (2005) has researched the neo-liberal influence

on health care in Israel. The relation between income inequality, the social

organisation of society, and health has been well examined (see e.g. Coburn, 2000;

Coburn, 2004; Daniels, Kennedy & Kawachi, 2002; Hertzman, 2000; Kawachi &

Wamala, 2007c; Lynch, 2000; Tarlov, 2000; or Wilkinson, 1999 and 2000).

Furthermore, Ericson et al. (2000) have studied the moral hazards of neo-liberalism

in the private insurance industry, albeit not specifically focused on health care

insurance; and finally, Clarke (2004) uses health care as one of the examples in his

analysis of ‘the logics and limits’ of neo-liberalism.

The above are examples of recent and extensive scholarly works investigating issues

in relation to health care, income, the market, trade and commercialisation. They

seek to analyse the consequences of some aspects of neo-liberal practices and

ideology. Nevertheless, few of these studies are based on a comprehensive

conceptual analysis of the theoretical and ideological framework of neo-liberalism.

More significantly, there is little analysis of the concept of neo-liberalism regarding

its ethical and moral underpinnings.

As a health professional, I find it interesting to observe how neo-liberal practices are

widely accepted and applied in many spheres of modern Western society without a

deeper analysis of its ethical foundations and consequences. Moreover, my own

experiences as a nurse have revealed that there may be some fundamental conflicts

between business management concepts as a way of organising health care, the

downsizing and privatisation of the health care sector, and the increasing focus on

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economics and efficiency, and the foundations of health care as a caring and giving

practice based on values such as the altruistic virtue of care, nurturing, compassion,

need and solidarity and so forth. These conflicting views can often result in

considerable distress and tension in every day practice for health care professionals

(based on Isaacs, 2006d, p. 11). Moreover, political strategies and decisions based on

neo-liberal considerations may have substantial health impacts. In effect, the health

of a population is often dependent on the political choices of policy makers in both

government and corporations (Milio in Schrader, 2005, p. 10). If only for these

reasons, it is important to articulate and to understand the impacts of neo-liberal

policies for contemporary health care.

To understand the neo-liberal approach to health care, and how neo-liberal based

policies may affect contemporary health care in Western developed countries, it is

necessary to have an understanding of what health and health care mean in a modern

setting. In the following section, I shall discuss briefly some contemporary and

prevailing notions of health and health care.

Contemporary notions of health and health care

Health and health care are multidimensional concepts, and they can have diverse

meanings in different cultures and societies. Nonetheless, health and health care

concern all people, and, therefore, they are also at a fundamental level universal

concepts. The following is an attempt to depict health and health care in a general

and contemporary manner, that, while able to be applied universally, in the context

of this thesis, specifically relates to Western developed countries.

Health and health care are made up of factors such as “…history, medical science,

culture, politics, ethical and social values, and economic theory” (Callahan &

Wasunna, 2006, p. 4). During recent decades, however, health has been increasingly

linked to the notion of being a basic human right, the right to health care (Gruskin &

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Braveman, 2006; McCabe, 2004, p. 72; Powers & Faden, 2006, p. 85; Schrader,

2005, pp. 11-12).

The human right to health and health care is evident in some major international

covenants and declarations. In the International Covenant on Economic, Social, and

Cultural Rights (1976) (ICESCR), article 12, it is stated that everyone has a right to

enjoy “the highest attainable standard of physical and mental health”, and, in this

covenant, there are several other health-related rights (e.g. regarding workplace,

living conditions and food-production). The ICESCR has been widely ratified by

governments globally (Gostin, Hodge, Valentine & Nygren-Krug, 2003, p. 4).

Special health-related duties to specific groups of people (e.g. women, children or

racial groups) are recognised in other international declarations and treaties (Gostin

et al., 2003, p. 4).

Furthermore, according to the Universal Declaration of Human Rights (United

Nations, 1948):

Everyone has the right to a standard of living adequate for the health and

well-being of himself and of his family, including food, clothing, housing

and medical care and necessary social services, and the right to security in

the event of unemployment, sickness, disability, widowhood, old age or

other lack of livelihood in circumstances beyond his control. (article 25 (1))

In fact, all countries in the world today participate in at least one human rights treaty

which includes health-related human rights, and they are, therefore, legally

responsible under international law in one way or another for human rights as they

relate to health (Gruskin, Grodin, Annas & Marks, 2005a, p. xvi). The United States

does not recognise the right to health as such, but 151 other countries (in 2005) are

bound to obligations of the right to health (Gruskin et al, 2005a, p. xiv). Moreover,

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because health is often understood as including multiple factors such as mental,

physical, and social wellbeing, the violation of any human right will potentially have

a negative affect on health (Gruskin & Tarantola, 2005, p. 40). However, the issue of

health as a human right has been challenged in many ways, and the notion of health

and health care being human rights remains somewhat ambiguous. (For a

comprehensive debate on health and human rights, see Gruskin et al., 2005b). For

example, human rights could mean that people cannot be prohibited from having

good health and health care, but this does not imply that institutions providing for

good health and health care necessarily are in place, or that everybody will have the

opportunity to experience good health and receive health care (Barry, 2006, pp. 19-

20, 25-26).

Beyond being a right, health is regarded as something of immense value to people.

Schrader (2005) describes health as an intrinsic social and human value, and that

good health is a prerequisite for human development and prosperous economies (p.

8). “Good health is valued as intrinsically good and instrumental in allowing other

freedoms” (Cosbey in Schrader, 2004, p. 8). There is no doubt that being in good

health is instrumental in achieving one’s goals, and increasing one’s opportunities in

life (Barry, 2005, pp. 72-73). Further, “Health is important in its own right and for its

own sake” (Powers & Faden, 2006, p. 128).

Health is additionally linked to human well-being. For example, the World Health

Organisation (WHO) Ottawa Charter (1986) states:

To reach a state of complete physical, mental and social well-being, an

individual or group must be able to identify and to realize aspirations, to

satisfy needs, and to change or cope with the environment. Health is,

therefore, seen as a resource for everyday life, not the objective of living.

Health is a positive concept emphasizing social and personal resources, as

well as physical capabilities. (¶ 3)

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The WHO Ottawa Charter (1986) additionally stresses that basic prerequisites for

health are peace, shelter, education, food, income, a stable eco-system, sustainable

resources, social justice, and equity (¶ 4). The WHO is the United Nation’s

specialised agency for health, and the leading global health agency (WHO, 2006).

The WHO provides a moral framework and agenda for global health (Buse & Walt,

2002, pp. 182-183).

Health is often referred to in a holistic sense, involving experiences of happiness,

contentment, pleasure, the potentials and capabilities of a person, achieving one’s

potential and ideals throughout a lifespan, being able to adjust to challenges and

changes in both the internal and external environment, and not merely the absence of

pathology (Brunner & Marmot, 1999, p. 17; Craven & Hirnle, 2007, p. 259; Pender,

Murdaugh & Parsons, 2006, pp. 16, 22-23). (Holism is an acknowledgement that

people display interactional dimensions of mind, body, spirit and the environment.)

Yet, some note that the holistic approach to health, which is increasingly accepted,

often becomes fragmented or lost in the practical world of health care and the

superiority of the bio-medical model of health, which views illness as a

malfunctioning of the body only (Isaacs, 2006j, p. 4; Pender et al., 2006, p. 25; Hwu

et al. in Pender et al., 2006, p. 30).

One of the most well known definitions of health is provided by the WHO (2006),

who defines health as “…a state of complete physical, mental and social well-being

and not merely the absent of disease and infirmity” (¶ 1). This definition is

representing a holistic view on health (Schrader, 2005, p. 8; WHO in Pender et al.,

2006, p. 17). It has nevertheless been critisised by some for being utopian, too broad,

and too abstract (see e.g. Callahan, 2002, p. 4; Larson in Pender et al., 2006, p. 18;

McCabe, 2004, p. 18; Powers & Faden, 2006, pp. 17, 83). WHO additionally states

that health care should be based on the principle of primary health care, which

entails universal health care access based on need, health equity and social justice,

and community participation in defining and implementing health agendas

(Mackintosh & Koivusalo, 2005, p. 6). In short, WHO is committed to “the ethical

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concepts of equity, solidarity and social justice” (WHO in Bonita, Irwin &

Beaglehole, 2007, p. 279).

Health and health care concerns all people on this earth. Health care is a unique

human need and a special human ‘good’, as it relates to conditions from which no

one is immune (Bhatia, 2003, p. 557; Commission on Social Justice, 2000, p. 55). At

times, health is dependent on the receipt of health care, and, therefore, health care is

a fulfillment of a basic human need (McCabe, 2004, p. 17). Health care is for these

reasons valued as a moral good (McCabe, 2004, p. 17).

At present, dramatic advances in technology, treatment and medical research have

created expectations of longer, healthier lives and curative treatment or symptom

relief of most illnesses. (As mentioned, these advances have brought with them

rising costs of heath care.) This development has encouraged a belief in an ‘infinite

model of progress’ which is a vision of eliminating or radically diminishing disease,

overcoming the limits of the human body, and even forestalling death (Callahan &

Wasunna, 2006, pp. 7-8, 74, 268). Nevertheless, human beings are vulnerable; we

are all prone to illness at some stage of our lives, and it remains certain that we will

all eventually fall ill and die.

The general objectives of health care, then, are to promote health, prevent and cure

illness, injury and premature death, provide care for terminally and chronically ill

persons, rehabilitation, and the alleviation of pain, suffering and disability (Callahan,

2002, p. 9; Hastings Centre in Callahan & Wasunna, 2006, p. 262; Mackintosh &

Koivusalo, 2005, p. 6). Some have furthermore suggested that the goal in health care

is not necessarily for everyone to have the same health care, or the same quality or

quantity of life, but to get everyone to a minimum level of health care that allows for

reasonable life choices (Roberts, Breitenstein & Roberts 2002, p. 76; Powers &

Faden, 2006, pp. 82, 95). Moreover, Callahan (2002) emphasises that the most

important question to ask in health care is ‘What is the right priority for this patient

at this time?’ (p. 10).

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Health care can be both a public and individual good. As an individual good, health

care is offered to the individual for the aim of curing, alleviating and palliating

illness, as well as contributing to overall well-being. Illness is an individual

experience, and for health care to be effective, it must meet the needs of the

individual (Callahan, 2002, p. 4; McCabe, 2004, pp. 19-20). The ‘healing’

relationship occurring between the patient and the health professional must therefore

meet ‘the good’ of the person who suffers (McCabe, 2004, pp. 19-20). This principle

has strong historical roots in medicine and health care, and dates back to the Greek

physician Hippocrates, who emphasised the principles of doing good and avoiding

harm to patients (Boyd, 2006, p. 31). Thus, the core activity within health care takes

place between the medical practitioner and the patient (Boyd, 2006, p. 32). This

activity is an inherently moral activity (Pellegrino & Thomasma in McCabe, 2004, p.

20) encompassing an altruistic virtue of care (Gastmans, de Casterle & Schotsman,

1998, p. 53). Additionally, individual health care encompasses what we do ourselves

to maintain our health.

Public health care is the organised efforts in a society to promote the health of its

population, usually including medicine and public health services (Callahan, 2002,

pp. 4, 13). The moral foundation for public health rests on an obligation to promote

good or well-being (Powers & Faden, 2006, p. 81). Public health is ultimately an

ethical enterprise committed to the idea that all people are entitled to protection

against hazards, as well as the minimisation of death and disability (Beauchamp in

Levy & Sidel, 2006, p. 6). Therefore, health care is an area of human life where

egalitarianism is a prevailing value. Many scholars point to the significant role of

state/government in providing health care (Geiger, 2006; Plough, 2006; Schrader,

2005), and many scholars stress the importance of universal access to a reasonably

comprehensive level of good quality medical care (Callahan & Wasunna, 2006;

Marmot, 1999, p. 3; Powers & Faden, 2006, p. 11).

The ethical foundation for health care has largely been guided by ethical principles.

The dominant ethical principles in health care today are the principles of beneficence

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(doing or promoting good, and balancing benefits against risks and costs), non-

maleficence (avoiding harm), respect for autonomy (decision-making capacities of

autonomous persons) and justice (fairness) (Beauchamp & Childress, 2001, p. 12;

Craven & Hirnle, 2007, pp. 91-92). These principles are seen as general values

underlying a shared, common morality in health care (Beauchamp & Childress,

2001, p. 12).

Health care as a shared public good is a complex area including:

• public health care facilities such as hospitals, aged care facilities, primary

health care clinics, school nurses, home care

• public health considerations

• health promotion

• assessing the impact of other policies on health emergency-preparedness (e.g.

relating to outbreaks of epidemics such as avian flu, SARS, cholera, natural

catastrophes, or biological attacks)

• education of skilled and professional medical workers

• research and development of health policies

(Adapted from Mackintosh & Koivusalo, 2005, pp. 5-6, 8; Raphael & Bryant, 2006,

p. 39.)

Furthermore, the social and economic organisation of a society may have a huge

impact on population health (Acheson in Marmot & Wilkinson, 1999, p. xi; Barry,

2005, pp. 70-72). Improvement in both individual and population health often

derives from improvement in the economic and social conditions under which

people live (Callahan & Wasunna, 2006, pp. 266-267). Factors such as education,

working conditions, the environment, income level, social security, culture, social

networks, political context, poverty, racism, class, age, gender, housing, and

transportation, are all related to individual and public health status (Bambas &

Casas, 2003, p. 325; Brunner & Marmot, 1999, p. 20; Dr. M. Brough, personal

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communication, February 26, 2007; Hofrichter, 2003, pp. 1-2, 6, 8; Kickbusch in

Kawachi & Wamala, 2007, p. v; Marmot, 1999, p. 3). For example, low living

standards and social class are now dominant influences determining poor health and

death (Barker et al., 1998, p. 3; Daniels et al., 2002, p. 20).

The above conditions are referred to as the social determinants of health (Brunner &

Marmot, 1999, p. 20; Dr. M. Brough, personal communication, February 26, 2007;

Marmot & Wilkinson, 1999; Daniels et al., 2002). Social determinants for health are

relevant to health in how they affect health and well-being (Powers & Faden, 2006,

p. 83). Yet, the causal direction of social determinants may be two-way, as health

may determine socio-economic factors and conversely social circumstances may

affect health (Marmot, 1999, p. 12). It is, however, evident that healthy populations

depend on the organisation of material conditions in everyday life, as well as social,

political and economic factors and social networks (Dr. M. Brough, personal

communication, February 26, 2007; Hofrichter, 2003, p. 6).

Today, social, political and economic determinants of health are well recognised.

However, there is a tendency to focus on individualised risks rather than on

structural accounts or political factors, so that the responsibility for altering these

factors is often placed on the individual (e.g. altering habits related to smoking,

exercise, education, work and so on) (Brough, 1999, pp. 94, 96; Dr. M. Brough,

personal communication, February 26, 2007). Individualised risks are also

emphasised in the neo-liberal approach to health care where the individual is

conceived as responsible for his/her situation and health status (see chapters four and

five).

Furthermore, population health is not only a reflection of national level factors, but

must be understood in a global context (Moore, Teixeria & Shiell, 2006, p. 166).

Mackintosh and Koivusalo (2005) state:

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...health care is a key international battleground, on which competing

visions of the ethical and political basis of society, and the nature of the

economy, are fought out. Health systems are powerful drivers of social

exclusion or inclusion: key markers of a country’s public ethics that play a

central role in nation building and in response to national crisis. (p. xiv)

The above account of health and health care is not exhaustive. Health and health care

have been described in numerous ways, and it is clear that these concepts are

extremely complex, consisting of an extraordinary diversity of elements.

Nevertheless, contemporary notions of health and health care have some

commonality:

• Health and health care concern all people on this earth.

• Health and health care are unique human goods and needs of intrinsic value.

• Everyone is entitled to protection against hazards and to the minimisation of

disability and death. Health care is, therefore, a fulfillment of a basic human

right and need.

• Health and illness are individual experiences.

• Good health is of immense value for people, and instrumental in allowing

other freedoms (e.g. education, employment, social activities).

• Health involves a holistic view of the human being.

• Health care is both an individual and a public good.

• As a public good, health care rests on a moral obligation to promote the

health and well-being of a population.

• Social, political and economic determinants and conditions have a significant

effect on health and health care.

• Health and health care are related to the notions of egalitarianism, equality,

solidarity, equity and social justice, and health care is viewed as altruistic at

its core.

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• The dominant ethical principles in health care today are the principles of

beneficence, non-maleficence, respect for autonomy, and justice. These

principles are seen as general values underlying a shared, common morality

in health care.

• Several scholars and leading health organisations (e.g. WHO) underline the

necessity for universal health care access and a minimum level of health care

to provide people the opportunity for reasonable life choices.

• Health and health care are situated within a global context of money,

markets, trade, and business.

I will in the coming chapters make references to the values and views underpinning

contemporary health care as per the above, as I analyse health care in the context of

neo-liberalism.

Having introduced the topic of this thesis on neo-liberalism and health care, I will

conclude the chapter by outlining the research questions and the purpose and

structure of the thesis.

Research questions and objectives

What are the distinctive core concepts, values and moral underpinnings of

neo-liberalism?

What is the neo-liberal approach to health care?

How does neo-liberalism affect the underlying values of contemporary health

care in Western developed countries?

These research questions are of a philosophical nature. They are questions with a

broad, universal scope, and lead to an inquiry which will describe, analyse, evaluate,

and provide knowledge about the interpretive framework of neo-liberalism and its

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approach to health care (adapted from Blaikie, 2000, pp. 60-70; Wisker, 2001,

pp.118-120).

The objectives of this thesis are, therefore, to articulate and analyse the neo-liberal

interpretive framework, moral values and language; and to articulate and analyse the

neo-liberal approach to, and effect on, contemporary health care in Western

developed countries.

Hence, this thesis is founded on basic, theoretical research. Furthermore, in this

thesis, I have taken the philosophical position that neo-liberalism has a particular

approach to contemporary health care, and that the influence of neo-liberalism

situates contemporary health care in a new perspective. It is, hence, an additional

aim of this thesis to demonstrate the neo-liberal influence on contemporary health

care, by analysing the ways in which the neo-liberal approach alters the nature and

purpose of health care.

Why the focus on philosophy, ethics and values? A discussion on ethics in health

care can clarify the goal and purposes of health care and health policies (Churchill,

2002, p. 59). As established in the section ‘contemporary notions of health and

health care’ earlier in this chapter, ethics and ethical principles are embedded in

health care, and contemporary Western views of health care rests on a moral

foundation of rights, needs, solidarity, egalitarianism, equality, equity, altruism,

social justice and universal access. As health care deals with the most visceral parts

of human life, and health care delivery has a capacity for harm as well as benefit,

ethics in health care are inevitable (Holland, 2004, p. 91). Health care is about

human encounters, and about vulnerability and the human condition (Martinsen,

2006, p. 53). As expressed by Martinsen (2003) “…ethics, life-philosophy and

metaphysics are the foundations of nursing” (p. 7) (personal translation from

Norwegian), and one might add such concerns provide the foundations not only for

nursing, but also for health care in general. Furthermore, philosophy deals with

existential questions about what a good life is, and how it may be realized

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(Martinsen, 2006, p. 129). Neo-liberalism is an ideology, which proposes answers to

what human life should be, and how to organise a society. I shall elaborate on this

subject in chapter two.

The structure of the thesis

To provide solutions to the research questions, and to respond to the objectives, this

thesis is divided into seven chapters, structured in the following way:

The following chapter, chapter two, presents an account of the research strategy,

which is that of philosophical inquiry, additionally drawing on political philosophy.

As this is a somewhat particular research strategy, which is rarely articulated, I shall

in this chapter outline what philosophical inquiry encompasses and how it shapes a

research project such as this.

Chapter three presents an account of the neo-liberal ideology and political-

economic theory. This account is a necessary background to understanding the neo-

liberal interpretive framework, and the neo-liberal approach to, and effect on, health

care. I will therefore provide a thorough account of neo-liberalism.

When I refer to neo-liberalism as an ideology, I indicate that it is “A system of ideas

and principles forming the basis of an economic or political theory” (Soanes,

Spooner & Hawker, 2001, p. 442). Moreover, the neo-liberal ideology encompasses

certain values (such as individualism, personal liberty, trade liberalisation and

competitiveness), and an ethical framework which is presented as a solution to what

a good life is and how a society should be organised to create a good life for people

(Holmsten, 2003, p. 24; Mittelman in Mittelman & Othman, 2001, p. 8). The

ideology of neo-liberalism is therefore a system of meaning and practice, which

guides the interpretation of everyday life (based on Hofrichter, 2003, p. 25).

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To give a simple yet comprehensive account of neo-liberalism, chapter three is

divided in the following sections:

• The historical context

• The rise of neo-liberalism

• Neo-liberalism as an economic and political theory

• The neo-liberal ideology

• Contemporary, global neo-liberal influence

Due to the limits of this thesis, the outline of the historical and political factors of

neo-liberalism will be somewhat moderate and concise. More detailed accounts can

be found in Slaughter (2005), Harvey (2005), Jang (2006), or Robison (2006a).

Chapter four is a critique of the neo-liberal theory and ideology. This chapter will

be divided into two parts. The first part will present critiques that have already been

voiced by several scholars worldwide (which will include supportive arguments of

neo-liberalism), and the second part will present a philosophical analysis of some

foundational concepts in neo-liberalism. This section will thus investigate the moral

foundations of neo-liberalism. The following concepts will be analysed:

• Individualism, the good life and human relationships

• Rational choice and the consumer

• Freedom

• Power

• Equality, justice and social justice

Chapters three and four thus seek to answer the research question ‘What are the

distinctive core concepts, values and moral underpinnings of neo-liberalism?’ These

two chapters will hence articulate and provide an analysis of the neo-liberal

interpretive framework, moral values and language.

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Chapter five will provide an account of the neo-liberal approach to health care;

building on the account and analysis presented in chapters three and four The first

part of this chapter shall seek to provide an answer to the research question ‘What is

the neo-liberal approach to health care?’ by outlining the aspects and beliefs

constituting this approach. The second part of chapter five will demonstrate how

aspects of the neo-liberal approach have been manifested in contemporary health

care through for example private health insurance, public-private partnerships, and

management theories and practices.

Chapter six seeks to answer the final research question ‘How does neo-liberalism

affect the underlying values of contemporary health care in the Western developed

world?’ This chapter will seek to analyse the neo-liberal approach to, and effect on,

contemporary health care in Western developed countries. The following concepts

will be analysed:

• The free market in health care

• Health as a commodity

• Individualism, independence and dependency in health care

• Social justice and inequality

Finally, this chapter will discuss the application of neo-liberal principles and

practices in contemporary health care, encompassing private health insurance,

public-private partnerships, and business-management theories and practices.

Chapter seven will present the findings and conclusions reached in relation to the

research questions, as well as suggest the implications for practice and ideas for

future research, and, finally, the contribution of this thesis to existing knowledge and

understanding.

In the following chapter, chapter two, I shall explain the research strategy in this

thesis.

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CHAPTER TWO: RESEARCH STRATEGY

The research strategy in this thesis is that of a philosophical inquiry, which

additionally draws on the discipline of political philosophy. It is a library and desk

research project, not involving empirical research, but instead based upon literature

review and philosophical analysis. Additionally, this thesis is largely concerned with

conceptual, theoretical analysis, as the primary focus of the thesis is that of

analysing and evaluating the social, political-economic and health care delivery

framework promoted by neo-liberalism.

PHILOSOPHICAL INQUIRY

Even though philosophical inquiry is a method of inquiry and rational critique with a

long historical tradition, very little has been documented about how it is

accomplished. This chapter will seek to provide an account of the method of

philosophical inquiry.

The lack of documentation on the practicality of philosophical inquiry might stem

from the rather elusive and abstract nature of philosophy itself. As Isaacs (1978)

describes “Often in the practice of philosophy a methodology of enquiry has been

taken for granted…” (p. 214). Furthermore, Isaacs (1978) states “The attempt to

explain what philosophy is promotes argument and conjecture. The answer to the

question ‘What is philosophy?’ is itself problematic” (p. 240). It seems, therefore,

that somehow it is the inexplicable nature of philosophical inquiry which also

defines it. However, lately there has emerged a small amount of literature, which

endeavors to describe aspects of this method of inquiry, regarding conceptual theory

and analysis (see e.g. chapters 21, 23, 24, on theory development, literature reviews

and critical analyses in Thyer (2001a)).

Nevertheless, I see it is as a necessary task to articulate some essential characteristics

of philosophical inquiry, to understand the purpose of this thesis. One might say that

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I am attempting to make the nature of philosophical inquiry intelligible (Isaacs,

1978, p. 230).

Firstly, what is evident about philosophical inquiry is that it is a theoretical practice

of thinking. That makes it different from disciplines such as science, which rely on

observation, measurement and experiments (Isaacs, 1978, pp. 218, 239; Nagel, 1987,

p. 4). An important characteristic, therefore, is that philosophical inquiry is based on

reflection and analysis (Lacey, 1986, pp.176-177). Moreover, Feinberg (2005)

describes philosophical inquiry as a creative process, which is a transaction between

the researcher, the problem and the paper or the computer (p. 3). It is a process of

doing philosophy and developing philosophical reasoning skills (Feinberg, 2005, p.3;

Isaacs, 1978, p. 214). What is implied by this process of doing is “…the assertion

that the mastery of the discipline comes about through practice” (Isaacs, 1978, p.

214). The doing of philosophy involves a theoretical method of systematic and

thoughtful investigation of a certain problem. It involves activities such as

discussion, critical analysis, evaluation and reading (Isaacs, 1978, pp. 217-218).

Hence, undertaking a philosophical inquiry requires reflective analysis of literature,

language, meaning and concepts, as well as involvement in discussions, and an

ability to critique and develop frameworks or theories that already exist, and

possibly from this create new knowledge and new theoretical possibilities.

This thesis is based on the doing of philosophy, which involves thinking, reflection,

literature study, and critical analysis to solve the research questions. It is a process of

doing a systematic investigation of the concept of neo-liberalism and contemporary

health care, and it is based on Isaacs’ notion of learning through practice and

Feinberg’s notion of a creative process as a transaction between the researcher, the

problem and the paper/computer.

Yet, what exactly is it that philosophical inquiry explores? Some describe

philosophy as the study of the most abstract and general questions about the world

(Lacey, 1986, p. 177; Pence, 2000, p. 42). Moreover, those questions for which there

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are already definite answers are often placed within the sciences, whilst those, which

at the present provide no definite answers often remain to form the sphere of

philosophy (Russell, 1980, p.90). Through contemplating these abstract and general

questions, philosophical inquiry seeks to provide theory, often universal, to

practices, and it is therefore concerned with the development of theories (Blaikie,

2000, pp. 73, 144; Isaacs, 1978, p. 239). Nonetheless, it may not be the task of

philosophy to provide definite answers, as an ultimate question within philosophical

inquiry is if there really exists universal and certain knowledge, but to provide

possible solutions to the questions that are investigated (Russell, 1980, pp. 1, 92-93).

Naturally, this gives philosophy a reason to continue its inquiry. Furthermore,

philosophy questions the very common ideas that people use everyday without

further consideration, such as ‘What is time?’ or ‘What is death?’ (Nagel, 1987, p.

5). Posing these questions entails critical contemplation on the human existence

(Martinsen, 2006, p. 142). The logic of asking these questions can be described as a

theoretical activity of trying to understand the way things are in this world and why

(Isaacs, 1978, p. 217).

Philosophical inquiry additionally encompasses critical evaluation of questions of

belief that are central to human life, for example considerations about the ways in

which reality is conceived (ontology or metaphysics), and the criteria of accuracy of

belief (epistemology) (Isaacs, 1978, pp. 218-219, 242). It is therefore assumed that

we as people are beings who have a ‘sense of self’, and that we can hold moral

values and make life-choices (Taylor, 1985b, p. 97). The value of philosophical

inquiry in this context, is its contribution to the clarification of the interpretive

frameworks of understanding, or concepts of beliefs, which determine our moral

values, our inter-human relationships, our sense of self and identity, and our very

being and becoming as human beings (Dr. Peter Isaacs, personal communication,

June 7, 2007). An interpretive framework (encompassing for example culture and

moral beliefs) is the framework that guides people in their thinking and actions in

every-day life. The notion of an interpretive framework is founded on the

phenomenological tradition, which sees humans as embodied and embedded beings

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in a complex world of relationships and communities, time and history, language,

spirit, and a framework (horizon) of values (Isaacs, 2006a, p. 1). (I shall return to

this in chapter four). Through these frameworks, we interpret and understand the

world around us.

This thesis is based on an analysis of the normative interpretive framework of neo-

liberalism as an ideology that outlines what moral values and practices should be

predominant and cultivated to create a good life and society for human beings. The

neo-liberal framework deeply affects our identity as humans, our sense of self, and

our relations with others, as well as our moral values and beliefs, as I will

demonstrate in the coming chapters.

Language is the central tool used to express, impose or understand these beliefs or

frameworks (Isaacs, 1978, p. 242). It is through the medium of language that our

moral values and our interpretive frameworks become manifest or embodied in the

human world; and it is through language that we express and realise a certain way of

being in the world (see Taylor, 1985a, pp. 218-219, 234). The dominant tradition of

analytical philosophy within the English-speaking world has been preoccupied with

the phenomenon of language, and sought to provide logical and rational methods to

evaluate, analyse, and clarify the meaning of language and arguments (Isaacs,

2006e).

On the other hand, the phenomenological tradition views language as a medium of

expression, understanding and interpretation. Through language we find meaning;

language is a part of being human (Taylor, 1985a, p. 216). Language is additionally

linked to the notion of power. For instance, one might suggest that neo-liberalism

has been advanced through purposely using a specific language describing specific

ideas such as ‘the consumer’, ‘free choice’, and ‘individual freedom’, as well as

through the language of management theories and practices. Hence, the language of

neo-liberalism has become a medium of power (based on Taylor in Isaacs, 2006g, p.

4), which has been incorporated into the understanding and interpretation of people’s

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every-day lives, as well as shaping the understanding of social and political life. The

power of the neo-liberal language often lies in that it remains taken for granted and

that it is not critically challenged. One of the aims of this thesis is therefore to

analyse neo-liberalism through a critical analysis of its use of language.

As stated, philosophical inquiry is manifested in this thesis through the articulation,

evaluation and analysis of neo-liberalism, an ideology and political-economic and

social framework which is intended as universally applicable. Neo-liberalism is

widely applied as a normative belief-system about what it is to lead a good life and

how to organise human society. Neo-liberalism has had a persuasive effect, as in

many societies it has been incorporated into common-sense ways of how people

interpret and understand the world, often through language, and hereby it has

become a socially shared ‘truth’ (Harvey, 2005, p. 3; Waitzkin & Iriart, 2004, p.

155). This socially shared truth may become part of a ‘social imaginary’, a common

and shared understanding of the social existence and practices that make up the

social life in a society (Taylor, 2002, p. 106). In this sense, neo-liberalism can be

interpreted as a system of belief and practice, a shared truth, which guides the

interpretation of everyday life in many Western societies. It has led to a new

understanding of the purpose and practices of contemporary health care, as we shall

see in the following chapters. The power of this neo-liberal belief-system lies in that

it is taken for granted (Hofrichter, 2003, pp. 25-26).

Many experts in health care, as well as politicians, researchers, and scholars,

contribute to the construction of the neo-liberal ‘shared truth’ by actively promoting

discourses, arguments and policies underpinned by the neo-liberal approach to health

care. This is for example manifested by pointing to a ‘crisis’ in health care as

stemming from financial causes, and by promoting managerialism and

administrative rationality as a way to resolve this crisis (Waitzkin & Iriart, 2004, p.

155). In addition, the neo-liberal legitimacy is manifested by stressing the

inevitability of a free market as the best regulator of cost, quality and efficiency of

health care services; as well as emphasising the virtues of the liberty, choice and

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right of the individual consumer, and the necessity of making labour relations

flexible to achieve efficiency, productivity and quality (Waitzkin & Iriart, 2004, p.

155). All of these claims represent a profound reconstruction of common sense

(Waitzkin & Iriart, 2004, p. 156). In Western developed nations, the present-day

social and political focus on inefficiency in the management of public health care

services, the shortages in resources, the excessive bureaucratisation, and escalating

costs, have become self-evident truths shared by patients and health care workers as

part of their lived experiences, and finally been turned into justifications for political

reform proposals (Waitzkin & Iriart, 2004, p. 156).

The above exemplifies how ideas of the neo-liberal belief-system may become a

socially shared truth, incorporated into the common sense of peoples’ lives.

Furthermore, concepts such as liberal trade, free markets, efficiency, profit and the

choice of the consumer (which are central values in neo-liberalism) are all common

concepts that many people use in their everyday language or at the workplace, not

necessarily contemplating what the meanings and impacts of these concepts are.

As mentioned in the introduction, I find it interesting, as a health professional, to see

how neo-liberal ideas, practices and language are widely accepted without a deeper

analysis of the ethical foundations and consequences. Thus, this thesis is an attempt

to challenge, on a philosophical-ethical level, the neo-liberal approach to health care

by a theoretical, philosophical activity of articulating, analysing and critically

evaluating the belief-system of neo-liberalism, and by presenting considerations

about the ways this ideology and practice may affect health care. The research

strategy in this thesis therefore draws on traditional analytical philosophy, due to a

focus on analysis and evaluation of the meaning of the language and arguments of

neo-liberalism. Nevertheless, this thesis additionally attempts to incorporate other

sources of ontological and relational moral orientations, and therefore this thesis

does not fully support the traditional analytical view of rationality as the goal and

basis of human thought and interaction. For example, this thesis includes the process

of articulation, which I shall explain in the following.

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Articulation

For any way of thought to become dominant, a conceptual apparatus has to

be advanced that appeals to our intuitions and instincts, to our values and

our desires, as well as to the possibilities inherent in the social world we

inhabit. If successful, this conceptual apparatus becomes so embedded in

common sense as to be taken for granted and not open to question. (Harvey,

2005, p. 5)

Apropos the above, an important task for philosophical inquiry is to articulate and

bring into light that which is unspoken and has remained taken for granted (Taylor in

Abbey, 2000, p. 41). Canadian philosopher Charles Taylor (in Abbey, 2000) argues

that many values and moral frameworks, which are part of people’s everyday life,

often remain unacknowledged and unspoken (p. 41). It is a task for philosophical

inquiry to be concerned with these questions of moral value, and to make sense of

the logic and language of values and beliefs, and their place in human life (Isaacs,

1978, p. 238).

Taylor (1984) states

Philosophy is an activity which essentially involves, among other things,

the redescription of what we are doing, thinking, believing, assuming, in

such a way that we bring our reasons to light more perspicuously, or else

make the alternatives more apparent, or in some way or other are better

enabled to take a justified stand on our action, thought, belief, assumption.

(p. 18)

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As emphasised, neo-liberalism is widely applied as a normative belief-system,

containing a moral framework, outlining what it is to lead a good human life and

how to organise a human society (including health care services). The moral

framework of neo-liberalism often seems to be unspoken, yet incorporated into

people’s every-day lives, and many of its values have become taken for granted.

Hence, it is the aim of this thesis to articulate, bring into light, and critically evaluate

the neo-liberal moral framework.

The task of articulation may also include showing “…publicly the theoretical

implications of a proposal…” (Isaacs, 1978, p. 239), which in this case concerns

analysing the political proposal of adopting a neo-liberal approach to providing

health care services, which could have consequences for both health care

professionals and clients. In this thesis, I take on the task of articulating and making

sense of the logic and language of the neo-liberal ideology and theory, as well as

showing the implications of a neo-liberal approach to health care. This thesis is

additionally an attempt to create a debate about the neo-liberal impact on health care,

which is also an important part of the articulation process (Abbey, 2000, pp. 42-43).

Even though neo-liberalism is generally framed in terms of its economic components

and effects, it is a conceptual framework which is deeply bound to socio-cultural

norms and taken-for granted assumptions of societies (Mitchell, 2001, p. 166). Neo-

liberalism is not only economically based, but also based on a social philosophy, as

it promotes a specific type of society; a libertarian society (Nevile, 1997, p. 15). “It

is a prescription for ordering social relations that increasingly pervades

contemporary public and private institutions and the lives of individuals” (Ericson,

Barry & Doyle, 2000, p. 532). Moreover, the introduction of neo-liberal policies,

such as privatisation, free choice and managerialism, has gradually transformed

‘common sense’ conceptions of health, illness and health care services (Waitzkin &

Iriart, 2004, p. 151). For instance, under neo-liberalism, health care is no longer a

universal right whose fulfillment is a state responsibility, but a commodity good for

the marketplace, available as demanded (Waitzkin & Iriart, 2004, p. 151).

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The moral values which underpin neo-liberalism are often not consciously

considered or evaluated either by health care professionals or by patients.

Nevertheless, many health care professionals and patients would be able to recognise

the notions of efficiency, accountability, commodification, consumer’s choices,

private health care schemes and the downsizing of public health services. This is an

example of how one is able to experience the impact of, in this case, neo-liberal

ideas and practices, without being able to know or articulate exactly what it is,

because it is a belief-system, which is taken for granted and rarely articulated.

Yet, the process of articulation can never be complete; it remains a continuing

process (Taylor in Abbey, 2000, p.46). The results of this research project should

therefore be regarded as an attempt to articulate a possible explanation to the neo-

liberal approach to, and effect on, health care.

A return to ontology and human engagement

This thesis seeks to add to the branch of contemporary philosophical literature which

seeks to restore the notion of ontology as significant to philosophical inquiry.

Ontology is the area of philosophy which is concerned with the nature of ‘being’

human, our human existence (Kearney, 2003, p. 299; Oxford dictionary, 2001, p.

619). The emphasis on reason, rationality, and the foundations of knowledge

(epistemology) is still dominant in current moral philosophy, and an emphasis on

ontology is largely absent from this tradition (Isaacs, 2006f, p. 3; Isaacs, 2006h, p.

