Nobel Prize Winner Angus Deaton Is Cautiously Optimistic About The Future

Angus Denton, Nobel Prize day, Wallace Hall

By Linda Arntzenius

Photos by Princeton University, Office of Communications, Denise Applewhite (2015)

The Princeton economist Angus Deaton seems almost bemused about winning the 2015 Nobel Prize in Economic Sciences. “I always think of what I’m doing as ‘tinkering’ to make something better—in the end you’ve got something that looks like a new machine but it started with a lot of stuff that other people had worked on and then the Nobel prize committee comes along and says ‘look what you’ve done!’”

Interviewed in his office on the third floor of Princeton University’s Wallace Hall just before leaving for a weekend in Washington, D.C. Deaton seems relaxed after the whirlwind of activity that followed his visit to Stockholm in December. Since winning the prize, his life has been “complete chaos,” he says, with numerous invitations to speak and requests for interviews.

When the Royal Swedish Academy of Sciences announced Deaton’s win last October, they cited more than three decades of his work on consumption habits, poverty and welfare, including a system for estimating the demand for different goods, studies of the link between consumption and income, and work on measuring living standards and poverty in developing countries.

Soft spoken with a gentle accent that is the result of his Scottish upbringing and schooling at one of Edinburgh’s most prestigious private schools, where he excelled at mathematics and rugby, Deaton is Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department of Princeton University.

Born in Edinburgh in 1945, a few days after the end of World War II, he spent his first nine years in “Auld Reekie,” as Scotland’s once sooty capital city was known—a city of beauty and culture alongside some of the worst poverty in Europe. And while Deaton’s family was never in dire financial straits, “money was tight,” he recalls. “There never was much money and my father worried about it often— he grew up in tough times.”

In a brief autobiography written for the occasion of his Nobel win, Deaton explains. “Both my parents had left school at a very young age, unwillingly in my father’s case. Yet both had deep effects on my education, my father influencing me toward measurement and mathematics, and my mother toward writing and history.” Deaton’s father hailed from the coal mining country of the north of England. Having worked hard at night school to eventually become a civil engineer, he was determined that his son would have advantages he’d been denied. Deaton’s mother was from a small town in the Scottish Borders where her family had been builders and carpenters for generations. Steeped in the traditions of that land, she knew and could sing many of the local ballads. “My father was very dedicated to my getting a better education, my mother not so much—she really believed in the moral superiority of manual labor and she didn’t much care for me reading around the house, for instance, she’d rather I was out gardening or doing something like that.”

At James Gillespie’s Boys School, a stone’s throw from his home, Deaton learned the basics in history, geography, arithmetic and reading—along with lots of drill but it was hardly an enriching experience. “I didn’t care for school much—it was very strict, corporal punishment in the form of the “tawse” was common and unpredictable, and I was often afraid.” With his father on weekends, he visited Edinburgh’s great zoo, museums, and the botanical garden. He loved to the see ships in the harbor—trawlers unloading fish and loading ice and salt—and dream of the great wide world beyond. Meanwhile, his father was dreaming of a first rate education for his son. “Looming in the distance over the eastern end of the botanical gardens was an enormous ‘castle,’ adorned with hundreds of grotesque gargoyles, which my father wistfully explained was Fettes College, Scotland’s most exclusive (and expensive) school where he had (impossible) dreams of sending me.”

Eventually Deaton would attend Fettes and from there go on to Cambridge University, where he set out to study mathematics but was steered toward economics. “My tutors told me that I had to stop doing mathematics and take up what they clearly thought of as a last resort for ne’er-do-wells, a previously unconsidered option called economics.” After taking his degree and working for a short while in banking, Deaton returned to Cambridge as a research assistant. That’s where the man now known as “The Data Guy,” found a talent for discovering patterns in data in dusty archives. “It is impossible not to think about the numbers, however dusty, to wonder what they mean, to look for patterns, even to test half-formed hypotheses…” he recalls. After receiving his doctorate from Cambridge University in 1974, Deaton went on to teach at Cambridge and then at the University of Bristol.

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Angus Deaton celebrates with 2 previous PU Nobel Laurates L to R: Chris Simms, Angus Deaton, Eric Weischaus

Married three times, Deaton became a widow with two young children when his first wife, Mary Ann Burnside, died of breast cancer in 1975. Deaton and his children, Rebecca and Adam, lived for a time in Bristol with his second wife Helge before moving to the United States.

Since 1983, he has taught at Princeton University, which he described as finding “an idyllic paradise with fabulous colleagues, students, and wealth.” It was in Princeton that Deaton met fellow economist Anne Case, the Alexander Stewart 1886 Professor of Economics and Public Affairs and a Professor of Economics and Public Affairs at the Woodrow Wilson School and the Economics Department. Although it wasn’t until 1997, fourteen years later, that the couple were married, Deaton says that he cannot imagine a life in which the two of them are “not joined at the hip.” It’s easy to see why. In addition to sharing a home life, their offices at the Woodrow Wilson School are just a few doors apart. “We often travel together, we sometimes—but not always—work together, we cook together, we go to the opera together, and best of all, we fly-fish together.”

