The Price of Civilization - Jeffrey D. Sachs

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the complete review - economics / government

The Price of Civilization

by
Jeffrey D. Sachs

general information | review summaries | our review | links | about the author

Title:	The Price of Civilization
Author:	Jeffrey D. Sachs
Genre:	Non-fiction
Written:	2011
Length:	pages
Availability:	The Price of Civilization - US
	The Price of Civilization - UK
	The Price of Civilization - Canada
	The Price of Civilization - India

US subtitle: Reawakening American Virtue and Prosperity
UK (and Canada) subtitle: Economics and Ethics After the Fall

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Our Assessment:

B : breezily written, and makes many good points -- but also comes with unreasonable expectations

See our review for fuller assessment.

Review Summaries
Source	Rating	Date	Reviewer
The Economist	.	12/11/2011	.
Financial Times	B+	14/10/2011	Martin Sandbu
The Guardian	.	6/10/2011	Robert Skidelsky
The Spectator	A	29/10/2011	Peter Jay
Times Higher Ed.	.	3/11/2011	Colin Crouch
Wall St. Journal	D-	1/10/2011	Paul Ryan

From the Reviews:

"Mr Sachs’s analysis can be doctrinaire and one-dimensional, but it is almost always grounded in solid economics. (...) Mr Sachs’s political analysis is less persuasive than his economics. Americans may tell pollsters they want the rich to pay more tax, but they would also prefer the government to cut spending rather than raise taxes. He vastly overstates the similarities between the Democratic and Republican Parties." - The Economist

"Sachs manages to paint an alarming picture of the US, while leaving the reader with a sense that its problems are eminently fixable. A second achievement is the sheer sweep of his analysis, which flouts the boundaries of economics to encompass politics, psychology and moral philosophy. The gain in perspective mostly outweighs the loss in authorial authority. (...) Sachs’s enthusiasm for planning is not without its problems. He neglects the cynicism bred by nebulous or missed goals. There is a disquieting scorn for politicians." - Martin Sandbu, Financial Times

"He is a fine economist and statistician, and if you want to stockpile facts and arguments for radical advocacy, this is the book for you. I had hoped, though, for something more arresting than a millennium manifesto for the Democratic party. It is also a very American book." - Robert Skidelsky, The Guardian

"Jeffrey Sachs’s new book is a landmark in this great and essentially American tradition, setting out with luminous clarity the narrative and the analysis of how the US and the wider world has been traduced and seduced by debased ideology, racist reflexes and huge vested interests from its liberal and enlightened roots. (...) Sachs goes further still. He restores our faith in mankind, particularly American mankind" - Peter Jay, The Spectator

"An outside reader, less caught up in the midst of the misuse of economics that lies at the heart of much of what has happened, especially around the financial crisis, may wish for a more moderate tone and at times tighter language. (...) But let these reservations not detract from a fine and timely book. And non-economists should not be deterred by the author's technical reputation: the book is thoroughly readable and accessible." - Colin Crouch, Times Higher Education

"The book's veneer of economic analysis cannot conceal what is essentially a crusade against the free enterprise ethic of our republic. (...) (U)ltimately, Mr. Sachs's quarrel is with our founding principles of equality and liberty. Underlying the arguments in The Price of Civilization is a contention that the Constitution is too conducive to freedom, that it endorses an economic system too friendly to growth and the satisfaction of appetite, that it creates political institutions too inattentive to our national character. (...) This book's budget proposals and economic policies are profoundly revealing. They lay bare the real agenda of those who wish us to abandon the American idea and consign our nation to the irrevocable path of decline." - Paul Ryan, Wall Street Journal

Please note that these ratings solely represent the complete review's biased interpretation and subjective opinion of the actual reviews and do not claim to accurately reflect or represent the views of the reviewers. Similarly the illustrative quotes chosen here are merely those the complete review subjectively believes represent the tenor and judgment of the review as a whole. We acknowledge (and remind and warn you) that they may, in fact, be entirely unrepresentative of the actual reviews by any other measure.

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The complete review's Review:

Jeffrey Sachs' The Price of Civilization is yet another book about an America that has lost its way, and an economy that is a mess. It does not begin promisingly, as Sachs opens the book by claiming:

At the root of America's economic crisis lies a moral crisis: the decline of civic virtue among America's political and economic elite. A society of markets, laws, and elections is not enough if the rich and powerful fail to behave with respect, honesty, and compassion toward the rest of society and toward the world.