1). This is due to the attention on epistemology in the traditional analytical model,

and to the task of seeking to establish certain and right knowledge which might

provide for right decision-making and right autonomous and rational action by the

autonomous self (Isaacs, 2006h, p.1). Yet, this view is characterised by thinking of

the human being as detached, a-cultural and a-historical (Isaacs, 2006i, p. 8). The

notion of the rational self-interested individual is also heavily emphasised in neo-

liberalism.

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The notions of rationality and an autonomous self may however provide some

problems for human life and relations within the context of health care. This

approach is a move away from the complex reality of human interactions. The

dominant analytical philosophical paradigm in English speaking countries does not

recognise that we are part of a shared human condition, and that we as humans are

engaged in a contextual life involving social relations, moral relations, nature, time

and history and more (Isaacs, 2006a, p.1, Isaacs, 2006h, p. 4). Conversely, European,

continental philosophers have acknowledged the complexities of the human

condition, and brought ontological considerations into the philosophical discourse

through the traditions of hermeneutics and phenomenology (see e.g. continental

philosophers like Hans-Georg Gadamer, Jürgen Habermas, Knud Ejler Løgstrup and

Maurice Merleau-Ponty, or the Canadian philosopher Charles Taylor). One might

however argue that the context and complexities, as outlined above, are utterly

important to human life, and that due to the reality of vulnerability and illness in

human life, all of these aspects become particularly visible in health care. Therefore,

this thesis will strongly argue in favor of an ontology, a shared human condition and

a human engagement in contemporary health care that stands as an alternative to the

neo-liberal emphasis on individualism, rationality and detachment. I will analyse this

theme further in this thesis, particularly in chapter four, where I will discuss the

ethics and fundamental moral values of neo-liberalism (especially in relation to the

emphasis on individualism and the autonomous, detached self in neo-liberalism), and

in chapter six, where I will discuss the human reality of vulnerability and

interdependency in health care.

POLITICAL PHILOSOPHY AND THEORY

As already noted, neo-liberalism is a political-economic theory and ideology, and a

normative belief-system, that has had a pervasive impact on modern human life, as it

outlines moral values and practices that should be cultivated to create a good life and

society for human beings. Furthermore, I have noted that the language of neo-

liberalism has become a medium of power, shaping the understanding of social and

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political life. Thus, neo-liberalism has had, and continues to have, an ethical, social

and political impact on human life. For these reasons, the research strategy of this

thesis additionally draws on political philosophy and political theory. These

disciplines are relevant to this thesis in several ways, as I will outline in the

following.

Political philosophy and theory study, interpret and contribute to knowledge

concerning politics, political systems, and the purpose of the state and government

(Lacey, 1986, pp. 181-182; McLean, 1996, p. 385; McNabb, 2004, p. 3; Reeve,

2003; Shapiro, 2005, p. 180). Political theory reflects on and seeks to understand

political phenomena, and reflects upon power in both public and private forms

(McLean, 1996, p. 388; Miller, 1987, p. 385). Political philosophy explores political

implications of particular disputes, and it tries to make sense of what we as humans

do and what we ought to do; and additionally it concerns itself with the problem of

the legitimacy and role of the state in society (Little, 2002, pp. xiv-xv, 29; McLean,

1996, pp. 384-385).

Political philosophy and theory are especially significant as regards neo-liberalism,

as neo-liberalism can be described as a political-economic theory and ideology, and

therefore conditions political inquiry to interpret the particular political meaning and

approach of neo-liberalism. In this thesis, political philosophy and theory moreover

contribute to the knowledge about and interpretation of neo-liberalism, regarding for

example the role and legitimacy of the state/government versus the free market, and

political and philosophical ideas of power and the freedom and rights of the

individual as part of a liberal society (see chapters three and four). Furthermore,

political philosophy is relevant to the interpretation of the neo-liberal normative

belief system that proposes what we as humans ought to do, and how we ought to

organise our society.

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ANALYSIS STRATEGY

Philosophical research may seem somewhat unstructured and abstract in its nature.

Nevertheless, there is a strategy to analysis in such a project, even if this might not

be as specific and straightforward a process as seen in other disciplines.

The ‘data’ in this thesis is collected through reviewing literature (Blaikie, 2000, pp.

183-184). This is common in philosophical inquiry (Denscombe in McNabb, 2004,

p. 452; McNabb, 2004, p. 452). In effect, this thesis includes a large literature

review, evaluating and analysing the current state of knowledge and literature in the

fields of neo-liberalism and health care, and from that creating new knowledge and

proposing solutions to the research questions (based on Blaikie, 2000, pp. 23-24, 71;

Sowers, Ellis & Meyer-Adams, 2001, p. 401).

The literature review/data collection will include material such as professional

journals (mostly electronical), unpublished university thesis (at Master’s and

Doctoral levels), published and unpublished books in several relevant fields (e.g.

within health care, philosophy, ethics, economics and politics), reports, conference

papers, and organisational web-site material (such as the WTO, WHO and IMF).

The selection and analysis of the literature will largely be guided by the research

questions (Blaikie, 2000, p. 71; McNabb, 2004, pp. 70, 135). This is a method,

which encompasses organising and classifying the literature to a guiding concept,

such as the problem, issues, or the research topic objective (The literature review: a

few tips on conducting it, n.d., ¶ 1). This is a purely analytical, conceptual method,

engaging in discussion of the state of knowledge and expanding the conceptual

frameworks already existing. It is a method encompassing the doing and practice of

thinking, analysing and synthesising. For example, in this thesis, I seek to expand the

knowledge about neo-liberalism, by analysing and evaluating the conceptual

framework of neo-liberalism, especially in relation to contemporary health care.

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Furthermore, universal literature review techniques will be central to the analysis

process, encompassing:

• that the literature provides necessary information

• inclusion criteria such as the relevance of the literature to the research

questions, and the significance and contribution of the literature to

understanding the main topics in the thesis (neo-liberalism and contemporary

health care in Western developed nations)

• the relevance of the literature to demonstrating the need for the research

project

• communicating established knowledge and ideas in the specific area of

research

• the credibility, validity, scope and currency of the literature

(Sowers et al., 2001; The literature review: a few tips on conducting it, n.d.).

Research strategy reflection

As philosophical inquiry is an established practice, this research project is not

innovative in relation to method of inquiry or analysis strategy. It is, however,

innovative in that it is documenting the method of doing a philosophical inquiry, a

process that has seldom been documented previously. This chapter is, therefore, a

contribution to the discipline of philosophical inquiry. Moreover, the very inquiry

into the topic of this thesis is innovative; it explores new territory significant to the

fields of contemporary health care, philosophy and politics. The philosophical

research strategy is a suitable method to solve the research questions, as the research

questions are of a philosophical and political nature, as well as being basic questions

with a broad universal scope.

The nature of this research, philosophical and conceptual inquiry and analysis, is

necessary as the specific topic of the neo-liberal approach to, and effect on,

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contemporary health care in Western developed countries has not distinctively been

investigated in depth previously. This basic inquiry is required to achieve a

theoretical understanding of the neo-liberal framework and its approach to health

care, and to provide an understanding about the impact of neo-liberalism to health

care (based on Thyer, 2001b, p. 365). Furthermore, this thesis holds significance in

its attempt to communicate the neo-liberal effect on contemporary health care

services.

Limits in this method of inquiry are that it can be a viewed as a somewhat

unstructured process, though this process is a part of philosophical inquiry (Blumer

in Blaikie, 2000, p. 74; Feinberg, 2005, pp. 2-7). Some have even disputed the role

of plausibility in philosophical inquiry (Smart, 1996). This research strategy is

purely theoretical and does not include empirical research. Finally, this type of

inquiry can leave research questions open or even add more questions, and not

necessarily provide ‘set’ answers to a problem. Therefore, as discussed, it may often

only provide further questions and possible solutions to problems.

However, this method’s major strength is that it challenges the ‘known’, the current

state of knowledge. It frequently creates new knowledge, sometimes universal, and

provides new theory to practices (Blaikie, 2000, pp. 73). Furthermore, this research

strategy will explain some fundamental concepts, which are central to be able to

raise general awareness amongst people, and create changes in society (Pence, 2000,

p. 42). The basic nature of philosophical, conceptual inquiry is necessary to

understand and describe a phenomenon, which in turn provides the basis for further

investigation and empirical application (Blaikie, 2000, p. 73; Thyer, 2001a, p. 367).

Additionally, this research strategy gives the researcher flexibility and encourages

creative thinking and problem-solving (Feinberg, 2005, p. 3). It is open to

subjectivity (Russell, 1980, p. 8). Furthermore, it is a method of inquiry that is able

to suggest multiple possibilities to a problem, and, as Russell (1980) expresses it, to

free us from the tyranny of custom and dogmatism (p. 91).

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It is my aim that the understanding, analysis and conclusions put forward in this

thesis, concerning the framework of neo-liberalism, and the neo-liberal approach to

health care, will contribute to the knowledge about the current environment in which

contemporary health care is situated, and will, further encourage empirical research.

Additionally, it is possible that the analysis and conclusion in this thesis will be

useful for policy changes in health care.

Concluding remarks

In this chapter, I have attempted to present an account of the nature and method of

philosophical inquiry. It is my hope that this chapter will clarify issues relating to the

research strategy of this thesis, and contribute to the understanding of the

presentation of the text, analysis and theory in the following chapters.

Finally, I would like to stress that the analysis and conclusions put forward in this

thesis is not meant to represent a fixed moral theory about how health care ought to

be viewed, although I will make some normative claims throughout the text. Rather,

this thesis is meant as a framework for reflection on the context of contemporary

health care and the influence of neo-liberalism.

The following chapter will articulate the neo-liberal interpretive framework, by

presenting an account of the neo-liberal ideology and political-economic theory, and,

furthermore, discuss contemporary neo-liberal influence.

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CHAPTER THREE: NEO-LIBERALISM

This chapter is an account of neo-liberalism. Firstly, I shall outline the historical

context within which neo-liberalism emerged, where after I shall describe neo-

liberalism as an economic and political theory, neo-liberalism as an ideology, and

finally discuss contemporary neo-liberal influence. To grasp the neo-liberal approach

to and influence on health care, it is important to appreciate all these aspects of neo-

liberalism.

THE HISTORICAL CONTEXT

Neo-liberalism has emerged as a theory, ideology and practice over the past fifty-

sixty years. The following is an account of some historical and political key factors

that have contributed to its development.

Some scholars argue that neo-liberalism developed from the neo-classical economics

model (dominant at the end of the eighteen-century/ beginning of the twentieth-

century) (Bell & Head, 1994, p. 37; Edwards, 2002, p. 38). This model advocated

perfect competition in free markets and minimal governmental intervention as the

best way for macroeconomic stabilisation and economic growth (Goodin, Headey,

Muffles & Driven, 1999, pp. 126-128; Quiggin, 1997, ¶ 9, 11). Furthermore, some

scholars argue that neo-liberalism draws strongly on Adam Smith’s economic

theories and the laissez-faire concept (Friedman, 1981; Jang, 2006, p. 2; McGregor,

2001, p. 86). Thus, some describe neo-liberalism as ‘a new line on an old story’,

drawing on the theories of classic liberalism (Esping-Andresen, 1990, p. 9; Scholte,

2005, p. 38).

To understand the emergence of neo-liberalism, we need to investigate its origins in

the industrial revolution, as an important factor for the advancement of neo-

liberalism was the historical development from industrial capitalism to modern

consumer capitalism.

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From industrialised capitalism to consumer capitalism

The industrial revolution began in Britain in the latter part of the eighteen century,

and took hold throughout the nineteen century. It was a process where land and labor

were ‘commodified’, as small farms were transformed into massive holdings owned

by landlords, and goods and services were made saleable, which resulted in the

abolition of the traditional social protection and obligations between owners of the

land and servants/workers (Dowd, 2000, pp. 20-21). The dispossessed rural families

and the poor (often from poorhouses) now found work in factories, mines or mills,

often under dreadful conditions for little pay, a situation which eventually led to the

creation of organisations, unions and socialist movements (e.g. the British Labor

Party) (Bauman, 2003, p. 57; Dowd, 2000, pp. 23-24, 70-71).

In this period, there was a boom of new technological inventions such as the steam

engine, and in 1815 the first modern factory opened in Britain (Dowd, 2000, pp. 24-

26; Södersten, 2004, p. 3). Additionally, there were huge advances in transportation,

for example with the creation of railroads and steamships, which enabled a rapid

global expansion of trade and industry. These developments facilitated

intensification in industrial production and global trade (Södersten, 2004, p. 3). By

the late nineteen-century economy and trade exploded as large-scale mass

production and fast transportation gave way to increased agricultural and industrial

production, provided by cheap machinery, metals, fuels and food. The world saw the

beginning of large corporations and extensive international trade (Dowd, 2000, pp.

26, 48-49).

As the industrial revolution became fully established at the end of the nineteen

century, neo-classic economics was developed as a theory of how to embrace the

boom in trade and economy (Dowd, 2000, p. 82). The neo-classical ideology

emphasised three main aspects: rational self-interested consumers, rational profit-

maximising firms, and competitive markets (Stiglitz in Dowd, 2000, p. 84). This

theory guided economic policy up until the 1930’s.

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At the end of the nineteen century/ beginning of the twentieth century there was a

further development in industry, as electricity took over from steam power, and the

chemical industry expanded. These two developments made a big impact on

consumer and capital goods as well as services and transport (Dowd, 2000, p. 49).

However, even if Britain was the initiator of the industrial revolution, other nations

quickly followed with growing wealth and industry, for example, the United States,

Germany and France; and by the beginning of the twentieth century, the United

States was becoming the dominant base of mass production, consumption and giant

firms (Dowd, 2000, pp. 55-56; Södersten, 2004, p. 2).

The industrial revolution hence enabled the mass production of consumer goods,

defining the modern era and laying the foundations for consumer capitalism.

The next important era defining the development of neo-liberalism was the period

after World War 2. This period, up until the 1970’s, was characterised by the

expansion of economic activity, technological advances in industry, production,

agriculture, transportation and services, and a massive increase in world trade and

investment. It was also a period emphasised by the hegemony of the United States,

which developed into the leading world economy (as it had not suffered the same

devastation from the two World Wars as its European counterparts), and became the

centre of economic development, consumerism and mass communication/mass

media (Dowd, 200, pp. 141, 143, 147, 167).

The post World War 2 era

The economic roots of neo-liberalism began with the re-establishment of

international monetary stability and reconstructions required after World War 2.

Major institutions such as the Bretton Woods Agreements, the IMF, the GATT (now

incorporated into the WTO), the World Bank, and the Marshall Plan (which re-

established Europe as a trading market) were created to achieve stability,

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development and reconstruction (George, 1999, ¶ 3-4; Gill, 2003, p. 94; Harvey,

2005, p. 196; Kitching, 2001, pp. 52-54; Slaughter, p. 25; Woods, 2000, p. 205).

In this period, the welfare state was the dominant idea and practice in Western

countries (George, 1999, ¶ 4). The welfare state is a system where the state assumes

the protection of the health and well-being of its citizens, based on the idea that all

citizens have a right to basic services such as education and health care (Henriksen

& Vetlesen, 2000, p. 19; Oxford dictionary, 2001, p. 691). The welfare state became

prominent in the twentieth century with its origins dating as far back as before World

War 1 (Pierson & Castles, 2000, p. 2). Western European countries became pioneers

in developing welfare arrangements (Navarro & Shi, 2003, p. 197; Södersten, 2004,

p. 2). In essence, welfare state arrangements were introduced to enhance income

security and provide social services for the majority of the citizens (Lindbeck, 2004,

p. 149; Södersten, 2004, p. 17). Government intervention was additionally seen as a

way of stabilising the national economy and avoiding market failure (Folland et al.,

2007, pp. 407, 409, 412).

Welfare state arrangements have typically presupposed substantial governmental

responsibility for the provision of social security, education, health care, housing,

unemployment insurance, pensions, and family allowances and more (Vivekanandan

& Kurian, 2005, p. 1). Yet, welfare states have taken diverse forms and undertaken

different tasks depending on the country (Pierson & Castles, 2000, p. 4), and no

single welfare state model can be applied to all countries transcending the diversity

of cultures and continents (Vivekanandan & Kurian, 2005, p. 11). (See e.g. Esping-

Andersen’s (1990) model of the three contemporary welfare states regime types

(conservative, liberal and social democratic), or Leibfried’s (2000) division of

welfare state types (Scandinavian, Anglo-Saxon, ‘Bismarck’, and ‘Latin rim’ welfare

arrangements (pp. 191-194)).

Welfare states have in general been seen as meeting social needs, as alleviating

social risks, as providing necessities, as promoting solidarity, and as bringing about

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economic and social equality, egalitarianism, and social rights (Bose, 2005, p. 17;

Das, 2005, p. 20; Vivekanandan & Kurian, 2005, pp. xiv-xv, 12; Wolff, 2006, p.

434). Welfare states have been seen, moreover, as balancing and structuring

conditions of class and power relations of capital and labour in society (Esping-

Andersen, 1990, pp. 23, 55; Offe, 2000, p. 67). Nonetheless, the welfare state can

also incorporate policies and practices of punishment or stigmatisation of welfare

recipients (Esping-Andersen, 1990, pp. 23-24; Titmuss, 2000, pp. 46-48). In other

words, one cannot automatically assume that welfare states reduces inequalities, or

develop egalitarianism and social rights, and it is not certain that the programs of the

welfare state offers protection for those who ‘suffer’ the most and are in need of

such arrangements. Nevertheless, in many Western developed countries, the welfare

state has become profoundly embedded in people’s everyday lives (Esping-

Andersen, 1990, p. 141).

Since the 1970’s, welfare states have been challenged, and there have been several

critical voices of welfare arrangements (Mann, 2000; Södersten, 2004, p. 96). One

such voice has been neo-liberalism. Moreover, the Western world came under

immense economic pressure in the late 1970’s- early 1980’s, due to the oil crisis and

the crisis in the world economy, which led to increasing unemployment, monetary

inflationary pressure and stagflation in the United States and Western Europe (Bose,

2005, p. 15; Green-Pedersen, 2004, p. 127; Södersten, 2004, pp. 13-14, 97-98).

Furthermore, poor economic performance, changing family patterns, ageing

populations and globalisation are factors that since the 1980’s have put the welfare

state under additional strain (Green-Pedersen, 2004, p. 128).

In addition to the concept of the welfare state, the two dominant economic and

political theories in the post World War 2 era were Fordism and Keynesianism.

Together with the welfare state, these two models served as the backdrop for the

development of neo-liberalism.

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The Fordist model was the dominant capitalistic model in the mid-twentieth century

(T. Smith, 2000, pp. 1, 3). It materialised in its purest form in the United States, but

spread to other parts of the world, such as Europe, aided by the political power and

economic hegemony of the United States (Jessop in T. Smith, 2000, p. 1; Storper,

1994, p. 198; Tolliday & Zeitlin in T. Smith, 2000, p. 1). Fordism centralised around

the mass-production of commodities in large firms, conditioning the emergence of a

mass consumer market. Moreover, Fordism was distinguished by a focus on

marketing and economic profit. Scientific management theories (e.g. Taylorism)

were introduced as a way to control the production and labor force, as well as

making the production more efficient (Jessop in Amin, 1994, pp. 9-10; T. Smith,

2000, pp. 4-6, 76-77). In this period, capital-consumer relations revolved around

mass-production and mass-consumption (T. Smith, 2000, pp. 6, 77).

The other dominant model, the Keynesian model, was mainly based upon the works

of the British economist John Maynard Keynes (Barraclough, 1977, p. 105; Johnson,

1977, p. 88). The term ‘Keynesianism’ has been applied both to the conclusions of

Keynes’ major work The General Theory of Employment, Interest and Money

(1936), and to suggestions that, although not found in this work, often have been

derived from its arguments (Eatwell in Eatwell, Milgate & Newman, 1987, p. 46).

One of Keynes’s central themes and concerns was employment (Barraclough, 1977,

p. 105). Barraclough (1977) describes Keynesianism as:

If, for the industrialised countries (but not for the world as a whole), the

fifteen years between 1948 and 1963 were a time of unparalleled growth,

there is no doubt that the commitment to growth and full employment, and

the realisation that government could influence both, were a major factor;

and this commitment had its roots in Keynes. Of course, it was not

maintained consistently; but it is what we mean by the Keynesian

Revolution. (p. 106)

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The Keynesian model was a model of macroeconomic management of the national

economy (Amin & Malmberg in Amin, 1994, p. 242). Keynesianism emphasised the

interventionist and responsible role of the state in the management of economic

growth (Eatwell in Eatwell et al., 1987, p. 46; Quiggin, 1997, ¶ 9). The

state/government should manipulate taxation and public spending to regulate

demand, and in that way stabilise fluctuation in the trade cycle (Winkler, 1977, p.

78). This position derived from the Keynesian conclusion that there was no

automatic tendency in the market economy that would ensure that the level of output

would correspond to that which would sustain full employment (Eatwell in Eatwell

et al., 1987, p. 46). Rather, the state should be responsible for managing the overall

level of expenditure in pursuit of full employment (Eatwell in Eatwell et al., 1987, p.

46).

Under ‘Keynesian welfarism’, state provision of goods and services to the national

population, such as education and health, was understood as a means of ensuring

social well-being to the public (Larner, 2000, p. 3). Keynesian welfare state polices

dominated Western societies in the period from the 1940’s to the 1970’s (Bessant et

al., 2006, p. 39).

The rise of neo-liberalism

Neo-liberalism emerged as a response to the post war Fordist/Keynesian economic

and political practices, and as a reaction towards the welfare state (Gamble, 2006, p.

22; Harvey, 2005, pp. 20-21). The transition from one hegemonic model, the

Keynesian/ Fordist, to another, the neo-liberal, was a shift from the welfare state

towards a political agenda that favoured the unregulated operations of the free

markets (Larner, 2000, p. 4).

During the late 1960’s, early 1970’s, the Keynesian/ Fordist models of governing

suffered multiple crises (Bessant et al., 2006, p. 139; Castells in Slaughter 2005, pp.

27-28, Smith, 2000, pp. viii). The post war economic development in the Western

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world stagnated, and the world experienced serious oil shocks in the early 1970’s

(Castell & Henderson in Slaughter, 2005, p. 29; Slaughter, 2005, p. 27; Turner,

2006, p. 96). Western countries struggled with high unemployment and inflation

(Bessant et al., 2006, p. 139; Robison, 2006b, p. 3). This situation forced a shift in

ideology. Bessant et al. (2006) term it a ‘paradigm shift’ in the economy of many

Western societies (p. 139). During this period, the ideology of neo-liberalism found

solid ground, supported by political mobilisation and a global network of right-wing

think thanks (Bessant et al., 2006, p. 139; Slaughter, 2005, pp. 28-29). Neo-

liberalism was in this context seen as a radical attempt to resolve the economic crisis

of the 1970’s (Armstrong et al. in Jang, 2006, p. 3; Offe, 2000, pp. 68-69).

Peck and Tickell state, “The collapse of Fordism-Keynesian led to a crisis in which

the nation state was decentred and its capacity to intervene eroded” (p. 282). In this

sense, neo-liberalism developed as a critical reaction to the post-war Keynesian

state-intervention economics, welfare provisions and labour movements in Western

countries (Jang, 2006, pp. 2-3). Neo-liberal advocates argued that the growth in state

expenditures and deficits, which many western countries experienced due to the

development of the welfare state, and the large labour unions with their claim for

higher wages, were destructive for the economy (Bessant et al, 2006, p. 140).

During the 1960’s and 1970’s ‘free-market’ think tanks and advocacy groups were

created in the United Kingdom and the United States (Harvey, 2005, p. 22).

Additionally, influence by intellectuals and economists such as Friedrich Von Hayek

and Milton Friedman contributed to the acceptance of neo-liberalism (Harvey, 2005,

p. 8; Helleiner in Jang, 2006, p. 11; Hodgson, 2005, p. 548). Friedman was a strong

advocate of the free, competitive market, and personal freedom, and he had a close

connection to the neo-liberal group of economists called ‘the Chicago boys’

(Harvey, 2005, pp. 8, 20). Von Hayek was also a strong advocate of the free market

and liberty (Rutherford, 1992, p. 203). Both argued that the market is the key to the

spread and success of democracy, prosperity and human freedom (Callahan &

Wasunna, 2006, pp. 10-11). Furthermore, both were opponents to Keynesian, state

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interventionist economics (Harvey, 2005, pp. 20-21; Rutherford, 1992, pp. 182,

203).

In addition, neo-liberal ideas were underlining trade discussions such as the GATT,

trade agreements within the European Union, the North American Free Trade

Agreement (NAFTA), and the Asia-Pacific Economic Cooperation (APEC). These

agreements encouraged free markets, free movement of capital funds, private

investment, and the limitation of national restrictions of business (APEC, 2006, ¶ 1;

Neoliberalism, n.d., ¶ 7; Ravenhill in Bell & Head, 1994, p. 83).

The implementation of neo-liberalism as a political and economic orthodoxy further

materialised when it became government policy under the Thatcher government in

the United Kingdom and the Reagan government in the United States during the

1980’s (Ayres, 2004, p. 12; Clark, 2002, p. 774; Harvey, 2005, p. 22, Schmidt &

Hers, 2006, p. 70). These two governments became the state instruments for the

implementation of neo-liberal policies and practices.

Prime Minister Margaret Thatcher sought to cure the stagflation that had

characterised the British economy in the 1970’s, and turned to neo-liberalism for

solutions (Friedman, 2000, pp. 104-105; Harvey, 2005, p. 22). The central idea of

Thatcher’s political program was competition between nations, regions, firms and

individuals. Competition was seen as promoting the allocation of resources in

society with the greatest possible efficiency. This implied that many services, which

up to now had been provided by the government, for example British Coal and

British Air, were privatised (Callahan & Wasunna, 2006, p. 32; George, 1999, ¶ 12,

16). Additionally, the Thatcher government promoted the virtues of individualism

and personal responsibility (Harvey, 2005, p. 23). Other main policies under the

Thatcher government included deregulation, reducing public expenditure and debt,

the defeat of inflation, reducing taxes and confronting trade union power (Harvey,

2005, p. 23; McLean, 1996, pp. 493-494). Trade unions and professional cartels

were seen as leading to poor professional performance, lack of value for money, and

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resistance to change within the public services (McNulty & Ferlie, 2002, p. 52).

Essentially, the public sector was viewed as a part of the problem (economic

stagnation) (McNulty & Ferlie, 2002, p. 52).

Even though the Thatcher program was largely based on neo-liberal theory and

ideology, Clarke (2004) points out that Thatcherism was not solely a neo-liberal

project, as it was also influenced by, for example, conservatism (p. 41). Additionally,

core public services, such as the popular national health care system and public

education, were at large kept out of the neo-liberal project (Callahan & Wasunna,

2006, p. 32; Harvey, 2005, p. 88).

The Thatcher government had a special attachment to the Reagan Government in the

United States, which exercised a similar political program (McLean, 1996, p. 494;

Rutherford, 1992, p. 384). The Reagan government believed that markets were a

better way of organising society than governments (Fligstein, 2001, p. 220). The

Reagan government implemented policies which reduced taxes, diminished

governmental regulation of businesses, lessened government interference in the

market, encouraged a free competitive market, attacked union power and changed

federal expenditure away from spending on social programs towards economic

investment in defence programs (Harvey, 2005, pp. 25-26; Rutherford, 1992, p.

384). This program thus applied supply-side economics to stimulate the United

States economy (Rutherford, 1992, p. 384). Neo-liberal policies were also extended

to the health care area in the United States, where market initiatives where seen as a

way to make health care more efficient (Callahan & Wasunna, 2006, p. 9).

What occurred within the UK and US governments at this time was what some

describe as a policy paradigm shift towards neo-liberalism (Ayres, 2004, p. 12; Jang,

2006, p. 3; Roy, 2000). These governments altered their policies towards the neo-

liberal agenda, and, additionally, promoted these policies worldwide by their control

over major institutions such as the GATT, IMF, the G-7 (now G-8) forum (the

advanced capitalistic countries), and the World Bank. In this period, promoters of

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neo-liberalism frequently stated, ‘There is no alternative’ (TINA) to globalised

capitalism [neo-liberalism]. The neo-liberal development was further aided by the

collapse of communist rule (notably the Soviet Union). (The above is based on Gill,

2003, pp. 99, 144; Mittelman in Mittelman & Othman, 2001, p. 3; Slaughter, 2005,

pp. 25, 36, 42, Stiglitz, 2002, p. 13).

Neo-liberal policies continued to be implemented under President Bill Clinton in the

United States and Prime Minister Tony Blair in the United Kingdom (Ayres, 2004,

p. 20; Gill, 2003, p. 125; Roy, 2000; Schmidt & Hers, 2006, p. 70; Slaughter, 2005,

pp. 28, 36, 38). By the late 1980’s and early 1990’s, neo-liberal policies were further

embraced in the United States, as president Clinton viewed free trade as fundamental

to his economic program, (Neoliberalism, n.d., ¶ 10; Scholte, 2005, p. 38).

Moreover, neo-liberalism was promoted as the answer to global problems through

the ‘Washington Consensus’ (consisting of the IMF, World Bank and US Treasury)

during the 1980’s and 1990’s (Kawachi & Wamala, 2007, p. 6; Harvey, 2005, p. 93).

Following the above, scholars claim that there has been a growing acceptance of the

neo-liberal model and market capitalism as the ultimate system for humankind

(Berthoud, 1996, p.133; Cohev, 2005, p. 320).

NEO-LIBERALISM AS AN ECONOMIC AND POLITICAL THEORY

ECONOMIC APECTS

Neo-liberalism positions economics in the centre of human life. It is based on the

assumption that the free market is the way to efficiency, economic growth, profit,

personal freedom and human well-being (Bell & Head, 1994, p. 37; Foldvary, 1998,

p. 145; Harvey, 2005, p. 2; Hodgson, 2005, p. 548; Slaughter, 2005, pp. 35, 39).

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Fundamental ideas

George (1999, ¶ 23) highlights three fundamental ideas of the neo-liberal economic

theory:

• Free trade in goods and services

• Free circulation of capital

• Freedom of investment

The foundation for these ideas is the

…generalized belief that the state and its interventions are obstacles to

economic and social development. This belief may be broken down into a

number of more specific propositions: that public deficits are intrinsically

negative; that state regulation of the labour market produces rigidities and

hinders both economic growth and job creation; that the social protection

guaranteed by the welfare state and its redistributive policies hinders

economic growth; and that the state should not intervene in regulating

foreign trade or international financial markets. (Clark, 2002, p. 771)

The free market, competition and commodification

The free market, with its ‘natural’ law of competition is regarded as the optimum

mechanism for the production and distribution of goods and services.

The relation between demand and supply define the efficiency of allocation of

resources in competitive markets (Folland et al., 2007, p. 69). It is the neo-liberal

belief that in the free market there will be ‘comparative advantage’ and mutual

benefits from competitive trading (Schrader, 2005, p. 18). This principle represents a

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belief that people, firms and countries will focus their productive efforts on the raw

materials, goods or services they can generate most efficiently, and trade these

products for items that cannot be produced locally in an efficient manner (Gershman,

Irwin & Shakow, 2003, p. 180). For the free market to work efficiently there needs

to be minimal intervention from the state. Therefore, free trade in a free market

requires minimal regulation on manufacturing and commerce, and the elimination of

trade tariffs to encourage business and competition (Bovill & Leppard, 2006, p.

394).

Furthermore, competition between businesses in the free market will cause the

competitors to lower prices, benefiting the consumers (Folland et al., 2007, p. 14).

Competition points towards both national and international competition.

International competition is regarded as healthy, and states are collectively urged to

negotiate reduction of trade barriers (Harvey, 2005, p. 66). (The major organisation

undertaking this task today is the WTO). A competitive environment will push

businesses to improve their products and services, and ensuring economic growth,

profit, and low prices (Edwards, 2002, pp. 41, 46). Finally, one of the main aims of

free market practices is to extract a maximum of profit (McCabe, 2004, p. 181).

Some have termed the above views ‘market fundamentalism’ (Ericson, Barry &

Doyle, 2000, p. 533; Jang, 2006, p. 2).

The free market is in neo-liberalism the solution to how the resources (e.g. natural

resources, human labour, technology and capital) will be best utilised to provide the

highest possible standard of living (Edwards, 2002, pp. 38, 42; Fligstein, 2001, p.

231). The free market is regarded as the most efficient and democratic way to obtain

the highest possible state of human welfare from the limited resources available on

earth (Edwards, 2002, p. 39). It is the neo-liberal belief that consumers’ choices will

ideally drive what is produced and offered in the market and how resources are

allocated (Powers & Faden, 2006, p. 100). Neo-liberalism regards this as the most

efficient and democratic way of utilising our resources, as consumers’ choices

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sharpen competition on price and quality in the market, and demand a situation “…

in which particular goods and services that are the most desired by consumers will

be produced with the least expenditure of resources” (Powers & Faden, 2006, p.

101).

Furthermore, the idea is that market participants engage in transactions freely and

face the same opportunities (Friedman, 1981, pp. 8-9; Friedman & Friedman, 1990,

p. 13). Ideally, transactions take place between parties regardless of race, religion,

culture and gender (Edwards, 2002, p. 78).

Government interference in the free market is seen as a disturbing way of misusing

resources and reducing the total welfare of communities (Edwards, 2002, pp. 38, 42-

43, 45, 78; Hill, 1996, p. 98).

Central to this economic theory is the fundamental belief that a high standard of

material living and continuous accumulation of goods and capital will be available to

more people if the neo-liberal doctrine continues to be implemented (Gill, 2003, p.

138). This view is based on the neo-liberal assumption of the ‘trickle down’ theory,

which maintains that elimination of poverty is best secured through free markets and

free trade, as the poor will eventually benefit from a more prosperous society

(Harvey, 2005, p. 65). Therefore, this belief fosters ever-increasing levels of

production and consumption (McCabe, 2004, p. 180).

The economic calculus of neo-liberalism also seeks to bring ever more human

aspects into the market place. Neo-liberalism upholds that most things, even those

formerly uncommodified, can be commodified and brought to the market, and those

aspects that for some reasons cannot, are expelled (Clarke, 2004, p. 35; Gill, 2003, p.

128; Harvey, 2005, p. 165; Smith, 2000, p. 88). That is, every aspect of human life

should essentially be available to commodification.

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POLITICAL ASPECTS

The most important aspect of neo-liberalism as a political theory is how it outlines

the function of the state/government and the free market.

The role of the state, government and the free market

Neo-liberalism emphasises that the role of the state and government should be

minimal; yet, a free market economy requires a strong state (Ericson et al., 2000, p.

532; Gamble, 2006, p. 22; Holmsten, 2003, p. 24; Larner, 2000, p. 3; Richardson in

Slaughter, 2005, p. 35). Nevertheless, neo-liberalism is a theory, which opposes the

welfare state (Clarke, 2004, p. 31; Ericson et al., 2000, pp. 532-533, 538).

Even if the free market creates occasional imperfections, inefficiency, or market

failure (an imbalance between what the market supplies and what the fully informed,

rational consumers demand, which may result in market prices that do not reflect

efficient allocation of resources (Musgrove, 2004, pp. 54-55; Schrader, 2005, p. 43)),

the government is more likely to fail than the free market, according to the neo-

liberal theory (Edwards, 2002, p. 66). Neo-liberalism emphasises that governments

are bureaucratic, inefficient, too costly, and inhibiting individual freedom and wealth

(Bell & Head, 1994, p. 38; Edwards, 2002, p. 90; Von Hayek, 2000, p. 90). The state

and its interventions are therefore seen as obstacles to both economic and social

development (Navarro in Clark, 2002, p. 771).

According to neo-liberal theory, economic growth is best achieved through the free

market, and through liberal trade and private incentive, not through government

spending and regulation (Harvey, 2005, p. 64; Holmsten, 2003, pp. 24-25, T. Smith,

2000, p. 126). Moreover, neo-liberalism upholds that state intervention in the labour

market produces rigidities and hinders economic growth and job creation (Clark,

2002, p. 771). Instead, privatisation, deregulation and competition in the free market

are seen as eliminating bureaucracy, and increasing efficiency and productivity

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(Harvey, 2005, p. 65). The private sector is, according to neo-liberalism, the primary

engine for economic growth (Friedman, 2000, p. 105).

Nevertheless, neo-liberalism acknowledges some legitimate scope for government

intervention (Felix, 2003, pp. 3-4; Hodgson, 2005, p. 562; Von Hayek, 2000). The

role of government should for example be to provide the market with the conditions

to operate freely (e.g. through laws, the military and the police), secure

private/intellectual property rights and the liberalisation of trade barriers, address

unusual market failure, and uphold ‘sound’ fiscal policies to stabilise price levels

(Edwards, 2002, pp. 79; Felix, 2003, p. 3; Friedman, 1981, p. 24; Harvey, 2005, pp.

2, 64-65; Niggle, 2003, p. 60; Slaughter, 2005, p. 39). Additionally, if markets do

not exist in areas such as water, education, health, social security and land, they must

be created, by state intervention if necessary (Harvey, 2005, p. 2); though, once a

market is created, state intervention should be kept at a minimum (Harvey, 2005, p.

2).

Furthermore, private property rights are considered imperative to economic

development and human welfare in neo-liberalism (Harvey, 2005, p. 65, de Austin in

McGregor, 2001, p. 84). In fact, neo-liberalism upholds that the state must use its

powers (police, military and law) to protect individual freedom and rights at all costs

(Friedman, 2000, p. 464; Harvey, 2005, p. 64). In this sense, neo-liberalism depends

on a strong functioning state and on strong legal institutions (Harvey, 2005, p. 117).

