john afternoon my name is massimo gadji from the italian daily career de la sierra i'm normally based in the united states for my activity as a journalist and i'm very happy to be able to have this grand finale which is all american for the festival of economics 2020. why am i saying so because we will address issues and problems related to the involution of the social and economic system in the united states which has been underway for years if not decades on the eve of the elections we read and know about a poor management of the coveted crisis with major delays in the united states and going beyond these contingent situations we also have a social involution issue that has involved several sectors including the health system and health conditions of u.s citizens this is a topic that has been discussed a lot and we have written about this and we also know that there has been a decline in the life expectancy between 2015 and 18 in the united states we know that thanks to the advance of hygiene and food weed and health care life expectancy has improved basically in all advanced countries while there is a reversed trend in the united states so much so that in the three years i mentioned life expectancy decreased for a number of sectors of u.s society we wrote about it i wrote about it myself in the corriere de la sera and we attributed this to an abuse in painkillers and opioids and yet there is more to that and case from princeton university together with angus titan nobel prize winner they investigated this element much more in depth and and case we'll talk about this today with us here and then angus deaton will address the same issue um as the closing event of the festival together with tito boyeri this is a broad phenomenon there are several causes the two authors made a complete and thorough analysis and anne will now help us understand what happened in u.s society and capitalism so she will help us understand why we reach that situation and then angus didn't will draw conclusions on the meaning of all days for the post-covered phase or the uh phase during the covet pandemic so without further ado i would like to give the floor to professor case thank you so much for being here and investigated extensively not only economics but also social issues and health care related issues which is a complex universe in the united states then we will have a number of questions which come from the digital viewers and they will read the questions you have the floor professor case thank you thank you so much for the invitation to be here uh we are i know i speak for angus as well when i say that we were really disappointed not to be there in person um in the spring we had our tickets we were we were ready to go but it is so kind of you to invite us to participate in in this in this part of the zoo festival i am going to talk to you today about uh work that we've written up in our new book deaths of despair and the future of capitalism which was published this spring by princeton university press and it draws on work that angus and i have been doing now for over five years and i want to acknowledge that our work has been funded through the national institutes of health for which we're very grateful um in this i just want to say before we start though that even before the arrival of covet 19 the lives of americans without a four-year college degree which we call a bachelor's degree in the u.s their lives were coming apart and that's two-thirds of the population in the u.s between the ages of 25 and 64. and in this book what we do is document what that means in terms of despair and excess mortality and then we dig further and try to discuss the long-run forces behind it um i want to start though by uh showing you what we would have expected to happen in the new century in the 21st century based on what happened in the 20th century so the picture you're looking at now are mortality rates for white americans aged 45 to 54 over the course of the entire 20th century and the rates that i show you today will be mortality rates which are deaths per 100 000 people at risk so you can just think of this as a falling risk of dying over the course of the 20th century you see the 1918 flu pandemic which is the last time we saw something as big as what's hitting us now we got used to the idea that this would continue that progress was great that both medical advance and behavioral change people stop smoking um very effective antihypertensives that are used to control blood pressure came on the on the scene and that we should continue to see mortality rates fall and in the rich countries of europe and in the other english-speaking countries that's what we saw again we're looking now just at 45 to 54 year olds but you could paint a similar picture for younger groups as well here's italy in blue falling at two percent a year which is what all the other rich countries are falling at but in the u.s the u.s decided to leave the herd so for whites in the u.s which is the thick red line here that looked a lot like germany um until the mid-1990s mortality rates began to rise and at best they're they're flat but they're they're much higher than what we think should be the case um here in the late 20 teens hispanics in the u.s have done very well they look like brits and african americans whose rates are still higher than whites but over this period their mortality rates were falling even faster than the rates that you see here for the european countries their rates were falling at 2.6 a year so one of these groups the white non-hispanics look different from the others and that's the group that we decided to go off and and dig into now is this um a little thing or a big thing that this happened well as massimo has already mentioned life expectancy in the u.s fell for three years in a row which hadn't happened since that 1918 flu epidemic and the decline was driven not by the elderly but primarily by what was happening to mortality uh to people in prime age or midlife people say age 25 to 64. now some of this we found was due to the fact that um we stopped in the u.s making progress against heart disease it's not entirely clear yet why that's the case but our mortality decline from heart disease slowed dramatically after the new century began but three causes of death actually started to rise and those we found were drug overdose suicide and alcoholic liver disease and the pictures i'm showing you now which are for one age group 50 to 54 year olds i've divided the