In Stockholm for the Nobel ceremony, Deaton’s entourage included his grandchildren Julian, Celestine and Lark. The media were charmed and the family was much photographed and televised.

CRISIS OF DESPAIR

In their collaborative work, Deaton and Case have also drawn a good deal of media attention. Their large scale project on mortality and morbidity among middle-aged non-Hispanic whites in the United States showed a rising mortality rate for this group between 1999 and 2013. It suggested that the rise in deaths “was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide and chronic liver diseases and cirrhosis.” Described as a “crisis of despair,” the study’s findings were reported widely in such media as The Guardian, The New York Times, and The Washington Post. Deaton and Case, an award-winning teacher who is also director of the Research Program in Development Studies and a faculty fellow in the Woodrow Wilson School’s Center for Health and Wellbeing and the Office of Population Research, were interviewed on television and radio.

GREAT ESCAPE

The news is not all bleak, however, as Deaton’s most recent work, published as The Great Escape: Health, Wealth, and the Origins of Inequality, describes. Taking its title (and an analogy that is well-maintained throughout) from the iconic movie about the World War II escape by some 250 allied prisoners from the German prisoner of war camp Stalag Luft III, Deaton contends that: “Life is better now that at almost any time in history. More 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.”

Being something of a movie buff, Deaton chose this story of an unquenchable desire for freedom to represent humanity’s escape from poverty and death. He examines the historical progress that began in Britain some 250 years ago and shows how the contemporary global inequality of wealth and health came into being. Progress is just part of the story. “Millions still experience the horrors of destitution and of premature death,” Deaton writes. “The world is hugely unequal.”

Addressing this problem, The Great Escape culminates in a chapter on what needs to be done (and what ought not to be done) going forward. Highly critical of international aid “industry,” Deaton writes: “I have come to believe that most external aid is doing more harm than good. If it is undermining countries’ chance to grow—as I believe it is—there is no argument for continuing it on the grounds that ‘we must do something.’ The something that we should do is to stop.”

Besides aid as a roadblock to development, Deaton is critical of the rich world that is “only too happy to provide arms to almost anyone who will pay for them.” He suggests strategies for reducing global poverty. And he tells his students to “work on and within their own governments, persuading them to stop policies that hurt poor people, and to support international policies that make globalization work for poor people, not against them. These are our best opportunities to promote The Great Escape for those who have yet to break free.”

As The Great Escape documents, people are getting wealthier and living longer as the result of sustained progress. And, while the benefits of innovation go first to aristocrats, or their modern equivalent, the rest of the populace subsequently gains from those benefits. Problems arise when incentives change (as in the case of the Wall Street excesses of recent years), or societies are shortsighted (as with climate change), or systems break down (as, for example, the mounting costs or U.S. health care). Deaton is “cautiously optimistic,” however. He believes we will work through these problems.

Deaton is known for building bridges between theory and data, and between individual behaviors and aggregate economic outcomes. His findings have influenced practical economic policy as well as modern economic research. He has done much to bring empirical research into development economics, which in the past was mostly theoretical, and he is credited with helping to transform development economics along with modern microeconomics and macroeconomics.

And yet, the new Nobel Laureate says that he became an economist “by accident.” In his Nobel speech, he credits the “distinguished mentors” who helped him along the way.” One such is the 2002 Nobel Laureate, Daniel Kahneman, who introduced Deaton to the Gallup Organization about a decade ago. Working together, Kahneman and Deaton used Gallup’s data to show that in the U.S., happiness improved with income, but only up to about $75,000 a year. Gawker.com famously summarized the project with the headline “science shows poverty sucks.”

Deaton also cites the utility of his long-standing relationship with the World Bank. “For me, it is always useful to be presented with other people’s problems and The World Bank is a constant source of real world economic problems. One of the downsides of being an academic is that one can become dissociated from real world problems. I’ve tried not to do that,” he says.

2015 was a stellar year for Deaton who becomes an emeritus professor in June. Besides winning the world’s most notable prize, he was elected to the prestigious American Philosophical Society and to the National Academy of Sciences. It was also something of a triumph for Princeton University, which has seen eleven of its associated faculty, staff and alumni receive the Nobel Prize in economic sciences, including Lloyd Shapley in 2012; Christopher Sims and Thomas Sargent in 2011; Paul Krugman in 2008; Eric S. Maskin in 2007; and John F. Nash in 1994, among others.

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MORE INFORMATION/FURTHER READING

Deaton’s many books include The Analysis of Household Surveys: A Microeconomic Approach to Development Policy, Johns Hopkins University Press (1997); Understanding Consumption, Oxford University Press (1992); and Economics and Consumer Behavior (with John Muellbauer), Cambridge University Press (1980). scholar.princeton.edu/deaton Swedish Academy of Sciences, kva.se, and at nobelprize.org. www.nobelmuseum.se.