October 8, 2014
The Great Escape:
Health, Wealth and the Origins of Inequality
Angus Deaton
Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School and Department of Economics, Princeton University
The Great Escape:
Health, Wealth and the Origins of Inequality
Angus Deaton
Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School and Department of Economics, Princeton University
Angus Deaton, Speaker
Minutes of the Fifth Meeting of the 73rd Year
The fifth meeting of the 73rd year of The Old Guard of Princeton was called to order by President Owen Leach. Julia Coale led the invocation.
The minutes of the October 1, 2014 meeting were prepared and read by Owen Leach.
Guests : George Hansen introduced Marilyn Walsh, Harold Borkan introduced David Atkin and Charles Rojer introduced Trudy Glueksberg. Attendance was 123.
Ruth Miller introduced Angus Deaton, professor of Economics and International Affairs at both the Woodrow Wilson School and the Department of Economics at Princeton University. Professor Deaton is originally from Scotland. He received his B.A. M.A. and Ph.D. from Cambridge in the UK. He is a world renowned expert on economic development, health economics and the measurement of poverty.
The topic was Professor Deaton’s latest book The Great Escape : Health, Wealth and the Origins of Inequality. The title, borrowed from the 1963 movie with Steve McQueen, is a metaphor of today’s world. The books tells a remarkable story of how, starting 250 years ago, some parts of the world began to experience sustained progress, opening gaps and setting the stage for today’s hugely unequal world. It’s the story of escaping to a better world, a world of higher life expectancy, of better education, of more wealth, while leaving many behind. The people left behind live both in the same country as those who escaped and live in other poorer countries. In other words, economic progress is an engine of inequality.
The great divergence started with the Industrial Revolution in the UK around 1750. That is when a huge gap opened between Europe and Africa, a gap that has never diminished as well as it opened a gap within the UK between the rich and the poor.
Professor Deaton reminds us that Europe was not always ahead. Admiral He from China built boats larger than football fields in the 15th century which could have been extraordinary tools of conquest and wealth creation. The Chinese emperor fearing the admiral’s power ordered the ships never to sail again. In so doing he pulled up the ladder and stopped prosperity for his subjects and himself.
Professor Deaton showed a graph depicting the high correlation between health and wealth and the progress through the ages of that correlation. While health improvements (due mainly to the elimination of childhood diseases and better sanitation) have reached the wider masses in developed countries, wealth however, has not followed the same path. Income is different from health.
The rich world is still growing, but more slowly, with the very top getting most of the increases. Instead of curing cancer or going to Washington to energize the political process, great minds are building derivatives for hedge funds. Stepping back, Professor Deaton was wondering whether this is a good allocation of resources.
Theoretically education is a pathway to mobility, yet lately the measures of mobility have declined in the US and are worse than in many other Western countries. There seems to be growing evidence that a stagnating economy as well as large inequalities are a brake to mobility. Professor Deaton reiterated his Great Escape metaphor. People with wealth and skills, those who have escaped, are pulling the ladder behind them, making it a much less competitive world.
Professor Deaton then changed subjects and talked about aid to developing countries, the most controversial part of his book. In his view foreign aid should be totally abolished to force countries to come to grips with their own problems and enact better policies. He offered a few measures to substitute for foreign aid: research on diseases such as malaria and TB, buying vaccines in bulk, doing away with agricultural subsidies in the West to allow these countries to export, stop selling weapons to dictatorships.
Professor Deaton mentioned the case of Sierra Leone, maybe the world’s poorest country where Ebola supplies are being held up at the docks. What is at stake is not the absence of money, but the absence of state capacity. By giving foreign aid we are preventing countries to develop their state capacity. Aid in summary just fuels ineptness and corruption.
Respectfully submitted
Miquelon L. Weyeneth
The minutes of the October 1, 2014 meeting were prepared and read by Owen Leach.
Guests : George Hansen introduced Marilyn Walsh, Harold Borkan introduced David Atkin and Charles Rojer introduced Trudy Glueksberg. Attendance was 123.
Ruth Miller introduced Angus Deaton, professor of Economics and International Affairs at both the Woodrow Wilson School and the Department of Economics at Princeton University. Professor Deaton is originally from Scotland. He received his B.A. M.A. and Ph.D. from Cambridge in the UK. He is a world renowned expert on economic development, health economics and the measurement of poverty.
The topic was Professor Deaton’s latest book The Great Escape : Health, Wealth and the Origins of Inequality. The title, borrowed from the 1963 movie with Steve McQueen, is a metaphor of today’s world. The books tells a remarkable story of how, starting 250 years ago, some parts of the world began to experience sustained progress, opening gaps and setting the stage for today’s hugely unequal world. It’s the story of escaping to a better world, a world of higher life expectancy, of better education, of more wealth, while leaving many behind. The people left behind live both in the same country as those who escaped and live in other poorer countries. In other words, economic progress is an engine of inequality.
The great divergence started with the Industrial Revolution in the UK around 1750. That is when a huge gap opened between Europe and Africa, a gap that has never diminished as well as it opened a gap within the UK between the rich and the poor.
Professor Deaton reminds us that Europe was not always ahead. Admiral He from China built boats larger than football fields in the 15th century which could have been extraordinary tools of conquest and wealth creation. The Chinese emperor fearing the admiral’s power ordered the ships never to sail again. In so doing he pulled up the ladder and stopped prosperity for his subjects and himself.
Professor Deaton showed a graph depicting the high correlation between health and wealth and the progress through the ages of that correlation. While health improvements (due mainly to the elimination of childhood diseases and better sanitation) have reached the wider masses in developed countries, wealth however, has not followed the same path. Income is different from health.
The rich world is still growing, but more slowly, with the very top getting most of the increases. Instead of curing cancer or going to Washington to energize the political process, great minds are building derivatives for hedge funds. Stepping back, Professor Deaton was wondering whether this is a good allocation of resources.
Theoretically education is a pathway to mobility, yet lately the measures of mobility have declined in the US and are worse than in many other Western countries. There seems to be growing evidence that a stagnating economy as well as large inequalities are a brake to mobility. Professor Deaton reiterated his Great Escape metaphor. People with wealth and skills, those who have escaped, are pulling the ladder behind them, making it a much less competitive world.
Professor Deaton then changed subjects and talked about aid to developing countries, the most controversial part of his book. In his view foreign aid should be totally abolished to force countries to come to grips with their own problems and enact better policies. He offered a few measures to substitute for foreign aid: research on diseases such as malaria and TB, buying vaccines in bulk, doing away with agricultural subsidies in the West to allow these countries to export, stop selling weapons to dictatorships.
Professor Deaton mentioned the case of Sierra Leone, maybe the world’s poorest country where Ebola supplies are being held up at the docks. What is at stake is not the absence of money, but the absence of state capacity. By giving foreign aid we are preventing countries to develop their state capacity. Aid in summary just fuels ineptness and corruption.
Respectfully submitted
Miquelon L. Weyeneth