picture into people with less than a college degree and people with a college degree or more and you can see that the dramatic increase has taken place for people with less than a four-year degree and in the book what we document is that that college attainment is a very clear dividing line not only for mortality but also for a lot of social dysfunction for um uh people stopping getting married in the u.s which is much more important in the u.s than it is in many european countries out of bloodline child bearing increasing um reports of pain reports of worse mental health all happening to people with less than a college degree it's also the case though that education is on the death records which allows us to look at the pictures in this way the death records in the u.s don't have income they don't have wealth they don't have mental health so we started with education and it did turn out to be a very important dividing line i should also mention that the fraction of adults with a bachelor's degree has changed very little since the birth cohort of 1945 so that it's not as if the group getting a bachelor's degree is becoming much more select or much less select over time now this picture that i just showed you is for people aged 50 to 54 but we we can paint the same picture for every five-year age group from p for people aged 25 to 29 60 to 64. we were hoping when we started this work that perhaps when people got to retirement age in the us and received their pension their social security and medical care that was guaranteed through medicare that maybe this would turn around but unfortunately what we're seeing in the newly elderly is that people are bringing these dysfunctions with them now there were 158 000 deaths in the us in 2008 2018 from drugs from suicide and alcoholic liver disease that's up from 65 000 deaths in 1995. now fifty 108 thousand deaths is less than the number of people who have died in the us currently from covid but this is happening now year in and year out and there's no reason to expect that once there's a vaccine for covid or effective treatments for covid that somehow magically that this epidemic is going to disappear we still don't see no reason to believe that that will happen there's no vaccine for drug addiction or alcohol addiction or for suicide we tend to put these together deaths from these three causes in part because they're all deaths from one of one's own hand one way or another and they all show a great deal of despair and we came up with this shorthand deaths of despair as just a shorthand for those three causes of death but that seemed to um touch a nerve in and the press picked it up and it became um sort of something that we see in the press quite a lot now for these three causes of death um instead of looking at a particular age group what we found doing this work is that it's more useful to look at it by a birth cohort so looking at all the people born in a particular year like 1945 these are all the deaths of people born in 1945 which we can observe from their mid-50s to their um early 70s and you can see that the risk of dying from drugs alcohol suicide is pretty flat it doesn't change much with age but for the people born five years later in 1950 the entire curve has jumped up and people are at higher risk at each age of dying from one of these causes and the people born in 1955 a higher risk still and 1960 and 1965 so this is not a problem that we see going away that somehow this was a problem of the baby boomers of the people born in the the large population boom following the second world war we see this actually um in all uh birth cohorts that follow we could do this separately for drugs separately for suicide separately for alcoholic liver disease and we see this picture emerge now these are for people without a bachelor's degree if you compare them to people with a bachelor's degree people who have gone to college for four years they look like they belong in different universes there has been a slight increase for people with a four-year college degree and especially in these younger cohorts but it's nothing like what we see for people without a ba that led us to look at durkheim and his great tome on suicide that was published in 1897 where he talked about suicide as being the result of a lack of social integration that people lose the connectivity uh with with people around them or too much social regulation that people are too restricted in what they can do but he he posited that suicide is more likely at times of great upheaval and that's what we see ourselves in currently in the u.s now what do we know about these people who are dying we know that this phenomenon is geographically widespread that in the u.s we have 50 states and in every state there was there were increases in all three causes of death separately between 2000 and 2018. so this is not one particular part of the country it's not just rural areas it's rural areas it's urban areas it's suburban areas and it's happening to men and women which is something that sometimes headline writers overlook they will write about white men dying but in part i think it's because they can't imagine that women would kill themselves in these ways and if you go far back and back far enough women really didn't kill themselves very much in these ways but for women women without a four-year college degree that has changed and the lines the increases for men and women between 2000 and 2017 were almost identical um so it is a phenomenon that's hitting all states it's hitting men and women it's hitting rural areas and urban areas um i wanted to ask you though can you find the financial crisis of 2008 in this picture because what we see when we look at this picture is that suicides and drug overdose and death from alcohol were rising before the great recession during the great recession and after the great recession so it's very hard to pin what's happened to current economic conditions we think it's something that's much older and so that's where we went to dig um i will just say briefly this in the book we cover this in some detail that underneath these deaths what we find is increasing reports of pain and poor mental health but again only for people without a college degree now reports of pain and reports of poor mental health are um easy to dismiss because they're self-reported that's the only way we know how to measure pain is what someone tells us it is they're easy to dismiss on their own but when you combine those reports with