Governments should also have a role in protecting vulnerable people, especially

children, from being mistreated by others (Friedman, 1981, p. 24). One of the

greatest advocate of neo-liberalism, Friedrich Von Hayek (2000) maintains that

“There are common needs that can be satisfied only by collective action and which

can thus be provided for without restricting individual liberty” (p. 90). Von Hayek

(2000) refers to areas such as health or education as areas where the state can play an

important role in society, without harming personal freedom (pp. 90-91). The

problem arises when the government or state gathers too much power and takes on

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the task of bringing about social justice through acting as a redistributor of goods,

services and income (Von Hayek, 2000, p. 92). In this case, the state uses its

coercive powers to determine and allocate resources after what it thinks people need

and deserve (Von Hayek, 2000, pp. 92-93). This kind of welfare state is according to

Von Hayek (2000) irreconcilable with a free society as it restricts people’s choices

(pp. 92-93).

Furthermore, Larner (2000) states:

…neo-liberalism is associated with the preference for a minimalist state.

Markets are understood to be a better way of organising economic activity

because they are associated with competition, economic efficiency and

choice. In conjunction with this general shift towards the neo-liberal tenet

of ‘more market’, deregulation and privatisation have become central

themes in debates over welfare state restructuring. (p. 3)

The state should hence embrace privatisation, and sell state assets to the private

sector, or contract public services out to the private sector (Harvey, 2005, p. 160;

Holmsten, 2003, p. 24; Scholte, 2005, p. 38; Slaughter, 2005, p. 43). This could

include all state owned enterprises such as schools, universities, public

infrastructure, radio and television, and health care (McGregor, 2001, p. 84).

The state should furthermore support deregulation and liberalisation, which implies

the limitation of the state’s ability to protect domestic interests and capital, in favor

of trade and capital flow (Scholte, 2005, p. 38; Slaughter, 2005, pp. 43, 56). The

state should adapt to a world of competition and deregulation, hence,

competitiveness of the national economy within global markets is the focus for

governments within a neo-liberal concept (Cox in Slaughter, 2005, p. 49; Larner,

2000, p. 5; Slaughter, 2005, pp. 48-50, 53, 91). This is termed ‘the competition

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state’, where states are ‘marketised’ due to their competitive function within a global

economy (Cerny in Slaughter, 2005, pp. 51-52; Slaughter, 2005; p. 51).

An important aspect of neo-liberalism is that it encourages the ‘de-socialisation of

economic government’, which is a shift from the ‘welfare-state’ to the “competition-

state”, where the notion of national welfare gives way to maximum competition

(Castells in Slaughter, 2005, p. 30; Rose in Slaughter, 2005, p. 53). The above is the

rationale for downsizing the public sector (Bell & Head, 1994, p. 39). For example,

instead of formulating policies to ensure an inclusive social welfare system, neo-

liberalism suggests a shift of focus to increased economic efficiency, managerialism

and international competitiveness. One consequence of this is that the market will

alternatively provide former public goods and services (Larner, 2000, pp. 4-5).

Moreover, the neo-liberal rationale for downsizing the welfare state is that the

welfare states is seen as creating dependency on social security (Ericson et al., 2000,

p. 538; Giddens, 2000, p. 371), as well as creating huge unnecessary economic costs

for the state, hindering economic growth and inhibiting human liberty (Clark, 2002,

p. 771; Von Hayek, 2000, p. 90).

Furthermore, to acknowledge the private sector and the free market, governments

should reduce taxes (both personal and corporate), and minimise governmental

expenditures and debt. Less personal income tax will give consumers more ‘choice’

in how to spend their money, and less corporate tax will support private incentives

(Bell & Head, 1994, p. 38; Scholte, 2005, p. 39). Neo-liberalism emphasises that

both individuals and corporations suffer unnecessary burdens under heavy taxation,

excessive regulation, and interference by government (Clarke, 2004, p. 31;

Vivekanandan & Kurian, 2005, p. 3). In short, the heavy taxations and regulations of

the welfare state, is seen as producing a disincentive to economic investment (Offe,

2000, p. 69).

Although neo-liberalism limits the function of state and government and seeks to

expand the free market and individual choice, this does not necessarily mean that

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there is less governance. Larner (2000) notes that neo-liberalism involves forms of

governance that encourage institutions and individuals to conform to the rules of the

market place (p. 11). In that sense, the market is merely a different form of

governance than the government.

Individual rights

Neo-liberalism places great value on the individual and individual freedom and

rights. According to Harvey (2005), neo-liberals are skeptical towards governance

by majority as they see it as a threat to individual rights and constitutional liberties

(p. 66). Governance by experts and elites are considered more favorable, as are

executive orders and judicial decisions, instead of parliamentary decision-making

(Harvey, 2005, pp. 66, 176). Conflicts and solutions are thus best mediated through

the legal system (Harvey, 2005, pp. 66-67).

Accordingly, a basic human right in neo-liberalism is the individual right, a right to

make autonomous decisions (consumer choice), and a right to individual liberty, as

well as a right to ownership of private and intellectual property. The latter depends

upon well-functioning legal systems that preserve private property rights. Ideally,

individual liberty also extends to freedom of speech, expression and thought

(Harvey, 2005, p. 181). The emphasis on individual rights rests on a belief in the

right to be independent from state intervention, which includes ‘unjust’ taxation

policies that infringe on the private property of income in order to aid others (social

redistributive policies such as extensive welfare programs) (Harvey, 2005, p. 181;

Little, 2002, p. 60).

The above reference to individual rights is fundamental to the neo-liberal language

and ideology.

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THE NEO-LIBERAL IDEOLOGY

As stated in chapters one and two, the neo-liberal ideology encompasses certain

values and an ethical framework which form a normative paradigm that is promoted

as the prescription for the good human life. (Holmsten, 2003, p. 24; Mittelman in

Mittelman & Othman, 2001, p. 8). In the following, I will outline some core values

in the neo-liberal ideology.

Individual freedom and choice

An essential aspect of the neo-liberal ideology is the notion of individualism and

individual freedom. One of neo-liberalism’s foremost advocates, Milton Friedman,

states that in the free market, people are provided the freedom to choose how to use

their incomes, the freedom to engage in transactions on a voluntary basis, in their

own interest, and becoming responsible for their own actions (Friedman, 1981, pp.

8-9; Friedman & Friedman, 1990, pp. 13, 65). These are central arguments of the

neo-liberal belief in its liberation for humanity.

At the core of this belief is the assumption that the free market is the optimum place

for individual choice and freedom (Edwards, 2002, pp. 39-40, 76-78; Hamilton,

2003, p. 64; Harvey, 2005, p. 7). Neo-liberalism asserts that free choice in the

market enables people to express their preferences and individuality (Hamilton,

2003, p. 71). Hence, in neo-liberalism, the consumer has the freedom to choose one

product or service over another and the freedom to choose what suits him or her best.

It is the neo-liberal view that the real power and sovereignty therefore lies with the

consumers (Von Mises, 1996, pp. 129- 130). The sovereignty of the consumer

includes the individual’s right to determine what is best for him or her and the right

to be foolish; and the freedom to buy or consume things that the individual ‘ought

not to buy’ or ‘ought not to consume’, or do not need in others’ views (Hamilton,

2003, p. 63; Von Mises, 1996, p. 130). This freedom should also extend to choices

regarding education, work, and leisure and so on (Von Mises, 1996, pp. 131, 135).

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The bottom line here is that individual freedom should be unrestrained by state

intervention (Jang, 2006, p. 2). The neo-liberal ideology maintains that people’s

preferences determine what they consume. Ideally, these preferences should not be

socially controlled or manipulated, for example by governmental restrictions or

censoring (Hamilton, 2003, pp. 64, 71). Instead, neo-liberalism emphasises that the

individual is generally the best judge of his or her interests (Hodgson, 2005, p. 547),

making decisions based on rational self-interest (Edwards, 2002, pp. 62-63; Gamble,

2006, p. 28).

Material well-being and individual responsibility

Neo-liberalism is an ideology which promotes individualism, economic growth,

personal freedom, and material progress as the ultimate aims of social life (Edwards,

2002, pp. 38-40; Slaughter, 2005, pp. 35, 38, 56).

According to this view, people are self-interested, independent individuals who

should be unrestricted in their pursuit of a good life and freedom from others. In

essence, people are viewed as being on a life-long ‘rational pursuit of self-interest’,

and only restrained by their budgets and the price of products or services (Edwards,

2002, pp. 55-56). The neo-liberal aim is to increase material well-being and thereby

provide for a good life, as in this view, material well-being is vital to be able to lead

a good human life. Accordingly, humans are seen as being materialistic, self-seeking

and competitive (Niggle, 2003, p. 60). Additionally, the neo-liberal ideology sees the

individual as actualising him or herself through the process of consumption (Gill,

2003, p. 119). As stated by Smith (2000), “…the consumer is the sun around which

the “new economy” turns…” (p. 78).

Furthermore, people are seen as individuals that are understood as independent and

responsible (Ericson et al., 2000, p. 533, 552-553; Kingfisher in Clarke, 2004, p. 31).

This has a number of consequences. For example, it implies that people are seen as

detached from social relationships (Kingfisher in Clarke, 2004, p. 31), and that

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individuals need have no concern for other people or the environment (McGregor,

2001, p. 84). Additionally, this view suggests that people are responsible for their

own lives and accountable for their actions and well-being (Harvey, 2005, p. 65).

Liability is, therefore, increasingly placed on the individual, and because of this,

costs (e.g. regarding education, health care and so on) are gradually transferred from

public resources to the individual or the household (Clarke, 2004, p. 33). This is so,

because the neo-liberal ideology replaces the notions of public good and community

with an emphasis on the individual and individual responsibility (McGregor, 2001,

p. 84). In the neo-liberal competitive world, the individual is responsible for his own

life and the opportunities he or she does or does not create for him/her (George,

1999, ¶ 14). Based on this view, the responsibility for individual success or failure is

placed on the individual and not with any systemic property (Harvey, 2005, pp. 64-

65).

Competition and inequality

The neo-liberal ideology asserts that competition is a fundamental feature of human

life. In the neo-liberal view, people are competitive by nature, and society is seen as

being a collective of self-seeking individuals that are competing for survival, power,

wealth and prestige (Niggle, 2003, p. 60). Therefore, the optimal social structure is

that which creates institutions to encourage, protect and nurture competitive

behaviour, such as the free market (Niggle, 2003, p. 60). It is the neo-liberal

conviction that this competitive interaction in society will increase wealth and

happiness (Niggle, 2003, p. 60).

Additionally, neo-liberalism emphasises that people are born unequal by nature.

Inequality is not necessarily an evil, as neo-liberals believe that the contributions

made to society by the best educated and the most successful people will eventually

benefit everyone: the ‘trickle down’ theory. This implies that the poorest people

should take responsibility for their lives and find their own solutions to raising their

living standards and opportunities (based on McGregor, 2001, p. 84). The notion of

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equality in neo-liberalism therefore entails that no members of society should

receive preferential treatment (referring to e.g. the poor, low-income groups or other

people that are in an ‘unfortunate’ position or otherwise in need) (McGregor, 2001,

p. 85). Rather, the free market and its natural regulation of resources is regarded as

creating justice in society (McGregor, 2001, p. 85).

CONTEMPORARY, GLOBAL NEO-LIBERAL INFLUENCE

After having outlined neo-liberalism as an economic and political theory and

ideology, I shall now illustrate how neo-liberalism influences contemporary

societies.

Scholars describe that, during the past decades, there has been a rise of a neo-liberal

world economy, and political life has increasingly been shaped by neo-liberal

economic and political practices (Filc, 2005, p.180; Gill, 2003, p. 124; Harvey, 2005,

p. 3; Slaughter, 2005, pp. 25-33). Neo-liberal economics have become the new

dominant economic paradigm in universities, think tanks and research centers

(Harvey, 2005, p. 3; Slaughter, 2005, p. 38). The world economy has more or less

changed from one model, the Keynesian/ Fordist, to another: the neo-liberal model

(Felix, 2003, p. 1; Filc, 2005, p.180; Gill, 2003, p. 93; Slaughter, 2005, p. 31).

Neo-liberalism is today most prominent in Western developed nations, most notably

in the United States and the United Kingdom (Clarke, 2004, p. 30; Gill, 2003, p.

169). Some have even termed these nations neo-liberal regimes (Jang, 2006, p. 8;

Sennett, 2006, p. 163). Sennett (2006) moreover describes that the European

(European Union) political economy has moved towards ‘a neo-liberal view of

Europe’, which stresses a financial and free trade conception, rather than the more

social democratic view of a ‘social Europe’ (p. 133). Others suggest that social

democratic policies have remained, and even strengthened, in European countries,

though with an incorporation of market principles (Hout, 2006, p. 219; Pedersen,

Kersbergen & Hemerijck, 2001, Turner, 2006). This has been termed ‘The third

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way’ (Pedersen et al., 2001, see also Giddens, 2000 or Hout, 2006, pp. 220-221).

European and Australian leaders (e.g. former English prime minister Tony Blair and

the John Howard government) have advocated ‘The third way’; a political program

trying to transcend social democracy, neo-liberalism, and contemporary

globalization, and hereby providing an alternative to ‘harsh’ neo-liberalism (Giddens

in Slaughter, 2005, p. 134; Robison, 2006b, pp. 5-6). The third way can be

understood as an attempt to combine the benefits of governmental interference with

the qualities of market-oriented parties (Klijn & Teisman, 2000, p. 85). Some have,

however, critisised the third way for not challenging the dominance of neo-

liberalism strongly enough (Bovill & Leppard, 2006, p. 404).

Clarke (2004) states that there have been problems of translating neo-liberalism into

practice in Western capitalistic democracies, because of the power of conceptions of

the public and the social and their embeddedness in collective institutions,

relationships and identities (p. 43). Nevertheless, neo-liberalism has had a persuasive

effect because in many places it has been incorporated into common-sense ways of

how people interpret and understand the world (Harvey, 2005, p. 3). Harvey (2005)

has analysed how neo-liberalism has developed and been integrated into the politics

and economics in several countries around the world (e.g. the United States, the

United Kingdom, Mexico, South Korea, China, Sweden and Argentina) and comes

to the conclusion that there have been uneven geographical developments of neo-

liberalism. This unevenness is, according to Harvey (2005), a result of factors such

as diversification and competition between national, regional and, in some cases,

metropolitan models of governance, as well as a whole range of other factors, such

as contextual conditions and cultural and political traditions, which might affect the

implementation of neo-liberalism in individual cases (pp. 115-117). Harvey’s

analysis thus indicates that the neo-liberal influence across the world is highly

complex and asymmetrical.

Neo-liberalism is often implemented through businesses, governments and

organisations worldwide. Ironically, neo-liberalism has often been dependent on

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governments and states to implement its policies (as for example in the United States

and the United Kingdom) (Robison, 2006b, p. 4). Furthermore, Gill (2003) states,

“The dominant forces of contemporary globalization are constituted by a neo-liberal

historical bloc that practices a politics of supremacy within and across nations” (p.

120). The ‘transnational historical bloc’ is largely formed by elements of the G-8

apparatus, transnational capital (as in finance, services and manufacturing) plus

associated privileged workers and smaller firms (e.g. service companies such as

stockbrokers, small and middle sized businesses that are contractors or suppliers,

import-export businesses, lobbyists, accountants and so on) (Gill, 2003, p. 119).

Other institutions promoting a policy framework based on neo-liberalism are

national finance Departments and Treasury advisers, financial institutions supported

by economists and bureaucrats, and the media (Boston in Larner, 2000, p. 5, Harvey,

2005, p. 3).

Slaughter (2005) stresses that a major reason why neo-liberalism has been able to

evolve into a worldwide ideology and practice, is that there has been the political

motivation and the technical infrastructure available (p. 30). Neo-liberalism is today

made practically possible by organisations and political institutions that adhere to its

ideas and norms, both globally and locally (Slaughter, 2005, pp. 40, 44).

Furthermore, neo-liberalism depends upon the most economically, politically and

militarily powerful governments, such as the United States (Gill, 2003, p. 173).

Several authors have described the above as the development of a neo-liberal world

order and neo-liberal governance (see e.g. Jang, 2006; Slaughter, 2005, pp. 30, 41).

Gill (2003) describes the contemporary dominance of neo-liberalism as ‘disciplinary

neo-liberalism’, a concept that involves neo-liberalistic forms of ‘discipline’ that are

bureaucratic and institutionalised, operating across various public and private areas

(pp. 130-131). Neo-liberal discipline is in this sense both a local and transnational

power (Gill, 2003, pp. 130-131). However, according to Edwards (2002), the

greatest source of power for neo-liberalism is that its practitioners truly believe in it,

and believe that it is in the best interest for all people to improve their standards of

material well-being (pp. 24, 38).

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To highlight contemporary neo-liberal influence further, I shall in the following give

some concrete examples of how neo-liberalism is actively promoted. One example is

how neo-liberalism underpins the work of the WTO. This influential organisation

has implemented neo-liberal principles such as open markets, reduction of trade

barriers and liberalisation of trade in services (including in health care services).

The WTO

The WTO consists of 148 member countries (2005) and controls 97 % of all world

trade (Harvey, 2005, p. 3; WTO, 2005a, pp. 7-8). WTO’s main function is to ensure

that world trade flows as freely as possible (WTO, 2005a, pp. 1-7). WTO promotes

competition in open markets, and economic growth through free trade. According to

WTO, this results in a more prosperous, peaceful world, and improves the welfare of

its member countries (WTO, 2005a, p. 2; WTO, 2005b, pp. 11-13). Furthermore, the

WTO (2003) argues that free trade agreements will allow resources on earth to be

used more efficiently (p. 11). The above are clear statements of how neo-liberal

ideas are underpinning the work of one of the world’s most powerful and influential

organisations. Harvey (2005) emphasises that the WTO agreements are crucial to

advancing the neo-liberal project on a global scale as they guarantee international

agreements between states regarding freedoms of trade (p. 66).

The trade and service agreements negotiated through the WTO have great impact on

health care services around the world. Contemporary health care services are

affected under the GATS and other agreements of the WTO (Jakubowski & Wyes,

2000, p. 16; Koivusalo, 2000; Schrader, 2005; WTO, 2005b, pp. 33-34). The GATS

is committed to progressive liberalisation of health services, by encouraging

practices such as ‘health tourism’ (where people from one country receive treatment

by health care services in another), foreign private investment and management of

public and private health care services, movement of health personnel across

borders, and international trade (e.g. shipments of laboratory samples) (Koivusalo,

2000, p. 19; Labonte, 2003, p. 487). However, liberalising health care does not,

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according to the WTO (2005b), “…affect governments’ rights to set a level of

quality, safety or price, or to introduce regulations to pursue any policy objective

they see fit” (p. 35). The Agreement on Trade-Related Aspects of Intellectual

Property (TRIPS) is another WTO agreement, which is highly disputed, especially in

relation to patented medicines (e.g. drugs for HIV/AIDS and malaria) and health

technologies (Koivusalo, 2000, p. 19; Bloche & Jungman, 2007, p. 251). Due to its

influence over trade in medical supplies, insurance and health services, the WTO is

now becoming one of the most influential international agencies in regard to health

worldwide (Jamison in Schrader, 2005, p. 34).

Other institutions

Other global institutions promoting neo-liberal policies are the World Bank, IMF,

and the Organization for Economic Cooperation and Development (OECD) (Clarke,

2004, p. 30; Gill, 2003, pp. 125, 131, 140; Harvey, 2005, p. 3; Holmsten, 2003, pp.

1, 2, 24, 25; IMF, n.d.; Larner, 2000, p. 5; Scholte, 2005, p. 39; Slaughter, 2005, pp.

37, 44-46; Stiglitz, 2002; Tabb, 2005, p. 47).

According to Clarke (2004), these institutions install the ‘neo-liberal truth’ on

dependent nations around the world, especially in South America, Africa and

Eastern Europe (p. 30). The IMF and the World Bank are especially important in the

process of implementing the ‘neo-liberal truth’, as these organisations often have

required indebted (developing) countries to implement neo-liberal policies such as

privatisation, more flexible labour market laws, and cuts in welfare expenditures to

receive debt rescheduling (Barry, 2005, p. 29; Breman & Shelton, 2007, p. 219;

Harvey, 2005, p. 29). Furthermore, access to new loans have since the early 1980’s

often required ‘structural adjustment programs’ (SAPs) from the receiving country

(as a response to an increasing debt), which frequently have involved implementing

neo-liberal policies such as major cutbacks in public expenditure and services, and

the commercialisation of welfare services (e.g. by privatisation and user charges), for

example in the areas of education and health care (Breman & Shelton, 2007, pp.

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219-220; Callahan & Wasunna, 2006, pp. 13, 116, see also chapter four; Powers &

Faden, 2006, p. 100; Waitzkin & Iriart, 2004, pp. 150-151; Wamala & Kawachi,

2007, p. 172). As an example, the World Bank has often demanded health care

reforms such as decentralisation and user charges as conditionalities for loans, as

well as influencing the commercialisation of health care in general through

promoting user cost-sharing, private provision or partnerships in health care services

(Ollila, 2005, p. 188). The objective of these SAPs has in general been to promote

economic growth through macroeconomic stability and elimination of market

distortions (Breman & Shelton, 2007, p. 219), as well as to increase the reliance on

private markets as an alternative to state-owned public welfare programs and

industries (Powers & Faden, 2006, p. 100).

Apart from the above mentioned organisations, another great contemporary neo-

liberal influence is the media. The notions of economic efficiency, material welfare

and unlimited progress for the human race are often presented and promoted in

media (i.e. through television advertisement), as well as in World Bank and IMF

reports (Gill, 2003, p. 125). Additionally, the United States is a major source in

promoting the neo-liberal ‘culture’ of consumerism and governance (Clarke, 2004,

p. 30; Gill, 2003, p. 197; Slaughter, 2005, p. 38). Often, people in the Western world

may become ‘passive’ supporters of the neo-liberal global economy through the

process of consumerism (Richardson in Slaughter, 2005, p. 37).

It is thus evident that neo-liberalism is a global operation promoted through major,

international institutions. Two other factors that have played an important role in

enabling neo-liberalism to make an impact worldwide are the development of

communication and information technologies and contemporary globalisation.

Information and communication technologies and global competition

Advances in information and communication technologies have had profound

impacts worldwide. The development of communication technologies has provided

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the base for a sweeping expansion and integration of global finance and service

markets. Information technology, computer technology, and the Internet has enabled

the expansion of global capital markets that are virtually unregulated and

electronically connected; and active around the clock, for example in the form of

global banking (Child, 2004, p. 149; Gill, 2003, p. 166; Sassen in Slaughter, 2005, p.

31; T. Smith, 2000, pp. 120-121). This has in turn enabled the development of a

single global market for money and credit (economic globalisation) (Schrader, 2005,

p. 16). Thus, traders are able to shift currency, bonds, and stocks via digital networks

twenty-four hours a day (Gershman et al., 2003, p. 181).

A downside for nation-states from this development is that it makes it difficult to

control capital movements across their borders (Krasner in Child, 2004, p. 151). The

recent rise of information and communication technologies will, as Child (2004)

describes it: “…change our analytical and conceptual framework” (p. 152). For

instance, some claim that the sovereignty of nation states is under threat by this new

development, as the Internet functions as a borderless enterprise, enabling

communication and economic activity in business, communication, insurance,

banking, which is invisible to the nation-state and government (Child, 2004, pp. 152,

154-155).

Furthermore, the neo-liberal aim of bringing as much of human life into the market

place as possible has created a need for developing information technologies with

the capacity to accumulate, store, analyse and transfer information to guide the

global marketplace (Harvey, 2005, p. 3). Computer technology has enabled the

gathering and processing of information about patterns in consumer behaviour and

choices through the scanners at the counters that register the products we buy,

computerised memories that are designed to store extensive data on customers,

networked computers that pass on consumer preferences directly from distributors to

producers, data files on the credit histories and financial status of consumers

(sometimes together with criminal records and insurances and health histories), and

firms that purchase relevant information about consumers from information

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providers (Gandy, 1993, in Gill, 2003, p. 192; Gill, 2003, pp. 136, 192-193; Tapscott

& Caston in T. Smith, 2000, p.78). (This process is also called geodemographics (see

Goss, 2003)). Hence, the contemporary evolution in computer and information

technologies makes it possible to identify individual consumer ‘wants’, and connect

production to consumer choices.

Furthermore, industrial enterprises are expanding their territories. Today, there is

‘transnational capital’ in manufacturing, services and finance (Gill, 2003, p. 119).

Goods may be produced in different locations around the world, to minimise costs

and maximise profit, and subsequently sold in various markets worldwide. Neo-

liberalism embraces these advances in industrial enterprise, as well as the

development of computer technology, which enables production to be carried out

more efficiently, and allows firms to cooperate across the globe (T. Smith, 2000, pp.

120-121). The global competition in industrial production is essential to the neo-

liberal global economy (Sassen in Slaughter, 2005, p. 32; Slaughter, 2005, pp. 30-

31). Scholte (2005, p. 56) and Slaughter (2005, pp. 33, 37) moreover argues that this

development has been purposely guided by investors, corporations and businesses,

and that both governments and media elites support this neo-liberal agenda.

In health care, information systems and computer technology has also evolved

rapidly in the last few decades, albeit somewhat slower than in other fields (Tan,

2001, p. 4). Health care is increasingly an information-driven service, incorporating

health care data and information systems in all areas of health care practice (Berg,

2004, pp. 1-2; J. Smith, 2000, p. 1). Moreover, health care ‘consumers’ today

increasingly engage with information technology, for example via the Internet (Cline

& Haynes, 2001, p. 671).

Information and communication technology are noticeably contributors to the global

expansion of neo-liberalism. In the following section, I will additionally argue that

neo-liberalism cannot be fully grasped without an appreciation of its close link to

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contemporary globalisation, and that contemporary globalisation is a main factor for

the successful expansion of neo-liberalism.

Neo-liberalism and contemporary globalisation

The connectedness between contemporary globalisation and neo-liberalism is

generously described in the existing literature (see for example Baylis & Smith,

1997; Chorev, 2005; Friedman, 2000, p. 9; Gill, 2003; Hirst & Thomson, 1999;

Kitching, 2001; Mittelman & Othman, 2001; Mittelman, 1997; Niggle, 2003, p. 60;

Schmidt & Hers, 2006; Slaughter, 2005; Scholte, 2005; Smith, 2000; Stiglitz, 2002;

Waters, 2001; Woods, 2000; World Commission on the Social Dimension of

Globalization (WCSDG), 2005).

Globalisation is a complex phenomenon, and there are multiple conceptions of what

it encompasses. Globalisation is not a new phenomenon, as it has occurred

periodically through human history (Kawachi & Wamala, 2007, p. 3; Labonte, 2003,

p. 469; Schrader, 2005, p. 15). According to Mittelman (in Mittelman & Othman,

2001), contemporary globalisation consists of complex historical processes, material

processes linked to the accumulation of capital, great advances in technology and

communication, and the neo-liberal belief in free markets and competition (p. 7).

Globalisation can moreover be seen as a set of interactions of politics, societies and

economies worldwide (Kawachi & Wamala, 2007, p. 5; Mittelman in Mittelman &

Othman, 2001, p. 7). Thus, people, businesses, nations and cultures are increasingly

being connected and exchanged across the globe (Labonte, 2003, p. 469).

Globalisation in the twenty-first century is undoubtedly breaking down political,

economic, cultural, social and demographic barriers worldwide, at an increasing

pace (Kawachi & Wamala, 2007, p. 3).

Thomas Friedman (2000) maintains that contemporary globalisation is the dominant

international system that has replaced the Cold War system after the fall of the

Berlin Wall, and that the developments of technology, finance and information

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sharing are its key elements (pp. 7, 139-140). Gill (2003) states that contemporary

globalisation is a concept which seeks to change towards a global economic system

dominated by large institutional investors and transnational firms, that are

controlling the majority of the productive resources in the world, and are the main

influences in world trade and financial markets (p. 124). Finally, contemporary

globalisation may be described as “…the accelerated diffusion of capital, traded

goods, people, ideas, etc. across increasingly porous of national boundaries…” (Buse

& Walt, 2002, p. 169).

Some scholars stress that globalisation in itself is neither a good nor a bad

phenomenon (Friedman, 2000, p. 355; Stiglitz, 2002, p. 22). It is therefore not

something that humans should automatically fear and oppose (Labonte, 2003, p.

470). Globalisation has the possibility to create as many benefits and opportunities

as problems and disadvantages (Friedman, 2000, pp. 355, 406; Stiglitz, 2002, p. 22).

It is how we choose to manage it, which determines the outcomes.

Neo-liberalism has dominated policy discourse for contemporary globalisation since

the 1980’s (Scholte, 2005, p. 39). Contemporary globalisation is strongly encouraged

by neo-liberalism, as contemporary globalisation is characterised by the

development of capitalist production relations, liberalisation of trade in goods and

services, expansion of free market economies and international capital flows

(Chorev, 2005; Friedman, 2000, p. 9; Labonte, 2003, p. 470; Navarro & Muntaner,

2004a, p. 89; Schmidt & Hers, 2006, p. 69; Scholte, 2005, pp. 39, 56; Woods, pp. 1,

3). Some authors also point to the overwhelming role of rich countries in the process

of ‘neo-liberal globalisation’, as governments in these countries drive forward

policies such as trade liberalisation and deregulation of national financial markets

which have affects worldwide (Gershman & Irwin in Schrecker & Labonte, 2007, p.

285; Marchak in Schrecker & Labonte, 2007, p. 285 in Schrecker & Labonte, 2007,

p. 285). Nonetheless, neo-liberalism is not equivalent to contemporary globalisation.

Even though it may be the dominant tendency of contemporary globalisation, Clarke

(2004) reminds us that it is not the only tendency (p. 30). Other forces are also

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making up this phenomenon, such as anti-globalisation movements and other forms

of international and political actions (Clarke, 2004, p. 30).

Nevertheless, several authors describe the indivisible connection between neo-

liberalism and economic globalisation (Chorev, 2005, p.318; Coburn, 2004, pp. 44,

53; Gill, 2003, p. 123; Schrader, 2005; Slaughter, 2005). According to Slaughter

(2005), contemporary globalisation is inseparable from economic or neo-liberal

globalisation, which he describes as a dominant movement, encompassing economic

activity as globally organised by actors seeing the world as a grand location of

economic activity (p. 20).

T. Smith (2000, pp. 120-121) presents a three-component model of the neo-liberal

process of contemporary globalisation. Firstly, as discussed, it encompasses the

technological developments that have enabled finance capital and productive capital

to escape national boundaries. Secondly, neo-liberalism has the potential to benefit

[material benefit] all groups in the world economy. Thirdly, governments should

give way for the ‘new, globalised economy’. The arguments behind the huge benefit

for the human race from the neo-liberal, globalised movement are as follows:

• Those who own and control corporations benefit from neo-liberal

globalisation, because the pressure of global competition forces corporations

to form organisations that are more flexible. Moreover, corporations become

skilled in taking advantage of opportunities.

• Workers within these corporations benefit in that their knowledge develops

into the most important resource, hence, they gain the ‘power’ to negotiate

good contractual arrangements in the workplace. Additionally, creativity and

multiskilling in workers are encouraged and rewarded.

• Consumers benefit as global competition ensures that prices of goods decline

while their quality and variety improves.

• Third World countries benefit by new technologies and products that were

previously unavailable due to trade barriers. These countries also benefit

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from now having the prospect of attracting foreign capital investment, which

permit them to industrialise and experience increasing living standards.

(T. Smith, 2000, pp. 120-121.)

These arguments can be discussed and critisised. For example, they do not take into

consideration all the workers that are not working within corporations. Furthermore,

the power to negotiate good contractual arrangements in the workplace is not only

determined by the worker and employer, but in many countries also regulated by

government intervention and laws. A full discussion of these arguments is, however,

not within the limits of this chapter.

Neo-liberalism is thus a central part of contemporary globalisation, and neo-liberal

ideas, such as trade liberalisation and free markets, are promoted and implemented

through the process of globalisation. Some have expressed concerns about this

development. The World Commission on the Social Dimension of Globalization

(WCSDG) (2005) has for example stated, “We believe the dominant perspective on

globalization must shift more from a narrow preoccupation with markets to a broader

preoccupation with people” (p. 242). Furthermore, some claim that the result of the

neo-liberal, economic globalisation is that economic considerations often

predominate over social issues (Schmidt & Hers, 2006, p. 69; Slaughter, 2005, pp.

15, 16, 19). These could be issues such as meeting peoples’ needs where they live

and work, nurture local communities through the delegation of power and resources,

strengthening local economic capabilities, strengthening cultural identity, or

respecting the rights of indigenous and tribal peoples (WCSDG, 2005, p 247). Other

social issues in this context could be the notion of equity, or the notion of social

justice.

Contemporary globalisation is also affecting global health, through its movement of

people (potentially transporting infectious diseases such as Tuberculosis), goods,

services and capital (Kawachi & Wamala, 2007a), as well as causing changes in

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ecological, biological and social conditions that might affect the burden of diseases

in certain countries (Saker, Lee & Cannito, 2007, p. 34). (For a more detailed

analysis of globalisation and health, see e.g. Globalization and Health by Kawachi

& Wamala, 2007a; or Labonte, 2003). Contemporary globalisation has long been an

increasingly dominant factor in areas such as medical technology and

pharmaceuticals (Mackintosh & Koivusalo, 2005, p. 12). Additionally, globalisation

has enabled public policy makers in the United States and organisation such as the

WTO, the World Bank and the IMF to advocate policies encouraging privatisation

and reduction of public health services previously provided in the public sector (e.g.

through structural adjustment programs in developing countries, as discussed earlier)

(Bonita et al., 2007, p. 269; Jasso-Aguilar et al., 2005, p. 38). Koivusalo (in Ollila,

2005) states that in a globalising world, rules are more gradually being made from

the perspective of business and trade policies, emphasising competition in stead of

health and well-being (p. 199).

Contemporary globalisation has undoubtedly blurred the borders between domestic

and foreign policy, and made it possible for the free market, non-state actors and

international organisations, such as the WTO, the IMF and the World Bank, to have

an increased impact on politics and policymaking around the world (Kawachi &

Wamala, 2007b, p. 4; Kitching, 2001, p. 20; Mittelman in Mittelman & Othman,

2001, pp. 4-5, Tabb, 2005, p. 47; Woods, 2000, pp. 4-5, 202-205). Politics and

policies are often directing possibilities, limitations and the choices that people have

in their lives. Gill (2003) emphasises that many aspects of political power within the

new ‘world order’ (neo-liberal globalisation) are now built into the everyday lives of

workers, consumers and citizens (p.117). As neo-liberalism grows as a political

ideology, it can therefore have profound impact on peoples’ lives (Jang, 2006, p. 24;

Slaughter, 2005, p. 36). The policies that governments implement can for example

determine the level of equalities or inequalities in a society, and even explain the

level of health of the population (Navarro & Shi, 2003, p. 196).

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Concluding remarks

In this chapter, I have sought to give a comprehensive and structured account of neo-

liberalism. Nonetheless, I agree with Kingfisher (in Clarke, 2004, p. 30) and Gamble

(2006, p. 34) that neo-liberalism is neither unitary nor unchangeable, and that, in

practice, it is always in interaction with other cultural structures or discourses.

Whereas the description of neo-liberalism in this chapter is theoretical, Harvey

(2005, pp. 19, 21) and Gamble (2006, p. 34) rightly note that the actual

manifestation of neo-liberalism may sometimes contradict and vary from the

theoretical concept. Adaptations of neo-liberalism have varied greatly from place to

place and over time (Harvey, 2005, p. 70). Furthermore, neo-liberalism is constantly

interacting with, and being challenged by, other ideologies and political practices,

and the future direction of neo-liberalism is uncertain.

In addition, Thirkell-White (2006) notes that there has recently been a growing focus

on market failure, due to the failure of many neo-liberal based programs (e.g. in

developing countries) (p. 152).

Moreover, there are some who disagree with the dominant view that neo-liberalism

has been the prevailing political-economic ideology and practice in recent decades.

For example, Akram-Lodhi (2006) claims it is neo-conservatism, rather than neo-

liberalism, which has dominated political discourse and practice for the last thirty

years. I will not enter into a discussion on this subject here, but I recognise that there

might be various interpretations of neo-liberalism, and its content and influence. The

account presented in this thesis, is but an interpretation of neo-liberalism, based on

existing literature as well as conceptual analysis.

In the next chapter, I shall reflect on neo-liberalism and present some of the critique

that has been raised towards it, as well as engage in an analysis of the ethical

framework of neo-liberalism. Together, chapters three and four seek to answer the

research question ‘What are the distinctive core concepts, values and moral

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underpinnings of neo-liberalism?’ These two chapters also provide the basis for

articulating the neo-liberal approach to health care in chapter five.

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CHAPTER FOUR: REFLECTIONS ON NEO-LIBERALISM

Neo-liberalism, and its implications for humanity, has been heavily critisised. In

fact, most of the literature to be found on neo-liberalism is written by critics. In this

chapter, I shall discuss neo-liberalism by considering criticism as well as supportive

arguments. Hereafter, I shall offer a philosophical analysis of some central beliefs of

the neo-liberal ideology. The chapter is thus divided into two parts:

• Part one: Critique of neo-liberalism, where I will discuss the neo-liberal

notions of the free market, the state, economic growth, and the accumulation

of capital and goods and its consequences.

• Part two: The ethics of neo-liberalism, where I will discuss the concepts of

individualism, the good life and human relations, rational choice and the

consumer, freedom, power, and equality, justice and social justice.

CRITIQUE OF NEO-LIBERALISM

There are a number of issues, which can be discussed in relation to neo-liberalism.

Based on the criticism already raised in the literature, I have divided this section into

the four themes as outlined above.

The free market

The free market is the cornerstone of neo-liberalism. It is via the free market that

neo-liberals see human liberty secured. A neo-liberal advocate, Thomas Friedman

(2000), claims that there are few alternatives to the free market economy today (pp.

