The Body Economic

by Basu, Sanjay, Stuckler, David

  17. “It is indubitable evidence,” Sydenstricker concluded, “that up to this time unemployment, diminished purchasing power, altered standards of living, even privation, have not killed very many of the population. Just what caused this gratifying showing is difficult to say.” See E. Sydenstricker. 1933. “Health and the Depression,” Milbank Mem Q v11:273–80.

  18. Another physician agreed, speculating that the “the weather may have been a contributing factor,” preventing outbreaks of pneumonias. Yet another doctor suggested that “the medical profession is becoming more and more skilled in the diagnosis and treatment of disease.” Another group of thinkers held that it was perhaps the Depression itself, leading to “a more normal mode of living than in boom times” and lower stress levels. All of these explanations, however, seemed unlikely. Most of the changes in death rates didn’t correspond to winter-time diseases, and the winter was not actually particularly mild—especially for those living in shantytowns. There had not been any new discoveries of drugs or new techniques in surgery. Sulfonamide antibiotics would not be invented until the late 1930s, and penicillin until the 1940s. It was also unclear how the Depression might improve health through less stress. All of the historical evidence suggests that people faced enormous stress during the Depression—much more so than in the boom years of the roaring 20s. Cited in D. Stuckler, S. Basu, et al., “Banking Crises and Mortality During the Great Depression”; see also US Climate at a Glance, National Climatic Data Center. Available at: http://www.ncdc.noaa.gov/oa/climate/research/cag3/cag3.html; R. Pearl, The Rate of Living (New York, 1928).

  19. For more details about our study see Stuckler, et al., “Banking Crises and Mortality During the Great Depression.” We are grateful to our colleague Professor Price Fishback for making these data available. Mortality data came from the Center for Disease Control, US Historical Mortality Database, 1929–1937 (Atlanta, 1929). Banking crisis data were taken from Federal Deposit Insurance Corporation Bank Data and Statistics, 2010.

  20. Source for Figure 1.1: Adapted from Stuckler, et al. “Banking Crises and Mortality During the Great Depression.”

  21. Source for Figure 1.2: Ibid.

  22. A. R. Omran. 1971. “The Epidemiologic Transition: A Theory of the Epidemiology of Population Change,” Milbank Mem Fund Q v49:509–38. Available at: http://www.jstor.org/stable/10.2307/3349375

  23. Other commentators have suggested that the Great Depression was the direct cause of very large health improvements. See, for example, J. Tapia-Granados and A. Diez-Roux. 2009. “Life and Death During the Great Depression,” Proceedings of the National Academy of Sciences v106(41): 17290–95. Their analysis used 20 data points from aggregated US data. One sign of a lack of validity in their analysis is in attributing the Great Depression as a cause of short-term improvements in cancer. Yet, at the time, no effective cancer treatments existed, and changes in cancer would require decades to occur. When we revisited their analysis using state-level data, and disentangled short-and long-term trends, we demonstrated how such implausible findings were spurious. See D. Stuckler, S. Basu, et al. 2012. “Was the Great Depression a Cause or Correlate of Significant Mortality Declines? An Epidemiological Response to Granados,” Journal of Epidemiology and Community Health.

  24. For methodological details see Stuckler, et al. “Banking Crises and Mortality During the Great Depression.” Briefly, we used a Hodrick-Prescott filter to differentiate short- and long-term trends. This is a technique, which decomposes movements in time-series data into short-term and trend components in two steps. First, the HP filter finds a smoothed time trend in the log level of the mortality for each state. Then, short-run deviations of the original time series from the estimated long-run trend can be used for subsequent statistical analysis. We performed a sensitivity analysis using different smoothing parameters for estimating long-term trends (the standard is 6.25, although Granados and colleagues use 100), finding that our results did not differ qualitatively. We also replicated our analysis using short-term changes in the mortalities (using annual levels of the percentage change in mortalities). We also controlled for relatively fixed differences between states, such as geographic location, by means of state dummy variables. Overall, we found bank suspensions were significantly associated with increased suicide rates but reduced transport-related death rates. No effect was observed on cardiovascular death rates, homicide rates, pneumonia, cirrhosis, or cancer death rates. Because the population risk of deaths attributable to road traffic accidents (RTA) was 50 percent higher than suicides, the reductions due to RTA outweighed the rises in suicides, yielding a negative net effect of bank suspensions on all-cause mortality.

