Pharmaceuticals can be a license to print money

It’s no secret that the United States suffers from by far the world’s highest costs for health care. As the most market-oriented health care system among advanced capitalist countries, this is no surprise. Health care in the U.S. is designed to deliver corporate profits, not health care.

On that score, the U.S. system is quite successful. Pharmaceutical companies are at the head of the class in this regard, frequently justifying the spiraling costs of medications by citing large research and development costs that include the costs for drugs that don’t make it to market. There are many drugs that fail to survive testing and become a cost that will never be compensated, that is true. But are these failures really so high to justify the extreme costs of successful drugs?

It would seem not. Firmer proof of that lack of justification has been published by the JAMA Internal Medicine journal, which found that revenue for cancer drugs far outstrips spending on research and development. The article, “Research and Development Spending to Bring a Single Cancer Drug to Market and Revenues After Approval,” prepared by Drs. Vinay Prasad and Sham Mailankody, found that revenue from 10 drugs (one by each of 10 companies) exceed those companies’ total research and development costs by more than seven times.

The increase in pharmaceutical prices (blue) versus the general increase in commodities prices (red).

The total revenue hauled in from these 10 drugs did vary considerably. Two of them earned more than US$20 billion after approval. Both of these high performers cost less than $500 million in research and development costs. The revenue from each of the 10, however, exceeded costs, with widely varied margins. Still profitable: The median revenue of these 10 drugs was $1.7 billion, more than double the median development cost of $648 million, the JAMA Internal Medicine authors report.

The authors write that the median cost to develop a cancer drug represents “a figure significantly lower than prior estimates,” adding that their analysis “provides a transparent estimate of R&D spending on cancer drugs and has implications for the current debate on drug pricing.”

To obtain these figures, the authors analyzed U.S. Securities and Exchange Commissions filings for pharmaceutical companies with no drugs on the U.S. market that received approval by the U.S. Food and Drug Administration for a cancer drug from January 1, 2006, through December 31, 2015. Cumulative R&D spending was estimated from initiation of drug development activity to date of approval. Earnings were tracked from the time of approval to March 2017.

The sky’s the limit for pharmaceutical prices

Another way of looking at this would be to examine the increases in the cost of pharmaceuticals against other products. Here again the numbers stand out. Using data gathered by the St. Louis branch of the Federal Reserve Bank, the consumer price index for pharmaceutical preparation manufacturing for the first quarter of 2017 was 747.8, with January 1, 1980, as the benchmark of 100. In other words, the price of pharmaceuticals is seven and half times higher than they were at the start of 1980. (See graph above.)

How does that compare with inflation or other products? Quite well — for pharmaceutical companies. That more than sevenfold increase in drug prices is an increase nearly two and half times greater than inflation for the period, and nearly four times that of all commodities.

So, yes, unconscionable price-gouging is the cause here. By the industry as a whole, not simply individuals like “Pharma Bro” Martin Shkreli, who might be an outlier in his brazenness but not in his profit-generation plan.

Although not the entire picture, this snapshot of corporate extortion plays a significant role in why the cost of the United States not having a universal health care system is more than $1.4 trillion per year.

Among 19 broadly defined “major” industrial sectors in the U.S., health technology is again expected to be found the most profitable for 2016, with a profit margin of 21.6 percent. Higher even than finance at 17 percent. When narrowing to more specific, narrowly defined industry categories, generic pharmaceuticals sit at the top with an expected 30 percent profit margin for 2016. Major pharmaceuticals rank fourth at 25.5 percent on a list in which health products and finance claim nine of the top 10 spots.

The sky’s the limit for pharmaceutical profits

That’s a repeat of 2015, when health technology had the highest profit margin of 19 broadly defined industrial sectors, at 20.9 percent, topping even finance, the second highest. When a separate study broke down profit margins by more specific industry categories, health care-related industries comprised three of the six most profitable.

Nothing new there, either. A BBC report found that pharmaceuticals and banks tied for the highest average profit margin in 2013, with five pharmaceutical companies enjoying a profit margin of 20 percent or more — Pfizer, Hoffmann-La Roche, AbbVie, GlaxoSmithKline and Eli Lilly. The world’s 10 largest pharmaceutical corporations racked up a composite US$90 billion in profits for 2013, according to the BBC analysis. As to their expenses, these 10 firms spent far more on sales and marketing than they did on research and development.

If those facts and figures aren’t enough, here’s another way of looking at excessive profits — a 2015 study found that, of the 10 corporations that have the highest revenue per employee among the world’s biggest corporations, three are health care companies. Two of the three, Amerisourcebergen and McKesson, both distribute pharmaceuticals, and the other, Express Scrips, administers prescription drug benefits for tens of millions of health-plan members. Each of these primarily operates in the United States, the only advanced-capitalist country without universal health coverage.

The extra layers represented by those three companies demonstrate that there are ample opportunities for corporate profiteering that contribute to extraordinarily high health care costs in the U.S., beyond drug manufacturing and insurance.

And because corporations have the ear of politicians and other government officials, it’s no surprise that one of the primary ongoing goals of the U.S. government for so-called “free trade” agreements, such as the Trans-Pacific Partnership, is to impose rules that would weaken the national health care systems of other countries. This was done in TPP negotiations at the direct behest of U.S.-based pharmaceutical companies, incensed that countries like New Zealand make thousands of medicines, medical devices and related products available at subsidized costs.

By far the most expensive system while delivering among the worst outcomes and leaving tens of millions uninsured, where tens of thousands die from lack of health care annually. That is the high cost of private profit in health care. Or, to put it more bluntly, allowing the “market” to decide health outcomes instead of health care professionals.

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Life under capitalism: Early deaths a ‘silver lining’ for corporations

Participating in Monday evening’s demonstration at the Trump Tower in Manhattan, I couldn’t help thinking of the connections between a Bloomberg article proclaiming that people dying earlier contains a “silver lining” because corporations will save pension costs and the ongoing savagery of the Trump administration.

Not simply the naked symbiosis between the Trump administration and white supremacists, neo-Nazis and assorted far-right cranks — all too sadly on display in Charlottesville, Virginia, last weekend — but the alliance of corporate titans, Republican Party leaders and President Trump himself. The rush by even conservative congressional Republicans to condemn the tweeter-in-chief for his refusal to condemn his so-called “alt-right” allies for two days should not distract us from the Trump administration’s all-out assault on regulations, civil rights laws, health care and the environment. (Let’s please retire the useless term “alt-right” and call them what they are: white supremacists, fascists and fascist wannabes.)

