Deaths of Desire: Book Review

Deaths of Despair and the Future of Capitalism (2020), Anne Case and Angus Deaton. A “downer” book stressing specific American problems (that are an epidemic here, but not in other rich countries), mainly on drug makers and other healthcare providers—a poor fit to capitalism. The focus is on the rise to epidemic level of deaths by suicide, drug overdoses, and alcohol liver disease. The increased deaths came mainly from white males without a bachelor’s degree and the degree/no degree is a major focus in their analysis—mainly done through graphs showing the increased deaths of the one group over time (also with comparisons to other groups like women, blacks and Hispanics). In addition to deaths, they show the growing gap in wages, quality of life, ill health and mental distress.

“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. Free market competition can do many things, but there are also many areas where it cannot work well, including in the provision of healthcare” (p. ix).

Introduction: Death in the Afternoon. What is the relationship between happiness and suicide, especially for middle-aged white Americans suffering more pain and poorer health? The authors looked at CDC data on deaths, which had been continuously going down in the 20th century. The CDC data showed a recent increase in drug overdoses (“accidental poisonings”), alcohol liver disease, and suicides. “A four-year degree has become the key marker of social status” (p. 3), built into a meritocracy.

Michael Yong coined the term “meritocracy” and labeled the left-behind group “populists” and elites “the hypocrisy.” [This part of the story was better handled by Steven Brill’s Tailspin.] The white non-Hispanics aged 25-64 without a college degree are 38% of the working-age population. Apparently, Blacks have been slapped down so long there was no “increasing despair.” Blacks are relatively better off than they were. According to the authors working-class whites think discrimination against whites is a bigger problem than for blacks: “equality begins to look like oppression” (p. 6). Hispanics are heterogeneous, defined only by a common language, and not analyzed in the book.

Real wages for non-degree white men dropped 13% from 1979-2017, while national income grew by 85%. Wage decline was accompanied by job decline (worse jobs). Case and Deaton also note that jobs “are the basis for rituals, customs, and routines of working-class life” (p. 8). This impacts on dignity and self-respect. Globalization and technological change are considered the major problems, where workers are replaced by foreign labor and machines; however, this seems to be primarily an American problem. Employers have the power, typically enhanced by government; the results benefit stockholders, not workers. They focus on the healthcare system as a “uniquely American calamity.” The power of drug companies to sell opioids with government protections is exhibit A. The FDA approved essentially legalized heroin. The impact is to redistribute income upward, in this case to the healthcare industry. “We will argue that the industry is a cancer at the heart of the economy, one that has widely metastasized, bringing down wages, destroying good jobs, and making it harder and harder for state and federal governments to afford what their constituents need” (p. 10).

They state that taxation is not the solution to rent-seeking, rather to stop the stealing. I disagree with this as a categorical statement; MVG thinks taxes should be higher for a multitude of purposes and reasons.

Part I: Past as Prologue.

Chapter 1: The Calm Before the Storm. Chapter 2: Things Come Apart. Age-adjusted mortality rates, 1990-2017 for whites 45-54: flat for US, declining substantially for other developed countries (p. 30); however, states with high education levels fell. Age effects versus cohort effects, with outcomes to people born about the same time (something of a cultural effect).

Chapter 3: Deaths of Despair. Drug overdose epidemic started in early 1990s after FDA approved Perdue Pharma’s OxyContin. Perdue incentivized doctors and marketed large doses when unnecessary. European countries limit OxyContin to immediately after surgery only. Mortality rates had been dropping largely because of lower heart disease deaths (lower smoking and better treatments)—this progress ended around 2010. Younger people now dying more rapidly.

Part II: The Anatomy of the Battlefield.

Chapter 4: The Lives and Deaths of the More (and Less) Educated. Case and Deaton view education as a key to understanding who and why white males (especially those 45-54) are dying (suicide, overdose, and liver disease) more rapidly. About a third had a bachelor’s degree in 2017, up from a quarter, with an earnings premium of 80%, also a lower unemployment rate about half. Many firms are outsourcing low-skilled jobs. The two groups have different tastes (restaurants, websites, TV, news, books). On a “ladder of life,” rating life from 0-10 (10 as best possible life), BS was 7.3, below 6.6.

Michael Sandel: “Winners are encouraged to consider their success their own doing, a measure of their virtue—and look down upon those less fortunate than themselves. Those who lose out may complain that the system is rigged, that the winners have cheated and manipulated their way to the top. Or they may harbor the demoralizing thought that their failure is their own doing, that they simply lack the talent and drive to succeed” (p. 54). Partly it is the belief that rewards are given for cheating, like the college entrance scandal of 2019. There is a “winner-take-all” attitude in corporations.

