The Significance That Economic Ideas May Have to Psychology - Essay Example

The Significance That Economic Ideas May Have to Psychology According to Wilkinson (1992) life expectancy is higher in countries with a more equitable income distribution and that health may be influenced by relative as well as absolute living standards. (p. 165-168) The implication of this for psychologists is remarkable because the statement is not merely referring to life expectancy in the biological context but including mental health as well. This paper will explore how economic issues affect mental health and how economic solutions can address specific psychological health problems. In the process, this paper is expected to outline the reasons why economics is fundamental in the successful practice of psychology. Materialism In discussing the relationship between economics and psychology, the dominant issue that emerges concerns that of money. Hanley and Wilhelm’s (1992) wrote: Money itself holds little value, it is merely a means of exchange. But for a great number of people projection of the emotional psychological value of money far exceeds its relative economic value. (p. 5) Wernimont and Fitzpatrick (1972) offered a more interesting perspective that is more relevant to the subject at hand. They stated that people attach a variety of meanings to money including failure and social acceptability and that these symbolic meanings differ among different occupational groups. Perhaps this is so because money can purchase various things including power, security, freedom and even love and personal satisfaction. Today, technological advances, among other contemporary factors, changed the nature of money and the monetary transactions as a distinct economic behavior. An offshoot of this is what Drenth et al. (2001) called as the ongoing process of economic socialization wherein people acquire economic values that are more or less commonly shared ideas about what is generally right and wrong in the economic realm. (p. 269) This brings us to the phenomenon we now call as materialism or the concept of conspicuous consumption. Here, “economic values relate to a person’s individual ideas with respect to the distribution of wealth and to one’s own absolute and relative position in that distribution. To the extent that stable individual differences exist with regard to the adoption of these values we may even speak of economic personality variables. Examples are greed, thrift, altruism, solidarity, the need for economic achievement.” (p. 269) The money-dimension to the many social and psychological problems offer psychologists invaluable insights particularly in addressing issues in regard to happiness, urban living and the stress and depressions that come with social ills like poverty, income inequality and welfare problems. From here, money takes us into various other economic factors that influence the psychological well-being of individuals such as unemployment, family relationship, and the role of the state. Unemployment There is little doubt that unemployment has an adverse effect on mental health and well-being. There are several studies that points to the relationship of unemployment to a number of mental health problems. Baum Andrew (1997), for instance, wrote that depressive symptoms are the most sensitive indicators of the psychological effects of unemployment along with other symptoms such as lower self-confidence and higher externality (one’s life is beyond one’s control). (p. 188) The multiple impacts of unemployment during the Great Depression of the 1930s is a case in point. Elder (1974) provided us an invaluable perspective in his research in regard to the economic deprivation’s effect on family structure, family interaction, and personality in 167 families covering the period of 1932 to 1964. He found that the ultimate effect of economic insecurity occasioned by severe unemployment of adults is to generate greater need for stability and security in the lives of their children. In addition, he also suggested that economic insecurity leads to familial adaptations that are likely to reinforce traditional attitudes with respect to sex roles, as girls are required to take disproportionate responsibility for helping in the house and boys to generate outside income. Another example is the case of a psychologically disturbed person. It has been argued that at a time of economic recession brought about by unemployment, among other economic variables, the emotional and material resources of a family are diminished. And so, the psychologically disturbed person’s family might have a lower tolerance for his or her behavior, thereby increasing the likelihood that the person will be brought into contact with a mental health professional. Unemployment highlights the meaning of work for individuals and the society in general. In any society, wrote Cochrane and Carroll (1991), the economy is the instrument by which the basic requirements of life are obtained but that in Western industrial societies, particularly, direct participation in economic life enables a person to satisfy a variety of psychological and social needs, in addition to providing material benefits. (p. 147) Family Unemployment underscores another important issue on the subject – family. Economic issues help shape the way in which family structures change over time, and hence, the family’s capacity to generate stress and provide support. Today, according to Baum, there are fewer large families, fewer extended families living under the same roof, more single parent families, more stepmothers and stepfathers, more elderly people, many of whom live alone. (p. 107) As a result the resources available to families have also changed. Although, one can argue that there is a significant rise in the standard of living among people, there are variables that offset this. For instance, there is the increase in the proportion of babies born in families on means-tested benefits or that more women now combine child-rearing with paid work. These circumstances highlight several new challenges that put economic issues as a fundamental variable in the changing dynamics of people’s mental health. The literature on the impact of father absence on mental health is rich in certain areas and sparse in others. For example, we know a great deal about the impact of divorce on children’s mental and social functioning, but we know less about the mental health of children in female-headed households because such phenomenon emerged rather recently. But, in the case of mental and social health, there numerous studies that measure the emotional and physical well-being of individuals. For instance, marital disruption that could possible result from an adverse economic condition has serious negative effects on the psychological health of both mother and children. According to Jacqueline Lowe Angel (1993), the children of divorced parents or those parents