Deaths of Despair and the Future of Capitalism
Anne Case and Angus Deaton
Princeton University Press
Copyright © 2020 by Princeton University Press
As our attention is focused on the threat posed by COVID-19, Anne Case and Angus Deaton’s “Deaths of Despair and the Future of Capitalism” reminds us of an issue that has shaped our politics and economics, and is only exacerbated by the current crisis.
Their desire to tell this story stems from their summer vacations in Madison County, Montana, when they learned the county had a suicide rate “four times that of Mercer County, New Jersey, where we spend the rest of the year.”
Their research quickly led them to this reality: “Deaths of despair among white men and women aged forty-five to fifty-four rose from thirty per one hundred thousand in 1990 to ninety-two per one hundred thousand in 2017. In every US state, suicide mortality rates for whites aged forty-five to fifty-four increased between 1999–2000 and 2016–17.”
From the CDC, they learned “it was not only suicide that was rising among middle-aged whites; it was all deaths … [and] that the fastest-rising death rates were from three causes: suicides, drug overdoses, and alcoholic liver disease … We came to call them ‘deaths of despair’ … and this book is an in-depth exploration of that despair.”
Significantly: “the increase in deaths of despair was almost all among those without a bachelor’s degree. Those with a four-year degree are mostly exempt; it is those without the degree who are at risk … seeing increases in their levels of pain, ill health, and serious mental distress, and declines in their ability to work and to socialize. The gap is also widening in earnings, in family stability, and in community. A four-year degree has become the key marker of social status …” (Emphasis added.)
Case and Deaton write: “Those who do not pass the exams and graduate to the cosmopolitan elite do not get to live in the fast-growing, high-tech, and flourishing cities and are assigned jobs threatened by globalization and by robots … The less educated are devalued or even disrespected, are encouraged to think of themselves as losers, and may feel that the system is rigged against them …”
Despite their broad-based critique, they “continue to believe that globalization and technical change can be managed to the general benefit. Capitalism does not have to work as it does in America today. It does not need to be abolished, but it should be redirected to work in the public interest.”
Unfortunately, “Deaths of Despair” does a much better job of delineating problems than offering comprehensive solutions. Clearly these are profound problems that defy simple answers, but a reform here and there just won’t do the trick.
But make no mistake about it: The authors perform a significant public service by highlighting a remarkable set of statistics and providing an undeniably disturbing portrait of poor white America.
Case and Deaton detail this educational, economic and cultural divide while adding a bit of moralizing: “For Americans without a bachelor’s degree, marriage rates are in decline, though cohabitation and the fraction of children born out of wedlock continue to rise. Many middle-aged men do not know their own children. They have parted from the woman with whom they once cohabited, and the children of that relationship are now living with a man who is not their father …
“One line of argument focuses on a decline in values or on an increasingly dysfunctional culture within the white working class itself. There is little doubt that the collapse of social norms about not having children out of wedlock, which seemed so liberating to so many at first, has brought a heavy price in the long term. Young men who thought they could live a life free of commitment found themselves alone and adrift in middle age.”
Have young working-class men really been intent on living a “life free of commitment?” Might there be many other and more compelling reasons — poverty, substance abuse, an inadequate public education, and the subsequent inability to secure meaningful and rewarding employment — that resulted in a life “adrift?” Evaluating the values of others is a tricky business. And they seemed to have ignored those whose sexual preference led them to choices other than heterosexuality.
Perhaps connected: “The comfort that used to come from organized religion, especially from the traditional churches, is now absent from many lives …” It was those same white working-class boys who were favored by the priests.
“Why is lack of religiosity and the decline in churchgoing a problem? … Put crudely, people need religion more in more hostile environments. This would fit the American states, where those with lower incomes and less supportive state governments have a higher fraction of religious people. It would also explain why it is true that, while more religious people do better than less religious people on many outcomes — they are happier, less likely to commit crimes, less likely to abuse drugs and alcohol, and less likely to smoke — more religious places — including US states — do worse on the same outcomes. Religion helps people do better, and they espouse religion in part because their local environment is difficult. When religiosity falls over time, it is the people side of this story that applies, and people lose the benefits that religion brings.”
