We considered using the phrase “the failure of capitalism” in our title, but opted instead for “the future of capitalism,” a future that we hope will be better.
—Anne Case and Angus Deaton, Deaths of Despair and the Future of Capitalism
In 2017, Anne Case and Angus Deaton presented the striking finding that the seemingly inexorable rise in longevity in the United States had stalled out. Their new book, Deaths of Despair and the Future of Capitalism, includes both an actuarial analysis of disturbing patterns of mortality in the United States and a political statement calling for government action to overhaul pharmaceutical regulation, take control of the health care system, and shift the balance of power in the economy away from capital and toward labor. It seems evident to the authors that their political statement follows from their actuarial analysis, but the connection between the two struck this reader as tenuous.
The Actuarial Analysis
Midlife mortality, meaning the rate at which people die in their 40s and 50s, has been declining for most populations in the world for at least the past 100 years. But Case and Deaton saw that more recently in the United States this indicator had stopped improving. Undertaking a finer analysis, they found that although midlife mortality continued to decline in other countries (even those where midlife mortality already was below that of the United States) and for blacks and Hispanics, non-Hispanic whites in the United States had a strikingly different experience.
Not only did whites not keep pace with mortality declines in other countries, mortality for them stopped falling altogether, and began to rise.
. . .We can calculate for each year how many people aged 45 to 54 died who would have been alive had late twentieth century progress continued. When we add up these numbers from 1999, the critical point where the decline began, to 2017, we get a very large total: 600,000 deaths of midlife Americans who would be alive if progress had gone on as expected.
The authors argue that one can attribute the disappointing performance to a sharp rise in death from opioids, suicide, and alcohol, along with a slowdown in progress against heart disease. They term deaths from opioids, suicide, and alcohol as “deaths of despair” collectively. Moreover, substance abuse is a factor in heart disease, which raises the possibility that some deaths from heart ailments are also linked to despair.
The next step in the authors’ analysis is to compare death rates for those with and without a college degree.
Taken as a whole, white mortality in the age group 45 to 54 has held constant since the early 1990s. But this masks the fact that for those with less than a bachelor’s degree death rates rose by 25 percent, while for those with a bachelor’s degree mortality dropped by 40 percent.
Case and Deaton are skeptical that college education per se is what accounts for this divergence. Indeed, it would be hard to argue that there is important health-related knowledge that is imparted only in college courses. Instead, Case and Deaton point out that the earnings gap has widened between those with and without a college degree, and they attribute the divergence in mortality trends to this divergence in economic prospects.
The authors find evidence of a similar divergence in other indicators, most notably mental health. They examine the incidence of severe mental distress as measured in the National Health Interview Survey.
. . . with a four-year college degree. . .the risk is only a quarter of that faced by those without a bachelor’s degree. Among young adults with a four-year degree, there has been an increase in severe mental distress, but it pales in comparison to that faced by those without a bachelor’s degree.
The Political Statement
Case and Deaton put most of the blame for the rise in deaths of despair on the pharmaceutical industry, the American health care system, and the presence in American capitalism of extraordinary ruthlessness and rent-seeking (corporations influencing the government to tilt the playing field in their direction). Their final chapter is entitled “What to Do?”
The authors write
the behavior of the pharmaceutical companies caused more deaths than would otherwise have happened. . .
. . .we believe that opioids are still being wildly overprescribed for chronic pain. The healthcare system needs to explore better options, including the wide range of alternative treatments that were used before 1999. Insurers should pay for such treatments, even if they are more expensive than prescribing a pill.
The American pharmaceutical industry is currently dysfunctional, as is healthcare more generally. OxyContin should not have been approved without consideration of the likely consequences of a large-scale release of an addictive drug into the population.
Turning to the capitalist system as a whole, the authors advocate improving the social safety net, increasing the antitrust scrutiny of company acquisitions by large firms, and raising the minimum wage. In addition, they criticize several forms of rent-seeking, although they do not have a magic political bullet to offer to overcome this problem.
