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Wealth and Health: Economic Status and the Psychological Effects of Economic Austerity

by Alex Carey
May 4, 2024
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Author: Dr Jonathan Kenigson, FRSA*

According to classical social contractarian thinking, governments should prioritize the economic prosperity of their citizens to the extent that their constitutions and customary practices permit. Economic austerity measures are sometimes implemented by national governments in response to economic recessions: Such interventions are calculated to reduce national debts, reassure creditors and credit-rating agencies of the stability of continued bond purchases, and demonstrate reduced risks of defaults on sovereign debts. In an austerity program, governments dramatically curtail expenditures for social services, government salaries, and fundamental research in order to attain a more favorable ratio of debts to GDP (Chisari & Lega, 2022).

Keynesian critics argue that neoliberal practices involving debt reduction can prolong adverse economic conditions via reduction of government consumption of domestic goods and services (Schiavo, 2018). Currency devaluation can augment increased international trade and foreign demand for domestically-crafted commodities, but such policies can contribute to recovery schemes that are unduly burdensome to lower-class and middle-class citizens.

Austerity policies mandated by the European Central Bank (ECB) following the Great Recession of 2008 likely had adverse effects on health outcomes in general and mental health outcomes more specifically (Massuda et al., 2018; Thomson & Katikireddi, 2018). The adverse psychological effects of austerity upon vulnerable citizens are often eschewed by policymakers and academics alike. This omission should be a moral consideration for governments seeking to minimize religious radicalism and ensure citizens’ mental health during trying times.

Reductions in the quality and availability of healthcare services during economic downturns can exacerbate mental health issues and lead to upticks in untreated mental health disorders like anxiety, depression, and PTSD (Matsubayashi et al., 2019). Austerity policies promote wealth-dependent disparities in general healthcare access that are particularly impactful upon vulnerable populations (Doetsch et al., 2023; Torfs et al., 2021). Curtailment of welfare, infrastructural, educational, and related services further exacerbate burdens on the poor (Turley et al., 2018). Simultaneous decreases in disposable household income arising from austerity also impact private, non-governmental services in the voluntary and community service sectors (Jones et al., 2015)

Because of their propensity to exacerbate pre-existing social inequalities, austerity measures can poison public sentiment toward governmental institutions, precipitating upticks in radicalism, xenophobia, and racial/religious tensions  (Bojar et al., 2021). Austerity has been associated with the emergence of extremist parties that would not prove politically viable during periods of economic stability and growth; these parties variously defend radically protectionist policies and vociferously oppose the inequalities propagated by globalization (Finnsdottir, 2019; Hübscher et al., 2023; Morini, 2020). Economic austerity also promotes radical religiosity among disenfranchised adherents, exacerbating possibly violent, chiliastic, and anti-government sentiments (Arefin & Ritu, 2021; Thoriquttyas et al., 2020; Widyaningsih et al., 2021)

Coda.

“We gathered on porches; the moon rose; we were poor.

And time went by, drawn by slow horses.

Somewhere beyond our windows shone the world.

The Great Depression had entered our souls like fog.

And time went by, drawn by slow horses.

We did not ourselves know what the end was.

The Great Depression had entered our souls like fog.

We had our flaws, perhaps a few private virtues.

But we did not ourselves know what the end was.

People like us simply go on.

We have our flaws, perhaps a few private virtues,

But it is by blind chance only that we escape tragedy.”

From “Pantoum of the Great Depression,” Donald Justice

Works Cited.

Arefin, M. and Ritu, N. (2021). Addressing the Political Dynamics of Radicalization Leading to Religious Extremism in Bangladesh. Simulacra Jurnal Sosiologi, 4(1), 115-129. https://doi.org/10.21107/sml.v4i1.10543

Bojar, A., Bremer, B., Kriesi, H., & Wang, C. (2021). The Effect of Austerity Packages on Government Popularity During the Great Recession. British Journal of Political Science, 52(1), 181-199. https://doi.org/10.1017/s0007123420000472

Chisari, G. and Lega, F. (2022). Impact of Austerity Programs: Evidence From the Italian National Health Service. Health Services Management Research, 36(2), 145-152. https://doi.org/10.1177/09514848221134473

Doetsch, J., Schlösser, C., Barros, H., Shaw, D., Krafft, T., & Pilot, E. (2023). A Scoping Review on the Impact of Austerity on Healthcare Access in the European Union: Rethinking Austerity for the Most Vulnerable. International Journal for Equity in Health, 22(1). https://doi.org/10.1186/s12939-022-01806-1

Finnsdottir, M. (2019). The Costs of Austerity: Labor Emigration and the Rise of Radical Right Politics in Central and Eastern Europe. Frontiers in Sociology, 4. https://doi.org/10.3389/fsoc.2019.00069

Hübscher, E., Sattler, T., & Wagner, M. (2023). Does Austerity Cause Polarization?. British Journal of Political Science, 53(4), 1170-1188. https://doi.org/10.1017/s0007123422000734

Jones, G., Meegan, R., Kennett, P., & Croft, J. (2015). The Uneven Impact of Austerity on the Voluntary and Community Sector: A Tale of Two Cities. Urban Studies, 53(10), 2064-2080. https://doi.org/10.1177/0042098015587240

Massuda, A., Hone, T., Leles, F., Castro, M., & Atun, R. (2018). The Brazilian Health System at Crossroads: Progress, Crisis, and Resilience. BMJ Global Health, 3(4), e000829. https://doi.org/10.1136/bmjgh-2018-000829

Matsubayashi, T., Sekijima, K., & Ueda, M. (2019). Government Spending, Recession, and Suicide: Evidence From Japan. [Various Printings – See Below]. https://doi.org/10.21203/rs.2.16528/v1

Morini, M. (2020). The rise of Anti-Establishment Parties. [Various Printings – See Below]. https://doi.org/10.1093/hepl/9780198811404.003.0015

Schiavo, L. (2018). Neoliberal Hegemony, Neoliberal Reforms of Education in Italy, Student Organizations and Their Protests: A Case Study. International Journal of Humanities and Social Science, 8(12). https://doi.org/10.30845/ijhss.v8n12p5

Thomson, R. and Katikireddi, S. (2018). Mental Health and the Jilted Generation: Using Age-Period-Cohort Analysis to Assess Differential Trends in Young People’s Mental Health Following the Great Recession and Austerity in England. Social Science & Medicine, 214, 133-143. https://doi.org/10.1016/j.socscimed.2018.08.034

Thoriquttyas, T., Saputra, M., Hanafi, Y., & Zaimatus, N. (2020). Strengthening the Religious Moderation Through Innovation of Islamic Religious Education (IRE) Based Civic Intelligence and the Values Clarification Technique (VCT). KNE Social Sciences. https://doi.org/10.18502/kss.v4i14.7878

Torfs, L., Adriaenssens, S., Lagaert, S., & Willems, S. (2021). The Unequal Effects of Austerity Measures Between Income-Groups on the Access to Healthcare: A Quasi-Experimental Approach. International Journal for Equity in Health, 20(1). https://doi.org/10.1186/s12939-021-01412-7

Turley, G., McNena, S., & Robbins, G. (2018). Austerity and Irish Local Government Expenditure Since the Great Recession. Administration, 66(4), 1-24. https://doi.org/10.2478/admin-2018-0030

Widyaningsih, R., Kuntarto, K., & Chamadi, M. (2021). The Level of Religious Radical Understanding Among University Students in Banyumas Region. Komunika Journal Dakwah Dan Komunikasi, 15(1), 39-53. https://doi.org/10.24090/komunika.v15i1.4169

Alex Carey

Alex Carey

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