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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)
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.
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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.
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III
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
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
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
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
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.
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
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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.
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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
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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;
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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
7
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
8
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)
9
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
10
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
11
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
12
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
13
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 &
14
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,
15
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)
16
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
17
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).
18
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
19
(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
20
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:
21
...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.
22
• 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
23
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
24
(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).
25
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.
26
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.
27
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
28
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
29
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
30
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
31
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
32
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.
33
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)
34
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).
35
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.
36
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
37
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.
38
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.
39
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,
40
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).
41
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.
42
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.
43
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.
44
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,
45
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
46
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.
47
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)
48
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
49
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
50
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
51
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
52
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).
53
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
54
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
55
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.
56
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
57
(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
58
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
59
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
65
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
66
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
73
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.
191
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
192
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
193
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.
194
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.
195
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
196
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.
197
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