Perhaps over the past years, organized religion has had less to offer those suffering from this chronic inequity.
The authors note another critical problem: “More workers used to belong to a union. Unions help keep wages up and help give workers some control over their workplace and working conditions. In many towns and cities, the union hall was a center of social life. The good wages that once supported the blue-collar aristocracy have largely vanished, and manufacturing has been replaced by service jobs …”
Unfortunately, there’s less emphasis on the cause than the effect: the decades’ long campaign by corporate America and its Republican legislators to make it more difficult for workers to organize, and their collaboration in easing the large-scale export of American jobs to low-wage nations.
While the authors didn’t include this graph from the Pew Research Center, it vividly demonstrates the critical transfer of wealth from the middle class, and the working poor to the upper class:
According to the 2018 Census, 62% of the 171 million Americans between 25 and 64 were white non-Hispanics, and 62% of those did not have a four-year college degree. They’re 38% of the working-age population.
As for race, Case and Deaton write: “African Americans have long had harder lives than whites. Blacks die younger, today as in the past. Blacks are also less likely to go to college, or to find employment. Those who work earn less than whites on average. Blacks have less wealth, are less likely to own their own home, are more likely to be incarcerated, and more likely to live in poverty. In many but not all of these areas, black lives have improved; since 1970, black education, wages, income, and wealth have risen. From 1970 to 2000, black mortality rates declined by more than those of whites, and they fell in the first fifteen years of the twenty-first century while those of working-class whites were rising.”
Case and Deaton suggest a 30-year lag, with the critical problems of the ‘70s and ‘80s that beset African Americans now harming working-class whites. The absent father, once black, is now white; more highly educated whites leave the inner cities for better neighborhoods; and there’s falling marriage rates, rising crime rates and drug overdoses.
They write: “As Jim Crow weakened, along with other forms of discrimination, working-class whites lost whatever benefits they got from it. More than half of white working class Americans believe that discrimination against whites has become as big a problem as discrimination against blacks and other minorities, while only 30 percent of white, college-educated Americans agree.”
I’m including some data from a 2017 study by Public Religion Research Institute that supports their thesis:
Back to the authors: “for white men without a four-year degree, median earnings lost 13 percent of their purchasing power between 1979 and 2017. Over the same period, national income per head grew by 85 percent … Since the end of the Great Recession, between January 2010 and January 2019 nearly sixteen million new jobs were created, but fewer than three million were for those without a four-year degree. Only fifty-five thousand were for those with only a high school degree …
“Many of the jobs that have come with the lower wages do not bring the sense of pride that can come with being part of a successful enterprise, even in a low-ranked position. Cleaners, janitors, drivers, and customer service representatives ‘belonged’ when they were directly employed by a large company, but they do not ‘belong’ when the large company outsources to a business-service firm that offers low wages and little prospect of promotion … In some of these jobs, working conditions are closely monitored by software that deprives workers of control or initiative, even compared with the old, and once much hated, assembly lines …”
With another bit of moralizing: “Men without prospects do not make good marriage partners. Marriage rates among less educated whites fell, and more people lost out on the benefits of marriage, of seeing their children grow, and of knowing their grandchildren. A majority of less educated white mothers have currently had at least one child outside marriage. Poorer prospects make it harder for people to build the life that their parents had, to own a home, or to save to send kids to college. The lack of well-paying jobs threatens communities and the services they provide, such as schools, parks, and libraries … It is the loss of meaning, of dignity, of pride, and of self-respect that comes with the loss of marriage and of community that brings on despair, not just or even primarily the loss of money …” (Emphasis added.)
Between 40% and 50% of American marriages end in divorce. And it’s debatable exactly how many, despite their education and income, actually make “good marriage partners.” How many are happy or fulfilled in the marriages that continue? Yes, statistics show disparities in divorce rates based on education and income, but isn’t it a bit presumptuous to imagine that poor people can’t find as much love and happiness as wealthier people? The overwhelming majority of people in the world are poor: Are they fated to live lives without dignity, pride and self-respect? Or that single moms and dads lack self-respect?