The health care system of the United States is already by far the world’s most expensive while delivering among the worst results. So of course the solution to this, in Republican eyes, is to make it worse. That effort has, so far, failed, thanks to massive grassroots activism. But plenty else is being rammed through under the radar through executive decrees — which is why we shouldn’t hold our breath waiting for Congress to impeach President Trump. He’s much too useful to Republicans and corporate executives. Should that change, of course, all bets are off, but short a Democratic tidal wave in 2018 Republican members of Congress turning on the president anytime soon isn’t likely.

On the march against Trump in New York City August 14 (photo by Mark Apollo/Hashtag Occupy Media)

So what does this have to do with an article published by Bloomberg? The headline on this particular article says it all: “Americans Are Dying Younger, Saving Corporations Billions,” complete with a subhead declaring “lower pension costs” a “silver lining.” As not only a proud member of the corporate media, but one specializing in delivering news to financiers and industrialists, extolling a benefit to corporate bottom lines and ignoring the, ahem, human cost of said benefit is only to be expected. The article is not at all atypical of the business press, even if this one is a little more obvious than usual.

But, as a friend who is an activist with a Marxist party but who once ran a chemical industry consultancy by day (if only his clients knew his politics!) once taught me, the business section is where they hide the news. So the point here isn’t the attitude of Bloomberg toward working people (no more hostile and sometimes less so than your average business publication) but the attitude of corporate titans toward employees. The article states:

“In 2015, the American death rate—the age-adjusted share of Americans dying—rose slightly for the first time since 1999. And over the last two years, at least 12 large companies, from Verizon to General Motors, have said recent slips in mortality improvement have led them to reduce their estimates for how much they could owe retirees by upward of a combined $9.7 billion, according to a Bloomberg analysis of company filings.”

Austerity costs human lives

Gains in U.S. death rates had been improving until 2009, Bloomberg reports, citing a Society of Actuaries analysis, but those rates then flattened before reversing in 2015. This isn’t necessarily unique to the U.S. — the Institute and Faculty of Actuaries in the United Kingdom last month reported that U.S., Canadian and British seniors have ceased seeing longevity improvements, suggesting the impact of austerity since the 2008 economic collapse is a primary culprit. The Actuaries report said:

“The rising mortality rates among US working age demonstrates that the historical fall in mortality rates cannot be taken for granted. The pace of life expectancy gains of older ages has slowed down, with some age groups showing signs of increasing death rates. These signs should be taken as warnings that worsened health care, behaviour and environment can reverse decades of success in health and longevity. Actuaries need to have a better understanding of the drivers of longevity to consider how to incorporate recent experience into forecasts of future longevity.”

As welcome as a new quantification of the toll of austerity is, such a notion is far from new, nor is it simply the latest variant of capitalism, neoliberalism, that is at work here. The increased deprivation of capitalism caused a half-million U.S. deaths from 1999 to 2015. Specifically, nearly half a million excess deaths have occurred since 1999 among middle-aged White non-Hispanic United Statesians, according to a paper published in 2015 by two Princeton University researchers, Anne Case and Angus Deaton.

A shuttered hospital (photo by Jim Henderson)

From 1978 to 1998, the mortality rate for U.S. Whites aged 45 to 54 fell by 2 percent per year on average, matching the average rate of decline in five comparison countries (Australia, Britain, Canada, France and Germany). But although, from 1999, other industrial countries continued to see a decline in mortality rates for the middle-aged, the U.S. White non-Hispanic mortality rose by half a percent a year, an increase that is unique, Drs. Case and Deaton reported. African-American death rates have not similarly risen although remain considerably higher than those for Whites.

The authors do not speculate on the reason for White deaths to increase in contrast to the trend of minority groups, but we might reasonably conclude that People of Color have had deprivation and economic difficulty imposed on them in greater numbers and more intensely, and thus are experiencing less of a change in historic circumstances than are Whites. The economic downturn that the world has lived through since 2008 certainly hasn’t bypassed People of Color — far from it — but the decline has not spared Whites, a group not as hardened to lower living standards thanks to their privileges.

Privatization costs human lives

Privatization and intensified reliance on “the market” has already been demonstrated to worsen health outcomes. A 2009 study published by The Lancet concluded that the mass privatization in the former Soviet bloc resulted in one million deaths. Mass privatization caused the average number of deaths to increase by 13 percent from the 1992 onset of shock therapy. An Oxford University press release summarized these findings:

“David Stuckler, from Oxford’s Department of Sociology, said: ‘Our study helps explain the striking differences in mortality in the post-communist world. Countries which pursued rapid privatisation, or ‘shock therapy’, had much greater rises in deaths than countries which followed a more gradual path. Not only did rapid privatisation lead to mass unemployment but also wiped out the social safety nets, which were critical for helping people survive during this turbulent period.’ ”

During Soviet times, we were assured by Western commentators that high levels of alcoholism were a sign of despair in Russia, yet alcohol per-capita consumption rates in 2007 were three times that of 1990.

When a health care system is designed to deliver corporate profits rather than health care — and this is precisely what privatized health systems do — such are the results. Throwing more than 20 million people off the roles of health insurance, as all Republican Party plans would have done, could only have exacerbated poor health outcomes. But doing so is consistent with Republican plans to shred what remains of the U.S. social safety net, sure to lead to further early deaths. As the more reliable instruments of the will of corporate plutocrats (Democrats having to sometimes make concessions to their voting base), Republicans see Donald Trump in the White House as a gift.

The purported disapproval enunciated by the likes of Senator Jeff Flake are a sad joke — the Arizona Republican has reliably voted for all Trump appointees and legislation. What really “embarrasses” members of Congress are the president’s vulgarity and ham-fisted obviousness. He simply refuses to use code words that way that ordinary Republicans have learned to do. Stop being so obvious! But in reality President Trump is the logical product of 37 years of Republican pandering — half a century if we go back to Richard Nixon’s “Southern strategy.”

We can certainly argue over what constitutes fascism, and whether President Trump is properly called a fascist or that he is simply a Republican who is more willing to show the fist behind capitalist rule albeit someone who carries the seeds for a potential fascist movement. The latter is more than scary enough. But as the casual talk of a “silver lining” for shortened life spans illustrates, human life is expendable in the pursuit of profits under capitalism. And as long as the Trump administration is useful to this pursuit, occasional protests from corporate executives will remain no more than hollow gestures.

