Angus Deaton for PS Say More

The PS Say More Newsletter | [View this message in a web browser]( [PS Say More]( Welcome to Say More, a weekly newsletter offering readers exclusive insights into the ideas, interests, and personalities of some of the world’s leading thinkers. In each issue, a Project Syndicate contributor is invited to expand on topics covered in their commentaries, address new issues, and share recommendations about everything from books and recordings to hobbies and social media. This week, Project Syndicate catches up with [Angus Deaton]( the 2015 Nobel laureate in economics and a professor emeritus at Princeton University. In [last week's edition]( of Say More, [Edoardo Campanella]( an author and Future of the World Fellow at the Center for the Governance of Change of IE University in Madrid, considered the limits of nostalgia in a post-Brexit UK, proposed measures for supporting firms that are not on the technological frontier, and identified what young people need most from their governments. Say More will soon be available exclusively to PS subscribers. We will still deliver a limited version straight to your inbox, but to enjoy unlimited access – not only to Say More but also to our On Point suite of long reads, book reviews, and insider interviews, The Year Ahead magazine, the full PS archive, and much more – [subscribe now](. Angus Deaton Says More… Project Syndicate[Angus Deaton]( Before the US midterm elections in 2018, you [challenged]( claims that President Donald Trump had been good for the economy, highlighting, among other things, that strong stock-market performance reflects the redistribution of income from labor to capital, at the expense of the vast majority of Americans. Trump’s defenders would no doubt point to low unemployment and rising wages, even for those at the bottom, in defending the president’s performance. In advance of November’s presidential election, what should American voters understand about the Trump economy? Angus Deaton: The US has undergone a long and very slow recovery from the Great Recession. But that recovery is attributable mostly to the actions of previous administrations, though Trump’s tax cuts also played a role. And while the employment rate has risen (as it always does when the economy is doing well), and unemployment is low, the employment rate remains lower than before the Great Recession, and substantially lower than in 2000. In fact, the long-run trend of less-educated Americans dropping out of the labor force shows no sign of having abated. The quality of jobs is deteriorating as large firms outsource many of their operations. Meanwhile, the stock market is booming in response to giveaways to corporations. PS: You’ve [highlighted]( the correlation between US counties with elevated mortality rates for white people – especially owing to what you and Anne Case call “[deaths of despair]( caused by suicide, drug overdose, and alcohol abuse – and counties that voted for Trump. You’ve also [pointed out]( that deregulation, which Trump has fervently embraced, can literally kill – the opioid crisis being a case in point. In other words, Trump’s policies are simultaneously deepening and capitalizing on his voters’ misery. The same goes for the gutting of US environmental regulations. What would Trump’s successor, whenever he or she arrives, have to do to break this cycle? AD: I’m not sure that it is a cycle that feeds into itself, or that is in any way inevitable. It is just bad policy. The opioid crisis should not have happened. (It has not happened in other countries.) US regulators allowed it. Those regulatory failures were not introduced – or ameliorated – by the Trump administration. Corporate interests are not the only ones that matter. There is nothing stopping a new administration from recognizing that and working for others. PS: Information and communications technology “need not doom us to a jobless future,” you [argued]( last year; “enlightened policymaking still has a role to play.” What policies – or policy goals – should top the list? AD: New technologies have been the primary source of prosperity for more than 200 years, but they often cause disruption, sometimes for a long time. A more comprehensive social safety net would be a good start. In my view, one key is to reduce the incredibly high costs of health care in the US, and to break the link between health care and employment. What I do not think would solve the problem – or even help – is a universal basic income. PS: As someone who [argues]( for economic policies that look beyond growth, what do you think of alternatives to GDP, such as Bhutan’s [Gross National Happiness]( index, the UN’s [Human Development Index]( or the US-based [Genuine Progress Indicator]( Are such broader metrics useful, or are they, like US [poverty data]( too vulnerable to manipulation to underpin real-world change? AD: Some such broader metrics have proved their usefulness as supplementary information, but they are not alternatives to GDP. In my view, the priority should be to improve GDP itself, excluding many of the things that do not improve human wellbeing (like useless but profitable medical procedures), and ensuring a much better account of distribution – in particular, how personal disposable income is spread across different groups. That said, the pre-eminent position of GDP is undeserved. In fact, if GDP is interpreted as a measure of how well the economy is serving its people, it is often extremely misleading. By the Way... PS: When it comes to addressing rent-seeking in the US, you’ve [identified]( policies that would help – such as reframing and enforcing antitrust laws – but noted in 2018 that you are “not very optimistic” about their implementation. Do any of the Democratic presidential contenders give you more hope? Alternatively, are there other less-than-ideal, but still useful policies that seem more feasible? AD: One key step would be to improve the public’s understanding of the extent of rent-seeking – for example, through investigative journalism of particular cases. News organizations such as The Washington Post and CBS News did a terrific job of exposing the abuses around opioids. But the bad guys are still extremely