this increase in mortality they fit into a larger picture now what do we think is at the root of this well at the root of this we think that the long-term labor market decline for less skilled workers is one of the root causes not necessarily because people's incomes spell although that is perhaps one of the catalysts for what happened but because of the fact that without a good job a person loses their sense of community we find that in the us that people without a bachelor's degree stopped getting married um that that they uh our friends in sociology had been telling us that a couple will move in together they'll cohabit and cohabitation in the u.s is way up but they don't get married those cohabitations in europe tend to be very stable but those cohabitations in the us are very fragile so people split apart they'll re-partner they'll have a child they'll split apart they may have another partner they may have another child but what they find then is that home life is very fragile work life is very fragile and without a good job a lot of people have a loss of meaning and a loss of status in their lives it's also the case which we document in the book that this particular group people without a bachelor's degree lost their political representation in washington dc that labor no longer has a voice with which it can stand up to the owners of capital if you look at what happened to wages now this is for men aged 25 to 54 between 1979 and 2019 what you find is that for this group without a college degree there's been this long term decline in real wages in the last couple of years there was real celebration of the fact that wages were starting to rise again for this group but they're nowhere near whether where they had been in 2000 and that's nowhere near where they had been in 1990 much less 1980 and at the same time men without a college degree have seen a long-term decline in attachment to the labor force so that the red lines here show you when recessions hit and men would lose their jobs during recessions and then they would slowly regain them again but never to the level that they had been before the last recession hit so there's been this ratcheting downward in attachment to the labor market there's little wage change within a job so the laws of wages and lower labor force participation come from losing jobs and then replacing them or not but replacing them with worse jobs often jobs that we would call outsourced for transportation for security for food services that once belonged to large companies but now those companies hire in that work from a cleaning company or a food service company and those outsource jobs there's a lot less commitment but between the employer and the employee those jobs have less meaning and it's harder to see them as part of a good life and workers low-skilled workers are less likely to see themselves belonging to an enterprise in which they take pride as i said this is we think not necessarily about the loss of wages as much as it's about what that brings with it that then puts people at risk of suicide fragile home life fragile work life loss of community and in the book we also talk about the fact that this in some respects looks at like what happened in the african-american community in the u.s in the late 1960s and 1970s when employment left the big cities and with the with with with a big industry leaving the the cities um marriage rates declined out of wedlock child bearing went up and it was the case that there was a crack epidemic another drug epidemic so that looks a little bit like a loss of marriage loss increases in out of wedlock child bearing and then the opioid crisis coming in on top of it obviously it's not a perfect parallel whites are not discriminated against covertly or overtly the way that blacks are but we think that this is the wheel coming around again and this time it's coming for less skilled whites now uh partly of course this is due to globalization and automation but those have happened in other rich countries too and in other rich countries we don't see the same increases in deaths of despair that we see in the u.s so what's different about the u.s well part of it is that the u.s allowed there to be an opioid explosion in which any doctor with a prescription pad could write out a prescription for what is essentially heroin in pill form the right the arrival of oxycontin in 1996 certainly made everything worse but we argue in the book that drug and alcohol and suicide mortality rates had started rising even before the arrival of this very heavy-duty opioid but the crisis the opioid crisis certainly made it much worse but we think that the opioids landed on ground that was very fertile for abuse people wanted some way to soothe themselves to soothe the beast and opioids were a very cheap way of doing that when one could get a prescription from a doctor or buy some on the street at very low cost pharma the big pharmaceutical companies targeted areas in the u.s that they thought would have high demand they sent marketers out to market this heroin in pill form and it was disastrous what else is different about the us we would argue that the health care system in the u.s has a lot to answer for the u.s has the most expensive health care in the world but measured in many different ways the us has the worst health and the rich world we are our life expectancy in the u.s is lower than any of the rich countries of europe or any of the english-speaking countries and we would we argue in the book that life expectancy fell in the u.s not in spite of what we spent on health care but because of what we spend on health care and i will come back to that in just a minute but i wanted to show you a comparison of the us and other rich countries in terms of life expectancy and spending on health care so if you look starting with the uk from 1970 up through 2015 and you graph life expectancy on the y-axis against what they're spending on health care per capita on the x-axis you can see that health care spending went up life expectancy went up as well if you add australia to the picture they're in the very much the same neighborhood as the uk canada is a little more expensive but their life expectancy has risen very much like what happened in australia france looks a lot like these other countries as well if you had the swiss the swiss have the second most expensive health care system but they also have very good results in terms of life expectancy now if you add the us to this picture