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Monday, June 07, 2021

Review: Deaths of Despair and the Future of Capitalism

 Deaths of Despair has a simple, unique thesis. The thesis is that the cost of healthcare and private health insurance has gotten so high that it has basically broken American capitalism for most people not in the top 1%. The argument goes as follows: when health insurance exceeded somewhere $12,000/year, the cost of hiring a low paid worker becomes so high that you might as well outsource all that to another company that essentially treats their workers like crap and don't provide significant benefits. This not only reduces the wages of that janitor, it also completely eliminates the path by which the mailroom person becomes the CEO of the company --- that pathway is completely blocked, and now you've permanently pushed the uneducated workers into a separate caste.

The talented kid who, for one reason or another, did not get educated to his or her ability can no longer work his or her way up from being a janitor to being a CEO, because the janitors and CEOs work for different companies and live in different worlds.25 There is a world of the more educated, and a world of the less educated; no one in the latter has hope of joining the former. Perhaps most crucially, the outsourced workers are no longer a part of the main company, they do not identify with it, and, in the evocative words of the economist Nicholas Bloom,26 they are no longer invited to the holiday party. They cannot find pride, meaning, and hope in being a part—however humble—of a great enterprise. (kindle loc 2805)

The net result is that those are the people most likely to experience pain, get prescribed addictive opoids, and then never get out of it and eventually kill themselves (either explicitly with guns or through overdose, etc)

The authors argue that the traditional Republican callout of the people caught in this trap as "lazy" and "gaming the system so they get money without working" is false:

We are sure that there are people who manipulate the system to their own benefit, but given what has been happening to pain for less educated people, and given how closely those patterns match deaths of despair, we suspect that the malingerers are relatively few. (kindle loc 1527)

That these people die means that they're crying out for help, not being lazy. The authors point out that the US is unique amongst all developed countries in having these problems:

Less educated workers live in a much more hostile world than did less educated workers of half a century ago. Much of this hostility can be seen not only in the United States but also in other rich countries. Wages and working conditions have deteriorated in several of them; they too have experienced a decline in manufacturing in favor of services, slowing rates of economic growth, and a decline in unionization. But these other countries do not face the costs of the American healthcare system, and they have much more comprehensive systems of social protection. None has seen wage stagnation for as long as has the United States. All of which could explain why we do not see epidemics of deaths of despair across the rich world. (kindle loc 4183)

The book is well argued, and contained many great points that made me highlight part after part from the book. It's well worth the time, and provides a much needed rebuttal to books such as Hillbilly Elegy,  which mostly blame the victims of poverty for being lazy. Recommended.


1 comment:

N said...

I will read this book.