The Great Escape: Health, Wealth, and the Origins of Inequality Kindle Edition

Has the human race made progress since the days when all our lives were nasty, brutish, and short?

Some might think this question patently silly, since it would appear to answer itself. But Angus Deaton finds in it a point of entry into his inquiry on “health, wealth, and the origins of inequality,” the subtitle of his ambitious new book. He is in no doubt that humanity has progressed, not steadily but by fits and starts — and continues to do so to this day. “Today,” he writes, “children in sub-Saharan Africa are more likely to survive to age 5 than were English children born in 1918 . . . [and] India today has higher life expectancy than Scotland in 1945.”

In The Great Escape, Deaton, a veteran professor of economics and international affairs at Princeton, explores inequality — between classes and between countries — with a detailed statistical analysis of trends in infant mortality, life expectancy, and income levels over the past 250 years. He concludes that the large-scale inequality that plagues policymakers and reformers alike in the present day is the result of the progress humanity has made since The Great Divergence (between “the West and the rest”) since the advent of the Industrial Revolution. “Economic growth,” Deaton asserts, “has been the engine of international income inequality.”

No argument there: Deaton is far from alone in this belief. Other scholars have written extensively about this topic in recent years. A Farewell to Alms: A Brief Economic History of the World, by Gregory Clark, is just one example.

Late in the 18th Century, the countries of Northern Europe and North America on the one hand and those of Asia, Africa, the Middle East, and Latin America on the other hand were not that far apart as measured by the available indicators of health and income. Deaton cites “one careful study [that] estimates that the average income of all the inhabitants of the world increased between seven and eight times from 1820 to 1992.” However, that average obscures a harsh reality. The ever-quickening rate of change in “the West” since 1760 or so has widened the gap between (and within) countries to an extreme degree. Deaton terms the freedom from destitution and early death that so many of us now enjoy “The Great Escape,” taking his title from the 1963 film of that name about a massive escape of prisoners from a German P.O.W. camp in World War II.

Only now is the gap closing between the rich nations and China and India (by far the world’s two biggest countries, with nearly 40 percent of the planet’s population and half the world’s poor). Deaton doesn’t consider a bright future for all a certainty, not by any means, in view of global climate change and the ever-present threat of killer pandemics. But, assuming the species continues to thrive, there is sufficient data available now to have some confidence that the gross inequality now existing among nations will not persist forever. After all, five sub-Saharan African countries are now growing their economies faster than China’s.

However, that misleading factoid ignores the outsize role that China has played in “the Great Escape” globally. Deaton notes, as have other observers, that “the number [of] people in the world living on less than a (2005) dollar a day fell from about 1.5 billion in 1981 to 805 million in 2008 . . . [This] decline in numbers is driven almost entirely by the Chinese growth miracle; if China is excluded, 785 million people lived on less than a dollar a day in 1981 compared with 708 million in 2008.” (This reality is one of the principal reasons why Paul Polak and I insist in The Business Solution to Poverty that traditional methods to end poverty have largely failed. After all, China’s methods were hardly traditional!)

In the course of exploring the historical record of growing inequality on the world stage, Deaton delves deeply into the role of foreign aid (officially, Overseas Development Assistance, or ODA) and finds it comes up short. ”You cannot develop other countries from the outside with a shopping list for Home Depot, no matter how much you spend,” he writes. With the exception of outside interventions in public health programs — including such breakthroughs as the eradication of smallpox and the near-success with polio — Deaton finds that foreign aid has done more harm than good. He argues that where the conditions for development are present, outside resources are unnecessary. Where they’re absent, ODA entrenches local elites, distorts the local economy, and discourages local initiative. The author insists that “the record of aid shows no evidence of any overall beneficial effect.”

But that’s only part of the story.

In 2012, ODA totaled about $136 billion. Throw in another $30 billion or so from NGOs, and total outside assistance comes to under $200 billion annually. However, net resource transfers from developing countries to rich countries are well in excess of $500 billion annually. (Transfers reached a peak of $881 billion in 2007, fell with the Great Recession, but are rising again.) Quite apart from the fact that an estimated 70 percent of “foreign aid” is actually spent on products and services from donor nations, ODA merely puts a dent in the huge disadvantage that poor countries suffer as a result of lopsided trade policies and prevailing political and commercial imbalances. In any case, just one factor in those resource flows — remittances from overseas residents of poor countries to their families back home — are twice as large as ODA.

The Great Escape is a worthy effort from a senior scholar whose wide-ranging studies have led him to big-picture conclusions. Policymakers and practitioners should be listening carefully.

Insightful book about the global rise of living standards during the industrial era. Charts a path between the political left and right on where the data supports inferences on economic growth, health and wellbeing, and inequality. Deaton also generally reflects a recognition that economics often serves best by obtaining and analyzing data to demonstrate the impact of particular policies, but that actual policy choices really often reflect considerations of norms and values that cannot be determined by the data alone.

However, I agree with many other reviewers that the final section on the ineffectiveness of international aid is a mismatch from the rest of the book. It is the least data-centered of the sections and the most like a one-sided persuasive essay. I think he raises a number of valid concerns and considerations about the efficacy of international aid as it is conducted, but I fail to be convinced by his seeming conviction that efforts to reform how aid is conducted would be fruitless. He comes off as a person who has become deeply disillusioned by development aid and can no longer see the legitimacy of any arguments in its favor. However, his even-handedness and open-mindedness about other economic matters in other areas of the book does mean that I am more willing to fully consider his arguments on this issue than I might have been from someone who had not demonstrated such qualities on other issues.

This is a great book. It combines a beautiful writing style with amazing insights. Deaton won the 2015 Noble prize in economics but you definitely do not need to be an economist to enjoy it.
It will cause thinking people on the left, right and middle to think differently (and better) about public health, equality of opportunity, and foreign aid.
This is the best book I have read on equality of opportunity because it appeals strongly to both the heart and the mind.
Deaton's in-depth expertise with the negative impacts of foreign aid (especially with smaller countries) is compelling. This counter-intuitive reality shows the importance of smart metrics (which was the foundation for Deaton's Noble prize).
From a positive perspective, he shows that public health usually provides a huge return on investment and lays the foundation for education and equality of opportunity.
I believe a focus on "equality of opportunity for everyone" could drive economic growth and reduce inequality in the U.S. and the world.
The Great Escape is a book that the world's leaders need to read, understand and embrace.

A lot of data, though he conveniently left out any discussions that did not fit his purpose, as obvious as they may have been. Only one sentence that even referenced war, for example, and he didn't even say the word. He may not believe it's a factor but I thought he should've at least said why not.
I also didn't think there was much that hadn't already been said. Ironically, he trashed Paul Collier, (Bottom Billion), then proceeded to say essentially the same thing.
The only reason I have him a two was because I found his mortality stats interesting.

Some great economists, which we used to know only through very formal papers, are proving to be good writer. Among them, Deaton excels. It brings very good stories with an exposition that we feel like reading a Tolstoi of Science. He knows how to tell good stories, which any scientific writing should search, and which involves concepts and notions that evolve. There some impressing exposition on Wealth and Health, on Incone inequality within the USA, on income inequality in the world, as well as on some attempted remedies. Worth Reading for economists and non-economists