The cost of not having single payer: $1.4 trillion per year

You could not devise a worse health care system than that of the United States if you tried. By far the most expensive, with among the worst results.

Perhaps saying “among” the worst results is being too kind. That is an accurate statement if we are simply measuring metrics such as mortality rates and other medical outcomes. But if we consider that tens of millions of United Statesians go without health insurance while none do in any advanced capitalist country (or most any other) — and that tens of thousands annually die because of that lack — then we must reasonably assess the U.S. health care system as the worst.

This is the high cost of private profit in health care. How much? The United States spends more than $1.4 trillion per year than it would otherwise if it had a single-payer system. Such is what happens when a service is left in the hands of the private sector, and allowed to be bent toward profit rather than human need.

To calculate that figure, I took the average per capita health care spending of the three largest EU countries — France, Germany and the United Kingdom — and the neighbor of the U.S., Canada, and compared that average to U.S. per capita spending. The composite average for Britain, Canada, France and Germany for the years 2011 to 2016 is $4,392 per capita per year, converted to U.S. dollars adjusted to create purchasing power parity as reported by the Organisation for Economic Cooperation and Development (OECD). Per capital health care spending in the U.S. for 2011 to 2016 averaged $8,924 — more than twice as much! Taking that difference and multiplying by 317 million, the average U.S. population for the five-year period, and the total annual excess comes to $1.44 trillion.

That excess has been steadily increasing. Doing these same calculations for earlier periods found that for the period of 2001 to 2010, the annual average of excess spending was $1.15 trillion. The annual average for the period of 1990 to 2000 was $685 billion.

For 2016, the OECD reports that only nine of the 35 countries surveyed spent more than half of what the U.S. spent on health care, and the second highest spender, Switzerland, spent $2,000 less per capita than did the United States.

Can this astounding amount of spending be accounted for by more health care? Nope. The average length of a hospital stay in U.S. in 2014 was 5.5 days, seventh shortest of 35 countries surveyed by the OECD. The average hospital stay in each of the four core comparison countries (Britain, Canada, France and Germany) was longer — a composite average of 7.6 days.

Paying more for less

So it really comes down to inferior results. The U.S. does well in combating cancer, but poorly in almost every other category of health care measurement. And people in the U.S. pay dearly for the privilege of health care, if they are lucky enough to have access to it. The cost of health insurance continues to rise, and the amount a patient must pay out of pocket before insurance kicks in (the “deductible” in U.S. lingo) is also steadily rising as employers push more of the cost of health insurance on to their employees.

Phillip Longman, discussing this issue for Popular Resistance, wrote:

“Indeed, the inflating cost of health care is the overwhelming reason why most Americans haven’t received a raise in years, and why employers increasingly make use of contract workers rather than taking on new employees that would receive benefits. This year, the total annual cost of health care for a typical family of four covered by a typical employer-sponsored plan surpassed $25,000, according to the actuarial research firm Milliman. Such a family will typically pay more than $11,000 of this cost directly out of its own pockets, through payroll deductions, copayments, and deductibles. They will also pay much more indirectly in foregone wages and other forms of compensation, and quite possibly more yet in the form of unemployment, as employers seek to escape their share of the mounting cost of providing health care for their employees.”

And because health care is dependent on maintaining a full-time job, bosses have more leverage over their employees, who will lose their insurance should they quit their job. Women with lower-paying work or staying at home to raise a family are also put at greater risk as health insurance for themselves and children are tied to their husband’s job, making it more difficult to leave a bad marriage. This dynamic could also apply to any one person in a non-traditional family or within a gay or lesbian household.

Thus it comes as little surprise that the United States is one of two countries in the world that do not provide paid maternity leave for women workers. Hope to get it at work? Good luck with that — only 9 percent of companies offered fully paid maternity-leave benefits to workers in 2014, down from 16 percent in 2008. By contrast, at least two-thirds of countries have mandatory maternity pay for at least 14 weeks, according to an International Labour Organization report.

You might not have it so good, but that is the price to be paid for high profits. An analysis by Forbes magazine found that health technology had the highest profit margin of any of 19 broadly defined industrial sectors, at 20.9 percent, topping even finance, the second highest. Three of the biggest companies — Pfizer, Merck & Co. and Johnson & Johnson — had profit margins of 25 percent or higher. When a separate study broke down profit margins by smaller, more specific industry categories, health care-related industries were three of the six most profitable. Generic pharmaceuticals topped the list, with a margin of 30 percent. Major pharmaceuticals and biotechnology were also among the top six.

Keeping people sick as a business model

The piles of money vacuumed into pharmaceutical pockets do not sit entirely idle. Big Pharma lavishes vast sums on doctors, state Medicaid officials and regulators to promote their products. Studies have shown that doctors who have received payments from pharmaceutical companies are more likely to prescribe those companies’ medications. But pharmaceutical companies go far beyond wining and dining doctors, or paying them speaking fees. They organize “patient advocacy” groups that pretend to be grassroots organizations. An investigative health reporter, Martha Rosenberg, writes that these front groups fly in “patients” to hearings to ask for expensive drugs to be fast-tracked for approval.

Expensive drugs that have to be taken for years, or even a lifetime, create a business model that “actually wants people sick,” Ms. Rosenberg writes. She says:

“ ‘Mental illness’ is a category deliberately ‘grown’ by Pharma with aggressive and unethical million-dollar campaigns. These campaigns, often unbranded to look like a public service, convince people with real life challenges they are ‘depressed’ or ‘bipolar’ and that their children have ADHD. Despite the Pharma marketing, the New England Journal of Medicine recently reported that the rate of severe mental illness among children and adolescents has actually dropped dramatically in the past generation.”

All this adds up to a 2011 study in the journal Health Policy that ranked the U.S. last in preventing early deaths. Attributing this result to “the lack of universal coverage and high costs of care,” the Commonwealth Fund noted:

“The United States placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care. … [O]ther nations lowered their preventable death rates an average of 31 percent between 1997–98 and 2006–07, while the U.S. rate declined by only 20 percent, from 120 to 96 per 100,000. At the end of the decade, the preventable mortality rate in the U.S. was almost twice that in France, which had the lowest rate—55 per 100,000.”

