Nobel economist Angus Deaton on a year of political earthquakes
Over trout in Princeton, the laureate says he’s glad the Clinton era is over and it isn’t only Trump voters who feel ‘excluded’
Having never lunched with a Nobel laureate before, I land early and prepared in the parking lot outside Mistral. The sleek Princeton eatery, whose chefs playfully blend local produce and global inspiration and describe themselves as “food activists”, is Angus Deaton’s favourite place to eat in town. Yet things quickly start to go awry when I find myself standing in the cold rain trying to wrestle my credit card out of a parking meter that is not just refusing to recognise it but seems to want to confiscate it. Getting increasingly wet, I am also caught in a logistical bind. The clock is ticking. Do I keep the laureate waiting or risk having to explain a parking ticket to the editor? I finally extract the card and decide to risk the fine. My boss will understand. My guest might not.
By the time I make it inside, I am a few minutes late and Deaton, winner of the Nobel Prize for economics in 2015 and optimistic defender of globalisation, is installed already at a small table on the far side of the room. I shake his hand and offer my apologies.
Deaton is gracious about my bind and offers some advice. It helps that he looks like he has been plucked from central casting for emeritus professors: requisite tweed jacket, jumper and wire-rimmed glasses; white hair just unkempt enough to give a flicker of Ivy League eccentricity. He is also wearing a blue bow tie with vivid red stars that once belonged to one of his mentors, the late Richard Stone, fellow Nobel Prizewinner and the godfather of British national accounts.
Mistral is bright and airy despite the rain outside, and filled with music, cheer and the clanging of cutlery and plates. The noise forces us — two slightly rumpled large men — to lean across the small table to hear each other. I can’t help thinking that we are also, in the parlance of 2016, two “metropolitan elites”, sipping a smooth Oregon pinot noir and pondering death, pain and Donald Trump.
The president-elect is one reason I am here, of course. At the close of a year that has upended western politics, Deaton is among those best placed to explain the populist earthquakes.
Just weeks after he won the Nobel Prize, Deaton and his wife, fellow Princeton economist Anne Case, published a paper revealing an alarming trend in US society: a surge in suicides and other “deaths of despair” among high school-educated white men had reached such an alarming level that middle-aged whites collectively had become the only demographic group in America in decades to see rising mortality. By their calculations, between 1999 and 2013 as many as 490,000 extra lives were lost as a result of the shift.
The Case/Deaton study was seized on as causal evidence for the rise of Trump and his appeal to disgruntled white voters in the American heartland. When President Obama welcomed Deaton and his fellow 2015 laureates to the White House, he spent most of a 45-minute meeting with the group interrogating the two economists about their findings. “He opened the door himself and shook my hand and I said, ‘I’d like to introduce you to my wife’. And he said ‘Professor Case needs no introduction. I’m a huge admirer of her work’,” Deaton recounts. “She just melted because we’d published the paper like the week before on the dying white people and he said, ‘We’re going to talk about your paper.’ And he’d read it down to the footnotes!”
Our waitress is full of American efficiency and the first of our food arrives quickly, a trout rillette served with pickled fennel and potato chips that Deaton has nominated as a favourite. An avid fly fisherman, he spends his summers stalking trout in Montana. “After a day’s fishing I’ll know the solution to something or have good ideas that were not accessible before,” he tells me later.
Back to Obama. “The man has a lot of class,” says Deaton. “He may not have been a very effective president. But that’s beside the point now I guess.”
In the wake of November’s US presidential election result, the quip is telling. Deaton is among those who sees Trump’s election — and the Brexit vote that shocked the UK earlier in the year — as a consequence of the arrogance of political elites.
He is scathing about the Clintons, and Hillary Clinton in particular, for their links to a broken establishment. “One of the great benefits of the election to me is that I don’t have to pretend that I like her,” he tells me at one point, even as he confesses he reluctantly voted for her.
But his bigger frustration is with what he sees as the detached and technocratic backgrounds of so many people in centrist politics nowadays.