who combine child-rearing and work are more depressed and have more problems in school and with social interactions than children in more traditional and intact families. (p. 19) Part of understanding family influences on health is about understanding the distribution of risk factors across families. Marmot et al. (1991) conducted a study among Whitehall civil servants and found that men in lower grade occupations still had worse health even after adjustments have been made for smoking, diet, exercise, and so on. What is significant in the study was the finding that potentially important influences on ill-health such as stress, personal control and social support were unequally distributed across grades, and may have contributed to the health gradients observed. Role of Welfare State An important dimension to the relationship of economic reality to psychology is the level of the national economy and, ultimately, role of the state in the relationship between the individual person and the economy. Here, economic psychological concerns relate to general economic well-being, economic expectations, and the perceptions, say, of the general economic conditions such as recession; inflation; the tax burden, unemployment and the level of social security. It is in this area where people are faced with the consequences of the economic policies and decisions that are made by the government authorities. According to Drenth et al., governments serve a double role here: first, as an important economic agent, influencing the economic circumstances at the individual or household level, and as a supplier of public goods (e.g. infrastructure) and services (administration, army, police, etc.). (p. 266) An example in this regard is how the modern concept of “welfare state” could change the dynamics of the Australian experience in the context of the issues being discussed in this paper. Australia is classified as a liberal welfare state regime along with other English-speaking countries such as Canada, New Zealand and the US. In looking at the records of these countries, they are classified as liberal welfare regimes because they are less generous, provide support which is often targeted and means tested, lack universal provisions and focus less on comprehensive and equal citizenship. In strengthening the welfare state, the idea is that through a social care system wherein social conditions are attempted to be improved by policies that promote equitable wealth distribution, universal healthcare, providing pensions and other social services, the behavior of people and their mental and physical well-being will be improved. State involvement in the provision of services and distribution of resources could help bridge the disparity of the psychological well-being of the poor and the affluent. The welfare state, however, has its share of critics. It has been constantly challenged by the continuous rhetoric about its affordability and feasibility from an economic standpoint. That is to say, that in the last two decades the welfare state has been challenged on the principle of affordability, with the need for social policy to match the economic realties of Australia. The premise of the argument is based on the rational of the welfare state being fiscally too costly as in the last decade when it has eaten up over a quarter of the Australian national income. (Teaha 2007, p. 70) However, despite this, spending for welfare is beneficial in the long term especially as we talk about public funding to improve the labor force. This argument could be a basis for compromise among people who do not hold a favorable opinion on the model. Consider: Poor physical and mental health tends to be associated with low educational achievement, low-income and low quality housing. (Floud & Johnson 2004, p. 236) The welfare state ameliorates many of these problems through its multiple activities. The government is the one whom we usually turn as we seek to maintain or upgrade our educational efforts, improve our physical and mental health, redevelop our decaying urban areas, build better and safer highways, overcome air and water pollution, equip our communities with sewers, parks, school and the like. The Swedish economic management is a model of a successful welfare state wherein organized labor and management are incorporated into the political policymaking, providing incentives on all sides of the economic structure that result in a harmonious industrial society. Admittedly, there are clear limits to which the various public welfare agencies can or should intervene with the choices that individual citizens make about how to allocate their time and money. But this is, ideally, where other economic models could come in for a possibility of a collaborative effort to address many social problems. Conclusion Of central importance to psychological analyses are individual reactions to economic phenomena and developments and to the policy measures that are based upon them, and the way the perceptions and evaluations feed into individual trade-offs and decisions. How individual behavior contributes to or boosts economic phenomena and changes and vice versa are joint issues of economics and psychology. The main point is that, aggregated economic phenomena interact to produce economic conditions, which, in turn, drives individual effects and behaviors resulting to a significant relationship to the psychological field. An understanding of these variables helps psychologists to better deal with psychological problems that are rooted from social and economic issues. Mental health can only be understood as one strand within a wider health and social care context and that it lies at the interface of what is increasingly seen as a continuous spectrum of policy and related services and practices. The economic issues provide a better way to introduce psychologists to an in-depth perspective not just on the breadth and depth of cases that awaits them but also on the occupational outlook, in general. From a reverse perspective, the issues outlined by this paper provided an impetus to some form of economic psychology because the field has acquired clear policy relevance. Psychology, in this context is no longer concerned about rescuing an individual. Psychology can enable economics to be better equipped in dealing with the numerous social problems that cannot be solved by existing models and approaches. References Angel, J. (1993). Painful Inheritance. University of Wisconsin Press. Baum, A. (1997). Cambridge Handbook of Psychology, Health and Medicine. 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(2007). Australian Contemporary Political and Social Issues: Answers to Questions. Lulu. Wernimont, P. and Fitzpatrick, S. (1972). “The meaning of money.” Journal of Applied Psychology, 56, pp. 218-226. Wilkinson, R.G. (1992). “Income distribution and life expectancy.” British Medical Journal, 305, 165-168. Read More