Fri night activities after the toddler finally went to sleep.
Deaton's argument: Economics often oversimplifies social interactions that are vastly more complex than our models suggest.
My reaction:
The critique is valid, but shouldn't the field strive to find useful approximations? Gravity isn't exactly 9.8 m/s² everywhere, but it's good enough to keep houses standing. We use more sophisticated models when we need more precision.
Maybe this is really an argument that econometrics is still in its infancy and that accurately modeling human systems is vastly harder than modeling physical systems. That doesn't seem like a reason to stop trying to improve the models.
The bigger problem seems to be that people adopt simple models that reinforce their priors and then stop questioning them. That's not unique to economics—it's a recurring issue across the social sciences.
Deaton's argument: America spends enormous sums on healthcare yet produces mediocre outcomes for many people. The problem is not simply markets or government but a political system heavily influenced by providers, insurers, pharmaceutical firms, and experts.
My reaction:
This feels like a broad critique of a system that is simultaneously impressive and deeply dysfunctional.
I'm sympathetic to the critique but still trying to understand the role economists specifically play here. Is the problem that economists become policy advocates rather than technical analysts?
More broadly: can economics ever be a purely technical discipline, or is it inevitably political?
Deaton appeals repeatedly to a moral obligation to care for others. I appreciate the humanist perspective, but is that economics? Or are we actually debating values and motives rather than economic analysis?
Deaton's argument: Skepticism toward grand technocratic solutions. Understand how poor people actually live rather than relying on abstract models or elite theories.
My reaction:
I strongly agree that the paternalism of elites—not just economists, but elites generally—is off-putting.
Based on my own exposure to Harvard-adjacent circles, many people who see themselves as champions of the poor are remarkably disconnected from how most people actually live.
I don't know much about Deaton personally, but my impression is that he spent much of his career in affluent Princeton. My experience with similar people is that they often possess a sincere philosophical concern for poverty while having very little direct experience with its realities.
Would they actually choose to live in a struggling neighborhood? Would they tolerate the consequences of poverty up close?
At one point Deaton suggests that perhaps everyone should have jobs as comfortable and lucrative as university economics professors. That line really bothered me. It reminded me of the Harvard-world types I occasionally encounter through Liz's family.
These people often have little understanding of how wealth is actually generated. They are far removed from business, production, and the practical realities of creating value.
It feels a bit like "let them eat cake" in reverse: an assumption that abundance can simply be declared into existence.
Interestingly, the grassroots progressives I encounter in Oakland often advocate a much more redistributive worldview—one in which people like Deaton would personally have significantly less. That position is less politically palatable, but at least it feels internally consistent.
The broader point stands: telling poor people what's best for them is deeply annoying.
COVID reinforced this. The behavior of many elites and experts damaged public trust, and it's not surprising that respect for expertise has declined.
Deaton's argument: Measurement matters. Statistics are political because what we choose to measure influences policy and public perception.
My reaction:
You improve what you measure.
The problem is that we don't seem to have good measures for quality of life.
This feels closely related to the current internet zeitgeist. Many people are deeply disillusioned with America despite strong macroeconomic statistics.
Wages may be higher, but they're paired with:
Traditional metrics don't seem to capture that experience very well.
Deaton's argument: Rising inequality is shaped not only by markets and technology but by political and institutional choices.
My reaction:
This echoes themes from Sven Beckert and Karl Polanyi.
Markets are not naturally occurring phenomena. Governments define property rights, enforce contracts, create institutions, and establish the rules of exchange.
If that's true, then it follows naturally that powerful groups will try to shape those institutions in their own favor.
That part makes sense.
The question is where economists fit into the story.
Deaton seems to suggest that economists often become intellectual supporters of existing power structures.
To be fair, I see some version of that in elite academic circles. People speak abstractly about inequality while remaining careful not to challenge the interests of those funding the institutions.
Deaton's argument: Many of the most important inequalities involve health, status, education, social connection, and life expectancy—not just income.
My reaction:
Strong agreement.
Money alone clearly isn't enough.
Something is going wrong in America:
This is another place where Polanyi feels relevant.
Perhaps economics is broader than money. Perhaps there are many kinds of markets and exchanges that aren't currently measured.
Maybe American households are losing ground in these unmeasured dimensions even while financial indicators look healthy.
Deaton's argument: Shifting retirement risk onto individuals often benefits financial institutions while leaving households exposed.
My reaction:
This chapter highlights how economics and politics become intertwined.
Who should decide these questions?
Economists? Voters? Legislatures?
Maybe economists should simply provide information rather than prescribe outcomes.
I had a coworker actively trying to leave the UK for the US. The pension-heavy European model that Deaton often views positively doesn't look especially healthy today.
At the same time, the American model has obvious flaws.
There often isn't enough information to determine a perfectly just outcome.
Many decisions are fundamentally political.
Questions like:
These seem like moral and political questions more than economic ones.
Maybe economists should function more like the Congressional Budget Office or OMB:
Then allow democratic institutions to make the actual choices.
Perhaps people lose trust when economists move from analysis into advocacy.
My reaction:
Yes, screw elite institutions.
Deaton's argument: The Nobel Prize shapes incentives and status hierarchies within economics.
My reaction:
He spends a surprising amount of time discussing Nobel prizes.
That itself is revealing.
It suggests how important prestige is within the profession.
I find that somewhat alarming.
One lesson is that people don't stop seeking status when money disappears. They simply create new status hierarchies.
Ironically, money can be an effective coordination mechanism. It helps align people around shared goals and practical outcomes.
Prestige competitions often feel less productive.
The obsession with awards and recognition strikes me as both unattractive and intellectually limiting.
I genuinely do not care that Deaton won a Nobel.
In software, many of the most important contributors are relatively unknown. They quietly build tools that millions use.
Open-source software creates a system where people can have enormous impact without needing prestige.
Sometimes it feels like prestige-seeking institutions end up suppressing the very innovation they claim to reward.
Deaton's argument: Economic theories can become policy frameworks, and bad models can create real-world harm.
My reaction:
Maybe economists should have a narrower role.
Interestingly, Deaton criticizes economics for being too narrow intellectually, but perhaps economists should also be more limited institutionally.
Economic models are useful tools.
They're probably not sufficient foundations for governing society.
The challenge is that I'm not sure what would replace them.
I'm also not sure economists would be enthusiastic about a reduction in their social influence.
Deaton's argument: Economics should engage more deeply with history, philosophy, politics, and sociology rather than relying solely on abstract models.
My reaction:
His closing critique of economics is entertaining, and I agree with much of it.
Economics is intellectually fascinating.
What worries me is the direct application of relatively primitive models of human behavior to large-scale policy decisions.
Polanyi seems to be making a similar argument: Markets are embedded within broader social systems.
That feels compelling.
It also suggests that economists should occupy only one seat at the table rather than dominating the discussion.
If simple models don't work, what does?
Appealing to complexity isn't a solution by itself.
Governments must make decisions quickly. Citizens expect action.
One thing I find interesting about modern politics is that voters often seem to prefer responsiveness over accuracy.
Trump, for example, frequently grabs knobs and turns them. Much of it is clumsy and misguided, but it is at least visibly responsive to public frustration.
There may be something valuable in the idea of:
The challenge is figuring out how to do that while remaining competent.
Can governments become more responsive to real suffering without becoming chaotic?
That feels like one of the central unresolved questions running through both Deaton and Polanyi.