And given that many deaths of despair occur among those without college degrees, the authors write:
We think that many of those who do not have a BA today could have obtained one, or could obtain one now. . . . Any policy that addresses these issues would help, although free college for everyone would be extremely expensive and would distribute most of the benefits to those who need them least.
Finally, they make four suggestions for taming corporations, two of which (reviving unions and requiring employee representation on corporate boards) they regard as unlikely to come to pass. A third recommendation—tighter regulations on outsourcing—reflects their concern that the practice is not always driven by the classic economic rationale of comparative advantage. Instead, they argue, outsourcing may be used to evade regulations that would protect workers’ rights. The authors would “ensure that outsourcing firms do not exist simply to cut benefits, or undercut wages using undocumented immigrants.”
The fourth recommendation for taming corporate power is: “Non-compete clauses could be outlawed everywhere, as is the case today in California.”
But non-compete clauses do not apply to the sort of blue-collar worker that Case and Deaton have identified as prone to deaths of despair. Without defending the practice, I regard any direct link between non-compete clauses and deaths of despair as impossible and even any indirect link as highly improbable. This political statement appears to bear no relationship to the authors’ actuarial analysis.
Admittedly, I have highlighted the most egregious example, but this disconnect seems to run throughout the book. The authors repeatedly glide by alternative explanations for deaths of despair that do not involve pharmaceutical company rapacity, systemic flaws in America’s health care system, or corporate power in general.
For example, the authors emphasize that other rich countries have not experienced a comparable rise in deaths of despair. They write:
The opioid epidemic did not happen in other countries, both because they had not destroyed their working class and because their pharmaceutical companies are better controlled and their governments are less easily influenced by corporations seeking profits.
This seems to be a powerful argument against American capitalism. But within the United States, they offer this tantalizing fact:
There is a “suicide belt” in the US that runs along the Rocky Mountains, from Arizona in the south to Alaska in the north. The six highest suicide states are Montana, Alaska, Wyoming, New Mexico, Idaho and Utah; all are among the ten states with the lowest population per square mile. The six lowest suicide states are New York, New Jersey, Massachusetts, Maryland, California and Connecticut, five of which are among the ten states with highest population per square mile; California is eleventh. . .Lack of population also means that medical help can be far away or slow to arrive, but likely more important is the fact that people are less likely to kill themselves when other people are around.
If high population density is protective against suicide, then this might explain some of the difference between mortality experience in America compared with rich countries in Europe and Asia. And one wonders whether population density also is protective against other forms of death of despair. Another difference with other countries that the authors mention is that “tobacco use in the US is a good deal lower than in many other rich countries.” But they do not connect this with differences in mortality. It is possible that for people who turn to drugs for comfort, smoking actually increases longevity relative to the alternatives of opioids or alcohol abuse.
In their haste to blame pharmaceutical companies for opioid deaths, the authors also glide past the fact that deaths from illegal opioids outnumber those from prescription drugs.
Opioids prescribed by physicians accounted for almost half of all opioid deaths in 2017, and nearly a third of the 70,237 drug overdoses that year.
It appears that death from opioids results from misuse of the drugs much more than from taking the drugs as directed. Still, Case and Deaton hold the pharmaceutical companies responsible.
The original formulation had warnings against taking it other than as directed, but those warnings, by telling you exactly what not to do, were easily reversed to give accurate instructions for how to convert the extended release pill into one giving an immediate high, or to prepare it for injection.
But if the companies are to be blamed for providing warnings, one doubts that they would be exonerated had they failed to do so. And the authors go on to say that when prescription opioids were reformulated to be more resistant to abuse, “it is possible that the reformulation actually cost lives, if users switched to relatively unsafe street drugs.”
Again, one doubts that the companies would have been applauded for not attempting to provide a safer form of the drug.
Turning to the health care system as a whole, the authors write:
The United States is the outlier in the picture; it has lower life expectancy than other countries but vastly higher expenditures per person on health.
