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Interrogating scarcity: a valuable strategy

Ted Schrecker | 26 March 2013

For purposes of setting post-2015 goals for development, inequalities should not only involve income and wealth, but also the power to decide on the uses to which resources are, or are not, put.

In countries rich and poor alike, we are used to hearing in health ethics and health policy about the need to set priorities for “resource-scarce settings.” This is true whether the issue is how much to spend on drug treatment for newborns and infants in Canada, or what interventions to offer pregnant women in low-income countries where as little as 50 cents per year may be available for maternal health  – this in a world where 350,000 women a year die in childbirth.

A remarkable book published in 1978 offers the basis for an alternative perspective. In Tragic Choices, Guido Calabresi and Philip Bobbitt introduce their topic by saying that “[w]e shall see what a market looks like, not when it is used to allocate cameras or fast cars, but when it is used to allocate a scarce life-saving resource.” That said, they start by recognizing that many scarcities of resources are “not the result of any absolute lack of a resource but rather of the decision by society that it is not prepared to forgo other goods and benefits in a number sufficient to remove the scarcity,” and then warn that: “We must determine where – if at all – in the history of a society’s approach to the particular scarce resource a decision substantially within the control of that society was made as a result of which the resource was permitted to remain scarce [...] Scarcity cannot simply be assumed as a given” (emphasis added). 

This commentary cannot begin to do justice to Tragic Choices, especially not to the authors’ discussion of the interplay between what they call first- and second-order determinations. My concern here is first of all with insights that are clearly applicable to today’s situation in countries like the United Kingdom, where government austerity measures will force local councils to reduce or eliminate a range of services on which working class households depend, and the government’s own research raises concerns about the growing unaffordability of a healthy diet.  Meanwhile, the top marginal income tax rate – the rate paid by the highest earners – has been lowered, and the idea of a wealth tax on houses worth more than £2 million remains controversial. But what about the low-income world, where (for example) health workers on the front lines can do nothing to increase the funding for their clinics or travelling interventions? 

Here, we have to go beyond Calabresi and Bobbitt’s formulation, to look at choices that are not within the control of the society where scarcities are experienced, but are very much within the control of an international community (for want of a better phrase) within which the distribution of resources and of power to determine how they are used is radically – some of us would say, inexcusably – unequal.  Recovering neoliberal Jeffrey Sachs got this right in a 2003 speech on the Millennium Development Goals, where he pointed out to an audience of officials from 40 countries that “in a world of trillions of dollars of income every year, the amount of money that you need to address the health crises is easily available in the world, even if it’s not necessarily available within your own countries.” He went on to add: “You do not have to be shy telling the richest countries of the world that you need more.”  

In the aftermath of the financial crisis that spread across the world in 2008, we learned even more about how resources can suddenly become abundant for specific purposes. In the words of the Bank of England:  “Almost half the world’s largest 20 banks received direct government investment [...] Overall, the total value of actual and contingent support in North America and Europe rose to over US$14 trillion, equivalent to about 50% of annual GDP in those economies.” Although the Bank went on to point out that the figure “does not equate to losses as in some cases these obligations were offset by holdings of assets,” the lesson about scarcity and power was clear.  The situation was accurately described, in the early days of the crisis, as a hostage-taking: the banks were simply too big and interconnected to be allowed to fail.  At least in the United States, they still are.  And we are, or should be, familiar with comparisons between the amounts spent on human-friendly objectives like education, health care and poverty alleviation and the world’s vast annual military expenditures. If you want to find out for purposes of interrogating scarcity how much the United States pays for a single item of hardware like a Patriot missile ($8 million is the answer), the Defense Department’s annual inventory of Program Acquisition Costs by Weapon System is a useful resource.

As Remco van de Pas of the civil society organization WEMOS points out in a February 2013 commentary, untaxed wealth and flight capital represent another resource that could and should be drawn upon to support development. In a special report that appeared in the same month, The Economist estimated the value of wealth sequestered in offshore financial centres (the polite word for tax havens) as $8-21 trillion; for obvious reasons, precision is elusive. This includes sums looted by corrupt rulers of some of the world’s poorest countries, as well as the proceeds of mispricing by transnational corporations, used to shift profits to countries where the tax regime is most favourable. The effect is to drain low- and middle-income economies of resources that are desperately needed for development, but that instead have been appropriated by the powerful and predatory.

These observations are especially important at a time when many low- and middle-income countries (LMICs) are trying to move toward universal health care coverage – a goal that has been endorsed by the World Health Organization and is prominent in WHO’s March 2013 report on Closing the Health Equity Gap. At the same time, WHO and the World Bank have warned that: “For poorer countries in particular, fiscal realities greatly constrain the ability to rely predominantly on public funding, making the challenges and trade-offs to be weighed even more difficult.”  Along with untaxed wealth and capital flight the long history of structural adjustment conditionalities, driven by creditor interests, and their more recent incarnations makes it imperative to adopt a critical perspective on the power structures that define “fiscal realities.” 

For purposes of setting post-2015 goals for development, then, the inequalities of greatest concern involve not only income and wealth, as important as those are, but also the power to decide on the uses to which resources are, or are not, put. WHO’s Commission on Social Determinants of Health, which released its landmark report in 2008, adopted tackling “the inequitable distribution of power, money, and resources” as one of its three overarching recommendations.  This was one of many things the Commission got right. For purposes of turning this recommendation into reality, notably by way of ethical critiques of public finance, interrogating scarcity represents both a valuable strategy and perhaps a moral obligation.  

Literature

Shaul RZ, Vitale D. Can We Afford It?:  Ethical Consideration of Expensive Drug Treatment for Neonates and Infants. Clinical Pharmacology & Therapeutics 2009;86:587-9.

Prata N, Sreenivas A, Greig F, Walsh J, Potts M. Setting priorities for safe motherhood interventions in resource-scarce settings. Health Policy 2010;94:1-13.  

Calabresi G, Bobbitt P. Tragic Choices. New York: W.W. Norton; 1978.

Provenance

This commentary draws on an open-access article by the author in Health Policy & Planning and on a presentation given at the Congress of Investigation in Public Health, National Institute of Public Health, Cuernavaca, Mexico, in March 2013.

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