An OECD report found that life expectancy in the U.S. is two years less than the average of OECD countries, a gap that is growing. That statistic isn’t improving at either end of life, as U.S. infant mortality rates are considerably higher than in peer countries. A report prepared by the Peterson Center on Healthcare and the Kaiser Family Foundation explicated this poor performance:

“The U.S. has been slower to improve its infant mortality rate than comparable countries, which we define as countries whose gross domestic products (GDP) and per capita GDP were above average in at least one of the past 10 years. While the infant mortality rate in the U.S. improved by about 13 percent from 2000-2013, the comparable country average improved about 26 percent, according to data from the Organization for Economic Cooperation and Development.

U.S. infant mortality rates appear to be about 42 percent higher than the comparable country average. Looking into specific measures of infant mortality, it also appears that the U.S. has about 66 percent more neonatal deaths (deaths which occur less than 28 days after birth) than the comparable country average. From 2000 to 2013, neonatal deaths decreased by 13 percent in the U.S. and by 23 percent in comparable OECD countries.”

What’s good for big business is good for big business

With such dismal results, why does such a furious campaign continue to insist on privatized health care? Ideology, of course. Ideology no different than that propagated to insist that government is always bad and private enterprise always better. But government doesn’t have to earn a profit; private enterprise expects to and will pack its bags if it doesn’t. Just as privatization invariably results in higher costs and often poorer quality than when the service was provided by a government agency as a public good, health care is provided far more efficiently when in public hands.

Noting that “high administrative costs and lower quality have also characterized for-profit HMOs” (health maintenance organizations funded by insurance premiums that supervise health care), a Journal of the Canadian Medical Association article provides the following figures for the percentage of revenue that is diverted to overhead:

  • For-profit HMOs: 19 percent
  • Non-profit plans: 13 percent
  • U.S. Medicare program: 3 percent
  • Canadian Medicare: 1 percent

Ideology drives the Trump administration and the Republican-controlled Congress to have no problem with adding more than 20 million people to the ranks of the uninsured by attempting to reverse the weak-tea, incremental improvement of Barack Obama’s Affordable Care Act. This is not different from Donald Trump’s chimeric $1 trillion infrastructure program, which is a scam that commits his administration to zero dollars while showering corporations with massive subsidies that would supposedly magically induce private infrastructure investment.

That extra $1.4 trillion paid for health care in the United States is the result of a system designed to deliver corporate profits rather than health care. It’s the “magic of the market” at work. It just isn’t magic for you. In a concise explanation on the Real-World Economics Review Blog, Peter Radford explains:

“Markets, you see, are wonderlands that always and inevitably lead to efficient outcomes. And it is no good any starry eyed liberal tinkering with those outcomes. They are magically correct. By correct we mean that they cannot be improved upon. Economists have this vice like attachment to certain core beliefs. One of those is that, if left unfettered, markets will zero in on an allocation of stuff that can never be improved, especially by meddlesome governments.

The way you get to this particular promised land is by letting the great forces of supply and demand batter away at individual preferences and budgets until all the trading and so on ends with no one able to make another trade without such a trade making someone else worse off. It sounds wonderful. Now to make this all work we have to believe in magic. We have to suspend our intelligence and imagine a world where everyone knows exactly what everyone else is doing, where no one cheats, where everyone is marvelously rational, where they don’t suddenly change their minds, where they can calculate at the speed of light, absorb vast amounts of data, and always — yes always — arrive at precisely that combination of stuff they wanted. Within the constraints of their budget of course.”

Sarcastic, yes, but that is a summation of what passes for economic orthodoxy nowadays. Markets always magically result in fair and just results for all, and any actions by government automatically damage this miraculous machine. And therefore health care should be left in the hands of corporations with as little regulation as possible. And therefore the U.S. is a country in which 22,000 people die and 700,000 go bankrupt per year as a result of inadequate, or no, health insurance in the United States. That’s one of the prices of capitalism.

The toll of pollution: How many lives vs. how much profit?

Frequently lost in the arguments over financial costs and benefits when it comes to pollution is the cost to human health. Not only illness and respiratory problems but premature death. To put it bluntly: How many human lives should we exchange for corporate profit?

Two new studies by the World Health Organization should force us to confront these issues head on. This is no small matter — the two WHO studies estimate that polluted environments cause 1.7 million children age five or younger to die per year.

Spent shale from a Shale oil extraction process (photo by U.S. Argonne National Laboratory)

Indoor and outdoor air pollution, second-hand smoke, unsafe water, lack of sanitation, and inadequate hygiene all contribute to these 1.7 million annual deaths, accounting for more than one-quarter of all deaths of children age five or younger globally. A summary notes:

“[W]hen infants and pre-schoolers are exposed to indoor and outdoor air pollution and second-hand smoke they have an increased risk of pneumonia in childhood, and a lifelong increased risk of chronic respiratory diseases, such as asthma. Exposure to air pollution may also increase their lifelong risk of heart disease, stroke and cancer.”

One of the two reports, Don’t pollute my future! The impact of the environment on children’s health, notes that most of humanity lives in environmentally stressed areas:

“92% of the global population, including billions of children, live in areas with ambient air pollution levels that exceed WHO limits. Over three billion people are exposed to household air pollution from the use of solid fuels. Air pollution causes approximately 600,000 deaths in children under five years annually and increases the risk for respiratory infections, asthma, adverse neonatal conditions and congenital anomalies. Air pollution accounts for over 50% of the overall disease burden of pneumonia which is among the leading causes of global child mortality. Growing evidence suggests that air pollution adversely affects cognitive development in children and early exposures might induce development of chronic disease in adulthood.” [page 3]

These types of calculations on health and mortality are absent from debates on environmental regulations. And not only is the human toll missing from cost/benefit analyses, but this pollution is actually subsidized.

Trump administration’s assault on the environment

These World Health Organization reports were published in the same month that the Trump administration mounted a full-scale assault on the U.S. environment. Not only has the Trump administration proposed draconian cuts to the Environmental Protection Agency and signaled its intention to rescind air-pollution rules for motor vehicles scheduled to come into force between 2022 and 2025, it has issued an executive order requiring a “review [of] existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources.”

One of the targets of this order is the Clean Power Plan, which requires a 32 percent reduction in carbon dioxide emissions from existing power plants by 2030, compared to 2005 emission rates. The standard, implemented by the Obama administration, was already seen as inadequate. The increased danger raised by President Donald Trump’s order was succinctly summed up by this headline on a Weather Underground article written by Jeff Masters: “Trump’s Executive Order Threatens to Wreck Earth as a Livable Planet for Humans.”