Health behaviors vary by education, including smoking and obesity. Deaths from despair higher in 1990 for non-BA men, rising over time to 2017 about three times. BA men stayed about the same. Women were lower than men in both groups, although non-BA women were higher and grew over time. It used to be more educated men killed themselves: Emile Durkheim 1897 study, then equally common for those born 1935-45. For those born in 1980, non-BA men four times more likely to commit suicide.

Chapter 5: Black and White Death. Blacks were the first to lose when corporations fired low-skilled workers; whites followed. The difference was when, not why. Black death rates were always higher, but also came down from 1970-2017. Blacks then and now likely to be poor, have lower BA rates, and continue to face discrimination. Blacks have lower deaths of despair than whites for both groups (age 45-54). Th use of fentanyl affected both white and black overdoses. Blacks have lower suicide rates (also true in Durkheim’s 1897 study). This suggest that underprivilege is not the driver of suicide. Blacks living in inner cities most likely to suffer job loss as corporations moved out. They faced a crack cocaine crisis in the 1980s.

Chapter 6: The Health of the Living. “Not only are people dying, but their live are becoming less worth living” (p. 71), partly because of sickness, pain, and mental distress (morbidity). CDC has Behavioral Risk Factor Surveillance System survey rating adults’ health. Poor health greater for non-BA and rising by age. The authors claim bad things happen in mid-life, as measured by Kessler Psychological Distress Scale. Scale rises to about 40, then declined for non-BA. Mental distress highest in midlife (40-60); 4-6 for BA.

Chapter 7: The Misery and Mystery of Pain. “The treatment of pain is a root of the opioid epidemic” (p. 83), big increase in midlife, reporting more pain than elderly. Pain increased despite the opioid epidemic.

Chapter 8: Suicide, Drugs, and Alcohol. Death from despair was 158,000 in 2017, 70,237 from drug overdoses, 40,100 from liver disease, the remaining 47,700 from suicides (versus 40,100 traffic fatalities). Suicides usually involve depression or other mental illness. Drugs and alcohol induce a euphoria that relieves pain temporarily.

Chapter 9: Opioids. The natural derivatives of opium poppy or synthetic; implicated in 70% of drug deaths. Heroin is three time as powerful as morphine MME 3. Oxycodone, MME 1.5, approved by FDA in 1995. Vicodin, MME 1. Fentanyl, MME 100. These are pain killers, plus produce euphoria. Each death equals 30 emergency room visits. Some 98 million adults prescribed opioids in 2015. Perdue sold $30-$50 billion in OxyContin. Sackler family received $12-$13 billion. Physicians also implicated.

About 10 million opium pills given out during the Civil War, plus millions of ounces in tinctures and powders. Veterans also received opium. Both opium and morphine were widely used after that, including children. The Harrison Narcotics Act of 1914 restricted use of opioids. Purdue reformed OxyContin to make it resistant to abuse, then drug deaths replaced by heroin, then fentanyl. Drug companies pushed their sales. Congress prevented the DEA from prosecuting over prescriptions, the FDA approved the drugs, doctors were incentivized to over prescribe, drug dealers made it worse, political powers protected the perpetrators. Other countries limit their use to post-surgeries and cancer pain. 90% of overdose deaths from non-BA. Note that drugs and alcohol widely used in Vietnam. Large shipments made to West Virginia. J&J provided most of the raw materials through Tasmanian Alkaloids.

“The American economy has shifted away from serving ordinary people and toward serving businesses, their managers, and their owners. Government and the law have been complicit” (p. 126). Drug companies still make money with drugs for treatment, like methadone. They also have subsidiaries in other countries. The medical system is not a free market. They are highly regulated, but often use government to protect their profits.

Part III: What’s the Economy Got to Do with It?

Chapter 10: False Trails: Poverty, Income, and the Great Recession. The US has millions of very poor people. BA people not much affected by Great Recession. People below the poverty line fell to a low of 11% in 2000, then a rise through the Great Recession (the second one this century). Midlife white poverty about 9% non-BA; worse for blacks and Hispanics. Alcohol liver disease and poverty correlate, but not drug overdoses. Deaths of despair do not happen in Europe, even in Greece and Spain where unemployment tripled between 2007 and 2013 (life expectancy rose). In the US deaths of despair correlated with employment rates (at a micro level).

