The Rise of Markets and the Fall of Infectious Disease

Increased wealth has brought increased health.


Stephen Gold is policy adviser for Citizens for a Sound Economy.

My grandmother was deaf, a fact I got used to early in life, but something to which she never fully adjusted. Born with the ability to hear, she lost it in her teens to scarlet fever. The fact that I was unfamiliar with this affliction was of no surprise—most of the serious illnesses my grandmother talked about were foreign to me. The free enterprise system had wiped them out before I was born.

My birth followed my grandmother’s by only six decades, a mere blink of an eye in the annals of history. Yet in that brief time civilization had changed more than in all previous centuries combined, mainly through the evolution and expansion of capitalism. Political leaders first recognized the value of free trade and open markets in the 1700s. The concept spread steadily in the 1800s, until by the turn of the century much of the world—most of Europe and North America, as well as the colonies of the far-reaching British Empire—had adopted market economies.

Those countries that opted to remove government controls over the economy and allow private enterprise to flourish saw their citizens grow more affluent. More money meant higher living standards through scientific and technological advances, better nutrition and medicine, and better products and services that were more readily available to the public.

More than anything else, increased wealth brought people increased health.

There’s no better example of this than the dramatic reduction in deaths from infectious disease in Western society. It’s a David and Goliath story, a tale of how one portion of mankind came face to face with its most formidable enemy, and—using newfound knowledge and skills—vanquished its terrifying foe.

And yet, success came so quickly and thoroughly in this battle that most contemporary Americans don’t realize how very serious the threat once was. Even with the emergence of AIDS, younger generations of Americans do not fear communicable diseases the way their ancestors did. They take for granted the environmental and health gains we have made this century—and forget how these came about. Sadly, having won the battle so efficiently, we have lost perspective on how America got from there to here in such a short span of time.

It wasn’t too long ago that Americans, like so many others around the world, were caught up in a lifelong struggle with such terrifying but familiar contagions as diphtheria, tuberculosis, and typhoid fever. In fact, infectious disease has long been the scourge of human civilization. These restive viruses, bacteria, and protozoa often travel in contaminated water or droplets of saliva, grow on spoiled food, or hitch a ride on parasites like fleas and lice. They thrive in crowded living conditions and filth, and can generally be found in poorer societies that cannot afford the luxury of a cleaner, healthier lifestyle. Each year, for example, 900 million people in underdeveloped countries contract diarrheal diseases stemming from contaminated water and inadequate sanitation.[1]

Historically, the most devastating communicable diseases were plague, smallpox, and typhus. In the almost 3,000 years from the Trojan War to the First World War, those infectious diseases claimed probably hundreds of millions of lives worldwide. Fortunately for my grandmother, by the time she was born in 1896 most Americans did not have to deal with these afflictions. The U.S. had already made significant advances in health and environmental protection, especially as compared to the impoverished nations of South America, Africa, and Asia. Average life expectancy was about 40 percent longer in America than in those pre-industrial societies, and pandemic outbreaks were virtually unknown here.[2]

Even so, the United States at the turn of the century—far from being the simple, rustic country envisioned by Americans today—was in fact a nation under siege by infectious diseases. In 1900 over 500 Americans out of every 100,000 died from them, or the often inevitable complications resulting from such illnesses.[3] To put this kind of health threat into perspective, cancer, the scourge of modern America, kills about 200 of every 100,000 Americans each year.[4]



As the nineteenth century yielded to the twentieth, America’s top killer after heart disease was influenza and its companion, pneumonia. Back then prevention and treatment techniques for such illnesses were still in their infancy. As a result, in 1900 over 200 Americans out of every 100,000—more than 150,000 people—died from influenza or a subsequent case of pneumonia.[5]

The medical record got worse before it got better. In 1918, the final year of World War I, a flu epidemic claimed 550,000 lives in America, 30 million worldwide—three times the number that died in combat in four years of war.[6] Even today, the flu is nothing to sneeze at. About 30 out of every 100,000 Americans, primarily elderly, die from flu complications annually.[7] Still, influenza no longer represents the risk that it once did in our society.

How did we conquer such a devastating illness? Unlike most other communicable diseases, influenza is not associated as much with filth and overcrowding as with a lack of good medical care. Of course, modern medicine is as much a part of the free enterprise story as clean water, adequate sanitation, and improved nutrition. True, much of the foundation for our medical achievements may be traced to the work of dedicated scientists and mathematicians in the pre-industrial age. But it took far more than just brilliant minds to produce a healthier population.