what you find is that we were we had more expensive health care in the 1970s and we had poor results even then if you add what happened in the 1980s you can see the health expenditure went up dramatically with less results in terms of improvement and life expectancy and then this is where we are in 2015. so it's a stunning uh difference between what other rich countries spend and it's not as if we can argue well the us spends more but our results are better no the us spends more and our results are worse um how how much do we spend that we shouldn't have to spend on health care you can do back-of-the-envelope calculations and we just took the swiss as an example they spend a little more than 12 percent of gdp on health care the u.s spends almost 18 in 2018 on health care that difference of 5.4 is more than a trillion dollars a year more than 8 300 a household and that's just the excess spending that's not the spending that's just what we think is the waste in the system and it's half again as much as the u.s spends on the entire military that has to come from somewhere and it comes from wages or profits or taxes in the us being one of the only countries in the world that ties health insurance to employers which is a crazy system as we've now seen with the covet epidemic when tens of millions of people lost their jobs and some fraction of those tens of millions of people lost their health care and have been unable to replace it in some other way people like to think that their employer-provided health care is a gift but it's not a gift it's being deducted in part or in whole from their wages so we think that one of the reasons for this long-term decline in wages is the increases in cost of health care in the u.s and many firms who face enormous health care premiums which are basically identical for workers whether they're a janitor or whether they're a ceo a family policy is going to cost them their share of a 21 000 a year policy and they're going to decide to outsource jobs as a result of that we think that financing health care in this way just took a wrecking ball to the low skilled labor market in the u.s now we don't want to stop globalization and automation necessarily we want to have a discussion about that but we as economists we think that there's a lot of good that comes from both of those things but fixing the health care system in the u.s would be something that we could do in the u.s that is going to help to protect low-skilled workers it's also the case that u.s state governments have to pay their share of a providing medical care to poor people in their states but as their as that cost is going up and up and up the u.s state governments have less money to spend on public universities to help bring up the number of people who have a way to go to college that's affordable infrastructure is crumbling it's it's really a disaster for the u.s so what do we think needs to be done well in the book we call it the future of capitalism we don't call it the failure of capitalism because we think that there are many things that we could do to help bring capitalism back up onto the rails and make it fairer we think healthcare reform is central to this given it's an injury that we're inflicting on ourselves and as i think angus will talk about uh in the next hour um we think that possibly the covet crisis may give us an opportunity for real change um that said there are five healthcare lobbyists for every member of congress in the u.s they're very powerful they have a lot of money this is not going to be easy um but in general it we we we go to the old adage that if you're not at the table you're on the menu and we think that a lot of less skilled americans are currently on the menu and something must be done so massimo i will leave it at that and come back to yes thank you if i can thank you and and if you don't mind i would like to ask you a few questions coming from the audience and also from me um the first one is on a queen so again thank you very much and i will now ask you a number of questions that come from the audience and i will ask my questions as well the first question is about the deep roots of the phenomenon you have already talked about this in your speech but in addition to the strictly economic ones increasing inequality and poverty and the health care routes and reasons and you mentioned also the loss of status related to the fact of losing a job so in addition to this we also need consider the fact that we have a buffers in our society welfare buffers which are related to other aspects of course if you have an interesting job so you are happy with that and your family is a source of happiness and the activity of the community is very important so how come that these mechanisms did not work in the united states this is the first question and that is a very good and very deep in question u.s i think that there's a mindset that's quite different um rather than us being all one community in the us sort of each of us says individuals works against us when it comes to solving these sorts of problems that we think that a lot of people think well you had a chance to go to college you chose not to so you're on your own um that it's really it's not our responsibility to take care of you i take care of me and my family you take care of you and your family and in the us we like it that way which does not help us when through globalization or automation large numbers of people need retraining need to find a skill set that will help them to support themselves and their families and they're just not there and the idea also that one could bankrupt oneself if one gets sick and knowing that risk is always there is a horrible thing to inflict on people yet the us does it great thank you the second question comes from me in this phenomenon which is explained very well in the book and it is the fact that these additional deaths due to suicide drug abuse and so on and so forth they caused an additional number in deaths in 2015-17 which is higher than the death toll during the world war so uh it is incredible and in your book you also tell that in the mindset of americans a situation arised arose whether it is the sheriff of nottingham that decides how to distribute income so it is an overturning in social equity as we consider it and in this alteration of capitalism what phenomena impacted is it the politics that has involved and has changed massively or is it the anti-trust legislation that had an impact so much so that new monopolies