David Leonhardt

TheGreatEscapeAngus Deaton’s ‘Great Escape’
Knowledge — which is to say education — is humanity’s most important engine of improvement. Deaton concludes, based on the data, that rising education is the most powerful cause of the recent longevity boom in most poor countries, even more powerful than high incomes.
Unfortunately, knowledge and facts are often on the defensive today. Fundamentalists of various stripes keep many countries from completing their own great escape. In the West, science still sometimes yields to dogma, on climate change, on evolution and on economic policy.

3 thoughts on “David Leonhardt

  1. shinichi Post author

    A Cockeyed Optimist

    Angus Deaton’s ‘Great Escape’

    by David Leonhardt

    http://www.nytimes.com/2013/12/22/books/review/angus-deatons-great-escape.html

    Economic nostalgia can have a strong appeal, especially following more than five years of a financial crisis and its aftermath. In the United States, people talk longingly of the mid-20th century, when the middle class was growing and upward mobility was the norm. In Europe and Japan, many hark back to the 1980s, before the euro was born and the Japanese bubble burst. Even in China and India, two of the world’s more dynamic economies, some like to celebrate a time when life did not revolve around breakneck growth.

    The biggest accomplishment of Angus Deaton’s “Great Escape” is to bring perspective to all this wistfulness. Deaton, a respected professor of economics at Princeton, does not stint on describing the world’s problems, be they income inequality in rich countries, health problems in China and the United States or H.I.V. in Africa. Large sections of the book revolve around such troubles and potential solutions. Yet Deaton’s central message is deeply positive, almost gloriously so. By the most meaningful measures — how long we live, how healthy and happy we are, how much we know — life has never been better. Just as important, it is continuing to improve.

    Deaton is surely aware that many readers will view these claims with skepticism, especially coming from someone whose discipline often seems to elevate money over basic human needs. He addresses this skepticism with both sweeping and granular descriptions of how life has improved. Life expectancy has risen a stunning 50 percent since 1900 and is still rising. Despite the resulting population explosion, the average quality of life has surged. The share of people living on less than $1 a day (in inflation-adjusted terms) has dropped to 14 percent, from 42 percent as recently as 1981. Even as inequality has surged within many countries, global inequality has very likely fallen, thanks largely to the rise of Asia. “Things are getting better,” he writes, “and hugely so.”

    Much of the most rapid change, of course, occurred long ago or — for Deaton’s readers in the United States and Europe — is happening far away. In the industrialized world, it can be easy to focus on bad news (like slow-growing wages and rising obesity) and dismiss the latest innovations (say, the newest iPhone) as materialist distractions. But this, too, would be a mistake. The pace of progress may have slowed in the West. For selected groups, on selected measures, progress may even have stalled. For most people, however, it has not stopped.

    The digital revolution has allowed people to remain in touch with friends and family who once would have grown distant. The democratization of air travel, for all its indignities, has helped, too. The greatest progress against cancer and heart disease has come in the last 20 to 30 years. And although Deaton does not emphasize it, nearly every form of discrimination has become less common. When people talk gauzily of life in postwar America, they presumably are not referring to the lives of women, African-Americans, gays, lesbians, Catholics, Jews, Mormons, Latinos, Asian-Americans or the disabled.

    Most of us can find miniature versions of this tale in our families. Deaton’s grandfather returned from World War I to a Scottish mine and rose to become a supervisor. Deaton’s father, despite not graduating from high school, became a civil engineer and lived twice as long as his own father. My own grandfather escaped the Nazis, to New York, but succumbed to cancer as a fairly young man in 1950. Had modern medicine advanced only a few decades more rapidly, my father may well have grown up with a father. In the starkest terms, most of us today have at least one family member or friend who would not be alive absent the innovations of the last several decades.

    Perhaps most impressive — and, at the same time, most worrisome — is that progress is by no means inevitable. Humanity has spent most of its history not making progress, with neither life spans nor incomes rising. “For thousands of years,” Deaton writes, “those who were lucky enough to escape death in childhood faced years of grinding poverty.”