Threats don’t get much graver than that, do they?

Given the gigantic size of the United States economy and the pollution thrown into the atmosphere, this is of serious concern to the entire world. The World Resources Institute estimates that the U.S. accounts for almost 15 percent of Earth’s current greenhouse-gas emissions, second only to China’s 20 percent. Russia and the U.S. emit more than twice the global average on a per capita basis, as does Canada, which, due to its heavy reliance on fossil fuel extraction, has the world’s largest per-person greenhouse-gas footprint.

When greenhouse-gas emissions are calculated on a cumulative basis, then the responsibility of the global North comes into sharper focus: The United States has accounted for 27 percent of all greenhouse gases emitted since 1850, and the countries of the European Union contributed another 25 percent.

Carbon dioxide is the biggest single contributor to global warming — which is why the U.S. Environmental Protection Agency had sought to regulate carbon dioxide emissions as a pollutant — but methane is also a significant contributor. The EPA in 2016 issued an order requiring that owners and operators of oil and gas facilities provide data needed to help it determine how to best reduce methane and other harmful emissions. But the Trump administration has withdrawn the order to provide data.

Not everything can be reversed at the stroke a pen, however. The larger attack on the Clean Power Plan will likely take years to carry out, Dr. Masters wrote:

“The Clean Power Plan will be difficult to undo quickly. The plan was finalized by EPA in 2015, and is currently being reviewed in the U.S. Court of Appeals for the District of Columbia Circuit. Under the new executive order, the Department of Justice will ask the court to suspend the case until the EPA can review and write a new version of the rule. (Before that happens, the court may still rule on the Plan as written, which will influence how the EPA can rewrite the rule.) Once the case is removed from the court, the EPA will have to legally withdraw the existing rule and propose a new rule to take its place, a process that could take years, as the new rule will have to be justified in court, and would likely be challenged in court by environmental groups.”

Hundreds of thousands of lives in the balance

Nonetheless, a fightback is essential. Lives are literally at stake, in large numbers, if regulations safeguarding air quality are reversed. The EPA estimates that 160,000 premature deaths were prevented in 2010 by the Clean Air Act, and estimates that 230,000 lives will be saved and 120,000 emergency-room visits saved in 2020 if the act is left intact. The EPA said the benefits of the act “exceeds costs by a factor of more than 30 to one.” This study, at least for the moment, hasn’t been expunged from the Internet by the Trump administration.

A separate study by the Massachusetts Institute of Technology (MIT) estimates that air pollution causes 200,000 early deaths each year in the United States alone. The two biggest contributors to that death toll, the MIT report found, are emissions from road transportation and power generation, which together account for just more than half the total. One of the study’s authors, MIT professor Steven Barrett, said a person who dies from an air pollution-related cause typically dies about a decade earlier than he or she otherwise might have.

The Canadian government estimates that a 10 percent reduction in particulate-matter and ozone levels would result in a net social welfare benefit for Canadians of more than $4 billion. A separate study estimates that the cost to Canadian health care from air pollution will total $250 billion by 2031 without significant reductions.

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

This exercise can be repeated around the world. A 2015 World Health Organization study estimates that indoor and outdoor air pollution costs European economies as much as €1.2 trillion annually in deaths and diseases. This includes £54 billion and 29,000 deaths per year in Britain. For Australia, the cost from air pollution was estimated at $5.8 billion in 2010, a doubling in only five years.

Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.

Only a drastic reduction in emissions can reverse these costs in human health and the mounting dangers of global warming.

We’ll have to go well beyond current plans

Cap-and-trade schemes, promoted by North American liberals and European social democrats, simply don’t work. The European Union system, for example, issued so many free certificates that the price of pollution is a small fraction of the target price, and attempts by environmentalists to reduce the number of certifications are consistently rebuffed. Moreover, cap-and-trade plans often allow “offsets,” whereby companies can buy emission credits from outside the program to “offset” emissions above the allowable level, allowing polluters to substitute unverifiable reductions elsewhere for real reductions locally.

Nor are renewable energy sources, as vital as they are to any rational future, a substitute for reducing energy usage. Renewable energy is not necessarily clean nor without contributions to global warming. Wind power and biomass, for example, have their own problems. The primary source of bioenergy is wood, which portends an increase in logging, counter to winning a struggle against global warming. Denmark and Britain are among the biggest users of biomass but must import wood to sustain that. The turbines used to produce electricity from wind increasingly are built with the “rare earth” element neodymium, which requires a highly toxic process to produce. Production of rare earths are environmentally destructive; increasing their extraction means more pollution and toxic waste.

The argument here certainly isn’t that a switch from fossil fuels to renewable energy as quickly as practical isn’t necessary; of course such a switch needs to be made. But if reversing pollution and greenhouse-gas emissions is the goal, then renewables are at most a partial measure.

Haze from forest fires in St. Mary Valley, Glacier National Park in August 2015, during the hottest and driest summer in Pacific Northwest history. (photo by Pete Dolack)

The Paris Climate Summit ended with a surprise decision by the world’s governments to limit the rise of the global average temperature to 1.5 degrees Celsius above the pre-industrial revolution average instead of the previously intended limit of 2 degrees. The difficulty here, however, is that even if every national goal were met, the Earth’s temperature would rise 2.2 to 3.4 degrees by 2100 with more to come, and the Paris summit contains no mechanism to enforce these goals.

Adding to the difficulty of reducing fossil fuel usage sufficiently to meet the Paris summit’s goals (and which would also reduce the damage to human health) is the astounding total of subsidies for them. A 2015 study that attempted to quantify the size of these subsidies on a global basis estimated them at US$5.6 trillion! That includes not only direct government subsidies through tax breaks and other programs, but damage to the environment — these are not inconsequential as the costs of air pollution and global warming transferred to society account for nearly two-thirds of that total.

“Fracking” (hydraulic fracturing) of rock to blast out natural gas alone accounts for billions of dollars of damages through contaminated water, health problems from the chemicals used in the process, air pollution, methane that contributes to global warming, disruption to agriculture and damage to roads from trucks. That the cost of those is transferred to society is another mammoth subsidy to the energy industry.

Overshooting Earth’s carrying capacity

The most recent estimate of planetary consumption is that humanity is using the equivalent of 1.6 Earths per year. By 2030, at present rates of increase, we’ll be consuming two Earths — that is, twice the capacity of our planet to sustain.

