America’s ‘killer capitalism’

After 1970, the engine of American progress began to falter. From the early 1980s, economic growth slowed, and what was once a fairly equitable distribution of benefits increasingly became top-heavy. The important work of economists Thomas Piketty and Emmanuel Saez with the US tax record shows just how well those at the top have done.

While many commentators with alternative calculations have questioned the extent of rising income inequality, none have succeeded in quashing the trend. Others argue that this is not a cause for concern, provided that everyone is prosperous. For them, proof of decline in physical measures poses a more serious challenge. Among men without college degrees, real (inflation-adjusted) median wages have declined for more than 50 years – experiencing disruptions during economic booms but never recovering well enough to return to previous peaks. Even at the height of the boom just before Covid-19, average wages were lower than at any point in the 1980s.

Critics argue that these data exclude various worker benefits such as employer-provided health insurance. Yet, the extraordinary increase in the cost of these benefits is itself contributing to a drop in wages and the destruction of jobs for the less skilled. Incorporating these benefits into the analysis is tantamount to duping someone and charging the price for the attack.

Our findings on the “death of despair” make another dent in the argument that working Americans are thriving despite physical evidence to the contrary. It is much easier to measure death than actual income. In 1992, life expectancy at age 25 was two-and-a-half years longer for men and women without college degrees. By 2019, the gap had widened to six and a half years; From 2010 to 2018, life expectancy fell by 25 every year for those without a degree.

Accidental drug overdoses are an important part of the story. Over half the increase in deaths from depression since the late 1980s was from overdoses. In the late 1980s, about 60,000 people died each year in the US from drugs, alcohol, and suicide. Just before the pandemic, the annual death toll of despair was running at 170,000 – an increase of more than 100,000 per year – with overdose deaths accounting for the largest share, but less than half of the total. With overdoses increasing by a little over half, it is probably true that America is suffering from an epidemic of drug overdoses, not despair. This is something that societies throughout history have had to endure, and will undoubtedly have to endure again.

The distinction matters. If the deaths are “justifiable” drug overdoses, they can be pinned on some unscrupulous and under-regulated drug companies and distributors. There is nothing fundamentally wrong with society, and there is certainly no sign of a deep flaw in the way contemporary American capitalism works. doing work. Depression, by contrast, is a disease of working-class Americans – people without bachelor’s degrees – whose job opportunities, marriages and social and economic institutions have weakened over the past half century. The story of the drug epidemic is one of them. Some Bad Apples The tale of despair is one of a society not serving the vast majority of its people, effectively sending them to second-class citizenship.

Several signs point to an epidemic of despair among Americans without college degrees. Measures of poor mental health for this group increase from year to year. They have experienced a widely documented increase in pain – a problem so severe among later-born peers that middle-aged Americans are now reporting more pain than the elderly, something that is true in Europe. Not there.

Drug epidemics are not like the plagues of locusts or earthquakes. They afflict societies that are already in crisis. Consider China in the 1840s. The looting of Scottish opium merchants William Jardine and James Matheson cannot be excused, nor can British Prime Minister Lord Melbourne’s decision to send them to the Navy to support them. But there is little doubt that the advanced disintegration of the Qing Empire was a precondition for the opioid epidemic that followed.

In the US case, the most significant previous opioid epidemic occurred during and after the Civil War. And on a smaller scale, there was widespread use of opium and heroin by American troops in Vietnam. Most of these addictions disappeared when soldiers returned to live well-supported, meaningful lives at home, bored out of their minds half the world. The fact that the current boom in drug deaths is almost entirely concentrated without college degrees tells us that, as in 19th-century China, despair and disinhibition were the preconditions that gave dealers that basis. Gave what they needed.

Perhaps most telling is what has happened to the suicide rate. While the fin de sicle French sociologist mile Durkheim thought that educated people were more likely to kill themselves, suicide rates in America today are higher among those without a bachelor’s degree.

In contrast, the world suicide rate has been falling for the past two decades, including in the European Union and other high-income countries. Even Japan and Finland, long rich countries plagued by suicide, now have rates lower than the US. There has also been a particularly sharp decline in Russia – with rates cut in half since 2000 – and in other countries of the former Soviet Union. While Russia still has a higher suicide rate than the US, the US resembles a suicide hot spot in the East.

Rising suicide rates are hardly a sign of a thriving capitalist democracy. There is nothing wrong with capitalism in principle, but there is a lot wrong with the version prevalent in America today. ©2021/Project Syndicate (www.project-syndicate.org)

Anne Case and Angus Deaton are, respectively, Professor Emeritus of Economics at Princeton University; and 2015 Nobel Laureate in Economics and Professor Emeritus of Economics at the Princeton School of Public and International Affairs.