Indian Society is Too Interdependent for a Long Lockdown: Nobel Economist and Poverty Expert Angus Deaton

Angus S. Deaton is a Senior Scholar and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University. The 74-year-old, who was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare in 2015, is one of the world’s top authorities on poverty and health economics. He has done extensive research on poverty and public health in India and has collaborated with the likes of Abhijit Banerjee and Jean Dreze to analyse the relationship between health and wealth in the country. Highlighting the high levels of malnutrition in India, he had once famously said that despite fast economic growth, India was also home to “the smallest and most undernourished people in the world”.

Deaton has worked with psychologists of the stature of Nobel laureate Daniel Kahneman to evaluate the effect of income on happiness. His other areas of involvement include wellbeing, economic development and randomized controlled trials. The celebrated economist spoke to Open on the ongoing COVID-19-related lockdown in India, the so-called financial stimulus and the new book titled Deaths of Despair he has co-authored with Princeton University economist Anne Case. Edited excerpts:

India is following the policy of saving lives first and saving the economy later. How viable do you think is this decision in a country with a poor public health infrastructure? In a Princeton University webinar, you said that only countries with strong administrations and health systems could enforce social spacing, comprehensive testing, isolation and treatment. You have not named India, but does it mean that policymakers in New Delhi should ease lockdown as soon as possible to preempt an economic catastrophe?

The quote is correct, as is its converse implication, which is that that specific argument cannot be used to justify lockdowns where health systems and administration are weak. I do not know what India ought to do. We don’t know if the epidemic in India will grow exponentially. If it does, and if social distancing is impossible for many, perhaps most Indians, there will be a catastrophe. I am skeptical that those who can socially distance themselves can protect themselves indefinitely from a pandemic that spreads widely among those who cannot protect themselves. Society is too interdependent for that.

How pragmatic is the growing demand for more financial stimulus at the point of time when there is hardly much economic activity in India?

As in the US, the main priority should be to look after people who have lost their livelihoods, by trying to make up for their lost incomes, to make sure they have enough to eat. Lines for food banks are endless in the US, where people are well-fed. Must be much worse in India. Stimulus is surely the wrong word, because the economy was crashed deliberately. The right term is the relief of suffering. Whether the economy should or should not have been locked down in the first place is a question to which I do not know the answer.

Now, this is a question related to your latest book, Deaths of Despair. Can some of the arguments in the book (which focuses more on the West) be applicable to India?

 Our Deaths of Despair book is about less-skilled people in wealthy countries. I don’t think it has any obvious parallels in India. Which is not to say there are no deaths from suicide or such things. Just that the story we tell about them is different.

First published in Open

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