Then there is the matter of global warming. Two scientific studies issued in 2015 suggest that so much carbon dioxide already has been thrown in the air that humanity may have already committed itself to a six-meter rise in sea level. A separate 2015 study, prepared by 18 scientists, found that the Earth is crossing several “planetary boundaries” that together will render the planet much less hospitable.

What is the price of making Earth uninhabitable? No amount of strip-mining the Moon or the asteroid belt will reverse mass die-offs on Earth.

Illusions that “green capitalism” will save us really must be abandoned. Beyond that capitalism requires constant growth (infinite growth is impossible on a finite planet) and discourages corporate responsibility because enterprises can offload their responsibilities onto society, every incentive is for more production. Adding to that, capitalist economics discounts the future so much that future life is seen as nearly worthless. Thus, in this type of accounting, there is no cost for future pollution.

Authors Richard York, Brett Clark and John Bellamy Foster put this plainly in a thoughtful May 2009 article in Monthly Review. They wrote:

“Where [orthodox economists] primarily differ is not on their views of the science behind climate change but on their value assumptions about the propriety of shifting burdens to future generations. This lays bare the ideology embedded in orthodox neoclassical economics, a field which regularly presents itself as using objective, even naturalistic, methods for modeling the economy. However, past all of the equations and technical jargon, the dominant economic paradigm is built on a value system that prizes capital accumulation in the short-term, while de-valuing everything else in the present and everything altogether in the future.”

As for the present day, capitalist enterprises aren’t going to guarantee jobs to workers displaced from energy-extraction industries, and if those workers don’t have any viable alternatives, it can’t be expected they will do anything other than join their bosses in fighting for their industry. Thus any rational plan to drastically shrink fossil fuel extraction has to be able to provide alternative jobs. Nor do the costs in human lives discussed above factor into capitalist economic calculations.

The drastic changes that are necessary to reverse the human and environmental tolls of pollution will come with a hefty price tag. But the cost of continuing business as usual is much higher — a price our descendants will pay if we don’t move to an economic system that values life rather than only profits.

Increased deprivation of capitalism causes half-million deaths

The recent years of austerity and economic dislocation have taken their toll around the world, but this deterioration on top of the already existing harshness of life in the United States has taken a particular toll there. Nearly half a million excess deaths have occurred in the U.S. since 1999.

Specifically, these half-million excess deaths are among middle-aged White non-Hispanic United Statesians, according to a paper by two Princeton University researchers, Anne Case and Angus Deaton, published in the peer-reviewed scientific journal PNAS. Widening inequality is seen as a significant factor. This increase in the death rate, reversing historic trends, was limited to the U.S. among advanced capitalist countries and, within the U.S., limited to non-Hispanic Whites. The authors of the paper, “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century,” write:

“This change reversed decades of progress in mortality and was unique to the United States; no other rich country saw a similar turnaround. The midlife mortality reversal was confined to white non-Hispanics; black non-Hispanics and Hispanics at midlife, and those aged 65 and above in every racial and ethnic group, continued to see mortality rates fall. This increase for whites was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis.” [page 1]

AlcoholFrom 1978 to 1998, the mortality rate for U.S. Whites aged 45 to 54 fell by 2 percent per year on average, matching the average rate of decline in five comparison countries (Australia, Britain, Canada, France and Germany). But although, from 1999, other industrial countries continued to see a decline in mortality rates for the middle-aged, the U.S. White non-Hispanic mortality rose by half a percent a year, an increase that is unique, Drs. Case and Deaton report.

The authors calculate that if the U.S. White non-Hispanic mortality rate remained at the 1998 level, 96,000 deaths would have been prevented; had the previous rate of decline continued, a total of 488,500 deaths would have been prevented. The increased mortality rates are accompanied by “a large and statistically significant decline” in those reporting excellent or very good health and a corresponding increase in those reporting fair or poor health. This is a population that had not previously had unusual health results:

“[T]he post-1999 episode in midlife mortality in the United States is both historically and geographically unique, at least since 1950. The turnaround is not a simple cohort effect; Americans born between 1945 and 1965 did not have particularly high mortality rates before midlife.” [page 2]

Deaths other than natural more frequent

A sign of this midlife change is that deaths due to poisonings, suicide, chronic liver disease and diabetes have all increased since 1999. At the same time, however, mortality rates among Hispanics and non-Hispanic Blacks have continued to decline; Black deaths continue to be higher than the rate for Whites but the ratio between the two is narrowing, mostly due to the increased mortality of Whites.

The authors do not speculate on the reason for White deaths to increase in contrast to the trend of minority groups, but we might reasonably conclude that People of Color have had deprivation and economic difficulty imposed on them in greater numbers and more intensely, and thus are experiencing less of a change in historic circumstances than are Whites. The economic downturn that the world has lived through since 2008 certainly hasn’t bypassed People of Color — far from it — but the decline has not spared Whites, a group not as hardened to lower living standards thanks to their privileges.

The authors do gingerly dip their toes into declining living standards and rising inequality. They draw this general conclusion:

“After the productivity slowdown in the early 1970s, and with widening income inequality, many of the baby-boom generation are the first to find, in midlife, that they will not be better off than were their parents. Growth in real median earnings has been slow for this group, especially those with only a high school education. However, the productivity slowdown is common to many rich countries, some of which have seen even slower grow in median earnings than the United States, yet none have had the same mortality experience. The United States has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm. Future financial insecurity may weigh more heavily on US workers, if they perceive stock market risk harder to manage than earnings risk, or if they have contributed inadequately to defined-contribution plans.” [page 4]

It is not only the middle-aged who are feeling these deprivations, however.

“[A]ll 5-year age groups between 30–34 and 60–64 have witnessed marked and similar increases in mortality from the sum of drug and alcohol poisoning, suicide, and chronic liver disease and cirrhosis over the period 1999–2013; the midlife group is different only in that the sum of these deaths is large enough that the common growth rate changes the direction of all-cause mortality.” [page 3]

Worse conditions leads to worse results

It would not be proper to put words in the mouths of Drs. Case and Deaton, but it is possible for us to go beyond the scope of their paper, which is to quantify a previously unnoticed increase in mortality rates and offer general commentary on the macro-economic trends behind it. If we do go further, it could be reasonably concluded that neoliberal austerity — the continual pushing down of living standards, increased deprivation, overwork for those still employed, and increased unemployment or more precarious employment for many others — is a policy that kills.