Case and Deaton ask a central question: “Why has the economy been failing the working class? If we are to come up with ideas for change, then we need to know what happened, where to begin, and what sort of policies might make a difference …”
“Globalization and technological change are often held up as the main villains because they have reduced the value of uneducated labor, replacing it with cheaper, foreign labor or cheaper machines. Yet other rich countries, in Europe and elsewhere, face globalization and technological change but have not seen long-term stagnation of wages, nor an epidemic of deaths of despair … in America, more than elsewhere, market and political power have moved away from labor toward capital … The rising economic and political power of corporations, and the declining economic and political power of workers, allows corporations to gain at the expense of ordinary people, consumers, and particularly workers …” (Emphasis added.)
Has a truly competitive free-market capitalism ever really existed outside of the dreams of Adam Smith? The authors maintain that “as the experience of other rich countries shows, globalization and automation, which are faced by all, need not reduce wages as has happened in the US, let alone bring an epidemic of death. American healthcare bears much of the blame, as does policy, particularly the failure to use antitrust to combat market power, in labor markets perhaps even more than goods markets, and to rein in the rent-seeking by pharma, by healthcare more generally, and by banks and many small- or medium-size business entrepreneurs … All of these get rich from the ‘oppressive monopolies’ and special deals, tax breaks, and regulations that they have ‘extorted from the legislature’ …
“… if the rich are allowed to enrich themselves through unfair processes that hold down wages, and raise prices, then inequality will certainly rise. But not everyone gets rich that way. Some people invent new tools, drugs, or gadgets, or new ways of doing things, and benefit many, not just themselves. They profit from improving and extending other people’s lives. It is good for great innovators to get rich. Making is not the same as taking. It is not inequality itself that is unfair but rather the process that generates it …”
I’m not sure their limited approach works: “the right way to stop thieves is to stop them stealing, not to raise their taxes. We need to stop the abuse and overprescription of opioids, not tax the profits. We need to correct the process, not try to fix the outcomes … The problem for less educated people is stagnant and declining wages, not inequality in and of itself, and indeed much inequality is the consequence of forcing down wages in order to enrich a minority.” (Emphasis added.)
But aren’t stagnant and declining wages a clear result of inequality, the unequal power of capital versus labor?
The authors explain: “even confiscatory taxes on the rich do not provide much relief for the poor, because there are so many poor people and so few rich people …We need to correct the process, not try to fix the outcomes.”
But working Americans are penalized by the process and the outcomes. And there’s a marked difference between fair and equitable and “confiscatory” taxing. One has only to go back to the 1950s to see a more equitable tax rate.
And yes, the richest have always found ways to reduce their tax burdens, but the solution is to scrupulously eliminate the loopholes. And fair taxation hardly rises to confiscation. Critics of capitalism might argue that the outcomes, the extraordinary fortunes many of the wealthiest have accrued in recent years, comes in fact from the exploitation of their workers. As even the authors note: “Among America’s 350 largest firms, average CEO earnings in 2018 was $17.2 million, 278 times average earnings. In 1965 the ratio was only 20 to 1.4.” Revising our tax system is just one of many measures to return equity to our economics.
Case and Deaton write: “Once political and financial power are increasingly concentrated, the dynamic does not appear to be self-correcting. The election of Donald Trump is understandable in the circumstances, but it is a gesture of frustration and rage that will make things worse, not better. Working-class whites do not believe that democracy can help them; in 2016, more than two-thirds of white working-class Americans believed that elections are controlled by the rich and by big corporations, so that it does not matter if they vote. Analysis by political scientists of voting patterns in Congress supports their skepticism; both Democratic and Republican lawmakers consistently vote for the interests of their more prosperous constituents with little attention to the interests of others … (Emphasis added.)
“For us, the best way to deal with this is to stop the rent-seeking, lobbying, and misuse of market power that is behind the extreme inequality, to stop the unfair process. If that is impossible, high marginal income taxes or, better — but practically much more difficult — a wealth tax would lessen the influence of fortunes in politics. But it is sometimes difficult to be optimistic …”
But doesn’t it make sense in the meantime that we enact tax policies that do in fact mitigate the outcomes? Isn’t profit what drives the desire to manipulate the process? Wouldn’t a rational, legitimate cap on profit help stop them stealing?