104, 445). The free market is where incentives, trade and entrepreneurship thrive and

contribute to a healthy economy (T. Friedman, 2000, p. 445). It provides people with

the freedom to participate in the interchange of, for example, goods, gifts, words and

labour, which by economist and Nobel laureate Amartya Sen (1999) are basic

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liberties (pp. 6-7). Furthermore, Sen (1999) stress that the free market is also a

contributor to overall economic progress, and an engine of fast growth and better

living standards, and that these positive effects of market liberalisation recently have

been more widely recognised (pp. 6, 26).

Moreover, Thomas Friedman (2000) argues that the free market has proved its

ability to be the most effective system in generating rising living standards, even if it

also has created wider income gaps (pp. 104, 307). Friedman (2000) states “Other

systems might be able to distribute and divide income more efficiently and

equitably, but none can generate income to distribute as efficiently as free-market

capitalism” (p. 104). In short, Friedman (2000) emphasises that the free-market

ideology is the only alternative to embrace the continuing integration of global

markets and technology, and to provide sufficient levels of economic growth through

foreign investment, increased trade, privatisation and a more efficient use of

resources (pp. 104-106, 109).

Neo-liberals argue that the free market is the most desirable way to secure liberty, as

people here engage in transactions on a voluntary basis, and in their own interest

(Friedman, 1981, pp. 8-9; Friedman & Friedman, 1990, p. 13; Layard, 2005, pp.

128-129). The late economist Milton Friedman (1990) states:

In a free trade world, as in a free market economy in any one country,

transactions take place among private entities-individuals, business

enterprises, charitable organizations. The terms at which any transaction

takes place are agreed on by all parties to that transaction. The transaction

will not take place unless all parties believe they will benefit from it. As a

result, the interests of the various parties are harmonized. Cooperation, not

conflict, is the rule. (p. 51)

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Yet, free market ideology and practices can be critisised on a number of points.

One problem with the free market is the problem of externalities or external effects,

which are uncompensated effects to third parties who are not party to the activity

itself (Foldvary, 1998, p. 137; Greenwald, 1982, p. 357). Externalities “result from a

failure of private costs (or benefits) to equal social costs (or benefits), and economic

inefficiency is the consequence” (Greenwald, 1982, p. 357). Examples of external

effects are congestion on highways, or pollution or other environmental

consequences of industry production, for example, to nearby residents to an

industrial area. I shall discuss the problem of environmental consequences later in

this chapter as a significant external effect of free market practices. If these external

costs are ignored and counted out of production costs, goods and services will be

priced below the social cost of production and the output of production will end up

being inefficiently high (Greenwald, 1982, p. 357). Thus, a free market economy

may prove to be less profitable and efficient when considering externalities. Some

ways of dealing with externalities involve government regulation or taxes/charges,

or private property rights, even if these alternatives may also be problematic (see e.g.

Foldvary, 1998, p. 138; Greenwald, 1982, p. 358).

Moreover, the free market is by no means an interplay of equals, as suggested in

neo-liberalism, and that there are always disadvantages and advantages at play

between people in a market transaction (Schutz, 2001, p. 159). Furthermore, the neo-

liberal assumption that all actors are presumed to have access to the same

information and can make rational economic decisions in their own interest in the

market place may be far from reality. Some claim that there are always asymmetries

of power relations in that some people are more powerful and have access to more

knowledge than others (Harvey, 2005, p. 68, Stiglitz, 2002, p. xi). Examples of

asymmetries and differences in information can be found in many obvious places,

for example between the employer and employee, the lender and the borrower, or the

insurance company and the insured (Stiglitz, 2002, p. xi). Yet, on a global scale, the

development of communication technologies and the Internet have provided many

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people with a better and convenient access to enormous amounts of information that

may reduce some power asymmetries in information (Yardeni in T. Friedman, 2000,

p. 81).

Another controversial feature about the free market is the perception that everything

can be commodified. This presumption suggests that everything from items to social

relations can be priced and traded, and subjected to legal contracts and private

property rights (Gill, 2003, pp. 120, 128-129; Harvey, 2005, p. 165). Some authors

observe that there are practical boundaries to the extent of commodification and that

there are several areas of economic activity where free markets may be undesirable

(Harvey, 2005, p. 165-166; Hodgson, 2005, p. 549; Polanyi in Harvey, 2005, p.

167). Nevertheless, it remains a fact that markets are essential in many sectors of

industry and finance (Hodgson, 2005, p. 549).

Yet, free markets need rules to operate, and international free trade requires global

rules, which is why organisations such as the GATT/WTO have been created

(Harvey, 2005, p. 80). Additionally, global markets depend heavily on nation states

and their regulatory role (Fligstein, 2001, p. 96). Therefore, deregulation often

creates re-regulation and some sort of governance in order for the free trade to

function (Gershman et al., 2003, p. 179; Harvey, 2005, p. 80). Free trade is therefore

dependent on a strong state or a strong regulatory institution to function (Friedman,

2000, pp. 158-159; Schrader, 2005, p. 29; Slaughter, 2005, p. 71). Gershman et al.

(2003) call this the paradox at the heart of contemporary global economy (p. 179).

Even with agreed rules and open markets, freedom and equal opportunities can be

difficult to secure in markets. Harvey (2005) emphasises that free competition often

results in monopoly or oligopoly, as stronger firms drive the weaker firms out of the

market (pp. 67, 80). Corporate responsibility also becomes important in this context.

Some firms may for example choose to avoid liabilities and costs by dumping waste

free of charge, which destroys or seriously damages ecosystems; or there may be

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minimal intervention and rules within labour health and safety, which can severely

affect human health and labour (Harvey, 2005, p. 67).

Moreover, the neo-liberal emphasis on competitiveness in the free market may

become destructive in nature. It may create a never-ending quest for technological

innovations, new products and new ways of doing things supported by a belief that

there are technological fixes to all problems. An example of this is how the

controvertible pharmaceutical industry may invent new medicines for which new

illnesses are practically ‘invented’ (Harvey, 2005, pp. 68-69).

Several authors have also raised concerns about the social impacts that flow from

neo-liberal market practices. Many scholars have underlined that neo-liberalism has

had vast, and often destructive, implication for humanity and human conditions. Gill

(2003) states that a disturbing feature of the emergence of the ‘market civilisation’

within the project of neo-liberal globalisation is that it produces a worldview that is

“…ahistorical, economistic and materialistic, me-orientated, short-term, and

ecologically myopic” (p. 118). Furthermore, Jang (2006) argues that there have been

several studies of the social outcome of neo-liberalism concluding that neo-

liberalism on a global scale has:

• contributed to an increase in labour flexibility but decline in work ethic

• intensified poverty and class polarization

• worsened standards of living

• contributed to rising global migration and dismantled societal and national

cohesion (p. 23)

Some additionally claim that the neo-liberal project has unleashed financial crisis,

and had devastating effects on employment and life chances in country after country

(Harvey, 2005, pp. 187; Stiglitz, 2002). For example, for most people in the Third

World (except China and East Asia), over the last twenty years, capital and resources

have been drained from the poorest nations to the wealthiest, and from the many to

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the few; thus, inequality has grown (Gill, 2003, p. 197). Today, the majority of the

world’s population remains excluded from the neo-liberal system of consumption

and economic growth, and one can question neo-liberalism as a mechanism of

controlling global economy while it ignores the needs and well-being of the majority

of the world’s population (Bovill & Leppard, 2006, p. 404).

Harvey (2005) argues that neo-liberalism has had a universal tendency to increase

social inequality, and concentrate power and wealth within upper elite classes of

societies (as e.g. in China, Russia and India). Harvey (2005) states:

It has been the part of the genius of neoliberal theory to provide a

benevolent mask full of wonderful-sounding words like freedom, liberty,

choice and rights, to hide the grim realities of the restoration or

reconstruction of naked class power, locally as well as transnationally, but

most particularly in the main financial centers of global capitalism. (p. 119)

According to Tabb (2005), neo-liberalism has long since proved its inabilities when

facilitating collapsing economies left in depression, rising unemployment, falling

incomes and extensive social suffering (p. 50). Tabb (2005) states that it is widely

recognised that overall economic performance and social development in the world

economy has been substantially in decline in the last two decades (p. 50).

Yet, neo-liberal dominance has not persisted without objection. Since the early

1990’s, there has been a global rise of protest movements which have contested neo-

liberalism (Ayres, 2004, p. 12). These movements have often been visible through

organised protests in relation to major meetings of institutions such as the IMF, the

WTO, NAFTA and the World Bank (Ayres, 2004; Harvey, 2005, pp. 185-186,

Stiglitz, 2002, p. 3). Nobel Price laureate and economist Joseph Stiglitz (2002)

emphasises that one of the overall problems with the economic decisions made by

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organisations such as the World Bank and IMF, are that they are often based upon

ideology and political interests, rather than facts, evidence, consequences and

practicalities, and that there is an overall lack of transparency and public information

and involvement (pp. x, xii, xiv).

Activists across the globe have highlighted harmful consequences of neo-liberal

market practices:

• the increasing external debt of developing countries

• a widening of the gap between rich and poor nations

• increasing poverty in many developing areas

• a decline in the average per capita income growth rate in the developing

south

• an increasingly unstable international economy

(Ayres, 2004, p. 17)

Furthermore, these organised protest movements have accused neo-liberal practices

for being unjust in that they generate environmental degradation, shift jobs to low

wage production areas and abuse human rights (Ayres, 2004, p. 20, Harvey, 2005, p.

172). In addition to protest movements, forums challenging and presenting an

alternative to neo-liberalism have been formed around the world. Some of these are

the World Social Forum, The European Social Forum and the Asian Social Forum

(Ayres, 2004, p. 28).

Thus, it appears from the above discussion, that the neo-liberal belief in the benefits

of free market practices have not largely been realised in practice, and that there are

problems with the application of a neo-liberal paradigm to a complex human world.

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The role of the state

As stated, neo-liberalism favours a minimal state. The discussion of the role of the

state is central in the neo-liberal theory and ideology. While advocating a minimal

state, neo-liberalism in many ways also depends on it.

Some scholars argue that there may be problems with restricting the role of the state,

as governments throughout the world are required to regulate and compensate for

social, economic and ecological problems while supporting existing patterns of

consumption and production (Bovill & Leppard, 2006, p. 395; Gill, 2003, pp. 138-

139). Additionally, the state often bears much of the responsibility for education,

training and social security (Bovill & Leppard, 2006, p. 395). Governments must

hence find a way to maintain a tax base, and regulate and police market society,

which may prove difficult when neo-liberal based policies request cuts in public

spending and limits the role and tasks of the state (Gill, 2003, pp. 138-139). The neo-

liberal position on the role of the state is therefore somewhat ambiguous in that it on

the one hand promotes global economic growth and integration, competition and

accumulation of goods, whilst on the other hand ignoring the exhaustion of

resources, undercutting traditional tax bases, and limiting the capability of the state

to provide public goods and services (Gill, 2003, p. 139).

Furthermore, the neo-liberal emphasis on efficiency, privatisation and free markets

may compromise the ability of the state to create policies that are addressing the

common public interests and issues such as public health, education and public

transportation and infrastructure, and fail to address the common interests of the

society as a whole (Smith, 2000, p. 116). This is due to the neo-liberal tendency to

focus on the individual and undermining issues in relation to ‘the common good’.

Niggle (2003) emphasises that the neo-liberal view of the limited state and the power

of the free market stands in opposition to ‘values inherent in collective,

communitarian, liberal and socialist philosophies, which see the state as rightfully

and necessarily undertaking to provide for our collective security’ (p. 61). The

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common interest of society may therefore be devalued by the focus on private

enterprise, free markets and competition, and the neo-liberal emphasis on the

individual rather than the needs of society as a whole.

However, some neo-liberal supporters recognise the importance of some public

programs. Thomas Friedman (2000) affirms, “…we still need traditional safety nets-

social security, Medicare, Medicard, food stamps and welfare- to catch those who

will simply never be fast enough to deal with the Fast World…” (p. 449). Friedman

here refers to a globalising world with increasing technological and communication

developments, moving capital and open trade. Another advocate of neo-liberalism,

Milton Friedman, agrees that governments do have an important role, even in a free

market society. Milton Friedman (1981) argues that governments must provide

where private enterprise cannot (p. 24). Examples of such areas are providing for

national defence, law and order, and protecting vulnerable people (e.g. children)

from being mistreated by other people (Friedman, 1981, p. 24).

Nevertheless, the neo-liberal ideology stresses the principles of deregulation and

privatisation, and these practices are “identified as transferring power away from

democratically elected governments with a mandate to ensure universal service

provision, towards private capital concerned primarily with furthering opportunities

for accumulation” (Larner, 2000, p. 6). Conversely, this does not imply that

privatisation in some cases (in strong functioning, competitive markets) cannot lead

to better efficiency or lower prices for consumers, in which case privatisation can be

desirable (Stiglitz, 2002, p. xi).

As much as neo-liberalism opposes state intervention and regulations, it may still

become the very thing it opposes. Harvey (2005) describes a scenario where the

‘neo-liberal state’, faced with social movements, is forced to intervene with police

and force, and does so to discipline or suppress movements against the neo-liberal

agenda (pp. 70, 77). In this scenario, the neo-liberal project becomes what it resists:

authoritarian, interventionistic and a suppressor of freedom.

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Instead of the divided description of governments versus markets, some scholars

have suggested an alternative position. In Stiglitz’s (2000) view, it is obvious that

markets will not solve every social problem, just as it is obvious that government

cannot remedy every market failure (p. xiii). Market and government should rather

be seen as complementary partners, where markets are the centre of economy and

the government plays an important role in areas as such as unemployment, pollution

and inequality (Stiglitz, 2002, p. xiii). Moreover, Elsenhans (2005) suggests that

although the welfare state appears to represent the opposite of a free market, the state

is necessary for maintaining an open, liberal and worldwide free market economy (p.

41). Elsenhans (2005) claims: “The welfare state, together with the rule of law and

democratic participation, constitutes one of the foundations of a liberal democratic

order” (p. 41). These views represent a ‘middle path’, reconciling the market and the

state rather than separating them.

Economic growth

One of the promises of neo-liberalism is economic growth achieved through market

practices, which will better life for human kind. According to neo-liberalism,

economic growth is the solution to unemployment, poverty, wellbeing and a better

society. Neo-liberalism maintains that through trade liberalisation, economic growth

will accelerate, and the income gap between rich and poor will diminish and thereby

lift millions of people out of poverty (by increasing their personal wealth) (Bloche &

Jungman, 2007, p. 253; Kawachi & Wamala, 2007c, p. 130). Neo-liberal advocates

thus assert that the free market is a contributor to overall economic progress, an

engine of fast growth and better living standards (even if it may create wider income

gaps) (Friedman, 2000, pp. 104, 307; Sen, 1999, pp. 6, 26).

Nonetheless, many scholars have contested the neo-liberal emphasis on economic

growth and the effects of neo-liberal economic practices.

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A major problem that arises from the emphasis on economic growth is the

distribution of this economic wealth. When implementing neo-liberal policies,

economic wealth, according to empirical data (see below), appears to have been

distributed very unevenly over the past few decades. Yet, in neo-liberalism, wealth

distribution, as a ‘social justice’ principle, is dismissed as it is seen as infringing

personal liberty (which I shall discuss in the last section of this chapter ‘equality,

justice and social justice’). In fact, wealth distribution controlled by an authority,

such as the state, is in neo-liberalism regarded as deeply unjust, and wealth

distribution should rather result from a natural, free float of capital in the free

market.

Yet, today, economic growth has become a leading priority in many countries.

Economic growth is the modern touchstone of policy success and national pride, and

national well-being and a good society is often measured in economic growth (e.g.

gross national product, GNP) (Gershman et al., 2003, pp. 164-166; Hamilton, 2003,

pp. 1-2). Furthermore, economic growth has become a measurement for individual

well-being (Little, 2002, p. 9).

Conversely, Sen (1999) argues that GNP is a narrow way of monitoring

development in any country (p. 5). Basic freedoms and rights such as the liberty of

political participation or the opportunity to get basic health care or education should

instead be essential components of the development of a country, and, furthermore,

these rights are very effective in contributing to economic progress (Sen, 1999, p. 5).

Therefore, according to Sen (1999), the success of a society should be evaluated by

the substantive freedoms that the members of a society enjoy (p. 18). At the same

time though, Sen (1999) maintains that a free market economy is rightly

acknowledged for its ability to contribute to high economic growth and overall

economic progress (p. 6). (Several scholars have been enthusiastic of Sen’s work,

especially Development as Freedom (1999), as it seems to indicate a departure from

the dominant neo-liberal position (Navarro & Muntaner, 2004b, p. 9). There are also

critics of this work, see e.g. Navarro (2004).)

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In many Western countries, living standards and incomes have in general increased

over the last few decades. The scenario is, however, different for developing

countries. As discussed in chapter three, developing countries have often been

required by institutions such as the IMF and the World Bank to implement neo-

liberal policies to achieve economic growth and global integration. This project has

not been entirely successful, and many scholars emphasise that neo-liberalism,

instead of increasing material well-being and ensuring economic growth, has in fact

generated the opposite. Felix (2003) maintains that there is accumulating evidence

that liberalising and globalising capital markets has provided slow and unstable

growth, contrary to the neo-liberal thesis of accelerated economic growth (pp. 9-14).

Moreover, Brohman (in Jang, 2006) argues that countries that have implemented

neo-liberal based policies have experienced problems such as declining terms of

trade, financial crashes, capital flights, polarization and impoverishment (p. 5). Neo-

liberalism, in this regard, has produced a ‘globalisation of poverty’ (Chossudovsky

in Jang, 2006, pp. 5-6). Schrader (2005) has also found that trade liberalisation does

not necessarily lead to economic growth (p. 19). Some scholars additionally claim

that the neo-liberal project has not been very efficient in establishing its goal of

global capital accumulation, as it has increased income gaps between rich and poor

in the way that it has functioned as a project to increase the capital and power of

economic elites only (Gill, 2003, pp. 119, 123, 125, 140; Harvey, 2005, p. 19).

There are, nevertheless, disagreements concerning worldwide trends in poverty and

inequality during the past few decades. Some claim that aggregate global growth

rates have continued to decline in the past decades since the 1960’s (WCSDG in

Harvey, 2005, pp. 154-155). According to the World Bank, more people live in

poverty than ever before, and the United Nations portrays poverty as a downside of

globalisation (Buse & Walt, 2002, p. 177). Yet, the World Bank estimates from 2001

show that fewer people in the developing world live in extreme poverty (under US

1dollar/day) compared to twenty years earlier, but poverty reduction has been very

uneven across the world (Kawachi & Wamala, 2007c, p. 123). Overall, there have

been great global inequalities in economic development in recent years, as some

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nations have experienced phenomenal growth, whilst others have experienced the

opposite, and the poorer groups of people seem to have become poorer (Gershman,

Irwin & Shakow, 2003, pp. 159-160). For instance, China and India have witnessed

considerable economic growth over the past few decades (yet, here strong regulatory

states have played a significant role), while for example Russia has experienced a

decline in per capita income after converting to a market economy; and many

African (especially sub-Saharan), Eastern European and Latin American countries

have not seen positive economic changes but rather an increase in the number of

poor (Gershman et al., 2003, pp. 159-160; Harvey, 2005, p. 154; Kawachi and

Wamala, 2007c, p. 123). Additionally, the proportion of the world’s population in

poverty may have fallen, but according to Harvey (2005, p. 154) and Kawachi and

Wamala (2007c, pp. 123-124), this is almost entirely caused by improvements in

China and India.

Furthermore, some have questioned the correlation between economic growth and

well-being, as it is claimed in neo-liberalism. Some have found that rich people (in

any given country) are no happier than people in poorer countries are, or than people

with moderate incomes; and that an increase in capital and material goods does not

necessarily produce a higher level of well-being and happiness (Hamilton, 2003, p.

33; Layard, 2005, pp. 32-33). Hamilton (2003) notes that more income does make a

difference to people who are very poor and lack basics such as food and shelter or

health care (p. 33). Yet, in rich countries, increasing income does not seem to

improve levels of national well-being (Hamilton, 2003, p. 33).

Moreover, Felix (2003) argues that there is a growing awareness of the weaknesses

of the neo-liberal case for capital market liberalisation, which is undermining

confidence in its policies at the IMF and other promoters of neo-liberalism (p. 9).

Alternative solutions to the neo-liberal chase for endless economic growth and

capital accumulation are offered by some scholars. Harvey (2005) suggests that we

shift our focus to human rights, such as the right to life chances, to integrity and

sacredness of our bodies, to be able to engage in critique without fearing reprisal, to

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have a decent and healthy living environment, to diversity, for producers to have

direct control over production, and finally, to collective control over property

resources (p. 204). Moreover, Barry (2006) suggests that we shift our focus to

promoting social justice on a global scale (an issue I will discuss in detail later),

creating equal opportunities for all in areas such as education, health and work, and

that we face the reality of the destructiveness of our current focus on economic

growth and exploitation of resources by drastically altering our policies and

behaviours towards more sustainable levels for the earth we live on.

Thus, it can be concluded that there are practical problems with the neo-liberal

assertion of reducing poverty, and increasing economic wealth and material well-

being for the majority of people, and thereby increasing human well-being.

Economic growth, and the distribution of economic wealth, has undoubtedly been

very asymmetrical across the world in recent years, and neo-liberal based policies

have not always been found to generate economic growth and prosperity, or

significantly increased economic wealth for the majority of people. Finally, studies

indicate that the neo-liberal mantra of economic growth and material prosperity does

not appear to increase human well-being and happiness, and further, does not appear

compatible with concerns of a healthy earth and human survival; issues that I will

discuss in the following.

The accumulation of capital and material goods, and its consequences

Neo-liberalism encourages unlimited amassing of capital and material goods. This

practice can nevertheless have harmful consequences and external effects, for

example, by increasing amounts of waste alongside other serious environmental and

socio-political consequences (Dowd, 2000, p. 156; Jang, 2006, p. 23). Nonetheless,

neo-liberalism fosters ever-increasing levels of consumption and production, and a

lifestyle based on work, material well-being and endless consumption (McCabe,

2005, p. 180; McGregor, 2001, p. 84).

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Yet, today, industrialisation, trade liberalisation and deregulation, globalisation,

mass tourism, urbanization, rising living standards and an increasing population have

put a major pressure on the planet through threatening the environment. Some issues

emerging from this pressure are:

• deforestation

• greenhouse gas emission and increasing levels of carbon dioxide in the

atmosphere

• loss of biodiversity and other ecological damage

• global warming

• rising sea levels

• over fishing/poor management of the resources of the oceans, resulting in a

dramatic decrease in the population of most fish and other sea creatures

• foreign exploitation of local markets

(Based on Barry, 2005, pp. 252-260; Kawachi & Wamala, 2007b, p. 8; Labonte,

2003, pp. 478-480; McMichael & Ranmuthugala, 2007, p. 82; Urry, 2003, p. 117.)

Yet, humans depend upon the earth’s biosphere and ecological systems for survival,

and judging from the current over-exploitation of the earth’s resources to sustain and

even increase material affluence, the future looks rather gloomy for the human race.

There is no doubt that the current pattern of material consumption is environmentally

unsustainable (Hamilton, 2003, p. 174, Labonte, 2003, pp. 477-478). Human

consumption of natural resources and energy (even when taking technology and

recycling into account) is growing, and creating overuse of resources and

disturbances in the natural environment and biodiversity of the earth (Hamilton,

2003, pp. 175-177; Harvey, 2005, pp. 173-175). Regrettably, the neo-liberal

ideology does not consider environmental consequences of consumerism as

problematic.

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If one imagines that the neo-liberal process of accumulation and consumption will

expand excessively in the near future, there is the prospect of the severe destruction

of the planet’s eco-systems, which is threatening to human survival. The typical

illustration is that if the current rate of consumption and accumulation found in the

United States were to be exercised in China, there would be inescapable and vast

damage done to the planet’s eco-systems (Gill, 2003, p. 138). Rapid industrialisation

and increased energy use and consumption in China and India are already producing

serious environmental and health issues in these countries (Harvey, 2005, p. 174).

Recently, there has been a growing public debate about environmental changes,

global warming and the possible impact on human life, and this debate reflects

recognition of the links between human activity, global changes and the threat to

human survival. Environmental changes and threats are playing an important role in

shaping future human health. In a health context, environmental changes could have

implications for increasing rates of infectious diseases (e.g. malaria, dengue fever

and other vector-borne diseases) (McMichael & Ranmuthugala, 2007, pp. 86, 90-91;

Saker et al., 2007, pp. 22-24). Furthermore, global weather changes and intensified

extreme weather (such as hurricanes, droughts, flooding and tsunamis) create

disaster situations, which may spur outbreaks of diseases such as gastroenteritis,

typhus and respiratory illnesses (Saker et al., 2007, p. 24). Nevertheless, the health

impact of climate changes will be very uneven around the world (McMichael &

Ranmuthugala, 2007, p. 95).

Apart from environmental consequences, the practice of ever-increasing

consumption will far from include all people. There will be groups of people that

will not fit into the category of a neo-liberal consumers (often due to the lack of

capital), resulting in exclusion and marginalisation of these groups. Examples of

such groups could be the homeless, the poor, low-class workers and other low-

income groups, various disabled people, chronically ill people and other vulnerable

members of society. These people are often marginalized from the privileged cohorts

of production and consumption (Gill, 2003, p. 197). Yet, these groups are merely

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regarded as a natural part of an unequal human population in neo-liberalism (as I

shall clarify later in this chapter). Nonetheless, it is proposed that the neo-liberal

project will benefit most people as the wealth of the rich ‘trickles’ down on those

less fortunate. This theory does, however, not appear to have been realised in

Western developed nations pursuing neo-liberal policies (especially in the United

States and the United Kingdom), where the past decades have found that the rich

(and few) in society have substantially increased their wealth, whilst the poor have

remained poor, and inequalities in income and wealth between rich and low-income

classes have increased (see Barry, 2006, for detailed examples).

Therefore, the neo-liberal emphasis on ever-increasing accumulation of goods and

capital seems somewhat idealistic, and it is neither environmentally sustainable, a

healthy alternative, nor unproblematic in practice.

THE ETHICS OF NEO-LIBERALISM

In the above, I have presented critical voices as well as arguments in favor of neo-

liberalism, and I have questioned neo-liberal principles and practices. In the

literature, neo-liberalism has been critisised on a number of issues, regarding both its

theoretical assumptions and its practices. In the following, I shall seek to add to this

literature by analysing the neo-liberal ideology from a different standpoint, an area

rarely discussed, the ethics of neo-liberalism.

Ideology and ethics in neo-liberalism

The majority of scholars portraying neo-liberalism describe neo-liberalism as a

political and economic theory or ideology, which has had impacts on private and

public human life. Moreover, most scholars describing neo-liberalism are often from

a political or economic background, and even if many scholars incorporate

discussions of issues such as social justice or inequalities in their debate of neo-

liberalism, the ethical foundations of neo-liberalism are rarely disputed directly.

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Ethics is concerned with moral principles. It has as its primary purpose to debate and

propose the realisation of the good life for human beings (Isaacs, 2006b, p.1). It

concerns how we live and what choices we make in daily life (Churchill, 2002, p.

53). Additionally, ethics is a social mechanism, which seeks to ensure that people

have the opportunity to thrive as human beings (Isaacs, 2006c, p. 8). As neo-

liberalism is a normative belief-system, consisting of certain moral values and an

ethical framework that suggests what a good human life is, a discussion on values

and ethics in neo-liberalism is necessary.

Wilber (2004) notes that modern economic theory often separates economics and

ethics, which is problematic, as economists have ethical values that their economic

theories and practice are based upon (p. 147). Economic institutions and policies

(such as neo-liberal policies), influence people’s everyday lives, and, therefore,

Wilber (2004) argues that ethical evaluations must supplement economic evaluations

(pp. 147, 149, 154, 157). Additionally, Jang (2006) points out that most studies on

neo-liberalism have not paid attention to how it affects ordinary people (p. 24). Yet,

neo-liberal influence in societies concerns people’s everyday lives, and, therefore,

Jang (2006) emphasises the importance of more research into this area (p. 24). These

arguments stress the importance of incorporating an ethical discussion of the values

and ethical framework of neo-liberalism.

Furthermore, as neo-liberalism is presented as an ideology, it is vulnerable to

analysis regarding that. An ‘ideal type’ selects some phenomena and aspect that it

brings together in an ideal type, which, therefore, excludes other aspects, and one

can hence question why some aspects are more important than others are (Smith,

2000, p. 1). Neo-liberalism as an ideology must accordingly be prepared to justify

why some aspects are included and others are not, and recognise that it is a limited

and specified picture of the world. Nonetheless, Smith (2000) points out that ‘ideal

types’ or theories/models are necessary to make sense of the world. “Some sort of

conceptual framework is necessary if we are not to lose ourselves in the ontological

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infinitude of the world….” (Smith, 2000, p. 2). The question, of course, is which

framework we choose to guide our actions and interpret the world.

Individualism, the good life and human relationships

The question of ‘the good life’ is one of the classical questions in philosophy

(Brülde, 2007a, p. 1; Chekola, 2007, p. 51). What is the good life for humans in a

neo-liberal view? Neo-liberalism strongly values individual freedom, choices and

rights. There is at large a great emphasis on individualism in neo-liberalism, and the

neo-liberal ideology associates the good life and human happiness and well-being

with individual liberty, economic growth, and material progress (Edwards, 2002, pp.

38-40; Richardson in Slaughter, 2005, p. 35; Slaughter, 2005, pp. 35, 38, 56). Thus,

in neo-liberalism, humans are perceived as materialistic, self-seeking and

competitive beings (competing for survival, power, wealth and prestige) (Niggle,

2003, p. 60). Accordingly, the notion of the common good gives way to the

emphasis on the individual, as neo-liberalism largely ignores notions of social

collaboration and the production of goods and services in a not-for-profit context,

and instead pursues individual material wealth (Bovill & Leppard, 2006, p. 404;

Isaacs, 2006c, p. 10).

What implications does this view have for human life?

In neo-liberalism, the individual is conceived as rational and autonomous (self-

sufficient/independent). The individual determines the contents of ‘the good life’ in

accordance with his/her personal preferences, not only concerning the material

world, but also concerning morality and beliefs (Hollenbach in McCabe, 2004, p.

181; McGregor, 2001, p. 85). The individual actualises him or herself through the

process of consumption, and the main human activity is engaging in market

transactions (Gill, 2003, p. 119; Schutz, 2001, p. 6). The market place is thus the

centre for a good human life and the rational and free consuming individual.

Additionally, the individual is ‘free’ of obligations to provide for the needs of others

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(Hollenbach in McCabe, 2004, p. 181), as general principles in neo-liberalism are

independence and self-reliance. Thus, in neo-liberalism, people are detached from

social relationships (Kingfisher in Clarke, 2004, p. 31), and relationships with other

people are not viewed as an essential part of life (Schutz, 2001, p. 6). Neo-liberal

human life is, largely, a life revolved around the self-concerned individual whose

goal it is to maximise personal satisfaction (Schutz, 2001, p. 6).

There are some encouraging aspects of the neo-liberal view on human life. The

emphasis on the individual gives people room to pursue their individual interests,

and the free market may provide opportunities and varieties of products and services

to fulfill these interests. In this sense, the free market provides a space where human

beings can pursue their dreams, and determine the content of their own lives. Neo-

liberalism appeals to individual freedom as the foundation of human life, and for the

individual to determine what is best for him or her. Undoubtedly, individual freedom

and self-determination are of undeniable significance to human life; and as noted by

Sen (1999), these are basic human liberties. This view is supported in this thesis.

Yet, a problem with neo-liberalism is that it seeks to place every aspect of human

life within the market, and those aspects that for some reason cannot (which cannot

be counted and commodified), are expelled. This process is called commodification

of human life, as the economic calculus of neo-liberalism seeks to bring more and

more of human activity and relationships within the economic calculus of the market

place (Clark, 2004, p. 35; Powers & Faden, 2006, p. 103). Because of this, neo-

liberalism cannot acknowledge value beyond that of price or instrumental value

(Anderson in McCabe, 2004, p. 181). This view therefore disregards that human life

is placed within a context of culture, and social and moral relationships, as these

features of human life have no intrinsic value in neo-liberalism (Anderson in

McCabe, 2004, pp. 179-180; Isaacs 2006a, p. 1). Furthermore, this approach does

not acknowledge the ontological reality of human embeddedness and embodiment.

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The condition of human life is such that we are formed together with others, and our

foundation is our common existence and embeddedness in the universe and the

world (Martinsen, 2006, p. 130). Through our physical bodies, we engage with the

world and with other humans (embodiment), and through our bodies, we interact

with the complexities of the human conditions (Isaacs, 2006c, p. 2). Furthermore,

humans are embedded in several dimensions such as the natural world, the social

world (e.g. human relations, moral engagements and identity), in time, in a

framework of values, and in language (Isaacs 2006a, pp. 1, 5; Isaacs, 2006c, pp. 2-

3). It is through embodiment and embeddedness that we as humans find meaning and

engage in the complex world of the human condition (Isaacs, 2006b, pp. 1-2; Isaacs,

2006c, pp. 2-3). It is through these conditions that the grandness of life appears; a

life which is not restricted to the life of the individual as it is in neo-liberalism. In

neo-liberalism, however, these ontological aspects of human life lose significance, as

they do not fit easily within the rational and economic calculus of the market.

Nevertheless, humans are dependent beings, dependent on other humans such as

family and friends, or people that serve in various public and private spheres. By

nature, humans are dependent on each other for the fulfillment of their needs and

potential (Commission on Social Justice, 2000, p. 62). As stated by Gastmans

(2002), “everyday interaction between persons is a complicated network of mutual

dependencies” (p. 497). Thus, people engage in a range of relationships, where

bonds of friendship, care and nurture are formed, which are necessary for human

survival. As the neo-liberal independent individual is detached from such social

relations, these relations have no intrinsically value in neo-liberalism. Harvey (2005)

has raised concerns about the contradiction that occurs between the emphasis on

individualism in neo-liberalism and the wish for a meaningful collective life, as

social relationships may be one of the most important determinant for human

happiness (pp. 35, 69). Furthermore, the notions of the common good and collective

life are notions disregarded in neo-liberalism as the focus of human life is placed on

the individual.

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A relationship which neo-liberalism appreciates is the relationship between the

individual consumer and the ‘businessman’ in the market transaction, an

interactional relationship, albeit on a superficial level (Von Mises, 1996, p. 129). In

this transactional relationship in the market, the consumer and ‘the businessman’

condition each other and are dependent on each other (Von Mises, 1996, p. 129).

This is an imperative relationship for business, but it falls short in addressing

ordinary human life, which is largely based upon relations with fellow people in the

community.

Yet, relationships are immensely important to human life, happiness and wellbeing

(Layard, 2005, p. 225), and the moral space between humans is part of the human

embeddedness in the world; shaping us as individuals within a collective setting

(Isaacs, 2006c, p. 3, Løgstrup in Martinsen, 2003, p. 21). One might say that in

social life and relationships, humans are ‘moral actors’, constantly engaging morally

with others through interaction (Henriksen & Vetlesen, 2000, pp. 22, 254-255).

Thus, morality is a fundament of human life (Løgstrup in Martinsen, 2003, p. 21).

The claim that people are independent and on a life-long rational pursuit of self-

interest excludes this reality of complexity and embeddedness in a social world

where we engage morally and socially with others. As argued by Isaacs (2006b)

“…power, responsibility, constraint, dependence, powerlessness and vulnerability

are enduring features of the human condition that intertwine to create the backdrop

of our lived realities and our desire to attain well-being” (p. 2).

Furthermore, humans are embedded in and dependent on the natural world.

Hamilton (2003) argues that in neo-liberalism, the non-human or natural world is

only valuable insofar it provides resources of economic value in the market place,

and thereby contributes to the material well-being of humans, which thus gives the

natural world instrumental value only (pp. 191-192). Here, then, we find a motive

for why neo-liberalism does not consider environmental consequences of excessive

material consumption, as there is in neo-liberalism a fundamental separation of

humans and nature, and nature is exploited and dominated by humans (Hamilton,

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2003, p. 192). Nature, which humans are dependent on, and which through its

diversity and natural influence shapes much of our life, loses its mystical and

amazing power and meaning in neo-liberalism. Yet, human life is dependent on

nature, and nature holds significance not as something in our power, but rather as

something which is powerful in itself and which we as humans gain access to

through our senses and our ‘bodiliness’ (Martinsen, 2006, p. 134).

As discussed, human life includes the interaction with fellow human beings and the

natural world. The neo-liberal ideology therefore appears narrow in its definition of

human life, human wellbeing and human potential, as it focuses on the self-

interested, self-reliant individual and economic growth and material progress as the

aims of social life. Furthermore, a possible explanation as to why neo-liberalism

does not incorporate moral or ethical discussions about these issues, could be

because it does not give embeddedness, embodiment and moral interactions intrinsic

value or regard these as vital to human life and well-being.

A critic of neo-liberalism, Hamilton (2004), argues that the neo-liberal agenda

interferes negatively with personal and social human life. Hamilton (2004) states:

”When market values rule, calculation drives out trust, self-centeredness displays

mutuality, superficiality prevails over depth and our relationships with others are

conditioned by external reward and, above all, money” (¶ 10). This way neo-

liberalism may come to transform human private and social life. One can here

question the depth of neo-liberalism, and if the pursuit of individualism and material

well-being should prevail human aspects such as relationships with others, collective

life, culture, nature and morality. A critical issue in neo-liberalism is, therefore, if

this ideology in reality is able to provide human beings with well-being and

happiness.

