|
|
In
October 2015, Princeton economist Angus Deaton got an early-morning
call from Sweden that most scholars can only dream of. Groggy and
bleary-eyed, Deaton learned that he had won the Nobel Prize in economics
“for his analysis of consumption, poverty, and welfare.”
For most award winners, the storm of media coverage following the Nobel
announcement is unlike anything they’ll ever experience. But, Deaton
writes in a new book, the publicity about his award was quickly
overshadowed “by an order of magnitude” when he published an academic
paper a few weeks after his Nobel win.
The paper, which he co-authored with his wife, Anne Case, another distinguished economist at Princeton, was titled “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century.”
Case and Deaton documented an astonishing fact: unlike virtually every
other demographic group in America (and other rich countries), the death
rate of white, middle-aged Americans was rising instead of falling. And
that this macabre trend was being driven largely by a rise in what they
would call “deaths of despair” — from suicides, drug overdoses, and
alcohol abuse — especially in the population without a college degree.
Case and Deaton’s findings hit American politics like an atomic bomb.
When they both went to the White House as part of the traditional
post-Nobel-award meet-and-greet with the president, President Obama
immediately brought up the paper. “Deaths of despair” became a constant
talking point in political speeches and debates. After Donald Trump won
the presidential election, many commentators cited the paper as evidence
that despair in white, working-class communities was a crucial reason
why those voters helped put the firebrand president into office. |
|
Jewel Samad/ Getty Images |
|
Deaton
isn’t necessarily the guy you’d expect to be such a prominent analyst
of economic angst in America. Born in Scotland and educated at the
University of Cambridge, he came to the United States in the early 1980s
to teach at Princeton. In his new book, Economics in America: An Immigrant Economist Explores the Land of Inequality,
Deaton recounts his journey to understanding the political and economic
dysfunctions of his adopted home. It’s sort of like Alexis De
Tocqueville’s classic Democracy in America, but with more numbers, more economics, and more vitriol.
A Biting CritiqueWhen Deaton first came to America in 1983, he
recalls being gobsmacked by how indifferent his fellow economists were
to rising inequality, and how ideologically opposed they were to
government intervention in the economy. Deaton, after all, had been
educated at Cambridge, which was steeped in Keynesian economics (John
Maynard Keynes had launched the Keyensian revolution, which provided an
intellectual framework in favor of greater government intervention in
the economy, while teaching there).
“I was appalled when one of my new colleagues (publicly) proclaimed that
‘government is theft,’” Deaton writes. “I had grown up in a country
where I, my parents, and our friends saw the government as benevolent, a
friend in times of trouble, and I found it hard to believe that a
distinguished academic could be so cynical and so libertarian. I still
do not agree with his sentiment, but I have come to understand the
extent to which state and federal government in the United States often
work, not to protect ordinary people but to help rich predators make
ordinary people poorer.”
Rare for an economist, Deaton offers a lucid and unsparing critique of
America’s political system. From healthcare to taxation to poverty to
regulations, Deaton sees a system that has increasingly served
monopolistic corporations and the rich over ordinary citizens, allowing
“a minority to prey on the majority.”
“The United States has become a darker society since I arrived in 1983,”
Deaton writes. “The hopes of the immigrant have been tempered by
reality, but even more by the corruption of the American economy and its
politics, a corruption that threatens our democracy.”
Deaton threads his book with eye-opening statistics to reinforce his
argument that there is something terribly wrong with the current state
of affairs in America. A sample: -
“Less well-educated Americans have seen little or no improvement in
their material circumstances for more than fifty years. For men without a
four-year college degree, median real wages have trended downward since
1970."
-
“There are several million Americans — Black, white, and Hispanic —
who live in households with per capita income of a few dollars a day and
whose living standards are arguably as bad as or worse than those that
the World Bank demarcates as destitute in India or Ethiopia.”
-
“The top 10 percent of incomes in the United States account for nearly
half of all income, compared with only 14 percent for the bottom half
of incomes.”
-
“Overall death rates in the United States have been rising, and, even
before the pandemic, adult life expectancy has fallen for ten years for
those without a four-year college degree.”
Deaton (and Case) argue that the alarming rise in deaths of despair amongst non-college-educated Americans — which accounts for almost two-thirds
of the adult population — is intimately related to their fading
economic prospects. Deaton writes that “the decline of good jobs” is a
crucial driver of despair. “This decline, in response to globalization
and, more importantly, technical change (robots), is made much worse in
the United States than elsewhere by the grotesquely exorbitant cost of
healthcare,” Deaton writes. “Beyond that, when bad things happen and
people need help, the safety net in the United States is fragmentary
compared with those in other rich countries.”
In all this, Deaton sees economists as largely as complicit in the
changes that have made life harder for millions of Americans. He argues
that many (but not all) of the people in his profession have provided an
intellectual legitimacy for a range of policies that have stripped away
support for working-class Americans and forced them into an
increasingly cutthroat labor market.
“They are apostles for the globalization and technical change that have
enriched an elite and have redistributed income and wealth from labor to
capital, all the while destroying millions of jobs, hollowing out
communities, and worsening the lives of their occupants,” Angus writes.
“And when confronted with deaths of despair, they can blame the victims
and those who try to help them.”
Going forward, Deaton urges the economics profession to think more about “predistribution
— the mechanisms that determine the distribution of income in the
market itself, before taxes and transfers — and less about a
redistribution that is not going to happen and is not what people want
in any case.” That, he stresses, will force many economists into
“uncomfortable territory: promoting unions, place-based policies,
immigration control, tariffs, job preservation, industrial policy, and
the like. We need to promote a more realistic understanding of how
governments and markets work. We need to abandon our sole fixation on
money as a measure of human wellbeing.”
To be fair to Deaton’s chosen profession, he is not the only economist
in America who is reconsidering traditional assumptions and policy
recommendations. A growing number of people in his field are changing
tack in light of emerging data, including the shocking statistics about
the rise in deaths of despair documented by Case and Deaton. |
|
|
|
| | | |