Chapter 9: The Losers' Ledger

In the textbooks, resources flow to their highest-value uses. A factory closes in Ohio because production is more efficient in Guangzhou. Workers are released to find new employment. Capital is freed for more productive investments. The economy, measured in aggregate, grows more efficient.

In Youngstown, the textbook version looks different.

The steel mills that defined the city began closing in the late 1970s. Within a decade, the region lost fifty thousand manufacturing jobs—the economic foundation of generations. The jobs that replaced them, if they came at all, paid less and offered less security. Young people left. Property values collapsed. Churches emptied. Social networks frayed.

And then came the drugs.

The opioid epidemic didn't arrive randomly. It followed the map of economic devastation, concentrating in the communities deindustrialization had hollowed out. As if the pharmaceutical companies had drawn a map of American despair and followed it to market.

This is the other side of creative destruction: the destruction part. Economic transformation creates winners and losers. The winners are diffuse—consumers who pay slightly less for steel, investors who earn slightly higher returns, workers in Guangzhou who gain employment. The losers are concentrated—specific people, in specific places, watching their world collapse.

Markets are not equipped to handle this distribution. They can measure efficiency; they cannot measure dignity. They can price labor; they cannot price the meaning that work provides. They can calculate optimal resource allocation; they cannot calculate what communities owe to those who built them.

Deaths of Despair

In 2015, economists Anne Case and Angus Deaton published a finding that stunned the research community: mortality rates were rising among middle-aged white Americans without college degrees. For the first time in a century, a large demographic group in a wealthy country was dying younger than their parents had.

The causes were what Case and Deaton came to call "deaths of despair": suicide, drug overdose, and alcoholic liver disease. These three pathologies, though medically distinct, shared a common root. They were deaths of people who had given up—on their futures, on their communities, on life itself.

The pattern was tightly bound to economics. Deaths of despair concentrated among those without college degrees, in regions that had lost manufacturing jobs, in communities where the pathways to middle-class life had closed. The correlation wasn't perfect—despair is complex and personal—but the aggregate pattern was unmistakable. Economic devastation preceded social devastation preceded physical death.

Between 1999 and 2017, over 600,000 Americans died deaths of despair—more than died in World War II. It's an epidemic hidden in plain sight, happening not in some distant country but in the towns that markets forgot.

The Geography of Abandonment

Drive through the former industrial heartland and you see the evidence: closed factories, empty storefronts, houses selling for less than cars. The economic logic is clear—these places are "inefficient," their workers too expensive, their infrastructure obsolete. Capital has moved on.

But people cannot move on so easily. They have roots. Families. Mortgages they can't sell out from under. Elderly parents who need care. Skills that don't transfer. The factory worker who spent thirty years mastering the mill's machinery doesn't simply become a software engineer because the market now values software engineers.

Economic theory often treats labor as mobile—a resource that flows where returns are highest. But labor is embodied in human beings, and human beings are not resources. They have attachments, limitations, needs that markets don't account for. The assumption of labor mobility is a convenient fiction that makes the math work out while ignoring the wreckage left behind.

Communities, too, have value that markets can't price. The church that provided belonging. The union hall that organized mutual support. The diner where everyone knew your name. The informal networks of people who helped each other through hard times. When a factory closes, it doesn't just end employment—it severs the threads that wove a community together.

The market sees a reallocation of resources. The community experiences an amputation.

Structural Adjustment: The Global South

The same logic that devastated American manufacturing towns played out at larger scale across the Global South.

When developing countries faced debt crises in the 1980s and 1990s, the International Monetary Fund and World Bank offered rescue packages with conditions attached. These "structural adjustment programs" required borrowing countries to open their markets, cut government spending, privatize state enterprises, and remove subsidies. The theory was straightforward: free markets would generate growth, growth would enable debt repayment, and everyone would benefit.

The practice was grimmer. Structural adjustment often meant slashing health and education budgets—investments in human capital with long-term returns sacrificed for short-term fiscal targets. It meant privatizing utilities that then raised prices beyond what poor families could afford. It meant opening markets to imports from wealthy countries whose own agricultural sectors remained heavily subsidized, devastating local farmers.