“Until the crash, it was possible to believe that the elites knew what they were doing … that economic growth and prosperity would make up for the ugliness of the system. … After the crash … capitalism began to look more like a racket for redistributing upward than an engine of general prosperity” (p. 147).

Chapter 11: Growing Apart at Work. Ill health and deaths are part of the “catalog of misfortune for those with less education” (p. 148). From WWII to 1970 economic growth was equally distributed, increasing inequality after that and social disintegration of the white working class. Economic growth has slowed to about 1.5%. Productivity growth (1979-2018) grew 70%, hourly pay, 12%. Google employees have degrees. Support staff are outsourced. “White workers perceive black progress as an unfair usurpation of opportunities rather than as a weakening of the privileged racial position they held” (p. 166).

Chapter 12: Widening Gaps at Home. Marriage, child bearing, abortion, churches part of social capital, a network externality. Network externalities can include social media like Facebook. Churches related to politics, but

secularization hypothesis talks about reasons to turn away from religion. Basically, people need religion in more hostile environments. Cantril ladder: people place themselves from 0 to 10, with 0 the worst possible life. Highest for BA (both black and white), lower for no-BA. Scores go up with age (measured to 70). Authors view black lives as improving, but no-BA whites worsening.

Part IV. Why Is Capitalism Failing So Many? Case and Deaton view capitalism as a major cause, with focus on profit for stockholders only; growing market power used against workers and consumers. Rather than protecting all other stakeholders, government’s role has been mainly to help maximize profit: poor safety nets, importance of campaign donations and lobbying, right-wing drum beat to eliminate regulation and reduce taxes. They view healthcare system as the “leading villain.” “Horrors are happening not in spite of the American healthcare system but because of it” (p. 186): Opioid prescription deaths, lack of health insurance for millions, enormous costs. Sociologist Andrew Cherlin: “Whites did not consider their status until their whiteness premium was lessened by legislation” (p. 189); reverse discrimination.

Chapter 13: How American Healthcare Is Undermining Lives. “Healthcare is expensive everywhere … but America does this about as badly as it is possible to imagine—both absurd and oppressive” (p. 191): $10,739 per person in 2017, 18% of GDP (up from 5% in 1960). Case and Deaton called it “reverse Robin Hood.” “Manufacturers and distributors of pharmaceuticals became enormously wealthy by triggering an epidemic” (p. 192). Higher costs plus lower life expectancy (and falling). Waste is probably about a quarter of total spending. For a Gallup Poll survey, 19% of Americans said they had confidence in the health care system—89th of 130 countries surveyed. Doctors get paid about double as average doctors of OECD countries;16% of “one percenters” are doctors. Drugs are three times more expensive in the US. Private equity owns many healthcare companies.

Government pays 45% of total costs (28% fed, 17% S&L). Medicaid is a major burden on state budgets—one reason why tuition has risen dramatically (as have student loans). Business pays about 20% of costs, covering about half the workers. As healthcare costs rose, employers reduced head counts and outsourced as many jobs as possible. Kenneth Arrow: market solutions for healthcare “would be socially intolerable” (p. 207). The idea of “market-based pricing” is absurd. In 2018 healthcare industry employed 2,829 lobbyists, spending $567 million in 2018. Obamacare passed because it did not include any cost savings. Medicare cannot negotiate drug prices.

Chapter 14: Capitalism, Immigrants, Robots, and China. Another chapter on the deficiencies of capitalism, especially for opioid drugs and healthcare in general. Manufacturing employment fell from 18 million from 1970-90 to 12 million in 2019. “The problem is not globalization or innovation; the problem is policies for dealing with them” (p. 222), such as retraining. In Britain, where working class also saw no growth, government programs essentially made up the difference (“sharing the risk”).

Chapter 15: Firms, Consumers and Workers. America became the leading industrial economy during the Gilded Age of income inequality. Somewhat like now. Case and Deaton review major examples. Google went from zero on lobbying in 2006 to $21 million in 2018—number one for corporations. Google has more temps and contractors than employees. Even low-income workers often have to sign non-compete agreements. Minimum wage increases don’t seem to cause lower employment levels.

There were 11,654 registered lobbyists in Washington in 2018, spending $3.46 billion. Campaign spending was $1.3 billion the same year.

Chapter 16: What to Do? Focus on obvious injustices; e.g., making money on human suffering. That is, unfairness rather than inequality. They recommend universal healthcare and control of healthcare costs. Joan Robinson considered the paradox of patents, which allow monopoly power for some time period.