The Student Economic Review and College Historical Society had the privilege of hosting the 2015 Nobel Prize Winner in Economics, Angus Deaton recently in Trinity. Students and academics alike filled the GMB to watch the Princeton Professor receive the Gold Medal for Outstanding Contribution to Discourse and hear his address.
Widely regarded as one of the forefront thinkers on welfare economics and inequality, the native Scotsman has held esteemed positions in his home country, through an honorary fellowship at Cambridge, and in the United States, where he was President of the American Economic Association. Praised for stressing the importance of individuals, households and their choice architecture in the formation of economic policy, he coined the Deaton paradox, which observes how sharp falls in income are not necessarily reflected in consumption. He has also been known to court controversy, as a vocal critic of foreign aid and its limited effectiveness.
Beginning with an overview of his family history, Professor Deaton showed how he followed the socioeconomic advancement began and encouraged by his father, a miner turned civil engineer, by becoming the first in his family to attend secondary school, and subsequently university. Peculiarly, he stressed the role of luck in his own family’s success, as his father’s contraction of tuberculosis saw him sent to Scotland, instead of to the battlefields of World War One. He compared this to the role of chance in the good fortune of the wealthiest in society, saying they tend to underestimate it.
Professor Deaton then ventured into his area of expertise, discussing some of the views expressed in his book The Great Escape: Health, Wealth and the Origins of Inequality. Refuting any idealists in the room, he stated that one cannot champion economic progress whilst criticising the existence of inequality, as the two go hand in hand. His exploration of some advantages of inequality proved particularly interesting, from its incentivising effects to its advancement of education and technology.
Simultaneously he cited its many disadvantages, such as those who advance blocking the progress of others, through creative destruction or political manipulation. Overall he stated that inequality, particularly in the US, reflects private returns far in excess of its social ones, such as through its exacerbation of climate change.
Following on this sentiment, he gave an insight into his current research on how the 45-54 age group in America have displayed an increasing mortality rate compared to the steadily declining mortality amongst all other groups. Comprised almost exclusively of whites and not reflected in any other OECD country, he cited irresponsible marketing and an “epidemic of despair” as possible reasons.
Despite the issues explored in his address, Professor Deaton ended on an overall positive note. Economic growth and progress have seen overall living standards in the Western World steadily rise over the last 200-250 years, which will ensure the pursuit of happiness and prosperity despite setbacks. He also affirmed that the growth of developing countries does not require the halting of that of wealthier countries.