Chris Johns: Despair is killing a generation in the US

Ground-breaking research by two economists, one a Nobel Prize winner, has given birth to a new and depressing phrase: “deaths from despair”.

For many decades we have become used to the fact that our lifespans have been steadily increasing. All of a sudden, in the US at least, a large cohort of people – the relatively uneducated, white working class – have started to die younger, reversing trends that have been firmly established since the end of the second World War. And they are mostly dying from drug and alcohol addiction as well as suicide. Hence the despair.

While increased longevity is obviously a good thing, there are some unpleasant side effects: pressure on health services and the demise of the defined benefit pension being just two.

Pension crisis

The pensions crisis has two main drivers: those longer lives and, relatedly, saving rates that are way too low. Those longer lives also mean more old people and more expenditure on care and chronic rather than terminal health problems.

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Actuaries and demographers have been telling us that these problems will only get worse as longevity shows no signs of ending its acceleration. At least until now.

The work of professors Angus Deaton and Anne Case has come something of a shock. The rise in deaths of despair over the past few years had largely gone unnoticed by social scientists: it is a mark of how the discipline is changing into something much more data driven that two eminent economists should discover something that more mainstream health professionals should perhaps have picked up earlier.

The research has not been without controversy. But it is clear that something very odd is happening. In commentary on their results, the professors note how everyone seems to bring their own prejudices to the results: everyone seems to know why US longevity has suddenly gone into reverse. Deaton and Case advance one or two ideas but are careful to stress that definitive answers are thin on the ground.

Personal misery

The most natural thing to do is to link deaths from despair to the current economic and political environment. Deindustrialisation and disappearance of relatively well-paid unskilled jobs must, it is often argued, lead to both personal misery and a vote for Donald Trump (and the rise of populism everywhere else). While there may be something to this, it is almost certainly too simplistic.

We simply don’t know the extent to which this is likely to be an exclusively US phenomenon. One unusual aspect of the rising US death rate is the role played by opioid addiction: until recently at least, the prescribing of prescription painkillers was, in the US, off the charts. Although showing signs of falling, it still is dangerously high.

A lot of these painkillers are essentially heroin in tablet form – and heroin that is delivered to the brain’s receptors far more efficiently – and addictively – than when injected or smoked. Why did so many prescriptions come to be written? A finger of suspicion is firmly pointed at the behaviour of certain pharmaceutical companies.

The obvious solution – stop prescribing – has had unintended consequences. Relatively scarcity of heroin-in-a-tablet has pushed many people into the black market and even scarier drugs like fentanyl – this particularly nasty opioid can be up to 100 times stronger than morphine. And all of this, of course, is linked to drug trafficking through Latin America (and Mexico in particular).

A potential explanation for the difference between the US and European experience is the ease with which these sorts of drugs are obtained. Another could be the social safety net: it is a lot stronger in Europe. When you are relatively confident about health care and pension payments, despair may be further away than when you are not. But these are tentative hypotheses only.

Misplaced optimism

More speculatively, the generation that is dying younger is the one that was raised by parents who came back from the second World War full of optimism about the future.

That optimism was for the most part fully justified. Economically at least, people’s lives got better. When asked in surveys about subjective self-assessments of how they felt about their lives, those parents were generally very positive. They raised children to believe that things would only get better. But they didn’t.

One brutal interpretation of all this misery is that it is in part a simple function of misplaced optimism: if only they had been told that things wouldn’t get better they wouldn’t have been so disappointed. At the very least, it looks like it would have helped if the despairing generation had at least finished high school.

Why didn’t things get better? This question merely raises lots of others: why has Western productivity growth (the only driver of living standards) been so poor? Does our winner-takes-all economy drive the increasing numbers of losers into the ultimate despair?

For what it is worth, my own prejudice is that it is blindingly obvious that when the few winners do leave the losers with nothing – which is what the lack of a social safety net implies – the results are not going to be pretty.

Why are the winners taking everything? Our economies are dominated by (mostly) tech and financial near-monopolies, something an older generation of economists would be amazed by: where did all our anti-monopoly legislation go? Why is executive pay so utterly out of control pretty much everywhere? It’s not about merit or managerial productivity – we know that from the results of the companies that those executives are running.

Ultimately, the demise of unskilled, unrewarding work is something to be celebrated. But the transition from mind-numbing tedium to the sunny uplands of more enlightened jobs and leisure is proving to be rather brutal.