“If you think about the first leaders of the UK’s Labour party, they were singing hymns on the train platform as they went off to work. And they were of ‘those people’,” he says. “If you think of someone like Gordon Brown, who I have immense admiration for, and Obama — and the high point of my year this year was my meeting with Obama — he’s not one of ‘those people’ any more. He’s an intellectual with progressive views who is making policy in a way that he judges is good for those people.”
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Deaton’s view is derived from his own background. Born in Edinburgh in 1945, he is the grandson of a Yorkshire coal miner, and the son of a civil engineer whose own battles to get an education drove him to push young Angus into a rigorous study routine that eventually led to a scholarship to Fettes, Scotland’s Eton, then Cambridge.
“I’ve always — and not always happily — considered myself an outsider,” Deaton tells me. “Certainly at Fettes. And then the Scots are always outsiders in England. They are always putting you in your place in one way or another and there is this pretty rigid class hierarchy.
This, he considers, “is a true sympathy that I think I have with these people who support Trump.”
Fishing in Montana has also contributed to his understanding. “You meet these people who are quite impoverished and they have a different set of values?.?.?.?Fishing guides with health problems, who are veterans and refuse to go to the [Veterans Administration hospital for free care] because they see it as a handout.”
Deaton is conscious that there is an irony to his feeling of alienation from the elite. A few days after we meet he is to be knighted by the Queen “for his services to research in economics and international affairs”, capping a remarkable year. While we lunch, Case is in New York picking up a hat to wear to Buckingham Palace.
“I’ve always shared the idea of being excluded,” he says. “Maybe I should stop feeling that. I think there’s this sense of not being recognised, which in my case is absurd and it’s just not true.”
Brexit has only amplified his feelings of detachment, however. He is against both a UK exit from the EU and Scottish independence. Yet 2016 has left him, like many Scots, reconsidering the latter. “I think the dilemma [Brexit] poses for Scotland is pretty intolerable,” he says. “If Scotland has to clean out all its universities of European citizens there are really horrible things that are going to happen.”
He has ordered a roasted pepper and broccoli rabe flatbread pizza with pine nuts, feta cheese, pickled raisins and a fried egg on top. I dig into a plate of creamy burrata served with beets, pear and hazelnuts. We toast. “So are you happy with this the way it is?” Deaton asks. I nod enthusiastically, confessing that if he has an obsession with data then I have one with burrata.
Deaton retired from his position at Princeton in the spring but he and Case are continuing to dig into the data. Since the election others have seized on the correlation between places with high white mortality rates and votes for Trump. But the link to those who report suffering from physical pain is even greater, Deaton says. He sees an epidemic of pain and a related flood of opioids into communities over the past decade as being, more than globalisation or economic dislocation, the real cause of rising mortality among middle-aged white Americans.
With Gallup’s help he has been collecting data on how many people report having felt physical pain in the past 24 hours and says the numbers are staggering in the US. What is causing that epidemic — and its links to Trump’s rise — remains unclear, he says. He seems more willing to blame pharmaceutical companies and doctors for overprescribing opioids. A surge in addiction (drug overdoses caused more deaths in the US last year than auto accidents) has, he argues, proved far more fatal than globalisation.
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Deaton’s 2013 book The Great Escape argued that the world we live in today is healthier and wealthier than it would otherwise have been, thanks to centuries of economic integration. He sees efforts to blame globalisation for woes in the US Rust Belt or Britain’s beleaguered industrial areas as a mistake.
“Globalisation for me seems to be not first-order harm and I find it very hard not to think about the billion people who have been dragged out of poverty as a result,” he says. “I don’t think that globalisation is anywhere near the threat that robots are.”
Our next course has landed. Deaton has a grilled shrimp Caesar salad placed before him while I have Weisswurst served in a hotdog bun with apple kraut.
In his book, Deaton argues there is an inextricable link between progress and inequality and his views on wealth and innovation are complicated by that. “It’s hard to think that Mark Zuckerberg is actually impoverishing anyone by getting rich with Facebook,” he tells me. “But driverless cars are another matter entirely,” with millions of truck and other drivers likely to lose jobs.