The human costs were enormous. Child mortality rose in some adjusting countries. School enrollment dropped. Malnutrition increased. The costs fell most heavily on those least able to bear them: the poor, the rural, women and children. The benefits, such as they were, flowed to creditors in wealthy nations and to local elites positioned to profit from privatization.

Whether structural adjustment helped or harmed remains debated. But the distribution is clear: creditors and elites were protected while ordinary citizens bore the cost. The market logic was impeccable; the human logic was obscene.

The Adjustment Problem

Here is the core issue: markets can generate aggregate gains while creating concentrated losses. Economic transformation can make society as a whole wealthier while making specific people poorer. And without mechanisms to share the gains with the losers, market legitimacy erodes.

In theory, the gains from trade are large enough to compensate the losers and still leave winners better off. Economists call this a "potential Pareto improvement"—everyone could be made better off if appropriate transfers occurred. But transfers don't occur automatically. They require political institutions, tax systems, social safety nets. They require, in short, deliberate intervention to do what markets will not do on their own.

In practice, the winners often capture politics and block such transfers. The beneficiaries of globalization—multinational corporations, financial institutions, educated professionals—have resources and organization. The losers are dispersed, disorganized, often disengaged from political processes they've concluded don't serve them.

The result is a legitimacy crisis. When people see that the game is rigged—that the same system that enriches the already-rich impoverishes communities like theirs—they lose faith in that system. Political instability, populist backlash, and social breakdown follow. Markets depend on social consent, and social consent erodes when market outcomes feel unjust.

What Is Owed?

Here the question shifts from economics to ethics. What do societies owe to those who lose when economies transform?

One answer: nothing special. Markets create winners and losers; that's how they work. The losers should have anticipated change, acquired new skills, moved to where the jobs are. Personal responsibility means bearing the consequences of your choices.

But this answer ignores several things. People didn't choose where they were born or what opportunities their communities offered. Workers who joined industries in their youth couldn't have foreseen decades later that those industries would collapse. And the "choice" to stay in a devastated community is often less choice than constraint—the mortgage underwater, the elderly parent immobile, the skills non-transferable.

Another answer: societies owe their members basic security. Unemployment insurance, retraining programs, wage subsidies, early retirement options—these create a floor beneath which no one falls. The details matter enormously, and many programs fail to deliver on their promises. But the principle is that membership in a society confers some protection against market misfortune.

A third answer: societies owe proactive transition support. Not just safety nets for after the fall, but active investment in communities facing disruption. Infrastructure, education, economic development—efforts to ensure that when one industry dies, another can be born. This requires foresight, resources, and political will—all scarce commodities.

The Coherentist Reckoning

From a coherentist perspective, the losers' ledger represents a fundamental failure of resonance.

A coordination system that generates aggregate gains while devastating specific communities is not resonating with human needs. The people in Youngstown, in the Rust Belt, in the villages of adjusting nations—they are not noise in an otherwise harmonious system. Their suffering is data. It tells us that market coordination, however efficient in aggregate, fails to create the distributed flourishing that legitimizes an economic order.

Coherentism asks: what would coordination look like that didn't leave corpses in its wake?

One element would be recognition: seeing the losers, counting their costs, including them in the calculus. Current economic metrics make the losers invisible. GDP rises while life expectancy falls. The numbers improve while the people perish. Better accounting would surface what markets hide.

Another element would be distribution: mechanisms to share gains widely rather than concentrating them narrowly. This doesn't mean preventing all inequality—market incentives require some differential rewards. But it means ensuring that economic transformation doesn't impoverish some while enriching others without limit.

A third element would be agency: giving affected communities voice in decisions that shape their fates. When factories close, when trade deals are signed, when industries decline—the people most affected are typically least consulted. Their knowledge of their own circumstances, their preferences for their own futures, their rights as citizens and human beings—all are overridden by decisions made elsewhere.

The Thread Forward

We've seen what markets can do: aggregate information, coordinate strangers, drive innovation, generate wealth. We've seen what markets cannot do: provide public goods, internalize externalities, govern commons, protect the people they displace.

The next part of our story turns to the alternatives that the twentieth century attempted—central planning's promise and its collision with reality. The question the losers' ledger raises—how to coordinate for shared flourishing rather than concentrated gain—has never been answered satisfactorily. The search continues.