In free market societies, a scientific discovery usually results in competition by entrepreneurs, producers, and doctors to make a profit from a marketable item. In such an atmosphere, each new discovery usually leads to an advance in technology, and ultimately to a new product or service for consumers.

In the battle against flu symptoms, this competitive process led to the development of antipyretics to reduce fever and analgesics to reduce aches and pains. Aspirin, developed near the turn of the century, was both, and as such was considered a miracle cure. Had it somehow been invented in the pre-industrial era, only one company would have been licensed to produce it, and only the politically favored rich would have had access to it. But in our market economy, numerous companies competed to get the drug into as many hands as possible. That meant coming up with less expensive ways to manufacture and sell it.

When it turned out aspirin was too acidic for some people’s stomachs, researchers turned their attention to developing a more soothing medicine. The result, acetaminophen, is used in hospitals nationwide under the brand name Tylenol. Most recently an even stronger analgesic, ibuprofen, has become popular with consumers.


Man versus Mycobacterium

After influenza, tuberculosis was the next great environmental threat to Americans at the century’s turn. The germ Mycobacterium tuberculosis is sometimes associated with poor hygiene—a social stigma for many turn-of-the-century Americans, a fact of life in much of the rest of the world, even today. Back then TB was also known as “consumption,” a telling description of the suffering it caused its victims. Another strain, usually transmitted to children through raw cow’s milk, was in past centuries a cause of severe deformities. In all, TB claimed about 195 out of every 100,000 American lives in 1900.[8]

The only effective treatment for turn-of-the-century Americans (aside from removing the infected lung) was bed rest, sometimes years of it. In fact, “TB farms” used to dot the countryside, isolating the sick from the rest of the population.

Fortunately, the rise of capitalism provided us with an assortment of tools with which to detect and fight Mycobacterium tuberculosis.

For starters, Louis Pasteur’s mid-nineteenth century research on bacteria led other researchers to develop a sterilization process for milk which kills the TB germ. But to market such a product, even regionally, would take special equipment that could heat large quantities of milk to 145° Fahrenheit, then rapidly cool it to below 50°. Then the milk would have to be stored at low temperatures, even during transportation. Who would want to invest the capital and manpower in the search for such technology?

The dairy farmers, of course. The fact that they were motivated by profits rather than philanthropy spurred them to action even more. A larger share of the market could be captured if they sold a safer product. There was some risk: Would consumers want to pay higher prices for the extra service? In this case, the answer was clearly yes. Consumers and health officials alike clamored for germ-free milk, and dairies purchased the necessary machinery and started “pasteurizing” their products.

Competition led other dairies to follow suit. The sterilization process was improved upon and made more efficient, making the product even more affordable. Today, of course, pasteurized milk is sold nationwide.

Other medical advancements, such as the development of vaccines, antibiotics, and x-rays, were equally important in the battle against tuberculosis. It took a combination of thorough research, entrepreneurial spirit, easy access to information, and money to develop all of these, conditions readily available through the freedom and economic incentives of our market economy.

In the decades between 1955 and 1985, tuberculosis declined to insignificance. Unfortunately, the U.S. has since seen a rise in the number of TB cases, mostly in large urban areas and at least partly as a result of the spread of AIDS. Yet to most Americans the threat of tuberculosis is still so remote—fewer than one out of every 100,000 dies from it[9]—that the term “TB farm” would, for today’s youth, more likely conjure up images of a diet facility than a rest home.[10]


Conquering Other Health Threats

Diphtheria and typhoid fever, caused by roving bacteria, were also among the greatest public health threats in 1900. Together they claimed 55,000 American lives, more than were killed in car accidents in the U.S. last year.

Diphtheria was contained only through the widespread immunization of infants and children in the last half-century. Once scientists discovered that antitoxins could be introduced into humans to fight such diseases, it was not long before pharmaceutical companies were inexpensively manufacturing these drugs on a large scale. Today, the risk of a fatal case of diphtheria is almost zero.[11]

Typhoid fever can present just as great a challenge to society: It kills a quarter of all its untreated victims. Typhoid epidemics are generally caused by contaminated water supplies, though the germ can also be spread by infected workers who handle food. That, in fact, is how Mary Mallon—better known as “Typhoid Mary”—caused the memorable outbreak of 1903. A carrier of the disease but never a victim, she worked as a food handler in New York City, and through her daily tasks managed to infect 1,300 people.

The threat of typhoid fever in this country was for the most part eliminated through technological advancements in water and sewage treatment. The use of chlorine in public water supplies was an especially effective step in preventing the spread of the bacteria Salmonella typhi.