It’s hard to think Mark Zuckerberg is actually impoverishing anyone by getting rich with Facebook. But driverless cars are another matter entirely
Asking whether inequality is bad for economic growth is, Deaton says, a “simple-minded question”. Yet inequality manifested in wealthy people or corporations buying control of government is a different matter. “That surely is a catastrophe. So I have come to think that it’s the inequality that comes through rent-seeking [the use of wealth to influence politics for selfish gain] that is the crux of the matter.”
I ask him what we should make of president-elect Trump’s installation of fellow billionaires in his first cabinet?
He shrugs. “I know. But then the Obama administration was elected on that platform [of change] and tried and didn’t succeed very well. And the Clintons just seem like the opposite of the way you want to do this stuff.”
Deaton’s work on wellbeing is among his best-known and he once argued that happiness effectively peaked once a person was earning the equivalent of $75,000 a year. Would Trump be happy on $75,000 a year? Would Deaton?
Deaton points out the paper’s conclusion was actually that gains in happiness flattened out once you rose out of poverty. “And I’ve been there where your life is really, really shadowed by not knowing where the money is going to come from?.?.?.?It’s a misery.”
“I doubt that Donald Trump would be happier?.?.?.?if he was a different person. But Trump is always telling people how great his life is and about all the great things that he’s done and that’s also all about his income. And that’s also what we found. If you ask people how their lives are going, as a whole, it seems they tend to point to income,” regardless of the diminishing gains in happiness.
He pauses. “I certainly have had more income in the last year.”
What have you done with the [Nobel] prize money? I ask.
“Well, I retired from Princeton,” he says, smiling.
Our dessert arrives. Deaton has recommended what turns out to be a delicious brown butter cake with crispy slices of fried fig and lemon poppy seed ice cream.
It feels like time to ask about the future. What of all those who see — in Brexit, Trump and the rise of populism in Europe — a looming end to the postwar liberal economic order?
“Let’s hope not,” he answers. “You can certainly draw a picture of 2016 which makes it look like the 1930s, which of course is what everyone is doing.” Deaton takes the long view and is convinced of the durability of progress, partly because he is also a product of globalisation and views things more broadly.
Although he holds both US and British citizenship, he identifies most strongly as an expatriate Scot and part of a tradition of ambitious young Scots who have ventured out into the world since 1707, when the union with England opened the British colonies to them.
“It was that opening which created those opportunities, which those people seized, and prospered. That’s why it’s hard for me to think differently,” he says. In places such as India, where he has worked extensively, the gains from globalisation have also contributed to “a huge decline in social oppression and it has happened worldwide,” he says, pointing to the gains made in women’s rights and gay rights in recent decades.
In Trump — and those he has appointed to cabinet posts — Deaton actually sees a reversion to the Republican mean, rather than a revolution. A Republican’s win was something that, according to US history, was always a more likely scenario than the election of another Democratic president.
He also welcomes the shaking up of liberal institutions and expects an adjustment. “The good story is these will all be warnings to the elites that you can’t go on like this.”
As the waitress refills our sparkling water, Deaton returns one last time to “dead white people”. “Despite what I said before, economics is a big part of the story that we haven’t put our fingers on,” he offers. “My guess is that economics and the decline of unions and the sense of not being represented any more prepared the soil for this horrible upheaval. They certainly lost these jobs in manufacturing and those jobs came with unions which provided them with representation. So they are deprived of that and that makes them more susceptible to suicide and depression.”
Would The Great Escape be less optimistic if he wrote it today? “No. I don’t think so. Because I’m talking about the last 250 years.”
A few minutes later we say goodbye and I wander back to my rental car. There is a limp, wet parking ticket stuck to my windscreen, a $40 fine. I smile. I’m also drawn back to the advice Deaton offered when I first sat down and mentioned my fear of a looming ticket.
“I’m sure you can get out of it,” the Nobel laureate told me. “Just tell them the system was broken.”
