THOUGH inequalities, across countries as well as within them, are large, on average people living today are much better off than those who came before. Understanding how this has happened might give us clues about what we need to do to help those who are still struggling. This seems to be the central point of Angus Deaton’s book, The Great Escape: Health, Wealth and the Origins of Inequality, a somewhat positive take on where we are today, what we have been able to achieve, and, equally importantly, what we have to do to help ourselves and others.

Global population has increased rapidly over the last 80 or so years and the world, on the whole, has been able to sustain it. Not only that, but, Deaton argues, by and large and based on averages, people now live longer, better and more fulfilling lives than at almost any previous time. Incomes have increased, life expectancies have gone up and morbidity rates are much lower than before. This is most obvious in the “developed and more advanced” countries in North America, Europe, Japan and Australia, and within these countries, in the middle and upper classes. And while the story is still unfolding in less developed countries, the gains are very much there as well. In some countries of Africa and South Asia, however, the story is more mixed; but even there, the gains, though small, are undeniable.

No wonder then that Deaton claims, “life is better now than at almost any time in history. Most people are richer and fewer people live in dire poverty. Lives are longer and parents no longer routinely watch a quarter of their children die. Yet millions still experience the horrors of destitution and of premature death. The world is hugely unequal.” There are too many people who still live on very low incomes, face malnutrition and / or starvation, see too many of their children die in childbirth or infancy or become maimed for life, live in conditions of squalor and misery, and have few or almost no choices and opportunities. In other words, they have no freedom, “the freedom to live a good life and to do the things that make life worth living.”

Two questions of paramount importance are addressed in the book. One, how to we understand progress and measure that progress; and two, why has progress been so uneven across countries and even within countries?

Deaton takes the cases of health and wealth to address both questions. He is very clear on the first one and explains how well-being, happiness, inequality, poverty and even national income and growth are measured and what issues are faced in their measurement across time and countries. If you are new to economics and statistics, and want to understand how aggregates are constructed and what they mean, read this book just for the pleasure of seeing how Deaton explains that. Unfortunately, though, the book does not go into the debate on well-being. There is a lot of work on notions of well-being and development. By not engaging with the literature Deaton has deprived us of seeing how a great and thorough empiricist would have tackled the more philosophical debates.

Health outcomes are an important part of any notion of well-being. And they are relatively easier to delineate and document as well. If people live longer, are free of disease and debilitation, or can manage them well, we have better health outcomes. And the world clearly has changed a lot over the last century, at least on this count. Average age has been increasing steadily across the world, and developments in medicine and sanitation have all but eliminated childhood deaths in developed countries.

Most of the initial gains in increased life expectancy came from reducing infant and maternal mortality. But even as far as diseases for the old go, new surgical procedures and medicines have made diabetes, cardio-vascular disease and even some cancers curable or manageable. Though the poor and the marginalised do not have the same health outcomes as the rich even in developed countries, the differences between them have been narrowing. As for the developing world, while infant / maternal mortality has come down, it has not come down fast enough and is still quite significant. Pakistan, for instance, loses an estimated 200,000 plus infants and 10,000 mothers a year even today. Deaton’s take on reasons for this is quite comprehensive: “Without an educated population and without government capacity — an effective administrative structure, cadres of educated bureaucrats, a statistical system, and a well-defined and enforced legal framework — it is difficult or impossible for countries to provide a proper health-care system.” This is also the lesson from the Acemoglu and Robinson’s book Why Nations Fail. Institutions matter, and here, clearly, developing countries are far behind. On the wealth / income side too, the story is similar. Developed countries have seen large increases in average income and wealth, as well as significant growth, for the last many decades.

But the benefits of increases in wealth have not been even and some people have gained a lot more than others. Deaton, however, like most economists, argues that this is to be expected given that growth opportunities are never evenly distributed: “health progress creates gaps in health just as material progress creates gaps in living standards,” he argues. Most developing countries have also seen significant increases in income and growth. There are very few examples of countries that have declined consistently and steadily, and almost all of these have been war-torn. For the rest, progress, though uneven, has taken place. Some have grown rapidly (the Asian Tigers, China, and for the last few decades, India) while others have had reversals (such as the AIDS epidemic in Africa).

What holds across countries, holds within them too. Despite overall progress, some people have benefited from growth opportunities a lot more than others. And millions are still trapped in abject poverty. It is quite a puzzle to try to figure out why inequalities should persist or increase, and why convergence in income should not happen over time. What one country can do, why can’t another; or at least, something similar? Given the information flows today, why is emulation and / or adaptation so hard?

This is indeed a million-dollar question. But Deaton’s answer is unfortunately not very detailed or thorough. To be fair, he does not set out to answer this question. Enabling institutions, provision of basic infrastructure and services, democracy, progressive taxation, rule of law and enforcement of basic rights all play a part. But the how of it is not easy to understand. There is a chapter at the end on “how to help those who are left behind” but that is mostly about the effectiveness or not of foreign loans and aid. It is written from the perspective of what a person living in a developed country and fortunate enough to have made ‘the great escape’ can do for those ‘left behind’. And Deaton’s answer, which might sound harsh is not too far from the truth. It is the governments and people of each country who have to do most of the work. Foreign aid, even when it works and that is not often, can only do little.

Deaton’s book could have been a lot longer or somewhat shorter. If he had engaged fully with the more philosophical debates on well-being, happiness, poverty, and inequality, it would have been much longer, and, I think, quite fascinating. But if he only wanted to say that life is much better now for most, though millions are still waiting to make the great escape from poverty, he could have said so in a much shorter book. Right now the book seems to be somewhere in the middle. But since almost every page has nuggets regarding how numbers should be interpreted, it is worth reading with care.

Quite a few books recently have tried to understand and explain the development process and its outcomes, often by some of the leading economists of out time. Deaton’s book falls in the same category. Though agreements are rare and conclusiveness is hard to achieve, these books are bringing a lot of academic material to the general public. And there is tremendous value in that. Maybe The Great Escape should also be seen in such a light.

Moreover, it is worth emphasising the role of the right institutions and organisations, rule of law, provision of basic infrastructure and services, and good governance, in ensuring consistent and fair development. One can only hope our leaders also read some of these books.

The Great Escape: Health, Wealth And The Origins Of Inequality

(ECONOMICS)

By Angus Deaton

Princeton University Press, US

ISBN 978-0691153544

360pp.