Psychology and philosophy are fields that have examined human happiness, or

subjective well-being, vastly. There are many approaches to what constitutes

happiness and well-being (see e.g. Brülde, 2007b; Chekola, 2007; Schoch, 2006),

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and happiness may be a highly subjective matter. Yet, studies have shown that

human happiness and well-being relates to such various factors as:

• personality, optimism and self-esteem

• love and emotional engagement

• family, and relationships and friendships with others

• a sense of solidarity with others and one’s community

• level of control over life situation, and autonomy

• good health

• genetics

• reasoning

• work and income

• intrinsic goals

• spirituality and personal values

• a sense of meaning and purpose

(Brülde, 2007a; Chekola, 2007; Demir & Weitekamp, 2007; Demir, Özdemir &

Weitekamp, 2007; p. 243; Hamilton, 2003, pp. 33-35, 39, 52; Layard, 2005, chapter

5; Powers & Faden, 2006, p. 24; Seligman, 2002.)

Additionally, some scholars argue that happiness in a society is likely to increase the

more people care about each other, and that altruism and solidarity therefore are

essential to human happiness (Layard, 2005, p. 141; Nussbaum in Powers & Faden,

2006, p. 24; Powers & Faden, 2006, p. 24).

Some claim that income and material wealth accounts for a smaller part of human

happiness (Hamilton, 2003, p. 34). Human well-being does, however, depend on

necessities such as food, housing, and clothes, and in poor countries, additional

income is valuable to human well-being and happiness when lifting people away

from poverty (Layard, 2005, pp. 32-33, 135). Yet, in Western developed countries,

studies have shown that additional income above US dollars 20 000 per person is not

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associated with more happiness (Layard, 2005, pp. 32-34). Thus, extra income, or

material wealth, when a person is already well off, is not contributing significantly to

higher levels of well-being and happiness.

The above leads me to conclude that the neo-liberal definition of human life and

well-being is limited, and that this view fails to consider the complexities of the

human condition and many of the factors that seem to constitute human happiness

and well-being. Yet, the neo-liberal view of human life is apparent and prominent in

human daily life, as individualism and self-reliance are now deeply embedded in

Western societies, and as we frequently encounter messages though various

mediums concerning how to obtain happiness through purchasing certain items,

changing our body appearance or striving for a higher income.

Rational choice and the consumer

Another curious aspect of the neo-liberal ideology is the praise of the rational

individual and self-interested choices. Yet, what does ‘rational self-interested

choice’ imply in neo-liberalism? ‘Rational’ is, according to the Oxford Dictionary

(2001) “based on reason or logic” or “able to think sensibly or logically” (p. 738). In

an economic sense, rationality entails “making choices that best further one’s own

ends given one’s resource constraints” (Folland et al., 2007, p. 8). The latter is based

on the economic approach that the decision maker is a rational being (Folland et al.,

2007, p. 8). These definitions are also the basis for the neo-liberal rational

individual. In neo-liberalism, all humans are seen as being the same: able to make

rational, self-interested choices in the free market (Edwards, 2002, pp. 62-63).

The notions of rationality and logic originate from the beginning of Greek

philosophy (notably Aristotle) around 400 BC, and they have played an immense

role in Western societies ever since (Isaacs, 2006a, p. 4; Taylor, 1985, p. 217).

Wilber (2004) indicates that in economics, the label of rational behaviour carries a

positive suggestion that rationality is desirable and morally good (p. 150-151).

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Rational choice in neo-liberalism is also viewed as desirable and morally good. The

neo-liberal individual is a person who makes choices based on self-interested

preferences directed by the ‘better self’: the self that knows which choice is the best.

This assumption is akin to the theory of economic utilitarianism, which presupposes

that everyone’s choices are directed by the ‘better self’ (Little, 2002, p. 14). Rational

choice in neo-liberalism is furthermore assumed to be well informed, based upon

knowledge readily available for the consumer in market transactions.

The notions of rationality and self-interest can be disputed. As per the previous

section, the notion of the self-interested, detached individual excludes the reality of

the human complexities and embeddedness, embodiment and interdependency. I will

not discuss this further here, but return to this point in relation to implications for

health care in chapter six.

The logic of rationality and consumerism in neo-liberalism is closely bound to the

rationality of money (Hamilton, 2003, p. 53). Contemporary consumerism is based

upon the acceptance of an economic system of money. Hence, choice in a free

market is available to those who have purchasing power (Bovill & Leppard, 2006, p.

394). Brown (in Hamilton, 2003) notes that the logic of money reflects a way of

thinking which is impersonal, abstract, objective and quantitative; a way of thinking

similar to modern science (p. 53). Due to this, the logic of money is seen as rational

(Brown in Hamilton, 2003, p. 53). Neo-liberalism is notably based on the logic of

rationality of money. The neo-liberal self-interested consumer is a person who

rationally measures the value of labour and material commodities in monetary value

(Hamilton, 2003). pp. 195-197). This way, humans lose social and cultural value

(Hamilton, 2003, p. 196). In neo-liberalism, people are rational beings who are

disconnected from nature, culture and social interactions, and operating as beings

bound to the rationality of money and commodities in the free market. As discussed

earlier, this view has some radical consequences for human life and relations.

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Yet, other factors than the rational, self-interested choice might affect our judgment

and decisions in the free market, such as advertising, other people’s opinions or

dominant norms in society. Indeed, external effects in the free market are common

(Layard, 2005, p. 137). We might additionally make irrational choices based on

emotions such as spontaneity, desire and greed (Fullbrook, 2004, pp. 77-80).

Moreover, it is not always the case that people choose what is best for them when

faced with the options of the market (e.g. buying cheap food of poor nutritious

quality); therefore, they may end up acting against their own rational self-interest.

Indeed, the freedom of the consumer includes the right to purchase services and

products that he or she does not need, or that may seem foolish to others. Thus, the

freedom of the consumer seems to include the right to act irrationally. Yet, when

such behaviour occurs, economists will often argue that this irrationality makes

sense when the incentives facing the individual are properly understood (Folland et

al., 2007, p. 8).

Another problem with the idea of rational choice is that well-informed choices may

prove difficult to secure in the free market, as there is often an asymmetry of

information between the different parties, and information explaining the nature of

the options may not be available. Therefore, a rational calculation of different

choices can be severely constricted and unequal (Barry, 2005, p. 137).

Nevertheless, the individual rational consumer is a cornerstone in the free market

economy of neo-liberalism. As stated by the WTO (2003) ”We are all consumers”

(p. 5). Western societies today have at large become consumer societies, where “…it

makes sense to think about all kinds of incongruous activities as instances of

‘consumption’” (Clarke, Doel & Housiaux, 2003a, p. 27, emphasis in original).

Contemporary Western human lives are encompassing consumption of goods and

services. The literature on consumerism is vast, and I will not discuss this

phenomenon at length here. In the following, I shall investigate consumerism as

related to neo-liberalism.

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Consumerism in neo-liberalism is related to the rational, self-interested individual

and material well-being. The neo-liberal, rational consumer is an active individual

who is required to be adaptive, independent, flexible, and competitive (Clarke, 2004,

p. 39; Niggle, 2003, p. 60). Consumerism refers to how these rational individuals

make ‘consumption choices’ when faced with limited resources (Folland et al., 2007,

p. 29). The consumer phenomenon additionally encompasses ‘mass-customization’,

which involves mass-producing customised products to meet individual or very

narrowly defined groups of consumer’s wants (Davidow & Malone in Smith, 2000,

p. 78; Davis in Smith 2000, p. 78; Smith, 2000, p. 79). Thus, at the same time,

consumerism addresses both the individual and the mass (Falk, 2003, p. 188). Neo-

liberalism claims to establish the sovereignty of the consumer, and that the

consumers have regained an “active” role in the production of goods, as they are no

longer just passive recipients of mass-produced goods, but are actively defining what

is to be produced (based on Clarke, 2004, p. 39; Smith, 2000, pp. 79, 81; Tapscott, in

Smith, 2000, p. 79). Conversely, consumer needs and wants are frequently

manipulated by marketing. Marketing involves knowing the consumers, creating

services and products that they want, and adapting these services and products to the

consumers’ ever-changing needs and preferences (Silverstri, 2005, p. 446).

Marketing strategies to promote products and services, both in the public and private

sector, are today very common (Silverstri, 2005, p. 444). Advertising can however

generate artificial needs creating a desire for a certain item or service, instead of

fulfilling or responding to consumer’s wants and needs. In this context, the consumer

becomes passive, resembling a target or an object that fulfills the needs of the

industry to continue production and profit making. In this situation, the behaviour of

consumers do not reflect their own preferences, but the preferences of the

organisations and institutions that influences them (through marketing), which

makes the notion of consumer sovereignty incongruous (Hamilton, 2003, pp. 64-65,

80; Layard, 2005, pp. 160-161). From this standpoint, the free market becomes an

enterprise that socially manipulates and determines people’s freedom of choice

instead of being a forum that provides for them (Hamilton, 2003, p. 66).

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The above represents polarised views regarding the consumer. One view sees the

consumer as a subject subdued by the forces and manipulation of marketisation and

large corporations, while the other sees the consumer as a sovereign individual with

great decision power and freedom of choice. It is likely that contemporary

consumers are both, as well as it is likely that the culture of consumerism consists of

many other factors, for example power and class relations in society, politics, culture

and social relations between people as influenced by consumption (Clarke et al.,

2003b, pp. 135-136; Crompton, 2003, p. 157).

An unmistakable aspect of neo-liberal consumerism is the emphasis on the logic of

money and purchasing power. One of the driving forces in today’s consumer

capitalism is the use of credit/credit cards and loans to finance expensive purchases

and support consumerism (Dowd, 2000, pp. 157, 190; Gill, 2003, pp. 191-192;

Hamilton & Denniss, 2005, pp. 74-78). As stated by Hamilton and Denniss (2005)

“Growth in consumer debt has partly been a consequence of the easy availability of

credit. But that easy availability has been matched by intense demand” (pp. 74-75).

Credit is hence a way to keep up consumption and satisfy immediate wants for goods

and services (Hamilton & Denniss, 2005, pp. 75-77). It is a path justified by the view

that one deserves to be ‘rewarded’, in a material sense, through consumption, and

that debt and credit is a natural way to uphold a certain standard of living (Hamilton

& Denniss, 2005, p. 81). Banks, commerce and debt collecting businesses have

profited largely on debt and credit, whereas individuals often struggle to repay debt

(Hamilton & Denniss, 2005, pp. 71-81). Nevertheless, many people are excluded

from this category of credit consumers, typically low-income households, as banks

are often not willing to extend credit to these people (Hamilton & Denniss, 2005, p.

74). Therefore, they are excluded from taking part in the neo-liberal promise of

lavish consumerism. As stated by Hamilton (2003) “…’empowering the consumer’

means entrenching inequality, because the power of consumers is directly

proportional to their incomes” (p. 17). Consumerism in this context may lead to a

situation where consumer goods become markers of unequal social hierarchies, as

the products one owns mark one’s status (Bovill & Leppard, 2006, p. 395).

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What do people gain by excessive consumerism? Hamilton (2004) seeks answer this:

Today, most people in rich countries seek proxy identities in the form of

commodity consumption, consumer capitalism’s answer to the search for

meaning. The hope for a meaningful life has been diverted into the desire

for higher incomes and more consumption. (¶7)

Consumption thus becomes a medium through which people endeavor to restore the

sense of self and individuality (Hamilton, 2003, p. 70; McGregor, 2001, p. 85), as

they put faith in consumption as the path to contentment and fulfillment.

Consumerism is moreover an individual pursuit based on individual satisfaction and

“…the creation and defence of individual status though the acquisition of particular

material possessions” (Purvis, 2003, p. 70). Therefore, the focus on consumerism

further highlights the neo-liberal emphasis on material well-being and the individual

as the centre of society. (Even though consumerism is often referred to as a

collective activity (see Purvis, 2003, p. 70)).

Nevertheless, many scholars point to the destructiveness of consumerism. Sennett

(2006) describes consumerism as a ‘self-consuming passion’ that will eventually

burn itself out by its own intensity. The desire for a new item creates a great

anticipation and excitement, but when one owns this item, the excitement fades and

the item loses some of its value (Sennett, 2006, pp. 137-138, 161). Smith (2000)

describes contemporary consumerism as ‘an addiction’ that can leave the consumer

in a state of unsatisfied desire and anxiety, which merely gets temporarily relieved

by another purchase (p. 87). Consequently, marketing is used as a tool to sustain

consumer dissatisfaction and create new needs (Hamilton, 2003, p. 80). Furthermore,

Harvey (2005) states “’I shop therefore I am’ and possessive individualism together

construct a world of pseudo-satisfactions that is superficially exciting but hollow at

its core” (p. 170). Moreover, Bauman (2003) emphasises that consumerism is often

concerned with bodily control and endeavors. Through the process of consumption,

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the body is disciplined to “…absorb an ever growing number of sensations the

commodities offer or promise” (Bauman, 2003, p. 60). Featherstone (2003) describes

that the current consumer culture encompasses a culture of narcissistic resemblance,

encouraging a ’performing self’, an individual who places great value on

appearance, display and management of impression (p. 163). Hence, the body

becomes the instrument through which we realize the process of consumerism, and

our embodiment is increasingly given purpose through this task.

The neo-liberal notions of rationality and consumerism seem monotone in their

emphasis on the individual, material well-being and rationality of money, and the

neo-liberal idea of rational choice appears problematic. Likewise, the idea that neo-

liberalism establishes the sovereignty of the consumer can be contested. Contrary to

the neo-liberal claim of securing liberty and diversity through individual choice, neo-

liberalism produces a homogeneous view of humans, based on the rational self-

interested individual. Clearly, the neo-liberal priority of rationality and consumerism

cultivates a hollow human life, undermining important aspects of human life such as

contentness reached through engagements with other people and the community,

well-being gained through a meaningful occupation (not necessarily work), or other

aspects of human life outside the free market, which cannot necessarily be subject to

the rules of the neo-liberal free market, but, are nevertheless significant to human

life.

Freedom

Harvey (2005) calls for a debate of freedom in neo-liberalism, a debate that he points

to as lacking in contemporary discourse (pp. 183-184).

Neo-liberalism maintain that the large, powerful welfare state is irreconcilable with a

free society as it restricts people’s choices, and uses its powers to take on the task of

bringing about ‘social justice’ through acting as a redistributor of goods, services

and income after what it thinks people need and deserve (Von Hayek, 2000, pp. 92-

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93). Alternatively, neo-liberalism promises individual freedom, rights, and choice in

the free market. These values are certainly appealing, and as discussed previously,

individual freedom is of great importance to human life. Yet, what does freedom in

neo-liberalism imply?

Neo-liberalism claims to secure individual liberty as it provides people with the

freedom to participate voluntarily in the interchange of goods, services, and labour

(Friedman, 1981, pp. 8-9; Friedman & Friedman, 1990, p. 13). Sen (1999) argues

that a denial of these freedoms in any society can be a source of unfreedom in itself

(pp. 25-26, 112). Furthermore, Friedman and Friedman (1990) emphasise that “…the

freedom of people to control their own lives in accordance with their own values is

the surest way to achieve the full potential of a great society” (pp. 309-310). The

neo-liberal individual thus holds the right to self-determination (Von Mises, 1996, p.

130). The greatest threat to this freedom is the concentration of power, which in neo-

liberalism is represented by large, central governments (Friedman & Friedman,

1990, pp. 309-310; Von Hayek, 2000). When the state uses its coercive powers to

determine and allocate resources after what it thinks people need and deserve, it

severely restricts people’s choices and liberty (Von Hayek, 2000, pp. 92-93).

Yet, Harvey (2005) states that to fully accept the type of individual freedom and

rights that are encouraged by neo-liberalism is to accept a situation where we live

“…under a regime of endless capital accumulation and economic growth no matter

what the social, ecological, or political consequences” (p. 181). Moreover, the neo-

liberal consumer, rather than involving freedom of choice and sovereignty, could

involve a ‘forced freedom’ where the consumer is expected to use his or her

economic surplus to make purchases in the market place to support economic growth

in society. Sennett (2006) claims “…we might consider the citizen as a consumer of

politics, faced with pressures to buy” (p. 133).

Consumer choices rarely exist without limits, even in a free market economy. Schutz

(2001) emphasises that there are always constraints of some kinds, and that the

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freedom to choose should be understood as having choices within limits of these

constraints (p. 163). For example, while people essentially have freedom to choose

in neo-liberalism, they are not expected to form strong collective institutions (e.g.

trade unions), and are not supposed to join in political parties that aim to increase

state interventions in the market (Harvey, 2005, pp. 69, 75).

The neo-liberal notion of freedom of choice is problematic, as consumer choices

regularly are manipulated by advertising through different mediums, and

government policies may encourage consumerism as a means to boost the overall

national economy. Additionally, as discussed previously, there will be groups of

people who will be excluded from the neo-liberal freedom and choice in the market

place, for example the homeless, the poor, low-class workers and other low-income

groups, various disabled people, chronically ill people and other groups (Gill, 2003,

p. 197). Moreover, the neo-liberal rhetoric on freedom could be deployed to serve an

elite class of society only (Harvey, 2005, p. 188). Yet, the neo-liberal ideology

believes that freedom and choice eventually will be available to all through

continuing implementing of neo-liberal practices.

Neo-liberalism defines freedom as an individual liberty to choose; however, freedom

might be defined in other ways. Sen (1999) analyses the concept of freedom, and

shifts the meaning of freedom to other areas of human life. For example, freedom

can mean having access to necessities such as education and health care and have the

liberty to choose political participation (Sen, 1999, p. 5). Even though neo-liberals

might agree with these basic freedoms, problems arise when people cannot access

these necessities because of poverty, location, or that these services are scarcely

offered or too expensive to access in a free market. Though neo-liberals believe it to

be only a matter of time before such services will be available and allocated by the

market, problems with the practical implementation of a free market economy, based

on private enterprise and interest, and the neo-liberal disregard of public interests

might fail to address these freedoms.

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Additionally, Polanyi (in Harvey, 2005) stresses that the very concept of freedom in

society is contradictory (p. 36). As much as freedom has obvious benefits, it can also

be deceiving. For instance, as Polanyi (in Harvey, 2005) explains, there are

‘freedoms’ that are less desirable, such as the freedom to exploit other people, the

freedom to restrain technological innovations from being used for public benefit, or

the freedom to profit from public misfortunes that may be secretly engineered for

private gains (p. 36). As neo-liberalism is a radical attempt to ‘restore’ individual

freedom, it might also produce these kinds of ‘freedoms’. On the other hand, neo-

liberalism may entail freedoms that humans find very attractive and favorable, such

as freedom of speech or freedom to choose one’s occupation (Polanyi in Harvey,

2005, p. 36).

From the above discussion, it can be concluded that the neo-liberal concept of

freedom is somewhat problematic and ambiguous. There are obvious contradictions

and problems with the unrestricted freedom as it is presented in the neo-liberal

framework, although there are also good arguments that support the view of

individual freedom and choice. There seems to be a fine line between freedom and

exclusion and suppression in neo-liberalism.

Power

What is power in neo-liberalism? A basic explanation of ‘power’ might here be

needed. Power is used in various contexts. Power is to accomplish something, to

affect, influence or dominate people, political or military authority or control, or

strength, force or energy (Oxford dictionary, 2001, p. 691; Schutz, 2001, p. 22). As

anywhere else, all these types of power may be in use in various forms in neo-

liberalism.

One way neo-liberalism inflicts its power is through language. As stated in chapter

two, neo-liberalism has been advanced through purposely using a specific language

describing concepts such as ‘the consumer’, ‘free choice’, ‘individual freedom’, and

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through the language of management theories and practices, and economics. Thus,

the language of neo-liberalism has become a medium of power (based on Taylor in

Isaacs, 2006g, p. 4).

Furthermore, power is in neo-liberalism closely related to money and purchasing

power. Schutz (2001) maintains that in free market societies “…virtually all aspects

of an individual’s personal and social accomplishment depend crucially upon the

particular kind of power that is conferred by having access to money in the form of

income, wealth or credit” (p. 131). Consequently, monetary power may produce vast

inequalities in people’s abilities to fulfill their material and other needs, or pursue

their aspirations, as there are, in capitalist market societies, often inequalities in the

distribution of income and wealth (Schutz, 2001, p. 131). Yet, contrary to the

appearance of economic inequalities, the neo-liberal belief is that market systems

provide equality through the opportunities provided in the free market. (This claim is

related to the neo-liberal belief in personal responsibility, which I shall discuss in the

next section ‘equality, justice and social justice’.) Nevertheless, in reality, people’s

purchasing power and opportunities are often unequal and determined by inherited

wealth and human capital conferred upon them by family or social backgrounds, or

by other disparities in people’s personal backgrounds (Schutz, 2001, p. 135).

Larner (2000) states, “Neo-liberalism is both a policy discourse about the nature of

rule and a set of practices that facilitate the governing of individuals from a distance”

(p. 4). Thus, policies underpinned by a neo-liberal agenda often subject the majority

of people to market forces even as these policies maintain social protection for the

strong in society, such as highly skilled workers or those with inherited wealth and

corporate capital; and the current neo-liberal dominance is increasingly characterised

by oligopoly, protection for the strong and market discipline for the weak (Gill,

2003, pp. 119,123-125, 140). Therefore, neo-liberalism is a political practice that

favours the most powerful and rich people and nations, and excludes a majority of

people (Capitalism; A brief critical outline, n.d.). Richardson (in Slaughter, 2005)

notes that neo-liberalism is ‘an ideology of the powerful’ (p. 39).

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Neo-liberalism promotes a view that the real power and sovereignty lies with the

consumers in the free market (Smith, 2000, p. 78; Von Mises, 1996, pp. 129-130).

Smith (2000) states that this is a peculiar view, as the firms that produce the goods

and services often use strong manipulative advertising mechanisms to convince the

consumer of the value of the good or service (pp. 84-85). This creates a power

asymmetry between consumers and businesses, where the power is often in favour of

businesses. In contrast, the free market is meant to free us from power struggles as

“Buyer and seller meets equally free to choose and with full knowledge from among

all possible alternatives, deciding whether to exchange, and at what terms, fully

voluntarily” (Schutz, 2001, p. 41). Nevertheless, real opportunities to attain

purchasing power are often greatly unequal due to differences in wealth or social

position, and, as noted earlier, the notion of the consumer being fully informed is

dubious. Schutz (2001) furthermore asserts that a perfect, competitive, free market

economy is a utopian project, and that the world consists of a complexity of unequal

conditions and power relations, which makes it difficult to realise this model in

practice (p. 160-161).

Power in neo-liberalism entails a shift of power from the influence of governments

towards power to private corporations and financial markets. According to neo-

liberalism, large governments are a threat to human freedom, as they represent an

exercise of coercive powers, and claim that they have the right to determine and

allocate resources after what it thinks people need and deserve. Some have however

argued that in a neo-liberal society, power can be taken away from individuals and

the public, as people may lose the power to influence society through political

processes (Hamilton, 2003, p. 17). Nevertheless, there seem to be several obstacles

to the ideals of a neo-liberal state, and the neo-liberal ideology seems to simplify the

many intricate processes of power that often play out in a society.

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Equality, justice and social justice

These concepts are particularly complex, and yet, discussing these concepts is

crucial to understanding the moral underpinnings of the neo-liberal ideology.

Neo-liberalism asserts that the free market naturally produces a ‘just outcome’ in

society (Commission on Social Justice, 2000, p. 51). The ‘just outcome’ comes

about as a result of individual liberty, private property rights, a strong legal system,

and freedom of choice and possibilities in the free market. The individual should, as

discussed, not be limited in his/her freedom by a paternalistic state, as neo-liberals

believe that it is unjust to infringe an individual’s property right (e.g. income)

through taxation in order to distribute income to supply another person with his

needs in the name of social justice (Little, 2002, p. 60). In a neo-liberal view, this is

deeply unjust.

Supporters of neo-liberalism argue that liberty secured in a free market economy

provides justice (Friedman & Friedman, 1990, pp. 132-133). In neo-liberalism,

justice is emphasised in the context that everyone should appear equal before the law

and justice system, as well as have access to the opportunities offered in the market

(Friedman & Friedman, 1990, p. 132). These opportunities will naturally differ from

county to country, but factors such as nationality, color, sex, or religion should not

determine the opportunities that are open to a person – only his [or her] abilities

(Friedman & Friedman, 1990, p. 132).

Hence, in neo-liberalism there is a difference between equality (of outcome) and

fairness (justice), because government measures to ensure ‘fair shares for all’

reduces personal liberty (Friedman & Friedman, 1990, p. 135). A government

imposed ‘fair share’ policy implies that someone in power will decide what is fair,

and thereafter take from those who have more than ‘fair’ to give to those who have

less, which restricts individual liberty and equality (Friedman & Friedman, 1990, p.

135). Thus, the use of force to achieve equality will destroy liberty, and power will

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end up with people who will possibly use it to promote their own interests (Friedman

& Friedman, 1990, p. 148). Alternatively, neo-liberalism suggests that individual

liberty should be the prime objective of society, which will naturally provide greater

equality, diversity and opportunity. Nevertheless, as stated by Friedman and

Friedman (1990) “There is no inconsistency between a free market system and the

pursuit of broad social and cultural goals, or between a free market system and

compassion for the less fortunate…” (p. 140). That is, if is a society of its own free

decides to impose taxes on themselves (on all equally) to help the more unfortunate

in society, this is consistent with equality, opportunity and liberty, as long as it is not

just the top earners that are forced by government regulations to provide for the

poorer (Friedman & Friedman, 1990, p. 140).

Moreover, as mentioned, the neo-liberal ideology asserts that people are born

unequal by nature, and that contributions made to society by the best-educated and

the most successful will eventually benefit everyone (the ‘trickle down’ theory)

(Friedman & Friedman, 1990, p. 137; George, 1999, ¶ 14). This notion of inequality

includes a ‘natural rate’ of unemployment, which is seen as a necessary by-product

of a well-functioning economy (Barry, 2005, p. 150; Coburn in Schrader, 2005, p.

26; McCabe, 2004, p. 181). In the neo-liberal competitive world, the individual is

responsible for his own life and the opportunities he or she does or does not create

(George, 1999, ¶ 14). It is only natural that there will be some level of inequality

regarding income, access to services, employment, and education and so on. Hence,

inequality in neo-liberalism is inevitable (Ericson et al., 2000, p. 554). (Inequality

here means disparity or difference, not to be mistaken with inequity, which means

unfairness or injustice (Bambass & Casas, 2003, p. 323; Oxford Dictionary, 2001, p.

460)). The individual is alone responsible for the opportunities he or she grasps and

creates. Consequently, one could say that social justice becomes individualised

(Hamilton, 2003, p. 141).

Thus, in neo-liberalism, the free market is seen as securing liberty, opportunity, and

justice. According to neo-liberalism, justice is best secured before the law, not by a

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powerful government that in its quest for equality destroys liberty. For the sake of

upholding freedom in the market, neo-liberalism accepts some levels of inequality,

and sees unemployment and misfortune of some people as necessary outcomes of a

free market economy. Additionally, neo-liberalism upholds that if people in the

lower classes of society experience worsened conditions, it is due to personal

reasons, or an inability to enhance their own situation by being more dedicated in

education, embrace flexibility in work, or being more disciplined (Harvey, 2005, p.

157). Therefore, responsibility for one’s situation and conditions is regarded as the

individual’s responsibility not a social matter.

Neo-liberalism may provide liberty (to some) at the cost of the vulnerable and

unfortunate. Harvey (2005) argues that the neo-liberal right of the individual

overrides social democratic concerns for equality, solidarity and democracy, (p.

176). Some inequalities will perhaps always exist, as undeniably some people are

poorer, live shorter lives or are less well educated than others, or are less fortunate

that others in other regards (Powers & Faden, 2006, p. 3). To remove all inequalities

would perhaps be impossible and suppressing some human liberties (regarding e.g.

inheritance or rewarding talent or experience in the workplace) (Commission on

Social Justice, 2000, p. 58). Thus, the dilemmas seem to be ‘What should be

considered as inequalities?’ ‘What inequalities matter most?’ ‘What inequalities are

injustices?’ (Powers and Faden, 2006). I will not seek to answer these questions in

this thesis (see Powers & Faden (2006) for an interesting discussion); however, the

discussion on inequalities and injustices is relevant in the context of neo-liberalism

in several ways. As the neo-liberal state withdraws from responsibilities and welfare

provisions, it leaves more and more people exposed to impoverishment (Harvey,

2005, p. 76). Social safety nets are reduced to a minimum as the emphasis shifts

towards personal responsibility. Consequently, the loss of, for example, universal

health care protection and the increasing amount of user-pay fees creates inequalities

in areas such as health and health care, and add to the burdens of the poor and low-

income groups. I will discuss this matter further in chapter six.

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The above is essentially a discussion about individual liberty versus interventionistic

egalitarianism (based on Wolff, 2006, p. 434). The critical question here is, should

we all be required to redistribute some of our wealth in order to support those who

are less fortunate so that we have a more ‘equal’ society, or is it up to each person to

be responsible for his/her situation and have individual liberty? Little (2002) argues

that there can be instances where welfare may override the emphasis on justice, and

where positive discrimination is appropriate (e.g. granting certain disadvantaged

groups of people special rights) (p. 60).

Critics of neo-liberalism would affirm that a neo-liberal society is deeply unjust and

places too much responsibility and emphasis on the individual. People might for

example frequently be defined or constrained by social determinants such as gender,

location, social structure, class and status, and markedly by power and monetary

status in society, and may not be personally responsible for these determinants. This

is not to say that an individual is not at all responsible for his/her situation or

possibilities. People might for example make different choices from the same set of

opportunities, or be provided with aid and opportunities, but choose not to take

advantage of it (Barry, 2005, p. 136; Dworkin in Wolff, 2006, pp. 450-451).

Nevertheless, neo-liberals claim that those born ‘disadvantaged’ benefit from

individual responsibility, because they become more responsible individuals, and are

forced to alter their situation and therefore are not dependent on welfare schemes or

wealth distribution.

Contrary to the neo-liberal approach, some authors have argued that social justice

should instead be the foundation for society. For instance, Barry (2005) emphasises

that social justice is more relevant than ever (p. 17). Furthermore, Powers and Faden

(2006) stress that a wider definition of social justice is needed today, one which

includes an analysis of justice encompassing a political and social context, without

being limited to certain theories, such as libertarianism, utilitarianism or

egalitarianism (p. x). Powers and Faden (2006) state

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...we assume that unjust inequalities will continue to provide the real world

context in which questions of justice will arise – not as a consequence of

noncompliance with ideal principles, but for the more basic reason that

achieving justice is an inherently remedial task, constantly shifting in its

specific requirements as social circumstances themselves change. (p. 5)

The above introduces a changeable notion of justice, one that needs to be constantly

reassessed against the reality of society. Powers and Faden (2006) emphasise that

social justice is concerned with human well-being (p. 15). They take a ‘moderate

essentialist view’, and propose that the justice of political and social institutions,

practices and structures can be assessed against the following six aspects of human

well-being, which are seen as being essential for a decent human life:

• health

• personal security (e.g. being safe from assault, intimidation, abuse, rape or

torture)

• reasoning (the various cognitive, practical and theoretical abilities that are

necessary to understand and function in the world, often cultivated though

education and the culture and institutions in a society)

• respect (self-respect and respect for others as persons of moral worth and

dignity)

• attachment (bonds of attachment (love and friendship) with other human

beings, and a sense of solidarity)

• self-determination (to have power over who we are and who we will become)

(Powers & Faden, 2006, chapter two)

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These dimensions of human well-being are meant to capture the ‘moral territory’ of

social justice, on a universal level, and they are each regarded as morally salient to

human well-being and flourishing (Powers & Faden, 2006, pp. 18, 21). Social justice

is thus to secure a sufficiency of these dimensions of well-being for everyone, so that

everyone can live a decent life (Powers & Faden, 2006, pp. 81, 192). In this thesis,

the notion of social justice is evaluated against the theory and ideology of neo-

liberalism. Towards the description of social justice provided by Powers and Faden,

the neo-liberal notion of inequality and justice becomes narrow and rigid, because it

is bound to a specific set of ideological principles. Moreover, the majority of the

moral dimensions of human well-being as described by Powers and Faden are not

supported by neo-liberalism, as neo-liberalism emphasises the rational, self-

interested individual, material prosperity, market transactions, and economic growth

as foundations for a good human life, and largely discards a discussion of the moral

nature of human life. Nonetheless, what we do find in neo-liberalism is an emphasis

on individual liberty and self-determination as foundations for humanity.

Concluding remarks

In this chapter, I have discussed the neo-liberal concept in more detail. The existing

critical literature offers a sound starting point for reflecting upon neo-liberalism and

criticism of its theory and practices. I have sought to add to this literature by

articulating some fundamental values and concepts in neo-liberalism, and by

providing a philosophical analysis of some elemental concepts and language in the

neo-liberal framework. This has been necessary to deepen the understanding of how

neo-liberalism has influenced and been incorporated into common sense

understanding and the interpretive framework of people’s lives in Western

developed countries in the past decades.

Thus, chapters three and four have sought to answer the research question ‘What are

the distinctive core concepts, values and moral underpinnings of neo-liberalism?’

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These two chapters also provide the basis for articulating the neo-liberal approach to

health care, which I shall attempt in the following chapter.

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CHAPTER FIVE: THE NEO-LIBERAL APPROACH TO HEALTH CARE

In the two previous chapters, I have provided an account of neo-liberalism and

sought to critically analyse its ideology and practices. I shall now seek to address the

question ‘What is the neo-liberal approach to health care?’

The explanation of the neo-liberal approach to health care provided in this chapter is

based on the account and analysis presented in the preceding two chapters. This

chapter is divided into two main parts: firstly, I shall articulate the neo-liberal

approach to health care, and secondly, I shall illustrate the pragmatic manifestation

of neo-liberalism in contemporary health care (private health care, public-private

partnerships, and management theories and practices).

THE NEO-LIBERAL APPROACH TO HEALTH CARE

Central features of the neo-liberal approach to health care include:

• privatisation, liberalisation and deregulation of government/public health

care provision

• increasing private health insurance and provision

• free trade and competition in the free market

• an emphasis on economic efficiency, growth and profit

• health care as a commodity

• the user-pays principle

• a focus on individualism, and individual freedom, choice and responsibility

• a natural rate of inequality

• incorporation of business/management approaches to the organisation and

management of health care services

As stated in chapter three, one of the main characteristics of neo-liberalism is how it

opposes large government expenditures and a generous welfare state. Health care

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provision is consequently affected in a neo-liberal approach, as national, state and

local governments historically have had an important role in public health and the

providing of hospital facilities (Friedman & Friedman, 1990, p. 112). To the

contrary, neo-liberalism maintains that it is damaging for an overall national

economy to maintain heavy public spending on health care (Schmidt & Hers, 2006,

pp. 74, 76). Nevertheless, in many Western developed countries, health care has

often been provided by the state/local government as well as absorbing a

considerable amount of public expenditure. To understand the neo-liberal approach

to health care, it is therefore necessary to understand the role of the welfare state and

universal health care in Western developed nations.

The welfare state and universal health care in Western developed nations

Historically, people have paid out-of-pocket for health care expenditures (Musgrove,

2004, p. 43). Gradually, health care services became provided by the state. National

health insurance was first introduced in Germany in the late 1880’s, and this practice

spread to other European countries throughout the remainder of the nineteenth and

into the early twentieth century (Callahan & Wasunna, 2006, pp. 63, 88; Folland et

al., 2007, pp. 463-464). Since then, major health accomplishments have derived

from government legislation, action and regulation, for example through housing,

water, food, and education policies, and prescription drugs and vaccination programs

(Schrader, 2005, pp. 41, 43). Therefore, government intervention in health care has

been widespread.

Western European countries have prioritised universal coverage and solidarity in

financing health care services (Callahan & Wasunna, 2006, p. 87; Koivusalo, 2000,

p. 18). Social democratic states, such as the Scandinavian nations and the United

Kingdom, have been known for realising an extensive welfare state, including public

health care services. Health care, a key sector of the economy, has thus been isolated

from the market due to the arguments that access to basic human needs should not be

mediated through the market, or access limited by capacity to pay (Friedman &

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Friedman, 1990, p. 100; Harvey, 2005, p. 71). Furthermore, in many European

countries, the market has been seen as a barrier to equitable distribution of health

care (Busse, 2000, p. 33). Most Western developed countries still have extensive

public medical care coverage (Navarro & Shi, 2003, p. 203). An exception here is

the United Sates, which relies on the private market for much of the provision of

health care, although there are some publicly funded programs such as Medicare and

Medicaid (Callahan & Wasunna, 2006, chapter two; Folland et al., 2007, p. 463).

The United States is hence the only Western developed nation without a system of

national health insurance (Tomes, 2003, p. 112).

In the Western European model of the welfare state, as well as in Canada and

Australia, solidarity has been the foundation for universal access to health care

(Callahan & Wasunna, 2006, p. 90; Schrader, 2005, p. 46). Solidarity requires

equitable access to health care and has provided a communal moral premise for the

provision of health care: a mutual responsibility of citizens for the health care of

each other so that when faced with illness and death we are bound together by

common needs which requires common responses (Callahan & Wasunna, 2006, pp.

90, 113). Solidarity thus involves a commitment to a common cause: the sharing of

the human condition of illness and death. Some authors maintain that to optimize

healthy populations, it seems advisable to maintain the welfare state (Navarro & Shi,

2003p. 215). Furthermore, Vivekanandan and Kurian (2005) state: “…the welfare

state is all about the quality of day-to day life for ordinary people everywhere in the

world. Therefore, its long- term validity is not in doubt” (p. xiv).

However, policy makers today have increasingly operated within a context where

economic efficiency and growth, profitability, market credibility and

competitiveness have prevailed in the provision of social welfare, and the market

and private forces have increasingly shaped public institutions (Slaughter, 2005, p.

59). On the other hand, Mills (in Buse & Walt, 2002) argues that many advocates of

the free market have lately moderated their position to acknowledge a role for public

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agencies, particularly in the health care sector, where markets often are not efficient

and make equity hard to achieve (p. 172).