       Expecting "respect, honesty, and compassion" from anyone -- especially economic and political leaders -- is a tall, tall order, and in a capitalist/free-market democracy it is only laws and elections that can keep the abuses of those in power in check; where America has gone off the rails is in its belief that the market is the strongest guarantor of freedoms and opportunity. (If not shaped and regulated to the ends of benefiting society as a whole, a 'free' market surely inevitably consolidates power and wealth among the very few -- witness the rise of the financial sector in the American economy (which contributes far below its weight to the well-being of society, but artificially generates lots of cash for those participating in the system) and the fact that it is the super-wealthy that have benefitted most from what new wealth has been generated in the US for several decades now, with barely any growth seen for the overwhelming masses.)
       Fortunately, Sachs does not focus nearly as much on the 'moral crisis' he diagnoses as one might fear, and he properly points to how the political and regulatory system (and hence the markets) have been co-opted by an elite. He finds the political process one that far too much of the time looks only towards the short-term -- stuck in a constant election (and hence fundraising) cycle, especially in the House of Representatives, where congressmen face (re-)election every two years -- and is increasingly incapable of dealing with larger and long-term issues, fiddling with small band-aid fixes while unwilling to tackle the bigger issues, from spending reform to investment in infrastructure, R&D, and education. Lobbyists and industry exerting far too much influence on the legislative process, and a population easily brainwashed by advertising (and an often co-opted media), have led the way to disaster, and continue to exacerbate it.
       While having some faith in 'the market', Sachs suggests it does not function well in certain areas -- including financial markets and the environment, to name two areas in which there has been significant de-regulation in the past decades, with spectacularly catastrophic results. Similarly, the 'privatization' of public services -- often in industries that do not lend themselves to market competition (most obviously the defense industry, which is now supported by tens of thousands of 'contractors' even in America's forays abroad -- a great get-rich-quick (and be-unaccountable) scheme for cronies all over ... -- but also everything from prison systems to perennial favorite education) -- has shifted work away from government but far more often than not otherwise conferred few benefits. An unfettered media (and specifically advertising) industry, where the public is misled ($300 billion spent on advertising, "paid for by somebody who expects a commercial return on his investment") further muddies and complicates matters.
       Sachs repeatedly hammers home several obvious points, including how unreasonable the Republican party line on taxation is. From the fact that taxes are at historically low levels or that, for example, the share of GDP paid in federal corporate taxes has fallen from an average of 3.8% in the 1960s to 1.8% in the 2000s, it should be clear that taxation policy should be more flexible (the jr. Bush's cutting taxes at the same time as he vastly increased government spending by launching the incredibly expensive boondoggles in Afghanistan and Iraq (spending the benefits of which are not immediately or obviously apparent to citizens back in the United States, unlike investment in domestic infrastructure, for example) is a classic example of what not to do). Aspects of this are admittedly difficult to deal with: as Sachs notes, there is an international race to the bottom regarding corporate taxation (a race no one can win in the long term, as he points out), though his solution of international government collusion to wipe this out perhaps expects too much from the international community being able or willing to work together.
       Looking at the current winners and losers, it surely is easy to see where the power and influence currently lie, and who benefits -- even, as Sachs notes, under the Obama administration, which he correctly complains has done little to even try to level the playing field in any meaningful way. Most obviously, corporations in the US are sitting pretty (and sitting on loads of cash) -- while not hiring (arguably justifiably in a market economy where demand has shriveled up) --, with 2010 corporate profits at an all-time high. 'Wall Street' has emerged fat and happy (well, when not complaining about the mostly toothless (but admittedly annoying -- more paperwork to file, etc.) regulations that have been imposed on it) from the crisis it caused, with no personal responsibility having been assumed by the still-huge-bonus-demanding employees and bosses (or any criminal charges filed against individuals by the government). Despite absurdly low interest rates banks show little interest in lending (again for perfectly valid -- but socially short-sighted -- market-reasons), to spur growth and demand (and instead raise fees on hapless consumers to gouge them in another way). And, of course, the super-wealthy are the ones who have made off like bandits over the past decades, enjoying by far the greatest growth in personal wealth of any demographic, while most Americans (the vast, vast majority) have been doing little more than treading water; whatever trickle-down was expected hasn't yet.
       Sachs believes that this isn't exactly news to most Americans:

The public knows the score and detests it. Yet at the end of the day, Americans have elected their leaders. Americans have allowed themselves to be manipulated by corporate propaganda.