Chlorine’s value as a purifier was known as early as 1800, but at that time there was no system in place to protect the water supplies of large communities. Only as American cities and towns grew and prospered could they afford such an effort to protect their drinking water. Communities first developed reservoirs, then a process to treat the water before it was consumed, then a network of pipes to bring the water into people’s homes, and finally additional treatment facilities to recapture the water once it had been used.

All this costs money, and only a relatively affluent society can afford it. Even today, as we approach the twenty-first century, a billion people in underdeveloped countries don’t have access to clean water.[12]

There were other serious infectious diseases in America 90 years ago, ailments which, by the time I came along, seemed as remote as the horse-and-buggy. Pertussis, or whooping cough, a highly contagious bacterial infection, killed a higher percentage of the population in 1900 than chronic liver disease and cirrhosis do today.[13] With the development of a vaccine, the threat was reduced to insignificance by 1960. Scarlet fever has virtually been eliminated, as has polio, a crippling disease which used to strike 20,000 Americans each year.[14] Then there were yellow fever, rheumatic fever, encephalitis—the list seems endless.

My own kids, of course, will never hear about most of these deadly threats. In the nine decades between my grandmother’s birth and my son’s, life expectancies increased 60 percent, from 47 to 75 years, and life got a lot easier for Americans.

Drugs and chemicals were developed to combat not just the micro-organisms that cause diseases, but the parasitic insects that transmit them. Our food supply became safer, with more widespread use of such things as refrigeration, packaging, preservatives, and cleaner industrial processes. In addition, our diets improved, with more access to vitamins, fresh fruits, and vegetables. Our water supply also became safer, as more and more communities modernized their sanitation facilities, along with their garbage treatment and disposal systems. Personal hygiene progressed as indoor plumbing became commonplace, making it far easier to bathe, wash clothes, and clean dishes. Additional advances in hygiene were made possible as new consumer products came on the market, like deodorant soap and household cleaners.


Wealthier and Healthier

All of these were made possible by our free market economy. The wealthier we’ve grown, the healthier we’ve grown. In effect, capitalism, operating under a responsive system of government, has enabled us to eliminate threats that have plagued mankind from time immemorial.

Unfortunately, communicable diseases remain one of the greatest threats to people in the developing world. As a result, there is a great deal more pain and suffering, and life expectancies are often still quite low. (Life expectancy, for example, is the same today for people living in Zambia, Laos, and Bhutan as it was for Americans in 1900.)[15]

But there is hope. True, capitalism is not a magic wand. As the former Communist countries of Europe are learning, an affluent market economy takes time to develop. Still, if the lesser developed countries of the world can liberate their economies from government control and encourage private enterprise, then future generations of children there will look upon infectious diseases like typhus, cholera, and tuberculosis the way I looked upon scarlet fever—as a relic of bygone, pre-market days. []

  1.   The World Bank, World Development Report 1992—Develop-ment and the Environment (New York: Oxford University Press, 1992), p. 5.
  2.   U.S. Bureau of the Census, Historical Statistics of the United States—Colonial Times to 1970, Part 1 (Washington, D.C., 1975), p. 55. Human life expectancy in pre-industrial societies is estimated to have averaged between 30 and 33 years. See, for example, Expectations of Life by H.O. Lancaster (New York: Springer- Verlag, 1990), p. 8.
  3.   Ibid., p. 58.
  4.   U-S- Bureau of the Census, Statistical Abstract of the United States: 1991 (Washington, D.C., 1991), p. 79.
  5.   U.S. Bureau of the Census, Historical Statistics, p. 58.
  6.   K- David Patterson and Gerald F- Pyle, “The Geography and Mortality of the 1918 Influenza Pandemic,” Bulletin of the History of Medicine, Vol. 65 (Spring 1991 ), p. 19.
  7.   U.S. Bureau of the Census, Statistical Abstract, p. 79.
  8.   U.S. Bureau of the Census, Historical Statistics, p. 58.
  9.   U.S. Bureau of the Census, Statistical Abstract, p. 79.
  10.   Historical Statistics, p. 58; Statistical Abstract, pp. 79, 85.
  11. .   National Center for Health Statistics, Vital Statistics of the United States, 1988, Vol. II, Part A (Washington, D.C., 1991), p. 93.
  12.   World Bank, op. cit., p. 5.
  13.   U.S. Bureau of the Census, Historical Statistics, p. 58; Statistical Abstract, p. 79.
  14.   “Infectious Diseases,” New Cyclopaedia Britannica (1989), Vol. 21, p. 531.
  15.   World Bank, op. cit., p. 218.


November 1992

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