A willingness to see health and economy as interwoven, as part of something larger, is at the core of thinking around wellbeing, and it is strikingly absent in the White House, writes David Hall.
It was a bleak event. The conference title was “Averting Systemic Collapse” but, truth be told, there wasn’t much talk of averting. Crisis felt baked in. And this was still a couple of months before the coronavirus made its fateful leap to humans.
The venue was the OECD’s headquarters in Paris, mid-September 2019. Several high-profile economists had been asked to challenge the OECD’s thinking. Among the better known were Italian-American economist Mariana Mazzucato, the Bank of England’s chief economist, Andy Haldane, the famed Keynesian Robert Skidelsky, and Brazilian philosopher Roberto Unger.
The subject was the world’s growing vulnerability to shocks. A variety of risks loomed – some new, some old – including economic crises, populist revolt, cyberterrorism, natural disasters and pandemics. Troublingly, these risks were being amplified by several overarching trends: the intensification of inequality, the supercomplexity of financial markets, the rise of digital monopolies and, above all, the twin crises of climate change and biodiversity loss. These aren’t only boosting the frequency and intensity of certain shocks, but enabling their impacts to cascade from system to system, to spill along supply chains, air routes, information channels, and financial transactions. A novel coronavirus takes hold and, next minute, media companies are collapsing, degrading the democratic capacity to make informed decisions and hold government to account. Such are the downsides of our highly interconnected world.
What did the economists propose? That governments adopt a wellbeing approach. In their report, Beyond Growth, which cites New Zealand’s Living Standards Framework as an exemplar, they argue, “our conception of economic progress needs to extend beyond individual, material prosperity to include indicators of social wellbeing, cohesion and empowerment, and the environmental boundaries of human activity.” In other words, conventional metrics, such as GDP and employment, only capture slices of economic reality. Critically, they fail to account for things – especially inequality and environmental degradation – that make societies more vulnerable to shocks.
Enter the representative for the United States. He was in his 20s, I suppose, with that boxy physique that the Midwest seems to breed for. Avoiding eye contact with others, he argued that the report was ideological, not evidence-based. It ignored the trade-offs between growth and environment, between growth and inclusivity (actually it didn’t). And then he rounded on the OECD, declaring that it should be a neutral institution, not dictating policy to national governments. Issues such as environmental policy, he said, should only be the domain of national strategy.
I wish I could describe the lift in Mazzucato’s eyebrow, but I’m no expert in Italian architecture. Let’s just say that an air of awkwardness descended, as if the US had just shat it pants. Perhaps this isn’t so uncommon these days, as Trump’s isolationist spirit is dutifully projected into diplomatic settings. Still, it was the first time that I’d seen it. How debauched the US had become that, instead of twisting international institutions to its own advantage (as it had successfully done for decades), it could only muster this impotent antagonism.
The US left the room and the conference continued.
Crises have a way of stripping politics back to fundamentals. Lives and livelihoods depend on decisions by leaders. As the data on the Covid-19 catastrophe comes in, political analysts are turning to the question: why did some countries make better decisions than others?
Part of the answer lies in what matters to decision makers. This is something that crises forcefully expose. Spin and subterfuge can’t slow the advance of a virus. Politicians must choose a course of action (or suffer the consequences of failing to do so). Science helps to inform decisions – but only to a point. What cuts through the uncertainty and conflicting advice is good political judgment – and this springs from sensing what’s important, not only to oneself, but also the populations on whose behalf the decision is being made.
When Jacinda Ardern announced the lockdown, it seemed to many that the economy had finally been subordinated to the basic needs of people. After hearing politicians fret over GDP figures for years, its downgrade was breath-taking.
Except that, on second glance, this isn’t quite right. It isn’t as if, were the virus to spread, the economy would carry on as usual. If history is any guide, economic outcomes are worse without lockdowns. Many people remove themselves from the economy to protect themselves and their relatives; and those who don’t continue to transmit the virus, forcing up the number of critical cases. If these overwhelm medical facilities, then the mortality rate for Covid-19 – as well as non-Covid-related medical issues – grows because resources are stretched. Increasing medical resources is possible, but this means that the health crisis weighs ever heavier on public finances, creating a doom loop for fiscal policy. In sum, it isn’t only that the economy relies on a healthy public; it’s that public health systems rely on a healthy economy.
Pundits talk of the choice between saving lives and saving the economy. But these are interdependent systems, which you can’t sensibly trade one off against the other. It’s like asking a gardener to choose between sunlight or water, when both are needed for the tree to grow. Economists study only some of the many ingredients that enable humans to flourish. So too for health professionals: “a wellbeing approach imbues good health with a greater sense of purpose; not just the what … but also the why: because good health helps people to lead fulfilling and meaningful lives.”