Nevertheless, market ideology has become increasingly prominent in health care,

leading to a wave of reforms (Callahan & Wasunna, 2006, p. 35). Furthermore, the

private sector of health care services has lately grown considerably, for example in

the areas of pharmaceutics, cosmetic surgery, and private surgery and treatment.

Public health care has moreover been heavily influenced by new approaches to

health services, such as public-private partnerships, new public management,

commodification, and consumerism, as I will outline later in this chapter. As stated

by Freckelton (2006) “The rhetoric of medicine and other areas of health service

delivery has become a commercialised and management discourse – outcome

objectives, key performance indicators and econometrics are now integral to health

policy development” (p. 41).

The neo-liberal response to the welfare state and universal health care

As an alternative to the welfare state, neo-liberalism stresses minimal government

involvement in health care, and urges that the private sector, philanthropic

organisations and the free market to be the provider and initiator of health care

services. Neo-liberalism does however recognise the important role of the state in

providing the market with the conditions to operate freely, and, as stated in chapter

three and four, some neo-liberal advocates recognise that there may be a need for

some government provision in health care. Yet, neo-liberalism emphasises that the

state should embrace deregulation and privatisation of health care, and sell state

assets or contract health services out to the private sector (based on Harvey, 2005, p.

160; Holmsten, 2003, p. 24; Scholte, 2005, p. 38; Slaughter, 2005, p. 43).

In the neo-liberal approach to health care, the free market is the alternative to

universal/public health care. The free market provides a system of exchange of

wages, goods and services, based on the supply and demand principle. It is the neo-

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liberal belief that private incentive and investment in the free market will enhance

consumer choice and the quality of health services, and offer consumers health care

at the lowest price due to natural competition (McGregor, 2001, pp. 86-87). Market

methods in health care moreover include “…a managerial rather than a bureaucratic

style in the organization of services, the promotion of cost-conscious behavior by the

‘consumers’ of health care, and the stimulation of competition and other

characteristic market-type interactions between purchasers and providers” (Ferrera

in Callahan & Wasunna, 2006, p. 37).

One area of health care where the free market is already operating (though subjected

to diverse levels of governmental regulation in various countries) is the

pharmaceutical industry. The pharmaceutical industry is an example of a business

which seeks to gain profits from meeting the needs of the ill, or, alternatively, by

creating needs by medicalising many of life’s problems (Callahan & Wasunna, 2006,

pp. 163-165). This industry is often pushing borders towards endless progress, as

well as increasing profits aided by competitive forces, a free market and public

health demands (Callahan & Wasunna, 2006, p. 166). (The pharmaceutical industry

also produces vital and necessary medication, which is of great benefit to clients.)

There are several arguments for the neo-liberal approach to health care.

Universal/public health care is seen as inhibiting personal freedom (Vivekanandan &

Kurian, 2005, p. 3). As outlined earlier, the concept of individual freedom is

fundamental in neo-liberalism, and people should essentially be ‘free to choose’

(Folland et al., 2007, p. 525). Neo-liberalism argues that only in a society where

services are provided by the free market, can people express their preferences freely

and get what they are willing to pay for (Burden, 2005, p. 85).

Neo-liberal advocates such as Friedman and Friedman (1990) argue that in a

publicly funded health care organisation there is little connection between what

people financially contribute and the service they receive (pp. 113-115). Freidman

and Friedman (1990) state:

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National health insurance is another example of misleading labeling. In

such a system, there would be no connection between what you would pay

and the actual value of what you would receive, as there is in private

insurance. In addition, it is not directed at insuring “national health” – a

meaningless phrase - but at providing medical services to residents of the

country. (p. 113)

Friedman and Friedman (1990) recognise that there will be some, due to poverty or

other reasons, who will not be able to afford private health care, but assert that

helping a few cases “…hardly justifies putting the whole population in a straitjacket”

(demanding that the whole population funds an expensive universal access to public

health care) (p. 115). Thus, as discussed in chapter four, the individual should not be

limited in his/her freedom by a paternalistic state that infringes an individual’s

property right (income) through taxation to distribute income to supply another

person with his health care needs in the name of social justice. This view is

supported by the neo-liberal belief that the individual is ‘free’ of obligations to

provide for the needs of others (Hollenbach in McCabe, 2004, p. 181).

Furthermore, neo-liberal advocates maintain that publicly funded health care is too

costly, bureaucratic and inefficient, reduces incentive in the medical sector and

offers worse service for clients (Friedman & Friedman, 1990, pp. 112-115, 117-118).

Public health care is moreover seen as creating huge unnecessary economic costs for

the state, and hindering economic growth (Clark, 2002, p. 771). That health care

costs today are undeniably rising, is an argument that neo-liberalism additionally

uses as evidence for the market logic.

The neo-liberal approach moreover maintain that welfare states are creating

dependency on social security, and making people less self-sufficient and less

responsible for themselves and others (Barry, 2005, p. 155; Ericson et al., 2000, p.

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538), which derives from the neo-liberal belief that people are responsible

individuals, responsible for their own life, opportunities and success, regardless of

external conditions.

Instead of relying on the state, neo-liberalism favours a greater reliance on private

and philanthropic activities for the provision of health care services (Schmidt &

Hers, 2006, pp. 74, 76). Health care is seen as an ‘unproductive’ area where the state

should cut its expenditures. Therefore, subsidised services in public health should be

replaced by the user-pays principle, and people should be encouraged to join private

health schemes (Bell & Head, 1994, pp. 38-39). If, for practical or other reasons,

public health services exist and cannot be privatised, they must be run in a way

which is consistent with market principles to be efficient (e.g. incorporating business

management methods) (Burden, 2005, p. 85). (This has been the case with the

introduction of New Public Management and other management practices in

contemporary health care, as I shall discuss later in this chapter.)

Neo-liberalism acknowledges some legitimate scope for state intervention in health

care. As outlined in chapter three, the state should provide the conditions for health

care services to operate freely in the market, for instance through reduced taxation

policies, legislation, securing private/intellectual property rights, liberalising trade

barriers, and addressing market failure. Therefore, a free market in health care

depends on a strong functioning state and on strong legal institutions to operate

efficiently. Even if neo-liberalism advocates minimal state involvement in health

care, it is not encouraging the state to abandon public health care altogether. Some

provision of health services may be necessary to provide for common needs, without

necessarily restricting individual liberty (Von Hayek, 2000, p. 90). Traditionally all

modern governments have provided some services for the unfortunate, disabled and

poor, and neo-liberal advocates such as Von Hayek (2000) and Thomas Friedman

(2000) acknowledge the importance of these.

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Nevertheless, as explained in chapter three, neo-liberalism encourages the

‘desocialisation of government’, and a shift from the welfare state to the

‘competition-state’, where national welfare gives way to maximum competition,

both nationally and internationally (Castells in Slaughter, 2005, p. 30; Rose in

Slaughter, 2005, p. 53). This includes competitiveness of the national economy

within global markets, as well as deregulation, and downsizing of the public health

care sector locally (Bell & Head, 1994, pp. 38-39; Larner, 2000, p. 5; Slaughter,

2005, pp. 48-50, 53, 91). A neo-liberal approach to health care thus suggests shifting

the focus of government involvement in health care services to increased economic

efficiency, private investment, managerialism, competitiveness and trade (both

national and international), instead of focusing on an extensive, costly and heavily

regulated universal public health care.

Furthermore, neo-liberalism argues that the free market will allocate health care

resources so that they will be best utilised to provide the highest possible standard of

health care through competition and economic efficiency (based on Edwards, 2002,

pp. 38, 41-42, 45, 77-78; Gill, 2003, p. 119; Harvey, 2005, p. 160; Larner, 2000, pp.

3, 7). The discussion on the allocation of resources in health care is central, as

medical services in general are expensive, and most countries have restricted health

care resources (e.g. trained staff, equipment, buildings, finances), which means that

political choices must be made on how to best distribute the scarce resources. Neo-

liberalism assures that its practices will secure the most efficient allocation of health

care resources, as excess services seemingly are controlled, and the financing of

services is directed towards providers of presumably higher quality (Waitzkin &

Iriart, 2004, p. 151). Additionally, in a competitive environment, providers have to

lower their costs and offer higher quality health services; a change which neo-

liberals assert will benefit consumers (Waitzkin & Iriart, 2004, p. 151).

Neo-liberalism additionally maintains that if consumers feel in control of their

payments for the health service (consumer sovereignty), they will act as natural

regulators of costs and quality, as consumers will choose health care providers that

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offer the best service at the lowest cost (Waitzkin & Iriart, 2004, p. 151). This point

is based on the notion of the rational choice of the consumer, as discussed in chapter

four, which assumes that consumers will make fully informed rational choices.

Furthermore, in theory, the neo-liberal notion of user fees will force clients to

consider costs, which will thus limit excessive demand (Callahan & Wasunna, 2006,

p. 212). Some areas where cost sharing or user-fees are already common are in

pharmaceuticals, and, in many Western countries, first-contact care and physician

fees.

According to neo-liberalism, health care in a competitive, free market will be more

innovative, flexible and dynamic (Clarke, 2004, p. 32). Competition between health

care providers will result in the best and most efficient health care for consumers,

and consumers’ choices will ideally drive what types of health services that are

produced and offered in the market.

Individualism, responsibility and the natural rate of inequality

Individualism and individual freedom and choice are central to the neo-liberal

approach to health care. The neo-liberal approach moreover emphasises the

principles of self-sufficiency, responsibility and independence in health care.

A neo-liberal approach encourages a risk-taking society where individuals are

expected to be informed and responsible risk takers (Ericson et al., 2000, p. 551).

Neo-liberalism hence fosters the applied ethics of the individual being fully

responsible for the daily practices of his or her life and for any condition that he or

she may suffer (Ericson et al., 2000, p. 553; Rose in Ericson et al., 2000, p. 554). In

neo-liberalism, people are responsible for their own lives and accountable for their

actions and well-being (Harvey, 2005, p. 65). The notion of individual responsibility

entails, therefore, that there should be less protection for those suffering illness and

injury. The cost of health care should accordingly be placed on the individual, rather

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than being placing on the public (e.g. through taxation) (based on Ericson et al.,

2000, p. 554). Larner (2000) states the neo-liberal approach applied to health care

encourages people to regard themselves as “…individualised and active subjects

responsible for enhancing their own well-being” (p. 11). People will for example be

responsible for adopting ‘a healthy lifestyle’ and self-manage chronic illnesses

(Clarke, 2004, p. 33).

Hence, responsibility for illness and health is in neo-liberalism placed on the

individual. Accordingly, public health issues and public responsibility for health

related issues are not viewed as of importance. The neo-liberal response to the

welfare state and its emphasis on shared risks, inclusion and social responsibility is

that social responsibilities should be shifted from the public to the individual, and

health care costs transferred from public resources to household budgets (Clarke,

2004, p. 33). Thus, neo-liberalism replaces the notions of public good and

community with an emphasis on the individual and individual responsibility.

As neo-liberalism inividualises risks in society, all differences and the inequalities

that result from them, are seen as a matter of personal choice (Ericson et al., 2000,

533, 554). The individual alone is responsible for his own life and the opportunities

he or she does or does not create for him or her throughout life (George, 1999, ¶ 14).

As discussed, that some are born in a better position than others is regarded as a

natural difference. Therefore, inequality in neo-liberalism is inevitable (Ericson et

al., 2000, p. 554). Nonetheless, in neo-liberalism, health care is ideally provided with

equal opportunity and justice, that is, everyone will have the same opportunity to

access the same services (meaning if you have the means to pay for the service, you

should receive it), even if this ideal can be difficult to secure fully (Friedman &

Friedman, 1990, pp. 132-133).

Therefore, in neo-liberalism, it is natural that there will be some level of inequality

regarding health care services and insurance. Some will simply be able to afford

better health insurance, due to their fortunate position or personal effort. It is the

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responsibility of the individual to attain a satisfying and affordable level of health

and health care. The market should only respond to the demand of the consumers,

and make sure that the most efficient health care is offered.

Commodification, commercialisation and autonomy

Because of the neo-liberal reliance on the free market, health care, as any other good

or service, is treated as a commodity (McCabe, 2004, p. 181). As discussed in

chapter three and four, every aspect of human life is sought to be commodified in

neo-liberalism, and those aspects that for some reasons cannot, are expelled, as neo-

liberalism cannot acknowledge value beyond that of price or instrumental value.

Clarke (2004) states, “The economic calculus of neo-liberalism expels that which

cannot be counted – but it seeks to bring more and more of human activity within the

economic calculus” (p. 35). The human activity of health care is no exception.

The neo-liberal attention to commodification in health care is driven forward by the

wave of ‘commercialisation of health care’, which promotes the user-pays principle,

the production of health care services for profit, private health care and public-

private partnerships in health care (Mackintosh & Koivusalo, 2005, p. 3). Thus, in a

commercialised environment, the user pays principle and private health insurance is

predominant, and the ability to pay, rather than health need is the primary criterion

on which health care resources are distributed (Wadee & Gilson, 2005, p. 251).

With the emphasis on commodification follows the notion of the consumer.

Consumer-driven health care aims to provide greater choice of health plans,

individual control over medical expenses, and to make consumers more conscious

about the cost of health care (Callahan & Wasunna, 2006, p. 77). Additionally,

today’s ‘consumers’ of health care are often informed and aware of their rights in

relation to health care delivery (Craven & Hirnle, 2007, p. 8). In line with neo-

liberalism, consumers are expected to make informed and rational health care

choices (Craven & Hirnle, 2007, p. 262; Folland et al., 2007, pp. 8, 12). Moreover,

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in this model, health care consumers have a right to receive what they pay for, and

they have a right to exercise autonomous choices. (There are obvious instances

where the principle of autonomy cannot be sustained, for example in the cases of

severe mental illness, suicidal or self-harming behaviour, unconsciousness and so

on. I will however not discuss this subject here, as the focus in this chapter is

autonomy as related to neo-liberal consumers’ rights and choices.) Autonomy is

today a fundamental value in health care, as well as in the neo-liberal approach to

health care. Autonomy here refers to the ability to make reasoned decisions and act

on them (Boyd, Higgs & Pinching in English et al., 2006, p. 117), or self-

government, independence or freedom of action (Craven & Hirnle, 2007, p. 92;

Oxford Dictionary, 2001, p. 53). Autonomy in health care is for instance the

patient’s right to refuse or agree to a certain treatment (Craven & Hirnle, 2007, p.

92), and the right to determine sovereignty over his/her body. In a neo-liberal

approach, autonomy is linked to the notion of rational self-interested choices, and the

consumer’s ability and right to choose based on an informed choice (from the

information available in the market). Furthermore, autonomy is seen as protecting

the individual from being subject to unsought-for interventions imposed by the state

or paternalistic professionals (English et al., 2006, p. 119). The ‘neo-liberal citizen’

is therefore regarded as an active citizen, able and obliged to exercise autonomous

choices (Larner, 2000, p. 11).

Comments on the neo-liberal view on health care

Neo-liberalism alters the purpose of health care from being a common good to being

an individual good provided on a user-pays basis in a competitive market.

Furthermore, the neo-liberal health care consumer is seen as independent and self-

sufficient, and responsibility for health and illness is transferred from the public to

the individual. Moreover, a neo-liberal approach to health care increases the focus on

economic efficiency, managerialism and competitiveness in health care. The neo-

liberal approach asserts that when health care services mainly operate in a free,

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competitive market, both users and providers will benefit from a more efficient,

liberated, fair, and improved health care of higher quality and lower cost.

THE MANIFESTATION OF THE NEO-LIBERAL APPROACH IN

CONTEMPORARY HEALTH CARE

In the past decades, reforms of the health care sector have been driven by ideas such

as public-private partnerships, managed care, and competition. The reason for this is

as Ham (2003) describes: ”Faced with funding pressures on the one hand, and

failures of service delivery on the other, policymakers have entertained radical

solutions in the hope they will lead to improvements in health-system performance”

(p. 1978). Some of these reforms have been heavily influenced by neo-liberal ideas.

Neo-liberal approaches to health care have been actualised in a number of ways in

Western developed nations, most notably in the United States, but also in countries

such as the United Kingdom, Canada, Australia and New Zealand (Harden in

McGregor, 2001, p. 82). The free market and private enterprises are now regarded

irrefutable parts of contemporary health care. Most Western developed nations today

have a mix of government and private providers in health care. In Europe it is now

common to speak about ‘quasi-markets’, where the provision of health care is left to

the competitive market, but financed, and in some cases, purchased by the state (Le

Grand in Callahan & Wasunna, 2006, p. 38).

There has moreover been an increasing use of private health care such as private

insurance schemes and private health care clinics. Additionally, neo-liberalism has

been an impetus for introducing managerialism and managed care in health care.

The neo-liberal rationale, emphasising that private enterprises are run more

efficiently than those of government are, that the free market is more efficient in

allocating resources and creating economic growth, profit and incentive, and that

neo-liberalism offers freedom to the consuming individual, has provided the ground

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for an increasing practice of privatising and outsourcing public health care since the

1980’s.

In the following, I shall outline how the neo-liberal approach has been actualised

through private health care and insurance, public-private partnerships, and new

management approaches to health care.

Private health care and private health insurance

Private health care comprises multiple institutions. Some of these are health care

consulting firms, pharmaceutical and medical equipment companies, private

practitioners, clinics and hospitals, and private health insurance companies. Because

of globalisation and trade liberalisation, many of these institutions are now present in

markets around the world (Jasso-Aguilar et al., 2005, p. 38).

Private health insurance is an example of the actualisation of neo-liberal practices in

health care. Private health care insurance is a way of funding health care, where

health insurance premiums are paid by an individual, shared between employees and

the employer, or paid in whole by the employer (the user-pays principle)(Callahan &

Wasunna, 2006, p. 217). It is a form of privatisation, which aims to limit the role of

the public sector and increase the role of the private sector (Callahan & Wasunna,

2006, p. 217). In neo-liberalism, private health insurance is the market-based

alternative to managing risks (such as illness, accidents and death) as opposed to the

state providing universal health care services to manage these risks (Ericson et al.,

2000, p. 533).

Private health insurance is in neo-liberalism seen as making people more self-

sufficient and responsible (Arnott & Stiglitz in Ericson et al., 2000, p. 538), as well

as encouraging innovation and efficiency in health care, and increasing the choice of

consumers (Callahan & Wasunna, 2006, p. 217). Thus, private health insurance

promotes individual responsibility, but also governance and surveillance. For

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instance, consumers are frequently induced into wellness practices, in order to

demonstrate that they are doing enough to stay healthy (Ericson et al., 2000, p. 551;

Staples in Ericson et al., 2000, p. 551). Consequently, if a consumer is found not to

have contributed enough to maintain a respectable level of health, he or she may be

subject to higher premiums, exclusions or other sanctions (Ericson et al., 2000, p.

551).

Private health insurance and user-pay system shifts the purpose of health care from

being a universally accessible service to a commodity for sale in the market.

Responsibility and risk is shifted from the collective to the individual. This approach

alters the role of patients towards becoming consumers of a commodity product, and

health care insurance becomes a business subjected to market rules and profit.

Public-private partnerships

Another area of health care delivery where the private sector has gained increasing

influence is through public-private partnership (PPP). This is not a new concept;

however, recent decades have seen a new focus on these partnerships. The current

notion of PPPs was firstly developed in the United States in the 1970’s (Carroll &

Steane, 2000, p. 38). The stagflation of the 1970’s and early 1980’s, combined with

state budget cutbacks and strained economies in many OECD countries, led to a

wave of privatisation of public services, and government partnerships with

businesses and voluntary groups in many countries (Walzer & Jacobs in Carroll &

Steane, 2000, p. 41). Furthermore, neo-liberal influences through politics and

leaders, such as Reagan and Thatcher, and a more competitive and trade interested

business sector, encouraged governments to privatise and regard the private sector as

a role model and potential partner (Carroll & Steane, 2000, p. 41). Additionally,

contemporary globalisation provided the contextual shift, which marked the

widespread emergence of global public-private partnerships (Buse & Walt, 2002, p.

171).

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In the last few decades, there has therefore been a dramatic growth in PPPs. In

European societies, however, which have traditionally been organised along the lines

of solidarity, there have been less interaction between public and private sectors than

there have been in countries such as the United States (Buse & Walt, 2002, pp. 181,

183). Yet, European countries have made an effort to develop new organisational

arrangements, including PPPs, in health care, and private actors and contractual

relationships are becoming more common (Callahan & Wasunna, 2006, p. 115;

Koivusalo, 2000, p. 18). Some claim that this effort has sought to combine

entrepreneurial activity with the resilient European value of solidarity (Saltman in

Callahan & Wasunna, 2006, p. 115).

PPPs can be understood as an attempt to combine the benefit of governmental

interference with the qualities of the market (Klijn & Teisman, 2000, p. 85). A PPP

can cover a wide range of relationships. It involves at least one private for-profit

organisation, and one not-for-profit or public organisation (Reich, 2002, p. 3). It is “a

commitment between public and private actors of some durability, in which partners

develop products together and share risks, costs and revenues…” (Klijn & Teisman,

2000, p. 85); in return for some positive outcome for each participant, which could

be an economic or social goal, or potential for synergy (Carroll & Shane, 2000, p.

37). PPPs are generally seen as a cost-efficient and effective mechanism for the

implementation of public policy across a range of policy agendas (Osborne, 2000, p.

1). The objective of a PPP often remains that of effective and efficient ‘value for

money’ (Grimsey & Lewis, 2005, p. xvi).

In essence, more or less all services which have previously been delivered by

governments can be subjected to PPPs or be delivered by the private sector (Grimsey

& Lewis, 2005, p. xvi). PPPs have become greatly influential in shaping health

policies, priorities and content (Ollila, 2005, p. 191); and public and private actors

have been driven towards each other to tackle public health issues (Reich, 2002, p.

2). Many countries have experienced successful collaborations between the public

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sector and non-governmental organisations or private institutions in the delivery of

health care (Cross in Lucas, 2002, p. 19).

PPPs in health care can for example entail the government contracting the private

sector to supplying services (e.g. cleaning) or goods (e.g. pharmaceuticals), or

agreements where a private company manage a public hospital or finance a new

hospital in return for a long-term concession to provide services (Lethbridge in

Schrader, 2005, p. 200). Other PPPs may focus on disease control, product

development, commercialisation of traditional medicines, health program

coordination, or health service delivery (Widdus et al. in Reich, 2002, p. 5). Often,

these partnerships have proved essential in achieving goals in public health, and

there is a growing recognition that some problems may require many partners to

address all the different aspects (Reich, 2002, p. 8).

As public health problems have increasingly being pushed into the international

policy agenda (e.g. due to the spread of AIDS and rapid disease transmission across

national borders) non-governmental organisations have gained increasing influence

(Reich, 2002, p. 2). Additionally, globalisation has required new arrangements for

health organisation, where international organisations, nation-states, global and local

and civil society organisations work together to tackle health threats and issues

(Buse & Walt, 2002, p. 190). There has, however, been some divergence

surrounding the issue of sovereignty of nation states versus international law, trade

and cooperation in these partnerships (see e.g. Gostin, 2006).

PPPs have thus increasingly been involved in addressing global public health issues

(Buse &Walt, 2002, pp. 186-187; Reich, 2002, chapter one). For example, the WHO

is involved in several partnerships worldwide (WHO in Bonita et al., 2007, p. 270;

Buse & Walt, 2002), as well as the Rockefeller Foundation, United Nations

Children’s Fund (UNICEF), United Nations Development Program (UNDP) and the

World Bank, to mention a few (Muraskin, 2002, p. 155, see also Buse & Walt,

2002). Another eminent example is the private organisation Gates Foundation (by

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Melinda and Bill Gates), which plays a growing role in funding private-public

partnerships in the health sector, often with a focus on issues of better access to

health care services for the poor (especially in poor, African countries) (Reich, 2002,

pp. 2, 6).

The growing influence of PPPs in health care has increased the presence of private

sector companies in public health care, as well as private finance initiatives,

contracting out of services (e.g. catering, cleaning and facilities management),

restrictions on government provision of services, and corporatisation of public sector

institutions (Lethbridge, 2005, p. 23). PPPs have sometimes been met with suspicion

and confrontation, but growing rapprochement between private and public

organisations have encouraged PPPs in the health sector (Lucas, 2002, p. 19). Yet,

private firms are primarily profit seeking organisations, and private firms that engage

in partnerships are often assumed to be solely seeking profit, or seeking control over

some international organisation (Reich, 2002, p. 9). Roberts et al. (2002) notes that

PPPs raise important issues about corporate responsibility and ethical obligations,

national and international social policy, and the appropriate role of the private sector

(pp. 67-68).

New public management

Another way, in which neo-liberalism has become institutionalised, is through New

Public Management (NPM), which represents a replacement of the ‘public

administration’ template that used to be dominant, and which emphasised the

distinguishing nature of the government, as opposed to private sector businesses

(McNulty & Ferlie, 2002, p. 51). The United Kingdom, Australia and New Zealand

are countries where NPM ideas have been integrated quite extensively (McNulty &

Ferlie, 2002, p. 52). Nevertheless, NPM reforms have evolved in diverse ways in

each country where they have been implemented, depending on the new and

traditional public service values that are specific to each country (Clark, 2000, p.

772; Grimsey & Lewis, 2005, xii).

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Yet, the development of NPM across the world has included a movement towards

‘marketising’ the public sector by:

• decentralising functions and responsibilities

• contracting out services

• increasing partnerships between the state sector and the private sector (e.g.

purchaser/provider split)

• making public sector activities more efficient

• focusing on managerialism, commercialisation, and accountability in public

services

(Drewry, 2000, p. 57; Gamble, 2006, p. 30; Grimsey & Lewis, 2005, p. xiv;

Mayston, 2005, p. 380; McNulty & Ferlie, 2002, p. 52.)

Essentially, NPM has been deployed to make government services, including health

care, more efficient (Pierre & Peters in Gamble, 2006, pp. 30-31). Furthermore,

Hood (in Grimsey & Lewis, 2005) notes that the ideas of NPM have been couched in

the language of economic rationalism (neo-liberalism), and promoted by a new

generation of ‘econocrats’ and ‘accountocrats’ (p. 44).

The NPM culture has had a profound impact on the public sector, including in health

care services. Under the influence of NPM, health care services have seen an

increasing emphasis on measurement and the optimising of performance outcomes

(as opposed to a trust in professional standards and expertise) (based on Drewry,

2000, p. 57; Hood in Grimsey & Lewis, 2005, p. 47).

Other management theories and practices, and managed care

“Management is the art of utilizing all available resources to accomplish a given set

of tasks in a timely and economical manner” (Fallon, 2005, p. 135).

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Management is essential in any health care organisation, as it provides the

framework needed to maintain the organisation and achieve the mission of the

organisation (Fallon, 2005, p. 128). Business management language, theories and

practices have had an increasing influence in Western health care services, to the

point where these concepts are now integrated and accepted as a part contemporary

health care. Learmonth and Harding (2004) state, “Over the last twenty years or so,

health care services around the world have witnessed an unprecedented rise in the

influence of managers and management thinking” (p. vii). Today, health care

services are heavily influenced by business and management approaches to health

care (Walburg, Bevan, Wilderspin & Lemmens, 2006, p. 23).

Since the 1980’s, the literature on management in health care has grown

considerably, and there are now journals that are solely dedicated to this topic (see

e.g. Journal of Public Health Management and Practice, Health Management,

Quality Management in Health Care, Health Care Strategic Management) (many

from the United States).

Loughlin (2004) claims that the focus on managerialism in health care services

emerged as neo-liberal ideas took hold in the 1980’s, most notably in the United

Kingdom and the United States (p. 26). In this period, these governments strived to

subject many aspects of social life to the ‘discipline of the market’, and encouraged

rational, business approaches to public services, including in the health care sector

(Loughlin, 2004, p. 26). The concept of managerialism in health care is clearly

linked to the economic discourse of neo-liberalism, as it is committed to a rational,

business-like view on organisational and policy choices (Clarke, 2004, p. 36). In

neo-liberalism, health care services (public and private) are expected be run along

lines consistent with market principles, and to be business-like and introduce

business management approaches. In this model, recipients of health care are

consumers buying a product (as opposed to clients receiving a professional service)

(Burden, 2005, p. 85; Clarke, 2004, p. 36).

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Moreover, as public expectations and demands have increased, new health

technologies has evolved, and there have been changing patterns of population, and

the health sector has faced the task of confronting these challenges whilst pursuing

efficiency and equity in the use of limited health care resources (Connelly & Worth

in Connelly, 2000, p. 262; Hurst & Jee-Hughes, 2001, p. 8). Today, both public and

private funders in OECD countries continue to strive to contain costs and control

supply (Hurst & Jee-Hughes, 2001, p. 8). One way of dealing with these issues has

been to draw on management ‘science’ and business theories and practices as a way

of re-organising and making health care services more efficient. In OECD countries,

there have for example been a “…widespread interest in the explicit measurement of

the ‘performance’ of health systems, embracing quality, efficiency and equity goals

and in influencing or managing performance” (Hurst & Jee-Hughes, 2001, p. 8).

Numerous management theories and practices have been brought in to health care as

a way of improving efficiency. One of the most prominent is quality management.

As health care costs have continued to rise dramatically, quality management has

been brought in to optimise the quality of care, as well as bringing health care

organisations to a higher level of performance (Van den Heuvel, Bogers, Does, Dijk

& Berg, 2006, p. 137). Other management theories influencing health care are ‘total

quality management’ (TQM) (see e.g. Gunther & Hawkins, 1999), strategic

management/planning to embrace changes (see e.g. Brody, 2000), and

performance/outcome management. The latter is a form of quality management,

which measures progress against performance indicators to achieve continuous

improvement of health care outcomes and make the most efficient use of resources

(see Walburg et al., 2006). Performance indicators in health care are for example

infant mortality rate, incidence of infectious diseases, survival rates from cancer,

immunisation rates, or breast/cervical cancer screenings (see Hurst & Jee-Hughes,

2001, p. 30). It could also include indicators such as patient satisfaction and

experience, equity of access, or efficiency (Hurst & Jee-Hughes, 2001, pp. 29-66).

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Several authors argue that concepts such as performance standards, performance

improvements, monitoring and indicators, outcome management, program

evaluation, and evidence based medicine and practices have increasingly been used

to describe and measure health care services, often to make these services more cost-

efficient and quality focused (Chalmers & Davis, 2001; Ebrahim, 2005; Martinsen,

2006, pp. 161-162; Mays et al., 2004; McLaughlin, 2004). With the increasing use of

market and management practices in health care, there has also been a new focus on

the notion of accountability. Accountability has become more complex, not only as

an issue between the health professional and the client, but incorporating

relationships with parties such as insurance companies and public-private

partnerships (e.g. managed care), which blurs the boarders of accountability (based

on Cassel & McParland, 2002, pp. 251-252). Moreover, as the patient has moved

towards ‘a consumer’ of health care goods, accountability has become even more

pertinent (Cassel & McParland, 2002, p. 249, 251-252). Thus, the patient is

increasingly seen as accountable for his/her own situation and health status, which,

as discussed, is heavily emphasised in the neo-liberal approach to health care.

There has additionally been a growing awareness of public health economics (see

e.g. Moulton, Halverson, Honoré & Berkowitz, 2004; or Musgrove, 2004). Public

policy has increasingly been constructed in economic terms (Small & Mannion,

2004, p. 57), and health care economists and administrators have become an

essential part of health care (Callahan & Wasunna, 2006, pp. 253-254). Health

economics has grown as a discipline, and introduced new ways of thinking about

health care and terms such as outcome measurement and evaluation, cost-

effectiveness analysis, supplier induced-demand, and human capital (Small &

Mannion, 2004, p. 58).

Yet another model of management that contemporary health care has been

introduced to, is the concept of managed care. Managed care is a market model of

health care distribution, which has been developed as a product of the neo-liberal

market model, to produce higher levels of efficiency and greater consumer choice,

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and reduce overall costs (Butler, 2002, p. 210; McCabe, 2004, p. iii). In managed

care, health care services are under the administrative control of larger, private

organisations (managed care organisations (MCO’s), also called health maintenance

organisations (HMO’s)) (Butler, 2002, p. 210; Waitzkin & Iriart, 2004, p. 148). In

short, managed care endeavors to promote competitive private health care providers,

whilst using the government to manage the competition to keep it viable and

effective (Callahan & Wasunna, 2006, p. 205).

Managed care originates from the United States, where it was adapted in the latter

part of the twentieth century as a model for controlling health costs (through

spending caps) and increasing efficiency (McCabe, 2004, pp. 1, 132; Tomes, 2003,

p. 98; Waitzkin & Iriart, 2004, pp. 148). The deeper agenda to managed care is,

however, to demonstrate the value of market ideas in health care (Callahan &

Wasunna, 2006, p. 76). Managed care has also been introduced in European

countries on a smaller scale (e.g. Sweden, Germany and the Netherlands); however,

as discussed, here public health care has been more popular and successful (Busse,

2000, p. 33; Callahan & Wasunna, 2006, pp. 109-111; Waitzkin & Iriart, 2004, pp.

148-149).

According to the above, neo-liberal approaches have been manifested in a number of

ways in contemporary health care, and are now integrated in the organisation and

conception of health care.

Concluding remarks

In this chapter, I have sought to articulate the neo-liberal approach to health care and

demonstrated how neo-liberal principles and practices have been manifested in

contemporary health care. Thus, this chapter has sought to add to the literature on

and understanding of neo-liberalism, by articulating the particular approach to health

care in neo-liberalism.

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The outline of the neo-liberal approach given here is a theoretical framework, and as

emphasised in chapter three, neo-liberalism is always in interaction with other

cultural structures, discourses and political ideologies and practices, and the actual

practice of neo-liberalism may sometimes contradict and vary from the theoretical

concept.

In the following chapter, I shall seek to provide a critical analysis of the neo-liberal

approach to health care, especially in relation to the moral nature of health care.

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CHAPTER SIX: CRITIQUE OF THE NEO-LIBERAL APPROACH TO

HEALTH CARE

This chapter seeks to provide an analysis of the neo-liberal approach to health care.

The neo-liberal approach to health care raises several issues. Some of these are:

• Neo-liberalism alters the conditions of the work environment for health care

professionals by, for example:

⇒ Introducing ‘flexible’ working conditions, short-term contracts, and

promoting the rules of the market, such as increasing competition and

profit making (Harvey, 2005, pp. 167-168; Hogstedt, Wegman &

Kjellstrøm, 2007, pp. 139, 148; McCabe, 2004, pp. 93, 181).

⇒ Devaluing and de-professionalising health care practitioners by

undermining the notions of ‘duty of care’ and professional expertise

(Isaacs, 2006d, pp. 10-11).

⇒ Limiting the autonomy of, or disciplining health care professional (in

particular doctors) (Busse, 2000, p. 34).

⇒ Altering the role and identity of the health care professional towards

that of a self-interested worker whose skills are for sale to the

requirements in the market (Isaacs, 2006d, pp. 10-11).

⇒ Commodifying the professional service and expertise of health care

professionals (based on Tomes, 2003, pp. 97-98).

• Neo-liberalism fosters inequalities in health care, both on a national and

international level:

⇒ Private health care tends to favor the affluent (Callahan & Wasunna,

2006, p. 249).

⇒ A drain of skilled health care workers, from developing to developed

countries, often resulting in a reduction in the capacity to deliver

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reasonable health care services and health education in the developing

countries (Labonte, 2003, p. 487; Mensah, 2005, pp. 201-203, 209,

214; WHO in Mensah, 2005, p. 207). International health care staff

migration is today a major topic of international health policy debate

(Mensah, 2005, pp. 201, 207, 209).

• Neo-liberalism affects global and local health through free markets and trade

liberalisation (Jakubowski & Wyes, 2000; Schrader, 2005; WHO & WTO,

2002).

• Neo-liberalism introduces new ways of organising health care, especially

through market practices and business management practices.

• Neo-liberalism has many hazardous environmental consequences, for

example by degenerating nature through industrial production, by increasing

waste, and by promoting over-consumption of resources, which eventually

can have serious ramifications for human health and the environment (as

discussed in chapter four).

• Neo-liberalism alters the role and identity of the patient, who in neo-

liberalism is an independent, responsible, rational and self-interested

consumer, purchasing health care commodities in the free market (Isaacs,

2006d, p. 10).

• Neo-liberalism affects the purpose of health care, from being an altruistic and

‘common good’ institution, to becoming a product offered as a commodity in

the free market, based on entrepreneurial practice with the intention of

seeking profit.

• Neo-liberalism affects the moral nature of health care, and undermines the

concepts of care and need as basis for health care.

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The above are some issues arising by applying a neo-liberal approach to health care,

and it is not suggested here that these are the only issues worth considering in this

context. Whereas all of the above are well worth analysing in depth, this thesis does

not allow such an extensive analysis.

This chapter seeks to analyse and evaluate the neo-liberal approach to and effect on

health care by focusing on considerations about the purpose and moral nature of

health care. Moreover, this chapter endeavors to demonstrate the theoretical

implications of the neo-liberal belief-system and approach to health care; for

example, how neo-liberal concepts such as the free market, individualism,

commodification and managerialism have challenged the moral conceptions and

underpinnings of health, illness and health care services. In this chapter, I shall thus

seek to answer the research question ‘How does neo-liberalism affect the underlying

values of contemporary health care in the Western developed world?’ The discussion

will include the following aspects:

• The free market in health care

• Health as a commodity

• Individualism, independence and dependency in health care

• Social justice and inequality

And, additionally:

• A critique of the manifestation of the neo-liberal approach in contemporary

health care (encompassing private health insurance, private-public

partnerships and the application of business management theories and

practices)

The analysis in this chapter builds on the account and discussion of neo-liberalism

and the neo-liberal approach to health care as presented in the previous chapters.

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Problems with the notion of the free market in health care

According to neo-liberalism, the free market (with some limited government

intervention) is the most efficient provider of health care services. The free market

allocates resources efficiently and economically, based on a supply and demand

principle that will naturally regulate the production and provision of health care

services in the free market. Due to natural competition, this will secure a high quality

of service at the lowest cost.