  25. Source for Figure 1.3: Adapted from Stuckler, et al. “Banking Crises and Mortality During the Great Depression.”

  26. Indeed, so many people died in accidents that car ownership had to be disclosed to life insurance companies. “Vital Statistics.” 1932. Report of the American Journal of Public Health. Available at: http://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.22.4.413. See Associated Press, “Traffic Deaths Drop in 1932; First Decline in Auto History,” New York Times, Nov 28, 1932; M. Kafka, “An Appalling Waste of Life Marks the Automobile,” New York Times, Aug 28, 1932.

  27. A. Reeves, D. Stuckler, M. McKee, D. Gunnell, S. S. Chang, S. Basu. 2012. “Increase in State Suicide Rates in the USA During Economic Recession,” The Lancet v380:1813–14.

  B. Barr, D. Taylor-Robinson, A. Scott-Samuel, M. McKee, D. Stuckler. 2012. “Suicides Associated with the 2008–10 Economic Recession in En gland: A Time-Trend Analysis,” British Medical Journal v345:e5142. Available at: http://www.bmj.com/content/345/bmj.e5142

  28. See for example, “U.S Highway Deaths at Lowest Level in 60 Years,” Washington Post, Sept 9, 2010. According to the Governors Highway Safety Association, “We attribute the progress to a host of factors, including increased seat belt use, stronger enforcement of drunk driving laws, better roads, safer vehicles and an increasingly well-coordinated approach to safety among state stakeholders and the federal government. [Transportation] Secretary [Ray] LaHood’s focus on distracted driving has brought an unprecedented focus to behavioral highway safety, and as a result, lives are being saved.” The more likely explanation for this favorable turn is the Great Recession itself. See also M. Cooper, “Happy Motoring: traffic Deaths at 61- Year Low,” New York Times, April 1, 2011. Available at: http://www.nytimes.com/2011/04/01/us/01driving.html?_r=0

  NIDirect Government services, “Lowest Number of Road Deaths on Record,” Jan 3, 2013. Available at: http://www.nidirect.gov.uk/news-jan13-lowest-number-of-road-deaths-on-record; for Ireland see Ireland’s National Police service. Garda National traffic Bureau. Fatalities and Other traffic Statistics. Available at: http://www.garda.ie/Controller.aspx?Page=138. The consequences have had knock-on effects elsewhere. Across the globe in India, more and more farmers are selling kidneys to pay debts, as the black market for organs has increased.

  29. Edward Behr, Prohibition: Thirteen Years That Changed America (Boston, 1996), pp. 78–79. For additional time-trend estimates based on aggregate, rather than state-level data comparing “wet” and “dry” states, see J. A. Miron and J. Zwiebel. 1991. “Alcohol Consumption During Prohibition,” American Economic Review v81(2): 242–47.

  30. M. Davis, Jews and Booze: Becoming American in the Age of Prohibition (New York, 2012), p. 191.

  31. Source for Figure 1.4: Adapted from Stuckler, et al. “Banking Crises and Mortality During the Great Depression.”

  32. Total government debt also increased from $16.2 billion in 1930 to $19.4 billion in 1932.

  33. Charles R. Geisst, Wall Street: A History (New York, 2012).

  34. Maurice Sugar, The Ford Hunger March (Berkeley, 1980), p. 108.

  35. Irving Bernstein, A History of the American Worker 1933–1941: The Turbulent Years (Boston, 1970), pp. 499–571. The Socialist Party of America’s membership doubled between 1928 and 1932.

  36. William E. Leuchtenbur
g, Franklin D. Roosevelt and the New Deal 1932–1940 (New York, 1963), pp. 1–17. It is perhaps ironic that the New Deal, which in part arose from Socialist agitation, made the Socialist Party much less relevant.

  37. C. E. Horn and H. S. Schaffner, Work in America: An Encyclopedia of History, Policy, and Society (Santa Barbara, 2003). We are grateful to Price Fishback and his team for the insight about marked variations in state’s implementation of the New Deal.

  38. As part of election politics, more relief funds were distributed to cities with Democratic presidential candidates, those with more representation on the House Labor committee during the New Deal, and those with Democratic governors.

  39. E. Amenta, K. Dunleavy, M. Bernstein. 1994. “Stolen Thunder? Huey Long’s ‘Share Our Wealth,’ Political Mediation, and the Second New Deal,” American Sociological Review v59(5): 678–702. Available at: http://www.jstor.org/discover/10.2307/2096443?uid=3739560&uid=2&uid=4&uid=3739256&sid=21101670536097; W. I. Hair, The Kingfish and His Realm: The Life and Times of Huey P. Long (Baton Rouge, 1991).

  40. See also P. Fishback, M. R. Haines, S. Kantor. 2007. “Births, Deaths and New Deal Relief During the Great Depression,” The Review of Economics and Statistics v89(1): 1–14.

