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Politicians, business leaders and the media often ask, “How is the economy doing?” — but what, exactly, is the economy? The term has its origins in Greek; eco from the Greek oikos, meaning a household and the suffix –nomy, derived from the Greek nomos, meaning management.
This original management-of-the-home definition is not how the term is usually understood by policy makers, the media and a lot of economists. Rather, the most common way of thinking about the economy is in terms of gross domestic product (GDP), financial markets, and jobs.
“ Many jobs, truly nonessential right now and without any tangible value for society in general continue during the COVID-19 pandemic, well paid and from comfortable home offices. At the same time, many front-line workers are barely paid enough to live. ”
Thinking this way about the economy is problematic and the coronavirus pandemic makes this all too apparent.
The economy as an engine
The economy is discussed as if it functions in an automatic way, a market system connecting businesses and households, driven largely by self-interests. Its value lies in the goods and services and the jobs it generates. Significantly, the focus and the valued end points are inanimate: growth, jobs, profits, income and wealth. The economy is like an engine.
When we think of the economy as an engine, without considering the human element, there are fundamental implications for policy and our future.
First, it pits the economy against health, which is why we hear some politicians and commentators asking whether it’s more important to save the economy or save lives. This perceived tension between economy and health has been translated into policies and institutions.
The austerity policies that many countries (e.g. United Kingdom) adopted following the 2008 economic crisis took resources away from health and social sectors at massive cost to people, families and communities. These policies prioritized debt repayment over public health expenditures and social policies, and those most at risk, such as people with disabilities, children and older adults, were disproportionately disadvantaged.
Globally, health is not considered essential to the economy. The World Health Organization (WHO) has never had a seat at the table when it comes to economic reforms led by the International Monetary Fund (IMF) and the World Bank, which set significant economic policies for low- and middle-income countries—or 80% of the world’s populations.
Where are the ethical questions?
Viewing the economy as engine is also dissociated from ethics. The engine produces considerable inequality in income, wealth, health-care coverage, working conditions, but as an inanimate process, what is being done is rarely questioned.
Many jobs, truly nonessential right now and without any tangible value for society in general (e.g. advertising), continue during the COVID-19 pandemic, well paid and from comfortable home offices. At the same time, many front-line workers, for instance those in the food industry or in nursing homes, are barely paid enough to live.
Such inequalities, and the institutions and markets that make them possible, should no longer be morally acceptable.
Public health and health care have not been visible parts of mainstream discussions around the economy. Yet, the current pandemic shows that the health of individuals and communities is a prerequisite for the engine to work. Human resources are the foundations and drivers of the engine.
Human-centered economy
In tomorrow’s economy, health can no longer be taken for granted or considered as an afterthought. Founding the economy on good health of both individuals and populations will make us more resilient to future pandemics.
The economy of tomorrow should be human-centered. At its core, such an economy must recognize people as moral and caring beings interacting with businesses as workers and consumers but also with each other within families and communities.
It must recognize the inherent vulnerability of all people, the need all of us have at some point in our lives for care and the value it represents. And not just monetary value: the care and support we give our children, our parents, our neighbors in times of need, are exactly the things that make us human — and humane.
In the economy of tomorrow, including the new U.S. stimulus package, success or failure should be assessed through a broad set of indicators, including health, poverty, hunger, homelessness, decent jobs. We need to make sure we are not just paying lip service to the well being and the struggles of individuals, families and communities.
So, “How is the economy doing?”
Pay attention
If there are millions at risk from COVID-19 who cannot afford to get tested or basic health care, who go hungry on any given day, if there are small farmers and family-owned stores that struggle, then the answer is clear — the economy is not doing well.
It is time for policy makers to start paying attention. All too often, we fall into the trap of allowing an inanimate system to limit our thinking of what the economy is and what, as citizens, we should demand from it.
The COVID-19 crisis is an opportunity to move towards a better economy. Changing what we mean and how we discuss “the economy” in the American national consciousness is a step in that direction.
Sophie Mitra is professor of economics and disability studies at Fordham University and the author of “Disability, Health and Human Development” (Palgrave, 2018).