That quote comes from New Zealand’s director general of health, Ashley Bloomfield, writing in December 2019 for the healthcare journal Milbank Quarterly. He argues that a wellbeing approach encourages health practitioners to see the bigger picture, not only by treating health as a function of wellbeing, but also as shaped by social, environmental and economic factors. This wider perspective enables a more nuanced understanding of health inequities. It also urges the treatment of patients as people whose values, experiences and aspirations warrant respect. As Bloomfield writes, a wellbeing approach encourages clinical practitioners to switch from asking, “What is the matter with you?” to asking, “What matters to you?”
This willingness to see health and economy as interwoven, as part of something larger, is central to a wellbeing approach. Contrast this with the view that I heard at the conference – or, better yet, from the US president himself.
What matters to Trump is economic growth. It was central to his 2020 electoral strategy. On February 4, he used his State of the Union address to brag that “our economy is the best it has ever been.” So when the coronavirus took hold in the US, he resisted reality, unwilling to see his economic “ratings” sabotaged. He dawdled, deferred and downplayed the crisis. When his administration was forced to declare an emergency on March 13, he complained, “Our country wasn’t built to be shut down.”
As he expected, the US economy is now in free fall; however its descent began before the lockdown, which suggests that a recession was unavoidable even if high death rates weren’t. GDP has flipped from 2% growth to a contraction of about 12%, potentially set to go as low as negative-40% in the next financial quarter. Unemployment has soared, with 33 million people applying for unemployment insurance and potentially millions more deterred from applying. Americans were already vulnerable, given the US’s thin social assistance. They are much more vulnerable now, because Trump, despite his strongman swagger, lacks the power of decision. He was unwilling to prevent the virus from spreading, but also unable to keep the economy open. Consequently, American wellbeing is doubly devastated.
If you’ve read this far, you may now be expecting me to draw a fat, straight line between New Zealand’s Covid-19 response and its wellbeing approach.
But I won’t. That would be too neat. Too implausible.
As I’ve written elsewhere, New Zealand’s wellbeing approach has unresolved ambiguities that limit its practical usefulness. It is also too new to be properly embedded into institutional processes. And even if it were, emergency decision-making abides by its own messy logic. When the story of New Zealand’s response is eventually told, there will be parts for science, error, fortune, necessity, compromise, well-made plans (and lack thereof), and raw political instinct. Political character – perhaps even gender – will have a role, notably through the prime minister’s communication skills and canny emphasis on kindness. And in the background there’ll be the Hobbesian mechanics of the state, poised to take control whenever the security of the people is at stake.
As we emerge from the lockdown, however, the wellbeing approach can, and should, be at the heart of political decision-making. The 2020 budget will be a critical test. Grant Robertson noted in his pre-budget speech that a wellbeing approach is “more important than ever in getting our response to Covid-19 right.” Yet as the Beyond Growth report warns: “All too often governments have published sets of alternative indicators but then largely ignored them”.
A wellbeing approach must be put into practice. To do this, the report recommends pursuing four economic goals: environmental sustainability, improved wellbeing, reduced inequality, and greater resilience. Without these goals, governments will keep stumbling from crisis to crisis, because they’ll underwrite policies that heighten society’s exposure to risks, hinder their capacity to manage change, and saddle future generations with assets that are vulnerable to the next pandemic, oil shock, or extreme weather event.
This will be an easy mistake to make. The real suffering caused by the Covid-19 crisis in New Zealand is tracked very well by conventional economic indicators: unemployment, loss of income, indebtedness. If this is the only data for decision making, it will be tempting to treat the economy like a dampened furnace that any “shovel-ready” project can reignite.
But a wellbeing approach reveals our more complex reality. It exposes the hidden liabilities of particular projects: they may spoil vital ecosystems, or degrade social cohesion through Treaty breaches, or lock us into risky dependencies on oil or high-volume tourism. It also reminds us that not all infrastructure is made of concrete and tar seal. This is the time to invest in human capabilities, most obviously public health and mental wellbeing, but also skills for people pivoting to new jobs. So too the “natural infrastructure“ of trees, waterways and wetlands; and the “social infrastructure“ of trust, connection and culture that strengthens community resilience.
Upgrading this infrastructure creates jobs too – and jobs that may better match the skills of people losing jobs from hospitality, tourism and retail. Repairing local ecosystems, revitalising local communities, rallying round those in need – this is care work that is often poorly paid or not paid at all, left to volunteers. Folding this into the paid economy only requires us to recognise the value such work provides.
Philosopher Krushil Watene argued recently, “When our Covid-19 lockdowns end, we can’t afford to stop caring about collective well-being … protecting each other to protect ourselves.” Policy makers haven’t always been good at accounting for these broad foundations of wellbeing. What the current crisis shows is that, if they keep neglecting them, the consequences will eventually take a form that no economist can ignore.
The Bulletin is The Spinoff’s acclaimed daily digest of New Zealand’s most important stories, delivered directly to your inbox each morning.