  41. Cited in G. Perrott and S. D. Collins. 1934. “Sickness and the Depression: A Preliminary Report upon a Survey of Wage-earning Families in Ten Cities,” The Mil-bank Memorial Fund Quarterly v12(3): 218–24. Available at: http://www.jstor.org/discover/10.2307/3347891?uid=3739560&uid=2&uid=4&uid=3739256&sid=21101670536097

  42. Our colleague Dr. Price Fishback, an economist at University of Arizona, looked at the data and drew similar conclusions: “Even though relief programs were targeted at a broad range of social and economic problems, they display similar costs per life saved as modern programs that are targeted more specifically at reducing mortality, such as Medicaid.” See Fishback, et al., “Births, Deaths and New Deal Relief.”

  43. The First New Deal totaled about 10–20 percent of GDP. In the six years after it was implemented, government spending doubled. Yet it was not until World War II and a large rise in government stimulus in the 1940s that the Depression ended. Price Fish-back and colleagues estimate that the personal income multiplier for public works and relief was around 1.67. This is similar in magnitude to our estimates for total government spending and social protection, cited in chapter 4. P. Fishback and V. Kachanovskaya, “In Search of the Multiplier for Federal Spending in the States During the New Deal.” Working Paper. 2010. Available at: http://econ.arizona.edu/docs/Working_Papers/2010/WP-10-09.pdf

  44. And the New Deal put in place reforms to prevent another recession from occurring. The 1933 Banking Act, the Glass-Steagall Act, as it is commonly known, separated commercial and investment banking and prohibited banks from dealing in debt and derivative securities, the types of investments that had precipitated the Stock Market Crash of 1929. Because of Glass-Steagall, more than six decades passed without another Crash or Depression. But, sadly, in 1999, after intense lobbying by the banks, a Republican Congress and a Democratic president, Bill Clinton, repealed Glass-Steagall. The floodgates reopened for risky investment to create another real estate bubble and a Great Recession. In 1939 Roosevelt also passed an additional “undistributed profits tax,” establishing the principle that corporate earnings could be taxed to pay for the negative effects of corporations’ actions on the rest of the economy. But it was watered down by Congress and soon expired. “The Wall Street Fix: Mr. Weill Goes to Washington: The Long Demise of Glass-Steagall,” Frontline, PBS, May 5, 2003.

  45. M. Harhay, J., Bor, S. Basu, M. McKee, J. Mindell, N. Shelton, D. Stuckler, “Differential Impact of Economic Recession on Alcohol Use Among White British Adults, 2006–2009,” unpublished analysis; J. Bor, S. Basu, A. Coutts, M. McKee, D. Stuckler. In press. “Alcohol Use During the Great Depression of 2008–2009,” Alcohol and Alcoholism.

  Chapter 2: The Post-Communist Mortality Crisis

  1. United Nations Development Program. The Human Cost of Transition: Human Security in South East Europe (New York: UNDP). Available at: http://hdr.undp.org/en/reports/regional/europethecis/name,2799,en.html. Technically Russia was not a state until 1992. World Bank World Development Indicators 2013 edition. Available at: http://data.worldbank.org/indicator. See also J. DaVanzo and G. Farnsworth, “Russia’s Demographic ‘Crisis’,” RAND, 1996. The Russian census had projected that the population would grow during this period, while the official US estimates also forecast continued growth. However, astute demographers, including Nicholas Eberstadt, who had been studying Russia’s mortality data since the early 1980s were quick to recognize that mortality had been on a long-term adverse path and that the early- 1990s reflected a short-term shock superimposed upon this long-term deterioration.

  2. USSR Census 1989. Published by the State Committee on Statistics. Natsional’ny Sostav Naseleniia Chast’ II. Informatsionno-izdatel’ski Tsentr (Moscow, 1989). See also “Abandoned Cool Mining Town in Siberia: Kadychan, Russia, Sometimes Interesting, July 24, 2011. Available at: http://sometimes-interesting.com/2011/07/24/abandoned-coal-mining-town-in-siberia-kadykchan-russia/. See population statistics from Russian Census 2002: 2002 .

  3. E. Tragakes and S. Lessof, Healthcare Systems in Transition: Russian Federation (Copenhagen: European Observatory on Health Systems and Policies, 2003).