There are, however, some pragmatic and moral problems with the neo-liberal

assumption that health care can be subjected to the rules of the free market. Some

have argued that there is no such thing as ‘the perfect market’ in health care, as

complexities, irregular and unpredictable demand, inadequate information

circumstances, uncertainty of outcomes, and inconsistent supply conditions are

common in health care, and, therefore, health care is prone to market failure (an

inefficient allocation of resources) (Arrow in Callahan & Wasunna, 2006, p. 38;

Callahan & Wasunna, 2006, p. 247; Powers & Faden, 2006, pp. 106-112).

Furthermore, the commercialisation of health care is seen as decreasing equity in

health care (Koivusalo, 2000, p. 18). As discussed in chapter five, these are reasons

why many Western developed nations have largely kept health care away from the

market.

Furthermore, health care differs on several points from the neo-liberal model of a

competitive market:

• There are barriers to entry in health care markets (e.g. license laws and health

planning controls on prices and facility construction).

• Often, there are few firms in the market, which have some degree of

monopoly power.

• Health care services are not uniform in quality or other characteristics.

• Motivations other than profit are common in health care.

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• Health events involve a considerable amount of uncertainty (as illness, injury

and medical needs are uncertain by nature), contrary to the market

competition model, which requires conditions of certainty.

• The actual and individual benefit of medical care is uncertain, as individuals

suffering from the same condition differ in numerous possible ways.

• People cannot predict the nature or quantity of health care that they will need

in the future.

• There are information problems (e.g. regarding asymmetry of information

between physicians and patients, or between insurers and the insured).

• Externalities (those situations where clients are affected by health care

received by others) (e.g. immunisation programs to prevent contagious

diseases) are widespread in health care.

(Based on Folland et al., 2007, pp. 390, 392; Powers & Faden, 2006, pp. 106-110.)

Additionally, there may sometimes be a conflict between what type of health care

people want and what health professionals believe people need, thus eroding the

equilibrium of the market by creating an inconsistency between needs, supply and

demand (Musgrove, 2004, p. 30).

Moreover, as mentioned in the above, there is a great level of asymmetry of

information in health care. A health care professional often holds greater knowledge

about and experience in treatments and illnesses than the client. Indeed, it is

common that patients do not have the same knowledge about illness and treatment as

the health care professionals have (who for that reason are entitled health care

professionals), which is a cause for why people seek professional health care

treatment. Yet, as discussed in chapter three, the Internet has provided more access

to information about health, illness and treatments. Moreover, patients who are

living with chronic diseases frequently become experts in their conditions (Powers &

Faden, 2006, p. 109). Nevertheless, patients often rely upon the professional

judgment of the health care professional, and this makes the neo-liberal assumption

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of the rational and informed health care consumer incongruous (Powers & Faden,

2006, p. 108).

The above arguments prove a competitive, free market in health care difficult and

disputable.

A health care system based on the free market may additionally undermine the moral

purposes of health care, as health care in the free market context is mostly

recognised for its instrumental and monetary value. The neo-liberal approach is

based on a user-pays system, and, therefore, it ignores the contemporary belief that

health care is a basic human need and right, and devalues the intrinsic value of health

and health care. Furthermore, the neo-liberal approach marginalises the values of

care and altruistic giving in health care, and the idea that health care exists as a

response to the human condition of need and vulnerability (Isaacs, 2006c, p. 10;

Isaacs, 2006d, p. 11). Health care need is related to an intervention for a person, or

group of people, suffering from a particular condition or conditions, where the heath

care intervention in some way provide benefit to people in the relevant condition(s)

(Hasman, Hope & Østerdal, 2006, p. 147). Health care need is independent of costs

(Hasman et al., 2006, p. 147).

Callahan and Wasunna (2006) claim that the free market ideology, with its emphasis

on choice, individualism, economy and competition, does not promote many of the

important goals of what is considered good health care by most definitions, such as

need, social equality, altruism, a minimum level of health care that allows for

reasonable life choices, or a concern for population health, because the market

ideology does not attend to these aspects of human life (pp. 261-262). Additionally,

as discussed in chapter five, neo-liberalism undermines the notion of solidarity and

the replaces the idea of ‘the common good’ with an emphasis on individualism and

individual responsibility. Yet, many Western health care systems have often been

organised around the value of solidarity (McCabe, 200, pp. 324-325).

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Situating health care in the context of a competitive market implies a greater focus

on economic efficiency and profit extraction, hence, altering the purpose of health

care from a moral profession to a business of profit and commodity, and threatening

the culture of care in health care (Isaacs, 2006d, p. 13). Indeed, some have argued

that health care is unsuited to distribution through a free market, which is dominated

by economics and profit motive (Faunce in Bovill & Leppard, 2006, p. 404;

McGuire et al. in Bovill & Leppard, 2006, p. 404). Moreover, health care based on a

free market model may increase the vulnerability of those in health care need,

especially the elderly, the chronically ill, and low-income groups, who often cannot

afford private health care or are denied private health care insurance (due to a ‘high

risk’). Because of this, and because the neo-liberal approach ignores the notion of a

common good, there is a possibility that more costly health care services and long-

term treatments, concerning health care for the elderly, the mentally ill or the

chronically ill, will not be prioritised in a neo-liberal approach (based on McCabe,

2004, pp. 189-190).

In return, the neo-liberal approach promises a greater degree of freedom and choice.

In principle, the market allows great freedom of individual choice according to

individual preferences. Nevertheless, choice may be severely diminished when a

person is seriously ill, due to both the nature and urgency of the illness, and the cost

of health care and technology (McCabe, 2004, p. 91; Powers & Faden, 2006, p. 107).

Furthermore, people may often lack the necessary knowledge about the illness and

treatment to uphold a full degree of choice (Ripstein in McCabe, 2004, p. 92). In this

case, both autonomy and freedom of choice may be restricted. McCabe (2004) states

“Indeed, the person who is ill is not free to bargain with health care providers, nor is

she always at liberty to take or leave health care services” (p. 92). Thus, many

patients, for example during acute illness such as accidents, heart attacks, severe

chronic illness, acute mental illness or other conditions, do not always have the

opportunity of rationally choosing service and treatment. When seriously ill, patients

may be powerless to do anything, and therefore put their trust in the judgment of

health care professionals. The latter underlines the importance of principles of good

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and ethical conduct, and professional knowledge, skills and expertise within the

medical/helping professions, aspects that I cannot find the neo-liberal approach

appreciates, but aspects that are of immense importance to the quality of health care.

Moreover, as choice in the neo-liberal approach is largely based upon the notion of

user-pays, there are constraints to the freedom of choice that many people will

enjoy. The loss of universal health care protection and an increasing amount of user-

pay fees will additionally add significantly to the financial burdens of the poor,

elderly, chronically sick and low-income groups (Griffin in Callahan & Wasunna,

2006, p. 212; Harvey, 2005, p. 171). Increasing user-pay fees have proved to deter

poor people from using health care services, resulting in adverse health effects for

these people (Callahan & Wasunna, pp. 214-215). A radical view is that in neo-

liberalism these people may simply not be regarded as important to ‘invest’ in, as

they do not contribute significantly to economic growth and productivity (based on

Musgrove, 2004, pp. 25-26). Thus, in a neo-liberal approach, inequalities are created

due to the emphasis on affordability in health care. As discussed, inequality in neo-

liberalism is natural and unavoidable, and consequently the groups of people as

mentioned above are often marginalized from the privilege of choice in a free

market, as they have limited monetary resources and therefore limited choice.

Another issue is the neo-liberal argument that free market practices in health care are

increasing efficiency and lowering costs. Some empirical evidence shows that this

may not be correct. After having reviewed Western European health care systems,

Busse (2000) found that there is no clear evidence that market orientated reforms

have increased efficiency (pp. 31, 33), as is claimed in neo-liberalism. Furthermore,

Callahan and Wasunna (2006) conclude, after collecting extensive data and literature

on market practices in health care in various countries around the world, that there is

no consistent evidence anywhere that an unregulated competitive market in health

care will increase efficiency or control costs; and, furthermore, such practices have

not necessarily led to a reasonable equitable access, compared to strong

governmental regulation (pp. 209-211). Neo-liberal practices, such as managed care

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in the United States, have not overwhelmingly proved to reduce health care costs,

and in the United States (the Western developed nation most influenced by market

ideas in health care), there have been problems with the application of market

practices in health care, as managed care and other market practices have produced

persistent disparities in the access to, and the quality of health care services between

the wealthy and the poor; and preventative public health programs have been

severely down-prioritised in favor of an increasing focus on extraordinary

technological advancements benefiting the few (Tomes, 2003, p. 112). Therefore, it

would seem that economic theory and ideology, not empirical data, has driven the

commitment to market practices in this part of the world (Callahan & Wasunna,

2006, p. 211).

Conversely, it is not evident that a free market per se is unsuited for good health

care. Western developed nations have already incorporated market practices in

health care, as outlined in chapter five, but no Western health care system is

completely arranged after the free market system (even the United States has some

public health care such as Medicaid and Medicare). Markets could have a place in

health care if supplemented and regulated to reduce expected inequalities (Powers &

Faden, 2006, p. xi). Even if market practices have not yet proven to contribute

significantly to efficiency, cost control, quality, or equity, or in general not promoted

many of the important goals of what is considered good health care, market ideas

and experiments should not simply be rejected; they may demonstrate to be valuable

and efficient tools in providing a good health care system, but further evidence is

greatly needed (based on Bovill & Leppard, 2006, p. 404; Callahan & Wasunna,

2006, pp. 261-262, 274). Thus, where market practices may be helpful, they should

be encouraged (Callahan & Wasunna, 2006, pp. 258-259). Nonetheless, according to

Callahan and Wasunna (2006), market practices should only be incorporated into

health care if they show a serious promise of improving overall population health,

not only the health of a few privileged groups, and government subsidy for those

who cannot take advantage of market practices is vital, as well a strong regulatory

system to control and monitor market practices (pp. 257-258).

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Health care as a commodity

As outlined, neo-liberalism does not acknowledge value beyond that of instrumental

or monetary value, and, therefore, health care is commodified in line with any other

good or service. Yet, subordinating health care to the rationalities of

commodification implies that health care is valued for a monetary value instead of

its intrinsic worth or non-material or moral value (based on Strasser, 2003, pp. 3,

17).

Viewing health care as a commodity is problematic when taking into account the

prevailing views and values defining contemporary health care, such as health care

as a special and basic human good and need of intrinsic value, and health care as

fundamental in allowing other freedoms and a reasonable life. Several scholars

emphasise that health care should not be treated as a commodity. Schrader (2005)

argues that the notion that health is merely a commodity, which can be approached

as merely another source of profit, threatens public health strategies, universal health

care delivery and the belief that health is a universal human right (p. ii). Even if

health care may have some instrumental value, McCabe (2004) emphasises that

health care is morally different from other goods which are conceived commodities

(pp. 31, 33). On this basis, health care cannot be conceived as a mere commodity, as

it has an intrinsic value and differs from the value which is placed on commodities,

and is critical for human flourishing in ways that other commodities may not be

(McCabe, 2004, pp. 31-32, 93, 324). Additionally, Koivusalo (2000) states:

“healthcare and health related markets are not typical markets and health related

goods cannot be traded in the same way as other services and goods” (p. 18). Thus,

health and health care are often viewed as ‘special goods’, which should not be

distributed as market commodities, because they have a social and moral worth that

is significant, and because they are unique human needs (Bambas & Casas, 2003, p.

325; Bhatia, 2003, p. 557; Commission on Social Justice, 2000, p. 55; Schrader,

2005, p. 17).

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Furthermore, the history of health care emphasises health care as an area of

professionalisation and professional service rather than an area of commercialisation

and commodification (Tomes, 2003, pp. 97-98). For instance, health care

professionals are expected to show an ethical commitment to good and professional

care and enhancing their client’s well-being, rather than focusing on seeking profit

from their service (Tomes, 2003, p. 98, see also Gastmans et al., 1998), which makes

the commodification of health care non-sensical (making little sense).

Recently, there has been emerging literature on the issue of the commodification of

health care (see e.g. Filc 2005; Musgrove, 2004; Schrader, 2005). Hofrichter (2003)

claims that health should not be treated as a commodity, and that thinking of health

and well-being as commodities negatively shapes the possibilities for ensuring

healthy populations, as profitability and economic concerns might prevail over

concerns about social issues of health and well-being (p. 30). Moreover, as argued in

the introduction, health care is full of complexities, which makes it difficult to

simplify health care into certain goods for commodification in the market. Health

and health care are not ordinary and simple commodities. Economist Burton A.

Weisbrod (in Callahan & Wasunna, 2006) states that even if competition in health

care may have a role to play “…the markets for health care and chocolate chip

cookies are different” (pp. 210-211, emphasis in original).

The neo-liberal approach undermines the view that health and health care are

fundamental human needs, based on moral ideas such as need, altruism, professional

care and solidarity. The emphasis on commodification in the neo-liberal approach

opposes the notion of universal health care systems based on an ethical commitment

to providing health care based on the need of the population; and, therefore, it

distorts the ethical commitment and moral purposes of health care, and undermines

the moral purposes of health care providers and professional medical morality (based

on McCabe, 2004, p. 325).

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Individualism, vulnerability and dependency in health care

As outlined, individualism and individual freedom and choice are fundamental

values in the neo-liberal approach to health care. Additionally, the neo-liberal

individual is autonomous, self-reliant and self-concerned, and ‘free’ of obligations to

provide for the needs of others. Hence, the neo-liberal individual is independent of

others and detached from social relationships. In chapter four, I argued that this view

has some severe consequences for human life, and that it excludes the realities of the

complex world of human embeddedness, social relations and dependency.

The neo-liberal approach moreover highlights the individual’s right to self-

determination. Neo-liberalism acknowledges that individuals are different and have

unique preferences, even if this, in neo-liberalism, is related to the context of the

market place. To recognise the patient’s uniqueness, and to respect the person’s

autonomy is essential in health care; and autonomy and respect for the person are, as

established in the introduction, fundamental values in contemporary health care. As

stated by Waller (2005), “A strong sense of competent self-control and effective

choice-making promotes both physical and psychological well-being (p. 177).

Furthermore, illness and health are individual experiences, and health care is

therefore to engage with and to respect the uniqueness of the individual (Henriksen

& Vetlesen, 2000, pp. 24, 253). One might additionally argue that everyone is

entitled to a ‘zone of untouchability’, a space in which to be private with thoughts

and feelings (Løgstrup in Martinsen, 2006, p. 64). Respecting this personal space is

showing respect for the person. As established by Powers and Faden (2006), self-

determination is an essential aspect of human well-being (p. 84). Therefore, in the

areas of self-determination and uniqueness, the neo-liberal approach supports

contemporary ideas in health care to some degree, although I cannot find that

uniqueness and respect in neo-liberalism involves individual experiences as related

to being a person that is unique in the light of others in social relationships.

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Yet, individual autonomy and well-being is necessarily tied to a common and

collaborative ethical human life (Isaacs, 2006h, p. 3). Thus, as neo-liberalism hails

individual liberty and independence, it overlooks the conditions necessary for

realising this goal: that individual liberty takes place within a community of social

relations (McCabe, 2004, p. 29). McCabe (2004) states, “To conceive the individual

in isolation from the community upon which she ultimately depends is to deny her

lived reality” (p. 29).

Moreover, health care is far more complex than the neo-liberal approach

acknowledges. For example, health care is situated in a complex sphere of

interrelationships, vulnerability and interdependency. As argued by Isaacs (2006j), it

is a reality of the human condition that “…we are embodied and embedded

(especially within the world of nature), and as a consequence, are vulnerable to

injury, illness and (premature) death” (p. 2). Furthermore, Henriksen and Vetlesen

(2000) maintain that the human is born vulnerable and dependent on others (p. 31).

Henriksen and Vetlesen (2000) state, “The human is not a self-sufficient being; and

the lack of self-sufficiency is not only present at birth, but rather a characteristic of

being human which lasts throughout a lifetime” (p. 31) (personal translation from

Danish). Humans are interdependent, dependent on each other (Løgstrup in

Henriksen & Vetlesen, 2000, pp. 262-263). The aim of health care is to respond to

this human condition of vulnerability and dependency (Henriksen &Vetlesen, 2000,

pp. 31-32), and to promote the good or wellbeing of the patient because he or she is

in need (Isaacs, 2006d, p. 6). Health care is therefore an act of morally responding to

the need of the other (Henriksen & Vetlesen, 2000, p. 259). Furthermore, in health

care, the ill or injured person is dependent on the compassion, expertise and care of

others (McCabe, 2004, p. 29). A problematic aspect of the neo-liberal approach is

therefore that it does not recognise that health care is based on the need of the

vulnerable other.

When ill, a person often experiences a diminution of autonomy and control, and

becomes dependent on the care of others (Isaacs, 2006h, p. 3; Isaacs, 2006j, pp. 6-7).

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In health care, there are obvious instances where autonomy cannot be upheld, for

example in cases where a patient is psychotic, exercising self-harming behavior or is

severely ill or injured. In this context, the neo-liberal notion of autonomy is

problematic. Contrary to the neo-liberal emphasis on self-reliance, health care is

bound to interdependency, care and vulnerability. Furthermore, the patient’s abilities

of self-management and autonomy may be weakened, and the patient may feel both

intimidated and powerless as he or she is unable to fulfill basic needs or functions.

Yet, in these situations, health care is working towards strengthening the patient’s

autonomy and self-care, which is a major aim of health care (Henriksen & Vetlesen,

2000, pp. 43, 45, 263).

The central relationship in health care is the relationship between the vulnerable

other (the patient) and the health care professional. This relationship is however

characterised by a degree of asymmetry; firstly, because the health care professional

holds specific knowledge that the patient needs but do not hold, and, secondly,

because the health professional is in a position of power and the patient in a position

of vulnerability (Cassel & McParland, 2002, p. 252; Isaacs, 2006j, pp. 6-7).

Moreover, in this relationship the patient can often not care for himself and is reliant

upon the aid of health professionals. Thus, it is a relationship based on trust, as the

patient puts his or her trust in the care and skills of the health professional. The

patient comes forward and exposes him or herself in the hope of being met and

accepted (based on Løgstrup, 1997, p. 10). Trust is a fundamental phenomenon of

human life, and without it, human relationships could hardly exist (Løgstrup, 1997,

pp. 8-9; Løgstrup in Martinsen, 2006, pp. 55-56). In health care, trust is particularly

evident. The life and well-being of the patient is literally in the hands of another

person: in the hands of the health care professional (Henriksen & Vetlesen, 2000, pp.

42-43, Løgstrup in Martinsen, 2003, p. 57). As stated by the Danish theologian and

philosopher Knud Ejler Løgstrup (in Martinsen, 2003), “We are always holding

elements of the life of other persons in our hands” (p. 57) (personal translation from

Danish), and this is especially evident in health care relations.

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Due to the above, the health professional must be committed to ethical conduct, and

meet the openness and trust of the patient other. As stated by Isaacs (2006j),

It is only within such a commitment on the part of the carer, that the ill

person can confidently entrust themselves to the carer secure that the caring

other will not abuse, exploit or manipulate them in their weakness, but will

show enduring, inclusive and compassionate care and will seek to nurture

them in their illness and seek as much as possible to restore them to an

integrative state of well-being. (p. 7)

As stated earlier, this interactional relationship between the health care professional

and the patient is at the very core of health care. It is a relationship maintained by the

act of care as responding to the uniqueness, vulnerability and need of the patient

other (Gastmans, 2002, pp. 496; Gastmans et al, 1998; Henriksen & Vetlesen, 2000,

pp. 33, 34). Care is a fundamental aspect of human life (Henriksen & Vetlesen,

2000, p. 34; Løgstrup in Martinsen, 2003, p. 69; Martinsen, 2003, p. 10). Health care

encompasses an altruistic virtue of care, and is essentially altruistic at its core

(Gastmans et al., 1998, p. 53). Thus, the health care professional is providing

professional health care for the benefit of the patient other; it is an altruistic act of

care (Henriksen & Vetlesen, 2000, p. 253). It is furthermore an ethical demand or

appeal in health care to care for the patient other, and to respond to the vulnerability

and need of the patient (Løgstrup in Martinsen, 2003, p. 69; Martinsen, 2003, p. 71).

This relationship can therefore not support the neo-liberal notions of independence,

competition and self-reliance as foundational aspects of health care – or the neo-

liberal emphasis on the individual as opposed to human relations and

interdependency.

The neo-liberal approach to health care fails to recognise the human condition of

moral engagement, interdependence, vulnerability and care, and therefore disregards

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the caring and altruistic response in health care. In chapter four, it was established

that human well being and happiness depends upon factors such as care, altruism,

love, solidarity and relationships with other people. Therefore, including a broader

and ontological view of human life and health care as presented in this thesis is a

critique and opposition to the instrumental, rational, individualistic and economic

approach of neo-liberalism.

Based on the discussion in this section, one might suggest that the respect for

autonomy, uniqueness, vulnerability, dependency and care are elements which are

equally valuable in health care, and which together constitute the complex human

condition in health and health care.

The emphasis on individualism and the rejection of dependency and vulnerability in

neo-liberalism have consequences for the ideas of solidarity and shared

responsibility in health care. “Solidarity implies a communitarian understanding of

the human situation, a need for social interdependence, and a lively awareness of the

ways in which disease and illness can overcome our individual economic and social

resources” (Callahan & Wasunna, 2006, p. 114). The human condition is such that

we are part of a shared community. Yet, as neo-liberalism places its emphasis on the

individual, the community and the ‘common good’ in health care is neglected.

Contemporary health care is however often concerned with the common good or

public health (as an ethical enterprise committed to the idea that all people are

entitled to protection against hazards and to the minimisation of death and disability)

such as the health and safety standards in homes and workplaces, public

immunisation programs, public health education, or public health care services,

which are essential to the ‘common good’, the overall population health and

individual health alike. By ignoring these aspects, the neo-liberal approach positions

itself in a difficult situation, as it is likely that the levels of health within a population

will deteriorate under a neo-liberal model, and threaten the productiveness and

national economy.

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Social justice and equality

“…the foundational moral justification for the social institution of public health is

social justice” (Powers & Faden, 2006, p. 80).

Contrary to the statement above, neo-liberalism accepts inequality in society as

natural and unavoidable, and dismisses the notion of social justice on the basis that it

threatens individual liberty. Nevertheless, as established in chapter one, the notions

of social justice and equality are underpinning contemporary conceptions of health

and health care. In the following, I shall argue that social justice and a reduction of

inequalities in health and health care are morally just and essential to contemporary

health care.

In chapter four, I presented arguments demonstrating that neo-liberalism produces a

range of inequalities in society. Yet, inequalities, and especially income inequality,

may have serious ramifications for the health of a population (Schrader, 2005, pp.

26-27). The greater the degree of socioeconomic inequality there is within a society,

the steeper the gradient of health inequalities will be (Daniels et al., 2002, p. 20;

Schrader, 2005, p. 27). As stated in chapter five, neo-liberalism dismisses socio-

economic determinants in health and health care, as it inividualises health and health

care, and, therefore, neo-liberalism undermines the notions of a common good and

public health, which in turn enforces the neo-liberal rejection of social justice.

Conversely, it is today widely recognised that social, political and economic

determinants and conditions have a significant effect on health and health care (see

chapter one).

Moreover, health and health care are special in that poor health or health care may

greatly limit a person’s opportunities throughout life, and limit the potential for

employment and social and political participation (Geiger, 2006, p. 208). In a neo-

liberal view, economic growth is the best way to raise overall living standards, and

thereby raise health standards. Economic growth is in neo-liberalism presumed to be

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beneficial to health, and the prime mode of reaching better health and well-being.

Economic growth in itself may however not necessarily generate better health

(Koivusalo in Schrader, 2005, p. 20; Wilkinson, 1999, p. 257). On the other hand,

there is a clear link between a healthy population, which is more productive, and the

level of national welfare and economic prosperity (Pender et al., 2006, p. 3; personal

communication with Dr. Mark Brough, February 26, 2007). Improvements in the

health status of a population may have enduring positive effects on economic

performance (Pan American Health Organization & WHO in Schrader, 2005, p. 20).

Inequalities in health may contribute to a worsened level of overall health in a

population, and therefore less productivity and a declining national economy. As

discussed in chapter four, neo-liberalism seems to have contributed to

impoverishment, unstable growth, increased income gaps between rich and poor, an

increase in social inequalities, and concentrated power and wealth within upper elite

classes of societies. Thus, neo-liberalism may in fact contribute to poorer overall

population health and health disparity.

Injustices due to poverty, maldistribution of resources within a society, racism,

gender or disability, or other forms of discriminations or inequalities, lead to a range

of adverse health consequences such as injury, disability and premature death due to

increased risk factors, and decreased access to medical services and preventive

services (Levy & Sidel, 2006, pp. 7, 10; Powers & Faden, 2006, pp. 87-88).

Additionally, as outlined in chapter one, political and social determinants of health,

for example inadequate housing, level of education, working conditions, class,

gender, or infrastructure may also cause health inequalities (Bambas & Casas, 2003,

p. 325; Hofrichter, 2003, pp. 1-2, 6, 8). These determinants and inequalities are

interactive, and can combine to make great adverse effects on health (Barry, 2005,

pp. 85- 86; Powers & Faden, 2006, p. 5). Hofrichter (2003) argue that disparities in

health status among different population groups are unjust, because they often result

from preventable, avoidable or systemic conditions and policies that are based on

imbalances in political power (p. 12). Therefore, health policies must aim at

reducing the overall burden of disadvantages, as well as focusing on inequalities

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involving systematically disadvantaged social groups (Powers & Faden, 2006, pp.

87-88; Wilkinson, 1999, p. 267). This implies tackling sources of inequality through

policies on for example employment, incomes, education and housing (Wilkinson,

1999, p. 267). Children have a special priority in this context, as social and political

conditions have a critical impact on the ability for children to develop, and

detrimental living conditions and health in childhood will compromise capabilities,

possibilities, and health and well-being in adult life (Powers & Faden, pp. 92, 93). In

line with Powers and Faden (2006, p. 95), Roberts et al. (2002, p. 76) and Callahan

(2002, p. 10), the above does not imply that there should be precise equality between

persons in health care, but rather that everyone should be able to enjoy a sufficient

level of health and receive a minimum level of health care that allows for reasonable

life choices.

The responsibility for illness and health is in neo-liberalism placed on the individual,

and furthermore, neo-liberalism dismisses the notion of political and socio-economic

determinants of health, which in chapter one was established as of great importance

to both individual and public health. Accordingly, there is a risk that public health

issues, health promotion and disease prevention will be undermined or ignored in a

neo-liberal approach.

Furthermore, social, political and economic factors may be hard for an individual to

change, due to for example lack of resources, location, or illness, and they may be

factors for which an individual cannot be held personally responsible. This is not to

say that individual behaviour and choices do not have considerable impact on an

individual’s health. On the contrary, individuals play a critical role in the

determination of their own health status, because self-care represents a dominant

mode of health care (Pender et al., 2006, p. 8). This may be termed self-

responsibility, a personal sense of accountability for one’s well-being (Lalonde in

Craven & Hirnle, 2007, p. 262). Thus, people may choose to engage in activities and

behaviours that may either promote or worsen their personal health (Bambas &

Casas, 2003, p. 329). These choices might however be restricted, for example due to

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socio-economic or environmental factors, and there might not be equal opportunities

for making healthy choices for all groups of people (based on Bambas & Casas,

2003, p. 330; McMichael in Hofrichter, 2003, p. 7).

Income inequality and poverty are areas that have been disputed in the literature as

having a particular position in health inequalities contributing considerably to poorer

overall health and health disparities (Coburn, 2004; Hofrichter, 2003, chapter one;

Powers & Faden, 2006, p. 91; Schrader, 2005). This is because low-income levels

and poverty limit people to access resources such as technology, transport, housing,

education, health care services, medicine and other resources related to experiencing

good health (Hofrichter, 2003, p. 15; WHO in Gershman et al., 2003, p. 160).

Additionally, low incomes tend to reduce social status, which may result in

worsened health (Wilkinson, 1999, pp. 256, 259). Poverty also reduces life

expectancy, and increases the risk of starvation, disability, stress, illnesses and

substance abuse (Desjarlais et al. in Gershman et al., 2003, p. 160; WHO in

Gershman et al., 2003, p. 160). Conversely, it is recognised that more affluent

societies experience increased rates of so-called ‘diseases of industrialisation’ such

as coronary heart diseases, diabetes, and colon diverticulosis, so that improvements

in living standards may bring losses to health as well as gains (Barker et al., 1998, p.

4).

As neo-liberalism transforms health from a public matter into an individualised

subject (Hofrichter, 2003, p. 28), it rejects social responsibilities and social justice in

health care. Health in neo-liberalism is a matter of personal choice, behaviour and

habits (Hofrichter, 2003, p. 29). Beauchamp (2003) states that this approach to

health care, which he calls ‘market-justice’, undermines our resolve to protect

human life because it encourages a minimal obligation to protect the common good

(p. 269). Moreover, as discussed in chapter four, Powers and Faden (2006) stress

that social justice needs to include an analysis of justice encompassing a political

and social context (p. x). For Powers and Faden (2006), social justice includes

securing a sufficiency of health and well-being for everyone (p. 9).

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The neo-liberal quest for endless economic and material growth, leads to depletion

of natural resources, and the reduction of government control over essential services

that protect and improve the health of populations (Hofrichter, 2003, p. 19). In a neo-

liberal society people may be exposed to hazards, illness, premature death and other

detrimental health factors, even as the individual is being held responsible for the

desperate situation; whereas there may be social or political factors contributing to or

causing poor health, as discussed in the above. Some scholars have noted that health

and health care are not merely an individual responsibility, but a social and political

issue and a public matter founded on values such as equity and social justice (see

e.g. Krieger in Hofrichter, 2003, p. 14; Robertson in Hofrichter, 2003, p. 14).

As well as promoting individual responsibility and dismissing political, social and

economic (except economic growth) determinants for health, the neo-liberal

approach seeks to minimise public health care and the role of the state. Yet, when

public programs and investment in infrastructure such as mass-transportation,

schools, housing, and public health are reduced, health risks are likely to increase

because of less social protection through these programs (Hofrichter, 2003, p. 21).

The discussion in this section has shown that the neo-liberal notion of individual

responsibility is inadequate, as it rejects socio-economic determinants for health and

undermines social justice and responsibility. Based on the literature, and on the

prevailing views of health and health care, it can thus be claimed that social justice

in health care is morally just, and that a reduction of inequalities in society, and a

strong role for public health care will improve the overall health status and well-

being of a population, as well as benefit the individual. I can moreover conclude that

the undermining of public health, and the disregard of inequalities and social,

political factors (except economic growth) of health and health care in neo-

liberalism, alongside the neo-liberal emphasis on individual responsibility is likely to

be an unhealthy agenda, not contributing to overall better health in a population. In

the following, I shall support this argument with empirical evidence.

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Empirical evidence

Mackintosh and Koivusalo (2005) have found that countries, which spend more of

their GDP (gross domestic product) on private health expenditure do not necessarily

display better health outcomes, and that commercialisation of health care is

significantly associated with worse health outcomes (p. 14). Conversely, countries,

which spend more of their GDP on health through public expenditure or social

insurance, are associated with better health outcomes, and, furthermore, health

outcomes in richer countries have been positively associated with high incomes and

more public and social expenditure relative to GDP (Mackintosh & Koivusalo, 2005,

p. 15). (The health outcomes were measured in life expectancy and child mortality).

Moreover, Caldwell and Sen (in Kawachi & Wamala, 2007c) have found that low

income countries such as Costa Rica and Sri Lanka have achieved life expectancy

levels that outperform richer countries (through investments in education, health care

and other social arrangements) such as South-Africa and Brazil (p. 133). This

suggests that factors like domestic policies and priorities, social spending and

income distribution are just as important to overall health as economic growth

development (Kawachi & Kennedy in Kawachi & Wamala, 2007c, p. 133).

A characteristic example of the outcome of neo-liberal based policies in health care

is the United States, the leading country of a free market economy, the largest

economy in the world, and a country heavily influenced by neo-liberal approaches to

health care. Here, health care is highly market oriented and often treated as a market

commodity (Geiger, 2006, p. 207; Schrader, 2005, p. 42). Yet, the public spending

on health care in the United Sates is higher relative to GDP than other Western

developed countries (Callahan & Wasunna, 2006, pp. 75, 214, 228; OECD data in

Callahan & Wasunna, 2006, p. 231). Moreover, the United States has one of the

worst health profiles in modern industrialised nations (Raphael & Bryant, 2006, p.

44), and, has, according to Labonte (2003), the most inefficient and inequitable

health care system of all economically advanced countries (p. 487). The United

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States is one of the least developed welfare states, and the only modern industrialised

nation which does not provide health care to its citizens as a matter of course

(Folland et al., 2007, p. 463; Raphael & Bryant, 2006, p. 44). There are also

egregious disparities in health indicators such as life expectancy; and around 46

million or more Americans unprotected by health insurance of any kind (in 2005),

mostly due to low annual income (Callahan & Wasunna, 2006, p. 62; Sklar, Mykyta

& Wefald in Gershman et al., 2003, p. 178). (See also Myer (2007) for a discussion

on health care in the United States.)

Additionally, it has been found that the most egalitarian countries, and not the

richest, enjoy the best health status (Daniels, Kennedy & Kawachi in Hofrichter,

2003, p. 4; Wilkinson, 1999, pp. 257, 259). This is a result of the smaller differences

in income and social status in more egalitarian countries (Wilkinson, 1999, p. 257).

Callahan and Wasunna (2006) have found that European universal health care

systems (be it tax-based or social health insurance (government coordinated but

privately run)) outperform the US market oriented model in almost all areas, from

cost control, to health status and patient satisfaction (based on OECD data,

Commonwealth Fund International Working Group on Quality Indicators data, and

other sources of data, see pp. 231, 234, 237-242).

These data contradict the neo-liberal idea of rejecting social justice, public

responsibility and public health. According to the data above, a strong role for public

health care and a reduction of inequalities in society, will improve the overall health

status of a population. Additionally, universal health care systems have proven to

outperform market oriented health care systems. Neo-liberal practices, such as in the

United States, have conversely proved to increase disparities and inequalities in

health and health care, as well as accounted for worse health profiles and outcomes.

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CRITIQUE OF THE MANIFESTATION OF NEO-LIBERAL APPROACHES

IN CONTEMPORARY HEALTH CARE

In this final section, I shall briefly discuss the application of neo-liberal principles

and practices in contemporary health care.

Problems with private health insurance

As outlined in chapter five, private health insurance is in the neo-liberal approach the

market-based alternative to managing risks (illness, accidents and death), as opposed

to the state offering universal health care. Private health insurance is in neo-

liberalism seen as making people more self-sufficient and responsible, and as

securing efficiency in health care. Moreover, neo-liberalism maintains that true

freedom of choice is only available through private health care and private health

insurance. The neo-liberal emphasis on private health insurance is however

problematic in several ways, as I shall discuss in the following.

Private health insurance suffers from many of the same pragmatic and moral

problems as the free market in health care, as discussed in the beginning of this

chapter, and private health insurance is therefore prone to market failure.

Moreover, as discussed in chapter four, the neo-liberal notions of freedom and

choice are in many cases severely restricted in health care, due to for example the

nature of illness and injury or the reality of asymmetry in information. Furthermore,

Harvey (2005) notes that there is a contradiction between authoritarianism and

individual freedom in private health insurance and that there often is an

asymmetrical power-relation between the individual and the insurance companies (p.

79). The insurer may for instance have a much greater knowledge concerning

various health insurance packages (and the profit they insure), and may choose to

withhold information, or engage in practices such as selling products at unfavourable

terms, or selling the wrong product (Ericson et al., 2000, pp. 542, 551).

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Likewise, where the employer provides health insurance, the employee may have to

choose between several options where the insurance policy and coverage may be

difficult to understand and poorly articulated (Barry, 2005, p. 158). This may lead to

a situation where the employee will be held responsible if there proves to be a gap in

the insurance policy (not covering the damage/illness), which may put the individual

in a financially devastating position (Barry, 2005, p. 158). Moreover, Butler (2002)

states that in the United States, as health costs have risen, and the relationship

between employers and employees have weakened, many employers have sought

ways of controlling the costs of health insurance instead of selecting the best health-

care insurance for their employees (p. 215).

Another example of the asymmetrical power-relations in private health insurance is

how companies often collect information about people to ‘sort’ them in to

categories, to fit with certain insurance packages “…to magnify differences among

individuals and risk assess populations, in order to achieve greater precision in the

commodification of insurance products and exclusion of those who do not fit”

(Simon in Ericson et al., 2000, p. 534). This way, private health insurance can

become highly discriminative, and favor consumers who will ensure profit, typically

younger and healthier individuals (Butler, 2002, p. 213; Ericson et al., 2000, pp. 534-

535). Consequently, people who are the most in need of health insurance, such as the

elderly, the chronically ill, or low-income groups are often discriminated against

because of their high risk and expected high health care costs, and they may find it

hard to locate affordable insurance (Butler, 2002, pp. 212-213; Callahan &

Wasunna, 2006, pp. 218-219; Musgrove, 2004, p. 54). Conversely, the clients may

have specific knowledge about personal illness or conditions, which additionally

contributes to an asymmetry of information in health insurance markets (Powers &

Faden, 2006, p. 111).

The neo-liberal idea that “Buyer and seller meets equally free to choose and with full

knowledge from among all possible alternatives, deciding whether to exchange, and

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at what terms, fully voluntarily” (Schutz, 2001, p. 41), is therefore problematic in

private health insurance.