    “The Great Escape” of Deaton’s title refers to the process that began during the Enlightenment and made progress the norm. Scientists, doctors, businessmen and government officials began to seek truth, rather than obediently accept dogma, and they began to experiment. In Immanuel Kant’s definition of the Enlightenment: “Dare to know! Have the courage to use your own understanding!” The germ theory of disease, public sanitation, the Industrial Revolution and modern democracy soon followed.

    Deaton’s writing is unfailingly accessible to the lay reader. At times, he repeats himself (he is definitely not a fan of foreign aid) or delves into technical subjects that will not interest everyone, like the calculation of exchange rates. But readers looking to learn some economics without picking up a textbook may enjoy these tangents. All in all, “The Great Escape” joins “Getting Better” — a 2011 book by Charles Kenny that concentrated on poor countries (and was more positive about foreign aid) — as one of the most succinct guides to conditions in today’s world.

    The great, unanswered question is how rapidly the progress will continue. Deaton pronounces himself cautiously optimistic. But he also acknowledges rising threats, global warming being the most obvious of them. Beyond climate change, economic growth has slowed and inequality has risen in most rich countries, leaving the middle class and poor with only modest gains. The skew is so severe in the United States that a vast majority of Americans — the bottom 99 percent, he calculates — have done worse than a vast majority of French in recent decades, despite our reputation for economic dynamism. In China, meanwhile, a growth slowdown may just be beginning, and it could bring true political tumult, including war.

    From a historical perspective, the most worrisome development may be the tendency not to heed the central lesson of the Enlightenment and, by extension, of Deaton’s Great Escape: Facts matter, especially when they conflict with dogma and preconceived notions. Pretending otherwise has consequences.

    Knowledge — which is to say education — is humanity’s most important engine of improvement. Deaton concludes, based on the data, that rising education is the most powerful cause of the recent longevity boom in most poor countries, even more powerful than high incomes. A typical resident of India is only as rich as a typical Briton in 1860, for example, but has a life expectancy more typical of a European in the mid-20th century. The spread of knowledge, about public health, medicine and diet, explains the difference.

    Unfortunately, knowledge and facts are often on the defensive today. Fundamentalists of various stripes keep many countries from completing their own great escape. In the West, science still sometimes yields to dogma, on climate change, on evolution and on economic policy. Elites on both the right and left question the value of education for the masses and oppose attempts to improve schools even as they spend countless hours and dollars pursuing the finest possible education for their own children.

    It is true that many of today’s biggest problems, including economic growth, education and climate, defy easy solutions. But the same was true, and much more so, about escaping centuries of poverty and early death. It was hard, and it involved a lot of failure along the way. The story Deaton tells — the most inspiring human story of all — should give all of us reason for optimism, so long as we are willing to listen to its moral.

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  2. shinichi Post author

    Great Escape

    Health, Wealth, and the Origins of Inequality

    by Angus Deaton

    This book explores the relationship between the material standard of living and health, both across countries and over time. Above all, Deaton is interested in the question of whether income growth contributes significantly to better health. His answer is no: saving lives in poor countries is not expensive, and there are many episodes of massive health improvements in the absence of income growth. As an alternative, he argues that the cross-sectional correlation between health and income is induced by variation in institutional quality, while over time, parallel improvements in income and health have been a result of advancing knowledge.

    **

    The world is a better place than it used to be. People are wealthier and healthier, and live longer lives. Yet the escapes from destitution by so many have left gaping inequalities between people and between nations. In The Great Escape, Angus Deaton–one of the foremost experts on economic development and on poverty–tells the remarkable story of how, starting 250 years ago, some parts of the world began to experience sustained progress, opening up gaps and setting the stage for today’s hugely unequal world. Deaton takes an in-depth look at the historical and ongoing patterns behind the health and wealth of nations, and he addresses what needs to be done to help those left behind. Deaton describes vast innovations and wrenching setbacks: the successes of antibiotics, pest control, vaccinations, and clean water on the one hand, and disastrous famines and the HIV/AIDS epidemic on the other. He examines the United States, a nation that has prospered but is today experiencing slower growth and increasing inequality. He also considers how economic growth in India and China has improved the lives of more than a billion people. Deaton argues that international aid has been ineffective and even harmful. He suggests alternative efforts–including reforming incentives to drug companies and lifting trade restrictions–that will allow the developing world to bring about its own Great Escape. Demonstrating how changes in health and living standards have transformed our lives, The Great Escape is a powerful guide to addressing the well-being of all nations.

