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Their Economic Health and Ours

October 18, 2012   ·   0 Comments

Source: NYTX

Economy

By Costas Panayotakis:

In a piece comparing the current health of the U.S. economy to that of other capitalist countries, Eduardo Porter concludes that “[r]elative to many, U.S. economy thrives.” “Relative” is, of course, the key word here because Porter’s optimistic pronouncement in his October 17, 2012 article in the New York Times derives whatever plausibility it has from the fact that, however bad the U.S. economy’s performance has been in the last few years, it still looks better than that of many European countries faced with continued recession or even depression.

The main piece of evidence that Porter uses to diagnose the U.S. economy as healthy is the fact that its Gross Domestic Product is slightly higher in 2012 than it was in 2007, before capitalism’s latest crisis had struck with a vengeance. According to the data that Porter provides, with respect to this indicator, the U.S. did better than the Netherlands and France and much better than European countries which have seen their economic output shrink (for example, Britain, Spain and Italy) or even collapse (for example, Greece). Even by this standard, however, saying that the U.S. economy is thriving is a bit of a stretch, since there seem to be as many countries that have experienced higher economic growth than the U.S. as there are countries that have not.

In any case, Porter’s focus on economic growth stems from the fact that the picture is decidedly more bleak when one looks at the employment picture, also discussed in Porter’s article. In particular, the number of jobs in the U.S. remains lower than it was in 2007 despite the economic growth that Porter celebrates. This disconnect between output and employment suggests that employed Americans are producing more. At the same time, however, the continuous growth of economic inequality in the U.S, a development reported on by another NYT article published on the same day as Poter’s panegyric, suggests that the return of modest economic growth in the United States has been accompanied by an intensification of the exploitation of American workers by U.S. capital. Indeed, as Anne Lowrey points out in that story, “[i]ncome inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.”

As this development makes clear, Porter’s pronouncement is based on a fetishization of economic growth. Why should economic growth be seen as a sign of health, if the vast majority of Americans do not benefit from it and if the top concern in their minds is, as Porter himself admits, the reduced availability of jobs?

Porter’s economic boosterism is informed by a wish to talk up the economic policies of Barack Obama, as against the more undiluted austerity policies favored by the Republicans in the U.S. and imposed by the troika of the European Commission, the European Central Bank and the International Monetary Fund on many of the countries of the European periphery. Obama’s policies are better than the policies favored by Angela Merkel and Paul Ryan in the same way that a doctor who prescribes aspirin to a cancer patient is ‘better’ than a doctor who kills the patient by prescribing her poison. And to continue with Porter’s health analogy, saying that a country in the midst of economic crisis is thriving compared to other countries that are doing even worse is like saying that a cancer patient coping with their disease better than average is healthy and thriving compared with other cancer patients who are not so “lucky”.

Making analogies between the state of the economy and the health of living organisms may make some sense if such analogies are based on a comparison between times of capitalist boom and times of capitalist crisis but they sound completely ridiculous when they are used to compare how different countries are coping with a state of generalized economic crisis.

It should be added here that Porter’s article illustrates the fact long recognized by sociologists that what counts as a social problem depends on the standpoint of different social groups with often conflicting social and economic interests. Porter’s diagnosis is not so much wrong as it represents the standpoint of the top 1% that is, as Lowrie’s story suggests, once again doing well and keeping to themselves the benefits attached to the resumption of economic growth. For them, the economy does seem healthy. For the rest of us, not so. And as far as those still without jobs are concerned, the ‘healthy’ economy that Porter celebrates continues to make them sick, as the many studies regarding the links between unemployment and ill health have long shown.

 

Costas Panayotakis is Associate Professor of Sociology at the New York City College of Technology (CUNY) and author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy (Pluto Press).

Notes:

(i) See Annie Lowrie, “Income Inequality May Take a Toll on Growth,” http://www.nytimes.com/2012/10/17/business/economy/income-inequality-may-take-toll-on-growth.html?ref=annielowrey&_r=0 .

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