Deaths of Despair and the Future of Capitalism
by Anne Case and Angus Deaton
Princeton University Press, 2020

America capitalism is mangled, and it is ugly. We find this difficult to talk about, first of all, because there is so much variation in the images capitalism elicits and in what we actually mean when we use the term; the distortions, likewise, frustrate dialogue in part because as we get more concrete their personal and emotional, social and political, and scientific components all vie for our attention.

In their new book Deaths of Despair and the Future of Capitalism Anne Case and Angus Deaton turn to the American system (this is really all they mean by capitalism) and a particularly grotesque manifestation of its disfigurement: deaths from suicide, drugs, and alcohol of middle-aged (45-54) white Americans, particularly those without a four year degree.

This is, of course, all relative. Taking an international perspective, from the late 1970s to 2000, in most wealthy countries mortality rates for this group decreased at an average rate of two percent per year. This decline continued for many of those countries, but for US white non-Hispanics, mortality not only stopped falling, it began to rise. If we look within the Unites States for this group, from 1999 to 2017, “we find the increases [in mortality rates] in all but six states, with the largest increases in death rates in West Virginia, Kentucky, Arkansas, and Mississippi, all states with education levels lower than the national average.” On racial lines, “blacks are doing worse than whites,” their mortality rates are (and have been) higher than white mortality rates. “By contrast, black mortality rates have fallen faster than white mortality rates.” And the primary reason for this more rapid decrease in death rates of blacks is that they “were not suffering the epidemic of overdoses, suicide, and alcoholism.”

There isn’t, unfortunately, really any way to cut the data and end up with a more uplifting picture, and mortality rates are not the only factor moving in retrograde. For example, they find that “as mortality rates have risen among midlife whites, indicators of health among those who are not dying are getting worse,” and they “suspect that if we were to track today’s midlife adults as they age, their pain will turn out to be much higher than the pain of today’s elderly.”

Heavy as it is, the first half of the book is when they’re at their best, and highlights their two main successes: first, they balance factors we indicated as making this kind of conversation so difficult. That is, they get the reader to see and understand the data (which you don’t appreciate until you’ve experienced it done poorly) but never lose the human component behind that data, they are never lugubrious and maintain the seriousness the subject deserves (what little humor can be found is gentle, welcome, and typically self-deprecating), and they combine academic rigor with moral force, which at times catches the reader off-guard. These aren’t eruptions of outrage at injustice, there’s something more adult about them, even when they border on anger. They impress you as stern reminders of obvious truths or the willingness to describe cruelty and injury with the strong language they deserve. Their second success, which flows out of the first, is that for the first half (less so the second) you feel like you are reading an important and necessary book.

Now, when they get to why capitalism is failing so many people the reader already knows it is primarily due to the worst part of our economy, the healthcare system: “The truth is that these horrors are happening not in spite of the American healthcare system but because of it.”

Case and Deaton recognize that healthcare is not a free market, and that the upward redistribution of wealth (what they call the Sheriff of Nottingham redistribution) comes “through manipulation of markets.” They write:

The American medical system, including the pharmaceutical industry, is nothing like a free market. The existence of moneymaking corporations does not imply competitive markets. Instead, these highly regulated corporations are largely concerned with seeking protective regulations from government and government agencies to protect their profits and limit competition that would be impossible in a free market.

Sections of their book could simply be an enumeration of government interventions, and they go as far as to write that “Certainly, as market fundamentalists argue, competitive free markets (together with antitrust enforcement) would almost certainly deliver lower prices than those we see today.”

Still, in what is the most off-putting aspect of the book, they insist that “free-market competition does not and cannot deliver socially acceptable healthcare” almost entirely on the basis of Kenneth Arrow’s famous 1963 paper “Uncertainty and the Welfare Economics of Medical Care.” Worse, they argue for an array of new government interventions and disastrously conclude that “America should follow other rich countries in providing universal insurance.”

This is just one example of how the second half of the book really does deteriorate. Despite clearly seeing market distortions they arrive at terribly interventionist conclusions, many sections are either remarkably underwhelming and unpersuasive, or downright bad, and much of this is done in a self-contradictory way (such as proving capitalism can’t provide healthcare with references to a system they’ve already admitted isn’t free-market).

In Deaths of Despair and the Future of Capitalism, Anne Case and Angus Deaton treat their subject with the seriousness it deserves, but they don’t provide the solutions it demands. They’re wrong when they write that “the problem is not that we have an unequal society but that we live in an unfair society.” The problem is that we live in an unjust society. Those looking for a principled defense of capitalism and the radical changes the American system requires will find this a deeply unsatisfying book and ought to oppose such muddle with vigor.

—David Murphy holds a Masters of Finance from the University of Minnesota.