Wax vanitas, Europe, 1701-1800Contrary to the assertion of Drs. Case and Deaton, productivity did not slow in the early 1970s. Pay slowed. Productivity grew 65 percent between 1979 and 2013 while pay increased eight percent for employees in that period, reports the Economic Policy Institute, and that trend certainly hasn’t reversed itself the past couple of years.

The present capitalist era of neoliberalism, with its increasingly harsh doses of austerity, does not fall out of the sky, but is the logical consequence of the relentless competitive pressures of capitalism and the consolidation of political power by the holders of economic power: industrialists and financiers.

This is hardly the first example of capitalism literally killing — mortality rates in the Soviet Union and other communist countries sharply increased following the imposition of capitalism. Mass privatization in the former Soviet bloc — the “shock therapy” instituted as the imposition of capitalism — is calculated to have led to one million excess deaths, according to a 2009 study published in The Lancet. Alcoholism and poverty skyrocketed in Russia following the fall of the Soviet Union; no surprise due to the economy shrinking 45 percent.

For that matter, health results in the U.S. badly lag other industrialized countries because the U.S. health system is designed to generate profits for pharmaceutical, medical-device and insurance companies rather than deliver health care. The U.S. spends an extra $1.15 trillion per year beyond what it would otherwise in comparison to health care spending in Britain, Canada, France and Germany, yet is well below average in life expectancy and infant mortality. About 22,000 people die and 700,000 go bankrupt per year as a result of inadequate, or no, health insurance in the United States.

It should come as no surprise that when people have life made more difficult, when the weight of corporate power and the governments that do the bidding of that corporate power constantly press down, health and well-being deteriorate. We ought to draw conclusions.

Dump the kid and get back to work

The presidential campaign season is well underway in the United States, and never in human history will more money be spent to say less. And only 16 more months to go.

A perennial favorite of the worst electoral system money can buy is the race among the candidates to be the most in favor of motherhood and apple pie. Not actually do something to make it easier to balance personal life and work, of course, but to send endless platitudes into the void. To put this in context, here is the complete list of all the countries in the world that do not provide paid maternity leave for women workers:

  • Papua New Guinea
  • United States of America

The International Labour Organization reports that 183 countries and territories on which it has information provide cash benefits to women on maternity leave; the two listed above do not. The ILO report, “Maternity and paternity at work: Law and practice across the world,” found that although not all countries reach its standard of at least two-thirds of pay for at least 14 weeks, almost half of the world’s countries do, including 25 of the 29 developed countries in which ILO researchers were able to make an assessment. [page 19] (Canada, Iceland and Slovakia are the others.)

Stockholm (photo by Sharon Hahn Darlin)

Stockholm (photo by Sharon Hahn Darlin)

The geographic region with the best results is Eastern Europe/Central Asia, where 88 percent of countries exceeded the ILO maternity-leave standards and every one at least equaled the standard. [page 18] This result isn’t surprising, as these countries were mostly part of the Soviet bloc. Women on maternity leave in the Soviet Union received full pay up to 112 days, partial pay up to 18 months, and unpaid leave from 18 to 36 months, according to a Max Planck Institute for Demographic Research paper. Maternity-leave benefits achieved during the communist era in countries such as Poland, the Czech Republic, Slovakia and Hungary have largely been retained.

That doesn’t mean all was well; women workers in the Soviet Union from the 1960s on earned about 70 percent of what men did, and industries with the highest concentrations of women tended to be those with the lowest pay. Then again, that is not much worse than today in the United States, where women earn 78 percent of what men earn. Canadian women earn about 74 percent of what Canadian men take home.

Leave for both parents

Of course, there is more to family-friendly work policies than conditions of maternity leave. Only about half of the world’s countries provide paternity leave. Although the ILO has not established a standard for paternity leave, the organization encourages it. The “Maternity and paternity at work” report says:

“Research suggests that fathers’ leave, men’s take-up of family responsibilities and child development are related. Fathers who take leave, especially those taking two weeks or more immediately after childbirth, are more likely to be involved with their young children. This is likely to have positive effects for gender equality in the home, which is the foundation of gender equality at work.” [page 52]

One way of encouraging gender equality is to provide for parental leave, where either parent can take it, or in the case of countries such as Sweden and Norway, some of the parental leave must be taken by the father. The ILO’s report says:

“As countries move toward greater gender equality in their legislation and policies, most countries are setting out parental leave as a shared entitlement, where either the mother or the father has the right to take parental leave and the parents determine the allocation of leave themselves. Countries adopting this approach include Albania, Cuba, Estonia, Finland, New Zealand, Uzbekistan and many others. …

“Sweden was the first country to grant men and women equal access to paid parental leave in 1974. Few men took parental leave, however, so, in 1995, Sweden introduced a non-transferable ‘daddy’s month’ and extended this leave to two months in 2002, with pay at 80 percent of income. Norway also has a non-transferable leave period of 14 weeks to encourage men’s take-up of childcare responsibilities. Germany and Portugal too provide non-transferable allocations of paid parental leave for fathers.” [page 62]

More help in difficult times

In contrast, in the United States, parental leave is a privilege attached to your job, just as with health care (where health care is far more expensive than every other developed country. Only 9 percent of companies in the U.S. offer paid maternity-leave benefits, down from 16 percent in 2008. Lest we pin this reduction on the ongoing economic crisis in which the world has been mired since 2008, the ILO report found that several European countries, along with others such as Chile and El Salvador, actually increased the levels of government support to families, and in 2010 Australia introduced paid universal parental leave for the first time. [page 28]

Those countries that already provided generous benefits haven’t reduced them. Sweden provides 480 days of paid parental leave, prenatal care through free or subsidized courses, and allows parents pushing infants and toddlers in prams and buggies to ride for free on public buses. Norway provides 49 weeks of paid parental leave at 100 percent of income or 59 weeks at 80 percent of income.

The only legal requirement in the U.S. is the 12 weeks of unpaid leave provided under the Family and Medical Leave Act — if you can’t afford to be without a wage, too bad. A Senate bill with 19 sponsors, the Family and Medical Insurance Leave Act, has been introduced that would provide up to two-thirds of pay for 12 weeks, capped at $4,000 per month, paid for by contributions by employers and employees. By contrast, most countries that provide paid parental leave do so through government benefits.