came into being in the sector of technology and pharmaceutics and so monopolies and oligopolies and also their regulation over the course of the years might have entailed that this type of phenomenon was not stopped because pharmaceutical industry abuses have been known for quite a long time thank you that's there's a lot in what you just said so let me see if i can remember all of the things i want to say uh now one is that uh yes the this crisis which is killing a hundred and fifty eight thousand people in 2017 and again in 2018 was is almost invisible because it's happening to people without a college degree so it was happen it's happening under the radar screen whereas something like covid every day we see what the new numbers look like and we see how high the mortality rate has has become but the idea that we have something where it's equivalent to 3 7 37 falling out of the sky every day and no one was talking about it is pretty stunning now why why sheriff of nottingham well you know in part when it comes to health care what happens is we do not have any a way to control costs for health care in the us that the the healthcare industry is powerful enough that it is able to sidestep any controls on what what is called what drugs costs right or devices for hips or our knees or for hospitals and part of what's happened is that the antitrust regulators have fallen asleep when it comes to things like mergers of hospitals in the u.s at one point there were a very large number of competitive hospitals in new york city but they've all been eaten up by just a couple of groups that now can charge much higher prices there's been very good recent work that actually actually documents that when those mergers take place instead of prices falling because of synergies prices go up because there's less competition and so in washington they've allowed that to happen in the healthcare industry more broadly we think that rent seeking so that which would be basically people going to washington looking for legislation that's going to protect their business rent seeking is a bit out of control and the people both on the political left and on the political right should agree that rent seeking is a bad idea that is anti-competition so that we we want to um find a way to see the people responsible for antitrust to do their jobs and stop the kinds of barriers that are being put up when it comes to the large tech firms the jury is still out on um what how one um thinks about the platforms that they've built right but one thing we know for sure is that these large tech companies do not employ employ very many people and they certainly do not employ very many people with low skills so part of what's happened as well is that they've become a larger part of the economy which mean in in a part of the space where low-skilled people need not apply and that is something also we're going to have to at least focus on and think about what we want to do with it thank you ann a very final question coming from the audience and i'm sure that you will be able to answer in a very concise way well there is a colleague who has written as follows nicolas christos new york times when commenting the fact that quality of life now ranks 28th so the u.s ranks 28th well he said that he went back to oregon after many many years and he went back to that village in oregon to discover that his school high school classroom well one-fourth of them have died committing suicide exactly for the reasons that you said and so the final question which comes from the audience a question that says now kovid do you think that kovid can change these dynamics well i think that i remember that this opioid epidemics that killed a lot of whites well now we are at a in a situation where kovid is uh killing people is also in other classes of people so do you have a comment about that yes um uh so i hear a couple of questions here uh we think that nicholas kustoff and cheryl wu dunn's book tightrope is on talks about what we talk about but on a much more human scale and they tell the very sad stories of what has happened to people without the skill set that's needed in order to build a life that can support marriage and community so we think that's a terrific book as well i think i heard a little bit about covet and i just wanted to say that given how powerful the healthcare industry is in the u.s i was not very optimistic about real change taking place but with this uh covet epidemic there are going to be um tens of thousands if not a million people who have health care bills they cannot pay and suddenly health care reform is going to be something that's not just taking place way out in and on the left in the us but people in the middle of the distribution are suddenly going to be very interested in health care reform and perhaps that will give us a way into this and think about serious reform for it but the final thing which i heard you say and i i didn't mention only for lack of time was that when we first started doing this work mortality rates from drugs and alcohol for african americans were falling very nicely in fact their mortality rates were lower than rates for whites and so it made this problem look like maybe we should focus on whites because everyone else looks like they're doing happily what we would hope would happen lower deaths from alcohol and drugs and african americans have lower much lower suicide rates have always had much lower suicide rates than whites but in 2013 a new drug entered the market a street drug a street version of a very powerful painkiller called fentanyl and fentanyl which only you'll only need a little bit of to kill yourself you can mix it with cocaine you can mix it with heroin and unfortunately once fentanyl was on the street mortality rates among african americans from drug overdose began to rise as well so it is we see what's happening really not as a white problem but as a problem for people with less than a bachelor's degree and we think that that going forward is what we're finding is that when it comes to life evaluation when it comes to reports of pain and changes of reports and pain the big difference is educational rather than by rapes and grazing thank you so much anna for your assessment and for this extraordinary book although a bit harsh to digest let's say about the american society so thank you so much uh to all those who have been with us online and now let's go to angus deaton who will close the festival thank you goodbye pleasure you