powerful. The health-care industry has five lobbyists for every member of Congress, and those who do their bidding rarely seem to suffer electoral consequences. Little wonder so many young people think American democracy is broken. All of the Democratic contenders give me more hope than Trump does. But change will be difficult for anyone. PS: Using money as a proxy for utility simplifies things when building formal economic models, but philosophers, as you’ve [noted]( reject the equation of financial gain and wealth with happiness. Assuming that the economics profession and society alike would benefit if economists were familiar with the relevant philosophical arguments, which works should be required reading? AD: [Amartya Sen]( is always worth reading. I particularly like [Development as Freedom]( and [The Idea of Justice](. Another excellent book by philosophers who think hard about economics is [Economic Analysis, Moral Philosophy, and Public Policy]( by Daniel Hausman, Michael McPherson, and Debra Satz. In it, they work through a number of different philosophical and ethical systems and show how they would apply to a series of ethical questions in economics. I think all economists should read it. PS: The US federal government recently reported that Americans’ life expectancy rose for the first time in four years in 2018. The increase was only a month, but it was driven by the first decline in drug-related deaths in 28 years, including in hard-hit states like Ohio. Has the US turned the corner? AD: I certainly hope so, especially as far as bringing the opioid epidemic under control is concerned. But there is a long way to go, and the other deaths of despair – suicides and deaths from alcoholic liver disease – continue to rise, especially among those without a college degree. A one-month increase in life expectancy is a terrible outcome, compared with the two-year increase that the US used to achieve every decade, and that other rich countries continue to come close to achieving, albeit somewhat more slowly. PS: You’ve [described]( the immediate aftermath of winning the Nobel Prize in Economics as “being transported to a fairyland.” What was most surreal, and most rewarding, about that experience? AD: The Swedes have been giving these prizes for more than a century, and they have perfected the process. The Swedish people – from ordinary working people to the royal family – have embraced the Nobel prizes, so winners become guests of the entire country, standing at the center of a glittering and magical winter festival that lasts a full week. You get to bring your co-authors, your friends, and your family. My grandchildren will remember it all their lives. It really was like being in one of the fairylands that I read about in books or saw in theaters as a child in Edinburgh. Deaton Recommends We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Deaton's picks: [Winners Take All]( Take All:]( [The Elite Charade of Changing the World]( By Anand Giridharadas This extraordinarily important book devastatingly exposes the dark underbelly of the global elite. You always knew that Davos must be a scam; read this book, and you will know exactly how – and why. We should make sure billionaires pay their taxes before we admire them for the good that they (claim to) do. [The Upswing]( Upswing:]( [How America Came Together a Century Ago and How We Can Do It Again]( By Robert D. Putnam Set to be published in June, this book shows how polarization, income inequality, and deaths of despair all followed similar trajectories in a country where only “I” mattered at the beginning of the century, where “we” dominated in mid-century, and “I” does again today. [On the Clock]( the Clock:]( [What Low-Wage Work Did to Me and How It Drives America Insane]( By Emily Guendelsberger I loved this book. It is an invaluable undercover account of what is really like to work in a call center, a McDonald’s franchise, or an Amazon “fulfillment center” that offers fulfillment exclusively to customers – certainly not to employees (most of whom do not actually work for Amazon). Everyone should know about this. From the PS Archive From 2016 Deaton asks whether globalization truly helps poor countries' poor more than it harms rich countries' poor. Read the [commentary](. From 2017 Deaton identifies several factors behind the stagnation of median wages and soaring incomes at the top. Read the [commentary](. [Deaths of Despair]( From Princeton University Press [Deaths of Despair and the Future of Capitalism]( By Anne Case and Angus Deaton In 2015, the authors became the first to document that suicides, drug overdoses, and alcoholic liver disease – which they christened “deaths of despair” – were driving up mortality rates in midlife, a trend that had led to three consecutive years of falling life expectancy in the United States. Deaths of Despair and the Future of Capitalism, to be published on March 17, examines the physical and social pain – the failing marriages, the unwanted or unexpected births, and the community disintegration – accompanying a problem that is getting worse. But only for some: these deaths are concentrated among those without a bachelor’s degree; the educated elite is largely exempt. Indeed, the devastation is traceable to an increasing hostile labor market for less-educated workers, who face falling wages and declining job quality, as well as to oppressively expensive health care and a lethal system of rent-seeking and lobbying in Washington, DC. Around the Web In case you missed it, here are some other places around the web where Deaton's work or ideas have appeared. During Nobel Week in 2015, Deaton answered questions about everything from what brought him to Economic Sciences to inspiring teachers to what advice he would give his 20-year-old self. Read the [interview](. In a 2017 interview with The Atlantic, Deaton discussed extreme poverty, opioid addiction, Trump voters, robots, and rent-seeking. Read the [transcript](. [Winter Sale]( Project Syndicate publishes and provides, on a not-for-profit basis, original commentary by the world's leading thinkers to more than 500 media outlets in over 150 countries. 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