       Naturally, the only solutions he can offer are of the paternalistic sort: Americans must be helped despite themselves. It's a tall order. This is a country where a significant part of the population wants to see less government, not more. Sachs makes a decent case why many of these folks are deluding themselves -- turns out, most Americans like a lot of this government interference, even (or especially) social support like Medicare -- and argues: "There is much more consensus than meets the eye". If so, however, that consensus is certainly staying pretty well hidden. And given, for example, current (late-2011) positions on taxation -- with Republicans (legislators and would-be presidential candidates) unwilling to even consider raising taxes (from current levels, not the much higher ones of the Reagan or sr. Bush, much less Nixon or Eisenhower eras, mind you) -- or business and environmental regulation and enforcement (with both the Republican and Democratic party wanting, to different extents, to pare them down -- admittedly at least somewhat of a consensus, albeit leading in the wrong direction) or investment in infrastructure and education, Sachs' hopes for a consensus leading to positive change seem very pie-in-sky.
       Interestingly, Sachs' is also a deficit hawk, and argues that it is important that the US gets its financial house in order (noting his doubts about the short-sighted pitching of "tax cuts today as a demand stimulus (according to the Democrats) or a supply stimulus (according to the Republicans)"). As he notes, the silly focus on earmarks and foreign aid as places for cuts is typical of the misguided way the subject is discussed and presented to the public (eliminate both completely and you save just 0.3% of GDP, a very small drop in the bucket). He makes (economically) realistic suggestions as to how the deficit can be addressed -- but in the current political climate these are entirely untenable.
       Sachs finds the public's loss of trust and faith in government -- fostered and fanned by a right-wing that would like to whither away the state almost entirely (except for, for some reason, an expensive Department of Defense) -- is a fundamental problem that he acknowledges is difficult to overcome. Some of his suggestions as to how matters could be improved are eminently sensible -- getting money out of politics would be the obvious way to start, but in a country where money has been equated with free speech, that bedrock of the nation, it seems unlikely that will be possible any time soon.
       Sachs' faith in government (not the current dysfunctional American one, but government in the abstract) is understandable, and he longingly repeatedly points to countries that manage to get it right, or at least do better than the US -- led by the Nordic nations, of course, but including much of the EU (except those profligate (and under-taxed) southern European nutcases like Greece and Italy -- Sachs presciently hedged his bets here). But his call for "a mindful society" sounds a lot like wishful thinking and unrealistic idealism. He even goes so far as to claim:

There are many errors in libertarian philosophy, but the biggest of all is its starting point: that individuals can truly find happiness by being left alone, unburdened by ethical or political responsibility to others. Buddha and Aristotle knew better. Without accepting social and political responsibilities, the individual cannot actually find fulfillment.

       Making claims about how others might (or can't) find fulfillment is a dangerous game, and it's not just libertarians who would deny this particular one. America's individualistic frontier-mentality -- and an economy based on a constant increase in the self-feeding consumption frenzy that is what makes capitalism 'work' -- make for the short-sighted, over-consuming, polluting society that is the United States. Folks may or may not be 'happy' (Sachs finds the statistics to say they're not, at least not compared to many less well-off (as measured strictly in money-terms -- GDP per capita, etc.) nations), but to think that Americans will see the light and change these most fundamental ways seems to be expecting far too much. But who knows, if some of the small steps can be managed first -- ending the 'corporatocracy', getting at least some of the (influence-buying) money out of politics, educating the public about long-term consequences and costs -- maybe there's some hope for greater change eventually.
       The Price of Civilization is an odd mix of sensible economic and policy discussion and wishful thinking idealism. Sachs' complaints about and diagnosis of a 'moral crisis', or his pinning his hopes on the 'Millennials' (the next generation) to act more sensibly are entirely subjective and not particularly useful; at their worst, these pronouncements ("Without accepting social and political responsibilities, the individual cannot actually find fulfillment") are more than merely annoying and threaten to undermine his more well-founded arguments. But Sachs does provide a good overview of much of that is wrong with the current situation, and provides some ideas (some practical, some very unlikely to be put into practice) of what might help set things right.
       A solid, readable overview of the current American condition, and much that is wrong with it.

- M.A.Orthofer, 16 November 2011

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Links:

The Price of Civilization:

Random House publicity page
Bodley Head publicity page
Fifteen Questions with Jeffrey D. Sachs in The Harvard Crimson
Q & A in the Toronto Star

Reviews:

Jeffrey Sachs:

Faculty page

Other books of interest under review:

See Index of books dealing with Business and Economics

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About the Author:

American author Jeffrey D. Sachs teaches at Columbia University.

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