They go on to write:
The excess cost of American healthcare goes to hospitals, to doctors, to device manufacturers, and to drug manufacturers. The trillion dollars that, from a health perspective, is waste and abuse is, from the providers’ perspective, well-earned income. Which still leaves us with two questions: what effects do these costs have on Americans’ lives, and how does the industry manage to get away with it?
Their claim is that high incomes for health care providers detract from the well-being of other Americans, and in that way the health care system contributes to deaths of despair.
But consider one specific example of high health care spending: knee replacements. Knee replacement surgery has grown exponentially in the United States, reaching 600,000 cases per year. At an average cost of close to $50,000, this amounts to $30 billion in 2018.
From the perspective of someone looking at health care spending in terms of whether or not it prolongs life, this $30 billion would represent waste. Other rich countries apparently do not undertake this procedure nearly as much.
Knee replacement is intended to improve the quality of life, not to extend life. People undergo the procedure in the hope of reducing pain, and in many cases it succeeds in doing so. It may even be the sort of alternative to opioids that should appeal to the authors.
My point in bringing up the example of knee replacements is that the issue of health care spending is quite complex. It is not just a matter of health care providers taking too much money from the rest of us.
Looking at the geographic pattern of deaths of despair, the authors find no direct link to poverty.
Whatever is the nature of the despair driving the epidemic, it is widespread and is not captured by income poverty at the state level.
Our main argument in this book is that the deaths of despair reflect a long-term and slowly unfolding loss of a way of life for the white, less-educated working class.
Later, they elaborate:
Declining wages are part of the story, but we believe that it is impossible to explain despair through declining material advantage. We believe that much more important for despair is the decline of family, community, and religion. These declines may not have happened without the decline in wages and in the quality of jobs which made traditional working-class life possible. But it was the destruction of a way of life that we see as central, not the decrease in material well-being; wages work through these factors, not directly.
So it is the non-material elements of life—family, community, and religion—that protect against despair. This raises the possibility that there are non-material causes, such as changes in social norms, that have undermined these protective institutions.
In fact, one researcher, Philip N. Cohen, has looked further into the phenomenon of deaths of despair and found that marital status is a crucial variable.
The overall rise in White mortality is limited almost exclusively to those who are not married, for men and women.
But the authors glide past this in order to provide a causal narrative that is purely materialist.
There are many different forces that are undermining working life for people with less education, but they all lead to the consequences for marriage and for community that we have documented and, ultimately, set the conditions for the rise in deaths of despair.
. . .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 would no doubt agree that the decline in marriage is an element in the increase in despair. Having children outside the marital bond creates a different lifetime experience. The parents—particularly the fathers—grow old without close relationships to children, and almost no chance of experiencing the satisfaction felt by grandparents. Instead of looking forward to the joys of a close relationship with grandchildren, single fathers are more likely to anticipate loneliness should they reach old age.
Can the decline in marriage be attributed primarily to a change in bargaining power between labor and capital? It might be more plausible that it is due to a change in the social roles of men and women. Perhaps the explanation for this is entirely non-material (the Sexual Revolution of the 1960s), but there also is a well-known economic narrative.
The technology that dominated manufacturing through much of the industrial era gave men an absolute advantage in doing work in the market, leaving women with a comparative advantage in household labor. The complementary nature of their labor made marriage attractive to both.
With the rise of the service sector, along with inventions that have lowered the cost of housework, many fewer women work in the home and instead have joined the labor force. This reduces the value to a woman of a husband’s earning power, leading to a lower rate of marriage.
This alternative narrative takes the capitalist villain out of the picture. I am not suggesting that I find this alternative narrative absolutely compelling. My point is rather to illustrate that the decline in the traditional working-class family is a phenomenon that admits to a number of plausible explanations. No one has pinned down the cause or causes, and it would be careless to imply that there is a clear and obvious solution.
The bottom line is that the authors would like to see more regulation and government expansion, particularly in the health care sector. Such policies may or may not produce desirable outcomes. But any link between those proposed remedies and the illness of social isolation is at best indirect and not well established. For that reason, their political statement strikes me as quite distinct from and not really supported by their actuarial analysis.