Angus Deaton, 74, and his wife Anne Case, 61, in Der Spiegel on inequality and despair, interview by Benjamin Bidder und Michael Sauga :
‘DER SPIEGEL: And it contributes to those deaths of despair, as you have called them. What is behind this phenomenon?
Case: We were puzzled by the discovery that mortality rates are no longer sinking, but accelerating in the group of middle-aged whites with low education. They are dying from drug overdoses, alcoholic liver disease and suicide - all deaths by their own hand. And they have all risen dramatically since the early 1990s.
DER SPIEGEL: Why? What about the opioid epidemic? Deaton: If despair due to the hollowing out of the white working class wasn't there, the drug epidemic would be much smaller. The despair is smoldering in society, and this created an opportunity for the pharmaceutical industry, an industry that is not appropriately regulated, which made the situation with opioids much worse. At the height of it, there were enough prescriptions for every American to have a month's supply. It was essentially legalized heroin.
DER SPIEGEL: What has caused this mass-despair in white, middle-class life? Deaton: Look at the labor market, at wages. Life-time jobs and the meaning that comes from a life like that is very important. Roles for men and women are defined by it, as is their place in the community. It's almost like Marx: Social conditions depend on the means of production. And these means of production are being brought down by globalization, by automation, by the incredible force of health care. And that's destroying communities.
DER SPIEGEL: Yet where there are losers, there should be winners as well. Who is to blame for this development? Deaton: Many people have said that there are two ways of getting rich: One way is by making things, and the other is by taking things. And one of the ways of taking things is to make the government give you special favors. Those special favors don't create anything, but they can make you rich, at the expense of everybody else.
Case: For instance, the pharma companies get a law passed that Medicare has to pay for drugs at whatever price the pharma companies choose. Or the doctors' lobby doesn't allow as many people to go to medical school, which helps to keep doctors salaries up. That's one of the reasons why doctors are the largest single occupation in the top 1 percent.
DER SPIEGEL: Would you argue that those in the top 1 percent are peculiarly prone to rent seeking? Deaton: No, but many people are in the 1 percent because of rent seeking. This mechanism is creating a lot of very wealthy people who would not be wealthy if the government hadn't given them a license to rip off the rest. We're not among the people who think of inequality as a causal force. It’s rent-seeking opportunities that create inequality.
DER SPIEGEL: How do the losers of this development react politically? Deaton: Well, many of them like Donald Trump (laughs)! Case: The election in 2016 was unique: Many people felt their voices weren't being heard either by the Republicans or the Democrats. They tended to move either toward Bernie Sanders on the left or to Donald Trump on the right. They wanted to signal that things were not well with them, that they did not see the country moving in the right direction. People did not feel like the parties in the middle were adequately serving their needs, especially the working-class people.
DER SPIEGEL: It’s a phenomenon seen throughout the West – that center-left parties are no longer champions of the working class and that their leaders are mostly intellectuals.
Deaton: In the United States, the Democratic Party gave up representing the unions and switched to being a coalition of well-educated elite on the one hand and minorities on the other. And the white working-class in the middle was just left unrepresented. In this respect, Hillary Clinton was the worst candidate you could possibly imagine. She's such a representative of that educated elite that appears to have no understanding of, nor sympathy with, ordinary working-class people.
DER SPIEGEL: She called them "deplorables."
Deaton: It revealed what she really thought of them. But those people do not see themselves as deplorable at all! There are a lot of people who think they're not represented by this educated elite, whether it's on the left or the right.
DER SPIEGEL: So the rage of Trump supporters has a rational foundation? Case: Oh, certainly! They know something is wrong, and it's easy to scapegoat in such cases. Things like: If we can just shut down immigration, then wages would improve.
DER SPIEGEL: The president himself seems to be the rent-seeker in chief. Is he actually doing anything to mitigate the pain of his base? Deaton: He - like inequality - is a consequence, not the cause. He certainly has changed attitudes towards international trade. Even Democrats have picked this up. And it's possible that the dismantling or slowing down of globalization could benefit some white, working-class voters. On the other hand, if manufacturing is being brought back to the U.S., robots are likely to be doing most of the work, not the less educated.
DER SPIEGEL: Yet Trump himself is a member of the top 1 percent. Why are those voters attracted to Trump? Case: He makes people feel that they have status, that they're being seen and heard. That's incredibly important. And if people can hold on to that and have faith in him, then even if things go against what they see as their immediate interests, they believe that in the long run, he will restore them to some position. People need hope.
DER SPIEGEL: But has he ever delivered? Case: Not in an economic sense, probably, but in terms of how they feel about themselves and their status, certainly.
Deaton: We spend a lot of time in Montana when we were writing our book and we talked to a fair number of people there. They are very Republican. The Montanans feel that a lot of the regulations they have to obey, a lot of the environmental regulations, the wildlife regulations, are being set not in their interests, but in the interests of the educated elites in California and New York. Issues like bringing the wolves back are divisive that way. Donald Trump is certainly doing something for those kinds of concerns by dismantling regulations. I'm sure he would kill all the wolves in Montana if he could.
DER SPIEGEL: Is it possible to identify the point when things started to go wrong in the U.S.? Deaton: One great question to ask is: Why doesn't America have a strong federal welfare state with health care like other European countries do? One answer is the issue of race. In the middle of the 20th century, it was the southern senators of the Democratic party who blocked any consideration of publicly funded health care. People don't like to pay for services that go to people that don't look like them, especially when they are black.’
Read the interview here.
Keep this is mind: White people don't like to pay for services that go to people that don't look like them, especially when they are black.
Many people in Europe don’t like to pay for services that go (also) to let’s say refugees, many people in the Netherlands, to name just one European country, don’t like to pay for services that go also to Moroccans.
The limits of this solidarity in the end will unravel a society, as we can see happening in the US. But this might happen in let's say France as well, where the democratic alternatives for Macron appear to extremely fragile.