CRF Blog

The Health of Nations

by Bill Hayes

In The Health of Nations for the New Republic, Martha C. Nussbaum reviews The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton.

Deaton is strongly, and repeatedly, critical of the idea that we can measure human well-being by GDP per capita, a standard shortcut in the development literature, and one with large political implications. (Narendra Modi, India’s recently elected prime minister, campaigned on his alleged development achievement in Gujarat: but closer inspection shows that, while Gujarat did very well on average GDP, it did much less well than Kerala and Tamil Nadu on health and education, in part because of the excellent quality of government services in those states, while Modi appears opposed to a large role for government.) Even if average GDP were the best single number to use as an index of welfare — and Deaton disputes this, making the familiar point that the profits of foreign investment are often repatriated by the investing country, so average household income would tell us more about how people are really doing — no single number is much good, given the complexity of human lives and what is worthwhile about them. Average GDP, moreover, does not include work done in the home (a point often stressed by Nancy Folbre and other feminist economists that has finally made it into the mainstream), and it does not include the value of leisure. And although there is a general correlation between GDP and some of the other good things Deaton mentions, the correlation can be disrupted. The high average GDP in the United States, for example, does not tell us about the inequalities that make for ill-fare (bad health, bad education, lack of political voice) in a distressingly large number of the nation’s inhabitants. These points are not new; they have pervaded the development literature for some time; but it is good to see them ringingly endorsed.

Nor does Deaton succumb to the lure of the once-again fashionable idea that we can measure welfare by “happiness,” defined as moment-to-moment feeling. (“Once again” because the similar view of Jeremy Bentham in the late eighteenth century, soon aptly criticized by his student John Stuart Mill, has now been revived with great éclat by the psychologist Daniel Kahneman, though without attention to Mill’s critique.) Feelings are important, says Deaton, but they are not reliable indicators of how people are really faring, because people adapt to hard conditions and to some extent tailor their satisfactions to what they think they can achieve — the phenomenon known in the economic literature as “adaptive preferences.” Moreover, Deaton adds, some valuable pursuits, such as love and the struggle for justice, require risk and effort, and may be accompanied at times by pain. Happiness, he concludes, is “a poor measure of overall wellbeing.” If we are to pay attention to survey data, he wisely suggests, we ought to prefer “life evaluation” surveys, which at least allow people to ponder many parts of their lives. But the important conclusion to draw, he says, is that there is no single measure of this complex notion, and “no magic question that provides a touchstone for judging well-being.”

This is a very important part of the book, except that it is not really a part: I have distilled these ideas from remarks scattered in many places. For the most part, the book’s analysis returns repeatedly to an emphasis on health and income, and the other dimensions of well-being, such as education and political participation, though often mentioned, are never analyzed. Deaton’s main concern is to study the complex relationship between income and health, and the rest is left as a set of pencil strokes to be filled in by someone else. [more]