No Republicans have offered to co-sponsor this bill, and not one of the 17 candidates vying for the Republican Party nomination is in favor. The Family and Medical Leave Act was bitterly opposed by George H.W. Bush when he was president, who vetoed it twice, and his son, current Republican establishment favorite Jeb Bush, shows no more inclination to align actions with rhetoric. When governor of Florida, Jeb Bush’s big initiative was to privatize the foster-care system, which handed big profits to corporations, and which took “a pretty well-functioning system and blew it to bits,” according to one case worker.

When “the market” is allowed to decide social questions, it shouldn’t be a surprise that corporate profits, not human needs, are the priorities.

Higher taxes lead to more jobs

Make it harder for people to retain a job, and fewer people will. Adequate pay that makes a job worthwhile is one factor, but frequently overlooked are support structures that facilitate employment.

Contrary to orthodox economic ideology, punishing people does not increase employment.

Countries that provide more subsidies toward services that are complementary to work — such as child care, elder care and transportation — have higher workforce participation rates. This shouldn’t be surprising as we don’t leave the rest of our lives behind when we go to our jobs, however much bosses insist we should. Such a finding can only be controversial in a world dominated by ideologies that insist that conditions be made as harsh as possible to “force” people to work.

Alas, such a world is the one most of us live in, particularly in the English-speaking advanced capitalist countries. I have often noticed that the thinking of middle-class conservatives often boils down to “I had to suffer, so everybody else should have to suffer.” I’ve heard words to this effect from many conservatives. Although people who have enunciated that to me often are people who did indeed work hard to rise from modest circumstances, the reductionist hyper-individualism it reflects is blind to the social solidarity necessary for society to function.

Moving up the vertical scale represents higher rates of employment; moving left on the scale represents higher effective tax rates. (Graphic by Henrik Jacobsen Kleven)

Moving up the vertical scale represents higher rates of employment; moving left on the scale represents higher effective tax rates. (Graphic by Henrik Jacobsen Kleven)

More subsidies lead to a higher percentage of working-age people holding regular employment, and these subsidies are possible through higher taxation. Contrary to orthodox economics, higher rates of taxation lead to more employment. This is the conclusion of a study by Henrik Jacobsen Kleven, “How Can Scandinavians Tax So Much?” Professor Kleven, a professor at the London School of Economics, compared Denmark, Norway and Sweden with other OECD (Organisation for Economic Co-operation and Development) countries (a club of the world’s advanced capitalist and some of the largest developing countries) and found strong correlations between taxation rates and workforce participation.

More social services, more employment

Plotted on a graph, there is a steady progression of countries with higher “participation tax rates” having greater percentages of their population employed. This pattern, not surprisingly, is even stronger for women than men. The author defines a country’s “participation tax rate” as the average effective tax rate when including all income and consumption taxes, and public benefits. This rate is far higher in Denmark, Norway and Sweden than it is in, inter alia, the United States, Japan or Britain. Professor Kleven writes:

“[T]he Scandinavian countries spend relatively large amounts on means-tested transfer programs that create implicit taxes on working and therefore reinforce the distortions coming from the tax system. On the other hand, these countries also spend relatively large amounts on the public provision and subsidization of goods that are complementary to working, including child care, elderly care, and transportation. Such policies represent subsidies to the costs of market work, which encourage labor supply and make taxes less distortionary. Furthermore, Scandinavian countries spend heavily on education, which is complementary to long-run labor supply.” [page 7, citations omitted]

Denmark, Norway and Sweden also have unusually low rates of tax avoidance. Professor Kleven writes that systematic third-party reporting is “crucial” to minimizing tax avoidance. (If your income is reported, it is very difficult to avoid paying taxes on it.) The three countries also have a broad tax base and Denmark in particular allows very few deductions and exceptions.

The United States, in contrast, has a complicated tax system riddled with loopholes. U.S. tax policy for low-income workers centers on the Earned Income Tax Credit (EITC), yet the Scandinavian countries have higher rates of workplace participation without such tax deductions. Because child care subsidies act as a subsidy to labor participation, Professor Kleven argues, those countries have no need for a U.S.-style income tax credit.

Although the author recoils somewhat from his own conclusions at the end of his paper, he does earlier write:

“[E]empirical and theoretical arguments above suggest that public spending on work complements such as child care, preschool, and elder care allows for a more efficient provision of low-income support and at the same time weakens the argument for low participation tax rates at the bottom of the distribution through an EITC. In this sense, it is conceivable that Scandinavian countries (with their large subsidies to work complements and no EITC) got it right, while the US (with its small subsidies to work complements and a large EITC) got it wrong.”

More health care earlier, better jobs later

Perhaps imposing ever harsher conditions on working people makes for a weaker economy? It would seem that several years of punishing austerity has not exactly brought prosperity to the world. Another study daring to offer heterodox economic ideas, just released by the National Bureau of Economic Research, calculates that spending by the U.S. government on child health care through the Medicaid insurance program likely will pay for itself by the end of a recipient’s adult working career.

Providing health care ought to be a human right; it is something that should be provided as a matter of basic humanity to enable better lives. In the U.S., of course, such is not the case; health care there is a privilege reserved for those with full-time employment that provides benefits or for those who can afford it. But, in raw economic terms, Medicaid for children may be cost-free over the long term.

This study, “Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?,” prepared by Amanda E. Kowalski of Yale University and two economists with the U.S. Treasury Department, David W. Brown and Ithai Z. Lurie, found that children who were Medicaid recipients as adults earn more money on average and thus pay more in taxes than those who did not receive that benefit. These cohorts were followed until age 28, but, projecting the results over a full working career, the authors estimate that the extra taxes accruing to the federal government will amount to 56 cents for every Medicaid dollar. That is virtually identical to the 57 cents that the federal government pays out of every Medicaid dollar.

Professor Kowalski, in summarizing the study, said:

“Although it will take years to know the long-term impact of current expansions of Medicaid undertaken as part of the Affordable Care Act, this study shows that the investments that the government made in Medicaid in the 1980s and 1990s are paying off in the form of higher tax payments now.”

The study did not take into account the extra tax money paid to state and local governments, nor benefits from decreases in mortality and increases in college attendance. If all factors could be calculated over a lifetime, it is conceivable that Medicaid for children will actually be a direct financial benefit. Such a crass calculation shouldn’t be necessary, but the U.S. health care system exists to provide corporate profits rather than provide health care, which is why U.S. spends much more on health care than other countries while achieving inferior results.

A society that provides the infrastructure for a productive, balanced life, as opposed to one that imposes grim struggles to survive, is a healthy society. We are, after all, a social species, something that the ever more propagandized individualist ideology of capitalism seeks to erase.