Shaggy Dog Story

The holidays, followed by the economics meetings, are always disorienting. As a way of regaining the horizon, I decided to read The Great Escape: Health, Wealth, and the Origins of Inequality, by Angus Deaton (Princeton University Press, 2013).

Deaton, 68, a Princeton University professor of economics, is perhaps the single most level-headed student of economic development in the world today.  He began his career as a student of Richard Stone, the Cambridge University Nobel laureate who pioneered the development of systems of national income accounts around the world.  A deeply-read and widely-traveled econometrician, an expert in the rough-and-ready measurement of consumer demand (and so poverty), Deaton was the man the World Bank chose to chair an independent review of its research activities. He served as president of the American Economic Association in 2009, and for nearly twenty years has written a semi-annual Letter from America for the Royal Economic Society.

The Great Escape is an extended meditation on the sources and consequences of inequality.  Deaton took his title from a famous film of that name, a World War II drama about the escape of an ingenious band of Allied fliers from a German prisoner of war camp. Seventy-six escaped; all but three were recaptured, and many of those were executed. But the story’s emphasis, Deaton notes, is on “man’s unquenchable desire for freedom, even under impossibly difficult circumstances.”

Not a bad way to render concrete, at least for Deaton’s generation and mine, the drama that occupies the first third of the book: the long escape from widespread infant mortality, short life expectancy and ill health that took place mostly in the years after 1750, thanks to public health measures, improved nutrition  and all manner of technological change.

Not a bad way, too, to call attention to the pathos of those who so far have been left behind in the modern world, perhaps as many as a 800 million persons in 2008 living on less than $1 a day. “The world is a healthier place now than at almost any time in the past,” Deaton writes. “People live longer, they are taller and stronger, and their children are less likely to be sick and die.” Not all of them, but most.

But of course no metaphor can do the work of measurement, so most of Deaton’s books is a series of statistical graphics interspersed with the stories of  studies behind them and their interpretation – page after page of cleanly-drawn little charts depicting  improvement of one sort or another – until the last third of the book, when the topic becomes globalization. At that point the graphics become sparse but the argument becomes powerful. “For every country with a catch-up story there has been a country with a left-behind story.”

Why?  It turns out that inequality is a two-edged sword – “helpful [for] showing others the way, or providing incentives for catching up, and sometimes unhelpful, when those who have escaped protect their positions by destroying the escape routes behind them.” The last section of the book is titled “How to Help Those Left Behind.” How?  Here’s a hint:  Deaton doesn’t think the answer has to do with “foreign aid.”

By the time I finished The Great Escape, I realized I’d chosen to wrong book to write about in a turnaround week.  The story is too rich, its conclusion too surprising to tell quickly. I’ll take another cut at it, from another direction, before long. Meanwhile, if you like, you can read Deaton’s introduction and a couple of chapter excerpts here.  Hope for better planning by EP next week!

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