  There had always been a low level of unemployment of about 1.4 percent in 1990. S. Rosefielde. 2000. “The Civilian Labour Force and Unemployment in the Russian Federation,” Europe-Asia Studies v52(8): 1433–47. Available at: http://www.tandfonline.com/doi/pdf/10.1080/713663146. Estimates of poverty rates based on analysis using the Russian Longitudinal Monitoring Survey; see P. Mosley and A. Mussurov, “Poverty and Economic Growth in Russia’s Regions,” Sheffield Department of Economics, 2009. Available at: http://eprints.whiterose.ac.uk/10002/1/SERPS2009006.pdf; London School of Hygiene & Tropical Medicine, “Living Conditions, Lifestyles, and Health Survey 2001.” Details available at: http://www.lshtm.ac.uk/centres/ecohost/research_projects/hitt.html

  4. See also G. Kitching. 1998. “The Revenge of the Peasant? The Collapse of Large-Scale Russian Agriculture and the Role of the Peasant ‘Private Plot’ in That Collapse, 1991–97,” The Journal of Peasant Studies v26(1): 43–81; R. J. Struyk and K. Angelici. 1996. “The Russian Dacha Phenomenon,” Housing Studies v11(2). Available at: http://www.tandfonline.com/doi/abs/10.1080/02673039608720854

  5. These projections were done by the US Bureau of the Census, led by Stephen Rapawy. See S. Rosefielde. 2000. “The Civilian Labour Force and Unemployment in the Russian Federation,” Europe-Asia Studies v52(8): 1433–47. Available at: http://www.tandfonline.com/doi/pdf/10.1080/713663146. The massive loss of people was in part driven by declining fertility (as documented by G. Cornia and R. Paniccia in their seminal book, The Mortality Crisis in Transitional Economies [New York, 2000]), but in terms of workforce losses the break that began in 1990 would not have affected working-ages as youth would not have become adults within the eight year timeframe.

  6. United Nations Development Programme, “The Human Cost of Transition: Human Security in South East Europe.” Available at: http://hdr.undp.org/en/reports/regional/europethecis/name,2799,en.html

  7. S. Rosefielde. 2001. “Premature Deaths; Russia’s Radical Economic Transition in Soviet Perspective,” Europe-Asia Studies v53(8): 1159–76.

  8. Source for Figure 2.1: Authors. Data from the World Bank World Development Indicators 2013 Edition.

  9. M. Field. 1999. “Reflections on a Painful Transition: From Socialized to Insurance Medicine in Russia,” Croatian Medical Journal v40(2). Available at: http://neuron.mefst.hr/docs/CMJ/issues/1999/40/2/10234063.pdf; cited from S. Sachs, “Crumbled Empire, Shattered Health,” Newsday, Oct 26, 1997, p. A4. In 1937, the head of the census was executed for getting the “wrong” data.

  10. Another sign that the former Soviet mortality data were reliable was that as all-cause death rates had increased greatly
between 1991 and 1994, but breast and lung cancers rates among all age groups over the whole decade were steady. This stability is an indication of internal validity, as cancer deaths should not fluctuate rapidly and aren’t directly impacted by the economy. See V. Shkolnikov, M. McKee, D. Leon, L. Chenet. 1999. “Why Is the Death Rate from Lung Cancer Falling in the Russian Federation?” Eur J Epidemiology 15:203–6.

  11. M. McKee. 1999. “Alcohol in Russia,” Alcohol and Alcoholism 34:824–29; M. McKee, A. Britton. 1998. “The Positive Relationship Between Alcohol and Heart Disease in Eastern Europe: Potential Physiological Mechanisms,” Journal of the Royal Society of Medicine v91; O. Nilssen, et al. 2005. “Alcohol Consumption and Its Relation to Risk Factors for Cardiovascular Disease in the North-west of Russia: The Arkhangelsk Study,” International Journal of Epidemiology v34(4): 781–8 8. Available at: http://ije.oxfordjournals.org/content/34/4/781.full

  12. D. Lester. 1994. “The Association Between Alcohol Consumption and Suicide and Homicide Rates: A Study of 13 Nations,” Alcohol and Alcoholism v30(4): 465–68. Available at: http://alcalc.oxfordjournals.org/content/30/4/465.short; M. McKee, A. Britton. 1998. “The Positive Relationship Between Alcohol and Heart Disease in Eastern Europe: Potential Physiological Mechanisms,” Journal of the Royal Society of Medicine v91; C. S. Fusch, et al. “Alcohol Consumption and Mortality Among Women,” New England Journal of Medicine a332(10): 1245–50. Available at: http://www.ncbi.nlm.nih.gov/pubmed/7708067; R. Doll, et al. 1994. “Mortality in Relation to Consumption of Alcohol: 13 Years’ Observations on Male British Doctors,” BMJ v309(6959). Available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2541157/; A. L. Klastky, M. A. Armstrong, G. D. Friedman. 1992. “Alcohol and Mortality,” Ann Intern Med v117(8): 646–54. Available at: http://www.ncbi.nlm.nih.gov/pubmed/1530196