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  3. shinichi Post author

    Angus Deaton wins Nobel Prize for economics

    by Ferdinando Giugliano

    http://www.ft.com/cms/s/0/1c2b99e4-70ce-11e5-ad6d-f4ed76f0900a.html#axzz3oREKVaP1

    Angus Deaton, a British-born economist at Princeton University, has won the Nobel Prize for economics for his pioneering work into what determines poverty and how people make their consumption decisions.

    The Royal Swedish Academy of Sciences said Mr Deaton was awarded the prize “for his analysis on consumption, poverty and welfare”.

    “[His research] shows an impressive breadth in its approaches: basic theory; statistical methods for testing theories; in-depth knowledge of the quality of existing data; and extensive work on producing new kinds of data.”

    A dual US and British citizen, Mr Deaton is the first native Briton to win the Nobel Prize in economics since Clive Granger in 2003. He joins a select list of academics who have won the SKr 8m (£630,000) prize by himself, including his predecessor, the French academic Jean Tirole.

    Mr Deaton’s work has employed innovative statistical techniques to understand what drives people’s shopping habits and how governments can better target economic development. He has spearheaded the use of more precise microeconomic data to understand what happens in an economy as a whole, questioning well-known assumptions and helping to solve apparent paradoxes on the relation between consumption and income.

    “Natural scientists are often sniffy [about the Nobel prize in economics], as they don’t regard it as scientific,” John Muellbauer, an economist at Oxford university who has worked with Mr Deaton told the FT. “This is an exception, it is evidence-based economics of the highest standard.”

    Together with Mr Muellbauer, Mr Deaton compiled a system of equations to understand how consumer decisions regarding different goods interacted. This is essential for governments planning to make policy changes such as cutting VAT for some products, as these decisions will have varying effects on different groups of consumers depending on what they buy.

    He built on work looking at the link between consumption and income by fellow Nobel laureates Franco Modigliani and Milton Friedman to understand how changes in income drive changes in consumption. He warned against using aggregate data for the whole economy to justify important policy decisions and showed how it is essential to understand what happens to different groups of consumers, depending on their age or income levels.

    “A lot of people have worked on consumption since John Maynard Keynes,” said Orazio Attanasio, an economist at University College London. “Angus Deaton is one of the few people who understands consumption behaviour deeply, both across individuals and over time.”

    Finally, he advocated the importance of building extensive data sets on consumption patterns to understand the determinants of poverty. Contrary to what was previously assumed, he showed that increasing people’s income leads to a better food intake. As a result, there was little empirical reason to orient aid programmes only towards food as opposed to fostering economic growth, as some agencies had recommended.

    “In the 1980s, research into economic development was mostly theoretical and, where it was empirical, it was based on aggregate data from national accounts. This has now changed,” said the Royal Swedish Academy of Sciences.

    “Development economics is a flourishing empirical research field based on the advanced analysis of detailed data from individual households. Deaton’s research has been an important driving force in this transformation.”

    Born in 1945 in Edinburgh, Mr Deaton earned his doctorate in economics at Cambridge university, with a thesis titled “Models of consumer demand and their application to the United Kingdom”.

    He subsequently moved to the University of Bristol and then, in 1983, to Princeton University, where he is now the Dwight D. Eisenhower Professor of International Affairs.

    In 2013, Mr Deaton published “The Great Escape”, a survey of wealth, wellbeing and inequality since the early 19th century. It was long listed for the FT’s business book of the year award. The British economist argued that the main barrier to progress in fighting poverty in the world’s poorest countries is bad government rather than a lack of resources. He also criticises global aid, arguing it can do more harm than good.

    Mr Deaton is a long-term critic of the official poverty line, which the World Bank has used to measure deprivation across the globe since 1990. Last month, the Bank raised its level to $1.90 per day from $1.25.

    In a recent interview with the Financial Times, Mr Deaton said the poverty line was misleading and accused the bank of a conflict of interest.

    “You’ve got a line that no one knows where to put it,” Mr Deaton told the FT. “I think [the World Bank] has some institutional bias towards finding more poverty rather than less.”

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