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A tragedy of reverse capitalism

In an especially informative and troubling analysis, Princeton economists Anne Case and Angus Deaton (the latter a Nobel Prize recipient), state the United States has been suffering from an epidemic of “deaths of despair.” These fatalities are caused by drug overdose, alcoholic liver diseases and suicide. The increased mortality rate resulting from these deaths — starting in the mid 1990s — has been so pronounced that life expectancy at birth decreased in this country from 2015 to 2017, the first such decline since the influenza pandemic at the end of World War I in 1918.

Drug overdoses are the most prevalent deaths of despair. According to the Centers for Disease Control and Prevention, from 1999 to 2017 more than 702,000 Americans died from a drug overdose; 477,000 (68%) of those deaths involved a prescription or illegal opioid. Angus and Deaton note that in 2007 alone there were 158,000 deaths of despair, the equivalent of three fully loaded Boeing 737 jets crashing every day for a year.

The unprecedented increase in deaths of despair, the authors note, “has been almost exclusively among Americans without a four-year college degree.” Suicide rates for more and less educated Americans were “virtually identical” prior to 1945 but began to change in the post World War II years and are starkly different for those born in the latter third of the 20th century. For Americans born in 1970, the suicide rate for non-college graduates is more than twice that of college graduates. Approximately two-thirds of white non-Hispanic Americans do not have a college degree — the group most at risk of deaths of despair.

Case and Deaton state that deaths of despair are not unique to the U.S. and are present everywhere. However, most rich countries exhibit no significant upward trend. The exceptions are the English-speaking nations of Australia, Canada, Ireland and the United Kingdom, and these nations have much lower rates of increase, “nothing close” to the spike in this country.

Case and Deaton argue that a major factor in the cause of these deaths is a radically changing economy, specifically the impact of globalization, outsourcing and automation. “There has been a long-term, slow-moving undermining of the white working class in the United States.” Declining wages and a sharp decrease in good-paying jobs have undermined the basic institutions of working-class life including “marriage, churchgoing and community.”

The authors note the decline in marriage has “contributed significantly” to deaths of despair among less educated Americans as marriage rates among this group at age 40 have declined by 50% between 1980 and 2018. “With lower wages, fewer poorly educated men are considered marriageable, and this has given rise to a pattern of serial cohabitation — when individuals live with a number of partners in succession without ever getting married.” Less educated white mothers have children out of wedlock, and many fathers separate from their children in midlife and live without the benefits of a stable and supporting family life.

“These trends among the less educated,” Case and Deaton state, “declines in wages, the quality and number of jobs, marriage and community life — are central in instilling despair, spurring suicide and other self inflicted harms, such as alcohol and drug abuse.”

Case and Deaton state an important difference between the U.S. and Europe regarding deaths of despair is European nations “have a well-developed” social support system that can mitigate the worst aspects of changes in the labor market that contribute significantly to these deaths. For example, in the United Kingdom between 1994 and 2015, earnings in the bottom 10% of families grew much more slowly than earnings among the more affluent classes. However, as a consequence of the British welfare state, the growth in after-tax family income was about the same across the entire population. No system to reduce the negative effects of globalization on the less educated segment of the labor force exists in the U.S.

Another factor that contributes to the “hollowing out” (reduction of well-paying middle-class jobs, especially manufacturing jobs) in the U.S. is the tremendous cost of health care. Whereas Switzerland spends 12% of its GDP on health care, the U.S. spends 18% of GDP for a health care system that leaves 27 million people uninsured and millions more under insured. Case and Deaton argue that lowering our health care cost to 12% of GDP would save over a trillion dollars a year, money that could be spent to improve education (and retrain less educated workers who lost good-paying jobs), invested in research and development, and implementing nationwide job-creating projects repairing roads, bridges, railways and airports.

The opioid crisis in this country (the major contributor to deaths of despair) is largely a factor of the government turning a blind eye toward the pharmaceutical and health industries. Case and Deaton note that “The U.S., unlike other rich countries, exercises no control over the prices of drugs or procedures and its health-care sector, including doctors, device manufacturers, hospitals and pharmaceutical companies.” Wielding immense political influence, the health-care industry has five lobbyists for every member of Congress.

Drug manufacturers took advantage of the growing desperation of the less educated class pushing opioid painkillers such as OxyContin — a legal drug that is essentially FDA-approved heroin — for every malady, be it major or minor. Purdue Pharma aggressively marketed OxyContin directly to physicians as a non-addictive pain medication. Between 1999 and 2018 more than 200,000 Americans died from prescription overdoses simply by following their doctors’ orders.

Case and Deaton note that when the Drug Enforcement Administration tried to bring a halt to the highly lucrative distribution of opioids, members of Congress successfully “brought pressure to remove the agents in charge.” In 2016, Congress passed a bill making effective government control of opioids more difficult.

According to court documents, the Sackler family, owners of the privately held Purdue Pharma, made between $12 billion and $13 billion in profits from the sale of OxyContin since 1995. “Europe, unlike the United States,” Case and Deaton state, “does not allow pharmaceutical companies to kill people for money.”

As a consequence of lax government control and corporate greed, the volume of opioid pills distributed by pharmaceutical companies climbed as the epidemic surged with more than 100 BILLION pills distributed from 2005 to 2014. Distribution rates were especially high in West Virginia, southern Virginia and northeastern Kentucky, with some counties exceeding 150 pills per person per year. It’s hardly surprising these locales had the highest opioid death rates.

Case and Deaton state the U.S. needs a public strategy to raise wages of non-college-educated workers and a more comprehensive social safety net. “Capitalism needs to serve people and not have people serve it.”

P.S.: The Washington Post reports that nearly 4 million adult workers without college degrees have not found work again after losing their jobs during the pandemic. Just under 200,000 adult workers with a bachelor’s degree or higher are in that same situation. Will deaths of despair increase for less educated Americans?

George J. Bryjak lives in Bloomingdale and is retired after 24 years of teaching sociology at the University of San Diego.

Sources:

Case, A and A. Deaton (Sept. 12, 2017) “The media gets the opioid crisis wrong. Here is the truth,” The Washington Post, www.washingtonpost.com

Case, A. and A. Deaton, (March/April 2020) “The Epidemic of Despair,” Foreign Affairs

“Drilling into the DEA’s pain pill database” (2020) The Washington Post, www.washingtonpost.com

Hopkins, J. and A. Scurria (Oct. 4, 2019) “Sacklers received as much as $13 billion in profits from Purdue Pharm,” The Wall Street Journal, www.wsj.com

Long, H. (April 22, 2021) “Many left behind in this recovery have something in common: No college degree,” The Washington Post, www.washingtonpost.com

O’Connor. K (2021) “Ending the Opioid Health Crisis in Five Years.” Harvard Public Health Review (30) www.harvardpublichealthreview.org

“Opioid epidemic by state” (2021) World Population Review, www.worldpopulationreview.org

“U.S. opioid prescribing rate maps,” (2019) Centers for Disease Control, www.cdc.gov

Warren, K. and T. Rogers (March 23, 2020) “The family behind the OxyContin pocketed $10.7 billion from Purdue Pharma. Meet the Sacklers, who built their $13 billion fortune off the controversial opioid,” Business Insider, www.businessinsider.com

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