Private health insurance may offer people some degree of choice, but not freedom,

because freedom is based on the capacity to choose action without external

constraints, whereas there are real constraints in private health insurance (Garland in

Ericson et al., 2000, p. 553; Rose in Ericson et al., 2000, p. 553). Such constrains

are, as outlined above, evident in the cost of private health insurance, the

categorisation of consumers, and in the discrimination of people who may be

presenting high risks or be too ill to ensure profit.

Furthermore, it is not certain that private health insurance is more efficient than

public health insurance. Indeed, Harvey (2005) claims that consumers may expect to

pay exorbitant premiums to what may be inefficient, bureaucratised and very

profitable insurance companies (pp. 79-80).

Gill (2003) argues that the emergence of private insurance and private health care

means that access that was often regarded as public goods under socialised and state

provision, now have become increasingly privatised, individualised and hierarchical

(as it is based on a user-pays system) (p. 126). Moreover, the burdens of risk (which

here refers to illness, old age and so on) in society are in a neo-liberal approach

redistributed, marketised and individualised rather than being socialised through

collective and public provision (Gill, 2003, p. 126). Therefore, the individual will

bear the cost and burden of illness, which is based on the neo-liberal principles of

self-sufficiency and individual responsibility.

As discussed in chapter five, private health insurance emphasises individual

responsibility, but is also a system of governance and surveillance, as consumers

may be subjected to sanctions such as higher premiums, exclusions or other

sanctions, if found to contribute too little to the maintenance of his or her health

(Ericson et al., 2000, p. 551).

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Private health care insurance may nevertheless serve some purposes. In some

countries (e.g. the United Kingdom) private health insurance providers act as a

supplement to government provided public health care, without evidently harming

the public system (Callahan & Wasunna, 2006, pp. 218-219). Therefore, it may

satisfy the demands of relatively affluent people to be self-financed, and expand

choices of treatment for these clients (Callahan & Wasunna, 2006, pp. 217-219).

Yet, Barry (2005) notes that if private health care insurance is to be considered

socially justifiable, the standard of public health care must be found adequate by the

large majority of the population (p. 84). Moreover, for private health care and private

health insurance to provide a real alternative, it is imperative that private practices in

health care are regulated to reduce the prevalence of unethical practices and to align

private health care with the social objectives of society (Butler, 2002, p. 202).

Based on the discussion, there seem to be real constraints in the freedom and choice

of the consumer in private health insurance. Private health insurance, whilst on the

one hand providing some people (notably the affluent) with a degree of choice, as

well as being a supplement to public health care, may on the other hand become

highly discriminatory and favor those that are able to pay for insurance packages and

ensure profit, as well as favouring those with good health and a low risk of becoming

seriously ill and claiming insurance. Evidently, this draws attention to the issues

related to people in need of continuous medical care such as the disabled, the

mentally ill, or the chronically ill, who paradoxically are those who often are the

most in need of health care and health insurance. Powers and Faden (2006) note that

a concern with health insurance markets is therefore that “those with greater health

risks also are at great risk for exclusion from insurance markets or limitations on

coverage that effectively exclude them from services they most need” (p. 127). It is a

concern that those who are disadvantaged and have fewer financial resources

undeniably will be harder hit in a private health insurance system, and therefore have

to live with the fear that if they fall ill or injured, they will not know how to pay for

the care required (Powers & Faden, 2006, pp. 127, 140).

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Public-private partnerships

As outlined in chapter five, PPPs in health care are becoming increasingly more

prominent in contemporary health care.

PPPs in health care can be useful. The different partners often come from varied

organisational cultures and professional backgrounds, which create a potential for

creativity and mutual learning (Roberts et al., 2002, p. 79). Other advantages of PPPs

in health care can be greater efficiency and increased the scales of resource

availability (e.g. skills, knowledge and information, and finances) since there are

more actors involved (McQuaid, 2000, pp. 19-21). Additionally, where public sector

capital budgets are constrained, a PPP can deliver public services that would

otherwise be unaffordable to a government (Gerrard in Grimsey & Lewis, 2005, p.

5).

Yet, not all partnerships are desirable. Mayston (2005) emphasises that private sector

involvement in itself is no guarantee for satisfactory outcomes (p. 381). Furthermore,

disadvantages to PPPs could include:

• misunderstanding or lack of clear goals for the partnership

• hidden agendas and problems with accountability

• high resource costs

• unequal power in the partnership

• organisational, coordinative, legal, technical or political difficulties

• differences in philosophical standpoints on issues

(McQuaid, 2000, pp. 22-25)

Furthermore, there is a risk that global PPPs in health may be focusing on relatively

narrow problems, and pay insufficient attention to crucial issues such as the

strengthening of health service delivery systems, or, possibly, they may contribute to

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increased inequity amongst countries (Buse &Walt, 2002, pp. 187-188). There may

also be a risk that PPPs may voice the specific interests of private companies, rather

than being a medium for the promotion and solution of public health issues (based

on Buse & Walt, 2002, pp. 184-188).

A challenge for PPPs in health care is therefore to assure accountability,

transparency and manage effective organisational integration (Reich, 2002, p. 15).

Lately, there has been a change in public attitudes, demanding greater corporate

responsibility and accountability (Buse & Walt, 2002, p. 175). The commercial

sector has thus been increasingly pushed to show greater social responsibility, invest

in the well-being of populations, adhere to global labour and environmental

standards, and invest in research (e.g. medical treatments) that will benefit the poor

(Buse & Walt, 2002, p. 178).

Market and business management theories and practices in health care

In the neo-liberal approach, health care services are expected to be run along lines

consistent with market principles, to be business-like, and introduce corporate

business management approaches. Today, health care services are heavily influenced

by business management approaches to health care (Walburg et al., 2006, p. 23). As

demonstrated in chapter five, business management language, theories and practices

have had an increasing influence in Western health care services, and these practices

have been implemented into health care with the assurance that they will enhance

quality and efficiency.

Nevertheless, some scholars take a critical approach to the benefits of business

management practices in health care services. Learmonth and Harding (2004)

question how these practices are now taken for granted, and how there is a lack of

alternative approaches (p. viii). It has become almost a hegemonic movement

(Learmonth, 2004, p. 3). Furthermore, Webb (in Crompton, 2003) argues that the

application of quality management theories (especially TQM) is deceiving, hiding a

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wish for downsizing rather than a genuine attempt to improve the quality of services

(p. 160).

Health care services have a history of focusing on the nature of services and the

needs of the clients, rather than measurable outcomes, as measuring outcomes in

health care can be difficult (Lewis, Lewis, Packard & Souflée, 2001, pp. 24-26;

Rutherford, 1992, p. 616). Yet, business management theories and practices often

embody a rational, instrumental, and technical approach, introducing concepts such

performance standards, performance improvements, monitoring and indicators,

outcome management, program evaluation, and evidence based medicine. As

discussed in chapter five, these terms and practices have increasingly been used to

describe and measure health care services, to make health care more cost-efficient

and quality focused.

The above illuminates a central problem with the adoption of business management

practices in health care: Business management theories and practices are

traditionally based on a linear, instrumental and technical logic of business

manufacturing, which usually involves the making of a very specific product. Health

care, however, is a highly complex service, and it is difficult to simplify health care

in a linear business-like logic. In health care, the services, clients and professionals

are extremely complex and unique, and there is no linear process of care (personal

communication with Dr. P. Isaacs, April 19, 2007), as there may be a multitude of

factors which inividualises patients.

Therefore, the dynamic and complex processes and relationships in health care, as

well as the human condition of embodiment and embeddedness, may be severely

restrained by the economical logic of business management theories and practices

based on business production logic. Furthermore, the application of business

management approaches to health care may possibly underplay the characteristic

(and important) moral values and purposes of health care, as well as threatening the

diversity of practices in the medical profession (Loughlin, 2004, pp. 29-30).

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Additionally, economic measurements in health care, such as cost-benefit analysis,

often requires that monetary value be put on human life or improvements in health

and well-being (Folland et al., 2007, p. 71). Small and Mannion (2004) emphasise

that the current practice of health care economics does not sufficiently appreciate the

complexities of modern human life, which encompasses aspects such as culture and

communication, and is too narrow in its understanding of the individual as a part of a

social world, which is shaped by reflective and interrelated people (p. 70).

Therefore, as stated in the introduction, there can arise some fundamental conflicts

by applying business management concepts as a way of organising health care, and

focusing increasingly on economics, and the concepts and foundations of health care

as a giving and altruistic practice based on values such as care, nurturing,

compassion, need and solidarity.

Yet, even if management theories and practices originate from manufacturing and

business settings, they may possibly contribute to some positive outcomes in health

care services, for example through providing a heightened awareness of how to

manage the limited resources efficiently, adjust to changes and upgrade service

delivery systems (based on Brody, 2000), or provide better understanding of the

utilization of economic resources. Furthermore, the increased attention to

accountability and effectiveness can lead to a new focus on the benefits of the

services for the clients (based on Austin, 2002, pp. 396-397). Nevertheless, a

continuing critique and evaluation of the impacts of business management

approaches to health care is necessary.

Another way of introducing market practice in health care, as outlined in chapter

five, has been managed care. Managed care has aimed at reducing overall health care

costs, producing higher levels of efficiency and greater consumer choice, and

promoting competitive private health care providers, whilst using the government to

manage the competition to keep it viable and effective. Yet, there is ambivalent

evidence that managed care has been successful in realising these aims. In the late

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1990’s, after having operated with success for some years, managed care did not

seem to stall increasing health costs in the United States, and it proved increasingly

unpopular amongst physicians and clients, much due to limits of choices in client

treatment and work conditions (Callahan & Wasunna, 2006, pp. 49, 76-77, 207).

There has since been much public and professional debate about the positive and

negative effects of managed care. Some claim that the cost of managed care is not

considerably less than that of traditional public health care (McCabe, 2004, p. 325;

Folland et al., 2007, p. 15). Others have found that in the United States, the model

did in fact control overall health care costs and contribute to more effective price

competition between hospitals (Bamezai et al. in Callahan & Wasunna, 2006, p.

207).

There has, however, been raised several concerns about the effects of managed care.

Some have argued that this model restricts access to health care services for

vulnerable groups of people, reduces spending in clinical services as more money go

towards administration and return to investors, and increases strain on public

hospitals and clinics (McCabe, 2004, pp. 325-326; Waitzkin & Iriart, 2004, p. 153).

In the Netherlands, managed competition in health care has been seen as in conflict

with the principle of solidarity (Busse, 2000, p. 33). Managed care has nevertheless

been a vehicle for incorporating the values and mechanisms of neo-liberal market

practices in health care. In her doctorate thesis, McCabe (2004) expresses concerns

of this development. McCabe states (2004) “…situated within the neo-liberal

market, managed care is imbued with the characteristics of that market in ways

which affect the moral tenor of health care provision” (p. 182). After having

analysed managed care in an ethical context, McCabe (2004) found that managed

care may affect the moral nature of health care in a number of ways, for example by

excluding vulnerable groups of people from access to services, producing a range of

injustices, commodifying health care, distorting the moral purposes of health care

providers, undermining ethical commitments of solidarity-based universal health

care systems, and ignoring the notion of need in health care (pp. 324-325).

Moreover, managed care reforms may produce fundamental changes to clinical

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practice. For instance, health professionals often become subordinated to an

administrative-financial logic and their professional judgment in the patient-

physician relationship may be undermined (Butler, 2002, pp. 210-211; Waitzkin and

Iriart, 2004, p. 151).

Thus, it can be concluded, that even if market practices such as private health

insurance, managed care and business management approaches to health care may

prove efficient and valuable in some contexts, they may nevertheless undermine both

the dynamic, unique and complex processes and relationships in health care, produce

inequalities and inequities, be discriminatory, and underplay the moral values and

purposes of contemporary health care.

Concluding remarks

This chapter has sought to analyse the neo-liberal approach to health care, and

answer the question ‘How does neo-liberalism affect the underlying values of

contemporary health care in the Western developed world?’. Furthermore, in this

chapter, I have endeavored to contribute to an understanding of the moral nature and

foundational values of contemporary health care in Western developed countries.

In the next and final chapter, I shall present the findings and conclusions reached in

this thesis, as well as suggest the implications for practice and ideas for future

research, and, finally, the contribution of this thesis to existing knowledge and

understanding.

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CHAPTER SEVEN: CONCLUSIONS AND DISCUSSION

This thesis has discussed neo-liberalism and its approach to, and effect on,

contemporary health care. It has been the intention that this thesis would provide a

framework for reflection on the context of contemporary health care in Western

developed countries and the influence of neo-liberalism. I have furthermore sought

to present a comprehensive philosophical-ethical conceptual analysis of the neo-

liberal ideology and theory, aiming at bringing forward the meaning and moral

underpinnings of the language and concepts constituting neo-liberalism. Moreover,

the aim of this thesis was to illuminate the neo-liberal influence on contemporary

health care, by demonstrating the ways in which the neo-liberal approach alters the

moral nature and purpose of health care. Therefore, this thesis has additionally been

concerned with the moral nature and foundational values of contemporary health

care in Western developed countries.

It was established, from the literature, that in recent times, political and social life in

Western developed countries has been shaped increasingly by neo-liberal ideology

and practices, and neo-liberalism has become the dominant economic paradigm. In

many places, neo-liberalism has been embedded into common-sense ways of how

people interpret and understand the world. Neo-liberalism is made practically

possible by organisations and political institutions that adhere to its ideas and norms,

notably the United Sates, the WTO, the IMF, and the World Bank. Additionally, as

discussed in chapter three, the development of communication and information

technologies, the emergence of a single global market for money and credit

(economic globalisation), and contemporary globalisation have played central roles

in enabling neo-liberalism to disseminate worldwide.

Furthermore, as outlined in chapters one, three and five, neo-liberalism has had, and

continues to have, a profound influence on contemporary health care in Western

countries, which is evident in:

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• an increasing role of the competitive market and private enterprise

• an emphasis on reducing public health care expenditure and increasing

economic efficiency and profit

• consumerism, commercialisation and commodification of health care

• neo-liberal language

• business management approaches to health care

• global trade and globalisation

Research questions and main findings

Based on the literature review and the existing knowledge, this thesis posed three

research questions in relation to neo-liberalism and contemporary health care, which

sought to articulate, evaluate and provide an analysis of the neo-liberal theory,

ideology, and language; and to articulate and analyse the neo-liberal approach to,

and effect on, contemporary health care in Western developed countries. The

research questions led to a basic philosophical inquiry describing, analysing and

evaluating the interpretive framework of neo-liberalism, and its approach to health

care. This basic inquiry was necessary to achieve a conceptual understanding of the

neo-liberal framework and its approach to and effect on health care.

The research question ‘What are the distinctive core concepts, values and moral

underpinnings of neo-liberalism?’ was addressed in chapters three and four.

In chapter three, neo-liberalism was described as an economic and political theory

and an ideology, and in chapter four, central beliefs and concepts in the neo-liberal

theory and ideology were analysed. The philosophical-conceptual analysis of neo-

liberalism demonstrated that neo-liberalism is a highly complex theory and ideology.

It was found that the distinctive core concepts, values and moral underpinnings in

neo-liberalism are as follows:

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Neo-liberalism positions economics and the free market in the centre of human life.

There are three fundamental ideas underpinning the free market: free trade in goods

and services, free circulation of capital and freedom of investment. The free market

is regarded as the alternative to the interventionistic welfare state, which in neo-

liberalism is understood as hindering economic growth and social development, and

unjustly inhibiting individual freedom. Government interference in the free market is

moreover seen as a disturbing way of misusing resources, and governments are

essentially viewed as inefficient, too costly, and creating social welfare dependency.

Conversely, the private sector and the free market, with its ‘natural’ law of

competition (both national and international), is regarded as the optimum mechanism

for the production and distribution of goods and services, and the most efficient way

to obtain individual liberty, economic growth, and the highest possible standard of

living. In the free market, consumers’ choices will drive production, which in the

neo-liberal view is the most efficient and democratic way of utilising resources. The

idea is that market participants engage in transactions freely and fully informed.

Moreover, neo-liberalism asserts that the free market naturally produces a ‘just

outcome’ in society, as a result of individual liberty, private property rights, a strong

legal system, and freedom of choice in the free market.

Neo-liberalism is thus a theory and ideology, which opposes the welfare state. The

state should alternatively embrace privatisation, deregulation, liberalisation and

competition, and reduce both personal and corporate taxes to encourage private

incentive and investment. Yet, even if neo-liberalism advocates a minimal state, it is

clear from the analysis in chapters three and four that a free market economy and

free trade require a strong state or a strong regulatory institution to function, which

will secure private property rights, provide the market with the conditions to operate

freely, and addresses market failure. Some neo-liberal advocates have additionally

acknowledged that the state may provide for some common needs without infringing

individual liberty. The ambivalent relationship between the market and the state in

neo-liberalism is a paradox. In chapter four, the role of the state was discussed, and it

was found that some problematic issues deriving from the neo-liberal position on the

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role of the state were the limitation of the capability of the state to provide public

goods and services, and the undermining of common public interests. Furthermore,

there is a possibility that the neo-liberal state may eventually become what it

opposes: authoritarian, interventionistic and a suppressor of freedom.

Central to neo-liberalism is the ‘trickle down’ theory, a belief in that a high standard

of living and continuous accumulation of goods and capital will be available to more

people if the neo-liberal doctrine continues to be implemented, as the poor will

eventually benefit from a more prosperous society. Therefore, neo-liberalism fosters

ever-increasing levels of production and consumption.

Another fundamental aspect of neo-liberalism is the commodification of human life,

as the economic calculus of neo-liberalism seeks to bring ever more human aspects

into the market place. Everything from items to social relations can be priced, traded,

and subjected to legal contracts and private property rights. Those aspects that for

some reasons cannot be commodified or counted are excluded from neo-liberal

human life.

The neo-liberal ideology encompasses certain values and an ethical framework,

which forms a normative paradigm that is promoted as the prescription for the good

human life. Neo-liberalism promotes individualism, economic growth, individual

freedom and rights, and material well-being and progress as the ultimate aims of

social life and as constituting the good life and human happiness and well-being.

Individual freedom and rights are essential to the neo-liberal ideology. The

individual should essentially be ‘free to choose’, and have the right to make

autonomous decisions (consumer choices). Individual freedom should be

unrestrained by state intervention, as free choice in the market enables people to

express their preferences, based on rational self-interested choices. In neo-liberalism,

this is termed the sovereignty of the consumer. The market place is thus the centre

for a good human life and the rational, free and consuming individual. Additionally,

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the logic of rationality and consumerism in neo-liberalism is closely bound to the

rationality of money.

People are in neo-liberalism viewed as self-interested, autonomous, responsible,

materialistic and competitive, and actualising themselves though consumption. The

individual is solely responsible for his or her life, opportunities and well-being, and

is free of obligations to provide for the needs of others. Social relationships are not

vital to the neo-liberal individual, and the notions of the common good and social

collaboration are replaced by an emphasis on individual responsibility, self-

sufficiency and independence.

Additionally, neo-liberalism emphasises that inequality is a natural part of human

life, and that people are born unequal by nature. Contrary to welfare arrangements

and social security, which are seen as creating dependency, individual responsibility,

the free market and the ‘trickle down’ theory are seen as solutions to raising living

standards and the way out of misfortune and poverty.

There has, however, been much criticism and concern about neo-liberalism and its

implications for humanity, for example in relation to its free market practices, global

economic and political consequences, environmental damage and consequences, and

social impacts. These issues were discussed in chapter four.

Moreover, in many instances, neo-liberal based policies and practices have proved to

be less successful, and not being realised according to the neo-liberal theory. It was

concluded in chapter four that neo-liberal based policies and practices do not appear

compatible with human well-being or happiness, a healthy earth and human survival.

Furthermore, it was found that there are practical problems with the neo-liberal

assertion of reducing poverty, and increasing economic wealth and material well-

being for the majority of people (and thereby increasing human well-being) as neo-

liberal based policies have not always been found to generate stable economic

growth and prosperity.

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In chapter four, the ethics of neo-liberalism were discussed. It was found that

although the neo-liberal emphasis on individual freedom and self-determination are

of undeniable significance to human life, this view excludes the ontological reality

of the human condition as constituted by aspects such as interdependence, collective

life, and our common embodiment and embeddedness in a social, natural, and moral

interactional world. The neo-liberal ideology therefore appears narrow in its

definition of human life and well-being, and, further, neo-liberalism fails to consider

many of the factors that constitute human happiness and well-being. Moreover, the

commodification of human life was found to be problematic, as neo-liberalism

cannot acknowledge value beyond that of price or instrumental value, which,

therefore, excludes central aspect of human life such as social and moral

relationships, culture and the intrinsic value of nature.

The concepts of rationality and self-interest were also discussed in chapter four, and

it was found that the rational, self-interested, detached and consuming neo-liberal

individual excludes the reality of the human complexities, embeddedness, and

interdependency, and discards the social and cultural value of human life. It was

additionally found that the notion of rational choice in the market was complicated

in several ways, for example, in relation to external effects and irrational behaviour

in the market, and, additionally, in relation to the problem of asymmetry of

information. The sovereignty of the consumer also proved problematical, especially

in the light of marketing practices. Furthermore, the emphasis on consumer

capitalism in neo-liberalism is likely to exclude many people, especially low-income

groups, as well as entrench social inequalities, as consumerism is directly

proportional to income.

An analysis of the neo-liberal concepts of individual freedom and consumer choice

proved that these concepts are controversial and constricted, as the freedom of

choice face limits even within a free market, and consumer choices may be

manipulated by marketing and politics. Furthermore, freedom is more than

individual freedom, for example, freedom is inclusive also of freedoms to political

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participation, or access to necessities such as education and health care. The concept

of freedom in neo-liberalism is contradictory, and neo-liberalism may produce less

desirable freedoms, such as the freedom to exploit others.

Likewise, the position of power in neo-liberalism is disputable. Neo-liberalism is a

political practice that favours the most powerful and wealthy people and nations, and

excludes a majority of people. Neo-liberalism could be deployed to serve an elite

class of society only. Moreover, neo-liberalism has inflicted its power through the

deliberate use of a specific language. Power in neo-liberalism is additionally related

to monetary power; however, it was established in chapter four that monetary power

entrenched inequalities in society due to differences in wealth or social position, and

that power is often in favour of businesses rather than consumers. Neo-liberalism

therefore appears impractical, as the human world consists of a complexity of

conditions and power relations.

The neo-liberal notions of justice and inequality were also discussed in chapter four,

and it was established that in neo-liberalism, ‘social justice’ is individualised. For the

sake of upholding freedom in the market, neo-liberalism accepts some levels of

inequalities, and sees unemployment and misfortune of some people as necessary

outcomes of a free market economy. Neo-liberalism emphasises individual

responsibility, and responsibility for one’s situation and conditions is regarded an

individual and not a social matter. The neo-liberal approach does therefore not

acknowledge social or political determinants to inequalities. Moreover, it is likely

that neo-liberalism may provide liberty to some at the cost of the vulnerable and

unfortunate. Contrary to the neo-liberal emphasis on individual responsibility, some

have argued that social justice should be the foundation for society.

The research question ‘What is the neo-liberal approach to health care?’ was

addressed in chapter five. In this chapter, the neo-liberal approach to and

manifestation in contemporary health care in Western developed countries was

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articulated. It was suggested that the neo-liberal approach to health care is as

follows:

The neo-liberal approach opposes a welfare state and large government expenditures

on health care, and rejects the principle of universal access to public health care

based on solidarity, as has been common in many Western developed countries

(except the United States). In the neo-liberal view, a universal/ public health care

system:

• inhibits individual freedom

• is inefficient and hinders economic growth

• creates an unnecessary cost for the state

• provides little connection between what people financially contribute and the

service they receive

• makes people less self-sufficient and less responsible

A public health care system is additionally seen as deeply unjust, as it infringes

private property rights (e.g. through taxation) to distribute income to supply another

person with his or her health care needs in the name of social justice.

Alternatively, neo-liberalism urges that the private sector, philanthropic activities

and the free market be providers and initiators of health care services. Health care

should essentially be part of the free competitive market. Yet, some neo-liberal

advocates recognise that there may be a need for some government provision;

however, the exact role of the state here remains unclear. The state should

nevertheless provide the conditions for health care services to operate freely in the

market, which makes a free market in health care dependent on a strong functioning

state and strong legal institutions to operate efficiently. Furthermore, the state should

embrace deregulation, liberalisation and privatisation of health care services, and

encourage competition. If public health care services exits and cannot be privatised,

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they must be run in a way which is consistent with market principles to be efficient,

by being business-like and incorporating business management methods.

In the neo-liberal approach to health care, the free market is the alternative to the

universal/public health care. Neo-liberalism maintains that in a free market,

individual liberty and choice are secured, and that when health care services mainly

operate in a free, competitive market, both users and providers will benefit from a

more efficient, liberated, fair, and improved health care system of higher quality and

lower cost.

Additionally, neo-liberalism strongly argues for the user-pays principle in health

care. Thus, the ability to pay, rather than health care need is the dominant

determinant in the neo-liberal approach. Therefore, neo-liberalism alters the purpose

of health care from being a common good to being an individual good provided on a

user-pays basis in a competitive market.

Individual freedom and choice, individual responsibility, and self-sufficiency and

independence are other central aspects in the neo-liberal approach to health care.

There should be less social protection for those suffering illness and injury, and the

cost of health care should be placed on the individual, rather than on the public.

Responsibility for illness and health is in neo-liberalism placed on the individual,

and, therefore, neo-liberalism replaces the notions of public good and community

with an emphasis on the individual and individual responsibility.

In the neo-liberal approach, health care is treated as a commodity, and patients as

health care consumers. Consumers are expected to make autonomous, informed and

rational health care choices. Furthermore, autonomy is seen as protecting the

individual from being subject to unsought-for interventions imposed by the state or

paternalistic professionals.

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In chapter five, it was additionally discussed how the neo-liberal approach has been

manifested through for example private health care and insurance, public-private

partnerships (PPPs), and new management approaches to health care, such as NPM,

quality management, and performance/outcome management, in Western developed

countries. Management practices have increasingly been used to describe and

measure health care services, often to make these services more cost-efficient and

quality focused. Furthermore, health economics has grown as a discipline, and

become increasingly important in contemporary health care. Reforms of the health

care sector have thus often been driven by PPPs, managed care, business

management approaches, economics, and competition, as the welfare state has come

under increased pressure and health care costs have continued to rise. The free

market and private enterprises are now regarded irrefutable parts of contemporary

health care.

The research question ‘How does neo-liberalism affect the underlying values of

contemporary health care in the Western developed world?’ was addressed in

chapter six. In this chapter, I sought to critique the neo-liberal approach to health

care by focusing on considerations regarding the purpose and moral nature of health

care.

It was found that there are pragmatic and moral problems with the free market in

health care. The complexities, unpredictability and irregularities of health care, and

the reality of asymmetry of information, were found to make a competitive, free

market difficult to realise in health care, and it was stated that the good of health care

is prone to market failure.

Furthermore, it was found that the free market might undermine the moral purposes

of health care, as health care in the free market is mainly recognised for its

instrumental and monetary value. The neo-liberal emphasis on the user-pays

principle ignores the contemporary belief that health care is a basic human need and

right, and devalues the intrinsic value of health and health care. Furthermore, it was

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found that the neo-liberal approach marginalises the values of care and altruistic

giving in health care, and the idea that health care exists as a response to the human

condition of need and vulnerability.

The free market does not promote many of the important goals of what is considered

good health care by most definitions, such as need, solidarity, altruism, a minimum

level of health care that allows for reasonable life choices, or a concern for

population health. Situating health care in the context of the competitive market

implies a greater focus on economic efficiency and profit extraction, which alters the

purpose of health care from a moral profession to a business of profit and

commodity. A free market in health care additionally increases the vulnerability of

those in health care need, and those who cannot afford private health care or private

health.

There was also found to be constraints to the idea of freedom of choice in health

care, and both choice and autonomy could be restricted due to the nature of illness

and injury and user-pay fees. In addition, the neo-liberal approach creates

inequalities in health care due to the emphasis on affordability.

Another problematic aspect of the neo-liberal approach is that the importance of

good and ethical conduct, professional knowledge, skills and expertise within the

medical/helping professions, even if of immense importance to the quality of health

care, are not appreciated..

The commodification of health care is also problematic. Subordinating health care to

the rationalities of commodification implies that health care is valued for its

monetary and instrumental value instead of its intrinsic worth or non-material or

moral value. It was established in chapter six that on moral grounds, health care

cannot be considered a commodity.

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In the areas of self-determination and uniqueness, the neo-liberal approach was

found to support contemporary ideas in health care to some degree, although

individualism and respect in neo-liberalism are not related to being a person that is

unique in the light of others in social relationships. Yet, a flaw in neo-liberalism is

that it overlooks the conditions necessary for realising the goal of individual

autonomy and liberty: that these features of human life take place within a

community of social relations.

The neo-liberal approach ignores the complexity of health care as situated in a

complex human condition of altruism, care, interrelationships and community,

vulnerability, trust and interdependency, and dismisses that the aim of health care is

to respond to the human condition of vulnerability and need. Health care is,

however, an act of morally responding to the need of the vulnerable other, but this is

not sustained in neo-liberalism. This thesis cannot support the neo-liberal emphasis

on individualism, independence, competition and self-reliance as the foundational

aspects of health and health care. The ontological view of human life and health as

presented in this thesis critically challenges the instrumental, rational, individualistic

and economic approach of neo-liberalism.

Neo-liberalism accepts inequality in society as natural and unavoidable, and

dismisses the notion of social justice on the basis that it threatens individual liberty.

Nevertheless, it has in this thesis been demonstrated that neo-liberalism produces a

range of inequalities in society, and in chapter six it was established that these

inequalities could have adverse effects for both individual and population health.

Based on the analysis of social justice and inequalities in chapter six, it can

moreover be concluded that the neo-liberal rejection of social justice and social

responsibility can not be supported, and that the transformation of health care to

merely an individualised matter undermines the notions of a common good and

public health, and rejects the notion of health care as a human need and right.

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As the responsibility for illness and health in neo-liberalism is placed on the

individual, there is a risk that public health, health promotion and disease prevention

will be undermined and ignored. The neo-liberal notion of individual responsibility

is inadequate, as it dismisses the importance of social determinants for health and

well-being. Based on the literature, and on the prevailing views of health and health

care, it can, however, be argued that social justice in health care is morally just, and

that a reduction of inequalities in society, and a strong role for public health care will

improve the overall health status and well-being of a population, as well as benefit

the individual. The neo-liberal approach is likely to be an unhealthy agenda, not

contributing to overall better health in a population. Empirical evidence has

supported the above, and proved that a strong role for public health care, and a

reduction of inequalities in society, will improve the overall health status of a

population. Additionally, universal health care systems have proven to outperform

market oriented health care systems. Neo-liberal practices, for example in the United

States, have conversely proved to increase disparities and inequalities in health and

health care, as well as accounted for worse health profiles and outcomes.

In chapter six, it was also found that neo-liberal practices such as private health

insurance revealed power and information asymmetries, which makes the neo-liberal

notions of fully informed and voluntary choices problematic. Private health

insurance was moreover found to produce inequities in access, be potentially

discriminative and constrain the consumer’s freedom of choice.

Furthermore, it may be appropriate to take a critical approach to the benefits of

business management practices in health care services. These practices are nowadays

more or less taken for granted, and there is a disturbing lack of alternative

approaches. The dynamic, unique and complex processes and relationships in health

care, as well as the human condition of embodiment and embeddedness, may be

difficult to accommodate in the linear process of business management approaches;

and health care may be restrained by the economical logic of business management

theories and practices based on business production logic. In addition, these

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practices may underplay the characteristic and important moral values and purposes

of health care such as altruism, care, nurturing, compassion, need and solidarity.

Thus, it can be concluded, that even if market practices such as private health

insurance, managed care and business management approaches to health care may

undermine the dynamic, unique and complex processes and relationships in health

care, produce inequalities and inequities, be discriminatory, and underplay the moral

values and purposes of contemporary health care.

The neo-liberal approach to health care offers no well-founded moral alternative to

that of the universalistic, solidarity-based approach, as it distorts the ethical

commitment and moral purposes of health care, as well as professional medical

morality. Furthermore, the neo-liberal approach cannot contain the complexities of

the human condition and health and health care, because it is limiting human life to

the free market and to instrumental and monetary value.

Implications for practice and ideas for future research

In this thesis, I have analysed neo-liberalism in relation to health care, which is

regarded a special human good. The conclusions in this thesis are not meant to be

applied to other areas of life such as employment, education, industry, income

policies, pensions or gender issues without further contemplation, as the neo-liberal

impact and meaning in these spheres may differ from that of the neo-liberal effect on

health care. Thus, this thesis offers a standpoint regarding health care alone.

Moreover, the results of this research project should be regarded as an attempt to

articulate a possible explanation to the neo-liberal approach to and effect on health

care, and not a fixed solution.

Nevertheless, one of the aims of this thesis was to demonstrate, in a philosophical-

ethical manner, the neo-liberal influence on contemporary health care. It is evident

that the neo-liberal approach fundamentally alters the purpose and meaning of health

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care and undermines the moral nature of health care as otherwise emphasised in

most contemporary views and definitions of health care. Therefore, it is important

that the influence of neo-liberal ideas and practices in contemporary health care in

Western developed countries continues to be scrutinised and questioned, and that a

discussion about these issues be encouraged in relevant political and health care

settings. It is hoped that the analysis presented in this thesis could prove useful to

considerations about policy and structural changes in health care due to an increasing

influence of market practices and neo-liberal ideas.

The issues arising by applying a neo-liberal approach to health care, are many and

complex, as presented in the beginning of chapter six. The limits of this thesis have

not allowed for an analysis of all of these issues, and, furthermore, the research

strategy in this thesis was that of a philosophical inquiry, additionally drawing on

political philosophy, thus concentrating on conceptual, theoretical research, based on

literature, not empirical data. Yet, from the results in this thesis, it is clear that there

is a need for more empirical research into the pragmatic consequences of applying

neo-liberal policies and practices to health care, for example regarding the impact on

the work environment for health care professionals, the role and identity of the

patient and the health professional, environmental consequences, or other relevant

issues. The analysis in this thesis could favorably serve as a basis for empirical

inquiry into these issues, to identify possible practical consequences of the neo-

liberal approach and influence.

There is, therefore, a need for empirical evidence to investigate the claims made in

this thesis, as well as there is a need for empirical evidence to support the neo-liberal

belief that its approach is beneficial to health care, as there is little research

sustaining neo-liberal claims of for example more efficient health care of higher

quality when implementing neo-liberal based practices.

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The contribution of the thesis to existing knowledge and understanding

This thesis has sought to add to the existing knowledge and literature concerning

neo-liberalism by presenting a comprehensive conceptual analysis of the theoretical

and ideological framework and language of neo-liberalism, especially concerning its

moral underpinnings and normative framework as regards the good life and society

for human beings. Furthermore, this thesis has sought to contribute to an

understanding of the neo-liberal approach to health care and its influence on

contemporary health care in Western developed countries.

This thesis has thus presented an ethical-philosophical analysis of the belief-system

of neo-liberalism, and suggested the neo-liberal approach to health care.

Furthermore, this thesis has added to the existing literature by presenting

considerations about the ways in which neo-liberalism may affect the meaning and

purpose of health care.

Finally, this thesis has sought to contribute to the knowledge of philosophical

inquiry by documenting the method of ‘doing’ philosophical inquiry, by providing

an account of the method of philosophical inquiry. Additionally, this thesis has

sought to add to the branch of contemporary philosophical literature that is

concerned with restoring the notion of ontology as significant to philosophical

inquiry. This thesis has strongly argued in favor of an ontology, a shared human

condition, and a human engagement in contemporary health care, as an alternative to

the neo-liberal emphasis on individualism, rationality and detachment. Including a

broader and ontological view of human life and health as presented in this thesis is,

therefore, an alternative framework for health care provision to that offered by the

instrumental, rational, individualistic and economic approach of neo-liberalism.

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Final remarks

Neo-liberalism is neither unitary nor unchangeable, and, in practice, it is always in

interaction with other political and cultural structures or discourses. The

manifestation of neo-liberalism may therefore contradict and vary from the theory.

The account of neo-liberalism presented in this thesis is but an interpretation of neo-

liberalism, based on existing literature and the conceptual analysis of the key

understandings provided by that literature.

This thesis is not a critique of markets per se, but a critique of market practices and

ideology in the context of health care. As stated earlier, further evidence is needed

regarding the ability of free markets to contribute significantly to efficiency, cost

control, quality, and equity in health care. In general, a free market in health care has

not appeared to promote many of the goals of what is considered good health care by

most definitions. Nonetheless, in Western developed countries today, market

practices and private investment are prevalent (most notably in the United States),

and we often find ‘mixed-markets’ of public and private services in health care. It is,

however, evident, that if a free market in health care is to supplement public health

care, it must be regulated to some extent to ensure that market practices are in line

with the social objectives of society, and to ensure that unethical practices are

reduced. Yet, based on the research in this thesis, a market based health care system

does not seem able to be the basis of any health care system as a whole.

It is, nevertheless, hardly realistic to envision unlimited universal public health care,

which provides ever-expanding opportunities of treatment and technologies for a

growing population. Some restrictions will be needed, either in the form of

government intervention (which has proven to be an efficient way of controlling

costs) or experimental market practices, or most likely, a combination of both. Yet,

the evidence that more egalitarian (e.g. Western European) countries outperform

nations such as the United States, which is heavily influenced by market practices in

health care, leads me to conclude that the state has a significant role in assuring that

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its citizens are provided the opportunities to enjoy the most efficient and highest

attainable level of health and health care.

Finally, as health and health care are conceived as basic human needs and rights,

services securing that people achieve sufficient levels of health and health care

should be in place in any society. Governments are an obvious candidate for

undertaking this task; however, social and political institutions in both the public and

private sphere can suitably contribute to this task. What is evident, however, is that

this is a collective task (constituting a joint individual and public effort), and not one

to be left to the individual citizen as a mere self-interested consumer.

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