It’s certainly relevant in The Age of COVID that one of their primary concerns is the exorbitant cost of health care, and they marshal a variety of measurements to chart the failures of our free market approach. “If governments are unwilling to exercise compulsion over health insurance and to take the power to control costs — as other rich countries have done — tragedies are inevitable. Deaths of despair have much to do with the failure — the unique failure — of America to learn this lesson.”
Optimistically, they write: “If we can get the policies right, we can ensure that what is happening today is not a prelude to another great disaster but rather a temporary setback from which we can return to rising prosperity and better health. We hope this book … will help put us back on track to make the progress in this century that we have generally made in the past. The future of capitalism should be a future of hope and not of despair.”
The authors were finished in October 2019, months before the manifest COVID-19 failures of the Trump administration. Obviously, we didn’t get it right. The lack of federal coordination over testing, the glaring shortage of protective gear, swabs and ventilators, and the shocking claim of our president that he’s not responsible has contributed to the continuing cascade of deaths caused by our failure to enact a coordinated public health response to the pandemic, a “unique failure” that disproportionally afflicted people of color and those in our nursing homes. And it’s a fair question to ask whether this is just the most obvious indicator of a government that is not only “unwilling to exercise compulsion” over costs, but not at all interested in bucking the health care industry that funds its political life. The effects of having limited Medicaid and the clear choice to protect the corporate supply chain and inflated profits rather than enact the National Defense Production Act to mobilize the manufacture of personal protective equipment and testing equipment was no “temporary setback” but a great disaster.
But this most recent failure has been a long time coming. Here’s a Washington Post graph comparing U.S. death rates with other countries:
The authors returned to the CDC “to see what kinds of deaths had been rising most rapidly since 1999 … In order of importance, they were accidental or intent-undetermined poisonings (which are almost entirely drug overdoses), suicides, and alcoholic liver diseases and cirrhosis …
Unfortunately, Case and Deaton explain: “Towns and cities in the heartland of America that used to produce steel, glass, furniture, or shoes, and that are fondly remembered by people in their seventies as having been great places to grow up, had been gutted, their factories closed and shops boarded up. In the wreckage, the temptations of alcohol and drugs lured many to their deaths. Most of these stories are never told … Addiction is seen as a moral weakness, not a disease, and it is believed that its effects are best covered up.
“In every US state, suicide mortality rates for whites aged forty-five to fifty-four increased between 1999–2000 and 2016–17. In all but two states, mortality rates from alcoholic liver disease rose. And in every state, drug overdose mortality rates increased.”
“The current epidemic began in the early 1990s and gained momentum in 1996 with the Food and Drug Administration’s approval and the subsequent marketing of the addictive prescription painkiller OxyContin, essentially legalized heroin, manufactured by Purdue Pharmaceutical …
“For whites between the ages of forty-five and fifty-four, deaths of despair tripled from 1990 to 2017. In 2017, this midlife age-group had the highest rate of mortality from deaths of despair. But whites in younger age-groups were also doing badly and their deaths rose even more rapidly, accelerating in the last few years.”
“In 2017, almost 40 percent of the American population aged twenty-five or older had no more than a high school diploma … In the late 1970s, those with a bachelor’s degree or more earned on average 40 percent more than workers who left school with a high school diploma.”
