Heaven knows I’m miserable now: a comparative study of free market capitalism, social background and health

The role of the market is one of the main dividing lines in politics. Marxists argue that free market capitalism tends to produce and reproduce inequality and ill health through poor material conditions. Liberals and conservatives, on the other hand, claim that capitalism is responsible for the great improvements in health that have occurred over the last century. They see capitalism as the main driver of economic growth, and thus as the critical condition for health improvement. Today, neoliberalism has become such a dominant ideology in shaping our world that it has been described as the “idea that swallowed the world”. It dictates the policies of governments and shapes the actions of key institutions such as the WTO, IMF, World Bank and European Central Bank. While there is now an emerging literature on the role of quality of government and policies for well-being, the issue of economic freedom is typically left out of this discussion. The large literature on economic freedom has almost exclusively dealt with economic outcomes, and documenting mainly favourable impacts. But going beyond economic indicators, does economic freedom also promote well-being? Combining the most recent data available on economic freedom worldwide with individual data on subjective health, we asked the following two research questions: how is economic freedom in a country related to the subjective health of its citizens, and is this relationship contingent upon a person’s social background? We combined the Frasier Index of Economic Freedom with data from the World Values Survey in the period 1981-2022, allowing for a time-series cross-section analysis of almost 100 countries over more than 40 years. At the individual level, the analysis controlled for the respondents’ demographic background, socio-economic status and political affiliation, while the country-level variables included GDP per capita, public health expenditure per capita, and health system type. The preliminary results indicate that the index of economic freedom is negatively associated with self-rated health, and that the adverse health effects are stronger for those with low education and income. Recent developments in multilevel methods and improved access to data should inspire further studies of how political and economic systems can serve and benefit citizens’ well-being and thus contribute to well-functioning societies.