And the rate of deaths of despair by education:
“Men with less education were always more likely to die from alcohol, drugs, or suicide, but the gap widened rapidly as the epidemic progressed, so that by 2017, those in the less educated group were three times more likely to succumb to these deaths …
“As mortality rates have risen among midlife whites, indicators of health among those who are not dying are getting worse. Fewer people think that their health is very good or excellent. More people are experiencing pain, serious mental distress, and difficulty going about their day-to-day lives. People report that their health is making it harder for them to work:
“One particularly important example is mental health … Since 1997, respondents in the NHIS have been asked a series of six questions about their feelings over the last month … how often respondents felt sad, nervous, restless, hopeless, worthless, and that ‘everything was an effort,’ all feelings that might contribute to despair. Figure 6.2 shows the relationship of mental distress and age over the period 1997 to 2017 for those without a bachelor’s degree, in the left panel, and for those with a bachelor’s degree, in the right panel, for respondents ages twenty-five to seventy-five …
“For those without a degree, the risk of severe mental distress is highest in midlife, peaking between ages forty and sixty, the ages at which the stresses of work, raising children, and caring for elderly parents may all be pressing. In the late 1990s, severe mental distress was less common among young adults and the elderly, although over the past twenty years it has grown as much for young adults as it has for those in middle age …
“The picture looks very different for those with a four-year college degree … The risk of severe mental distress in this group is also highest for adults in their middle years, but the risk is only a quarter of that faced by those without a bachelor’s degree …
“Since 1997, the NHIS has asked adults how difficult they would find it to walk a quarter of a mile (about three city blocks), climb ten steps, stand or sit for two hours, go out to do things like shop or go to the movies, relax at home, and socialize with friends. An ever-growing fraction of working-age whites without a four-year degree report ‘more than a little’ difficulty in each of these activities — something that has not happened to whites with a bachelor’s degree, and something that has not happened to older adults (ages sixty-five to seventy-four) … The inability to socialize with friends not only removes one of life’s most pleasurable and important activities but also puts people at risk for suicide …
The authors note “We have told a story in which death and sickness go together. Something is making life worse, especially for less educated whites. Crucial capabilities that make life worth living are being compromised, including the ability to work and the ability to enjoy life with others. Severe mental distress is on the rise.”
Let me reiterate. Anne Case and Angus Deaton shine an important spotlight on the growing divide between the wealthy and the working poor, connecting a critical dot between income and education. If all you do is pay attention to the data, you’ll greatly benefit. For me, the irony is that they couch their analysis of those succumbing to these deaths of despair in an academic language few less educated whites actually speak.
Ask someone who works his or her ass off for minimum wage whether poverty is painful. You’ll get a more colorful answer than how these two highly intelligent and highly empathetic economists from the Woodrow Wilson School at Princeton University put it:
“Lower earnings are associated with more pain, and it is entirely possible that the pain comes not from what happens at work but from the loss of status and meaning as a worker, or from the loss of the social structure that was supported by a well-paying job in a union town. There are experiments showing that the pain experienced by social exclusion works similarly in the brain to the pain experienced by an injury. If so, the slow destruction of the working class … may well be one of the causes of the increases in chronic pain.”
Let us leave you with this sad statistic: “People kill themselves when life no longer seems worth living, when it seems better to die than to stay alive … Most suicides involve depression or other mental illness. In 2017, forty-seven thousand people died from suicide in the US …”
“Figure 10.2 presents the mortality rates from deaths of despair (drugs, alcohol, and suicide) and those from heart disease for forty-five-to-fifty-four-year-old whites over this period, as well as the sum of these two types of mortality.
And this: “Our argument is that the deaths of despair among whites would not have happened, or would not have been so severe, without the destruction of the white working class, which, in turn, would not have happened without the failure of the healthcare system and other problems of the capitalism we have today — particularly persistent upward redistribution through manipulation of markets …”
The authors conclude with this call for hope and reform: “Democracy is fully capable of serving people better than it now does. Democracy in America is not working well, but it is far from dead, and it can work again if people push hard enough … We cannot describe policies in detail, and it is neither our purpose nor within our competence to choose among the many varieties of healthcare reform and safety net design that have already been comprehensively described by others. Yet we hope that the sheer awfulness of the epidemic of deaths, as well as the extremes of inequality that have been generated by rent-seeking and upward redistribution, will generate an opportunity where schemes that have been long thought about might be put into place. It is past time.”
It’s been past time for an awfully long time. And I suspect if there’s any chance of meaningful change, it will require the replacement of American capitalism with an equitable alternative. Clearly, the miserable response to COVID-19 ought to show Americans the critical need for profound change.