Random House has recently published the paperback edition of “The Price of Civilization” by Jeffrey Sachs with a new preface by the author, addressing the rise and fall of the Occupy movement, the nomination of Romney-Ryan, and other events that have transpired since the book’s appearance in 2011.
With the presidential election now squarely focused on the economic issues Sachs expertly analyzes, the book has gained relevance during the past year and its sales should gain a second wind as a result.
Sachs, the well known macroeconomist at Columbia University, presents a clear and convincing diagnosis of what ails the U.S. politico-economic system. His treatise is, in fact, so convincing that it made this reader wonder whether a cure is not all but impossible. Sachs argues that our politics have been so thoroughly corrupted by the influence of corporations, the wealthy, and well-funded special interests, that nothing less than a restructuring of the entire system will restore it to health.
Despite the fact that the 2008 financial crash was famously called a crisis too good to waste, the government’s response only reinforced, rather than sought to change, the status quo. The cause of that failure is clear to Sachs. “As long as practical politics revolves around raising large sums for media campaigns,” he writes, “America’s corporatocracy will remain in place and the downward economic slide will continue.”
Although he is not the first to make this argument, Sachs makes it well, providing a lot of historical context and statistical support. He believes prosperity for the widest range of Americans depends on a mixed economy: a capitalist marketplace regulated by a strong, interventionist federal government. In his view, the U.S. lost the appropriate balance between free markets and government intervention during the Reagan years, when the federal government was cast as an obstacle to prosperity, and tax revenues began to seriously decline. Every administration since 1980 has exacerbated the problem.
Sachs’ central argument is reminiscent of Ralph Nader’s campaign theme in 2000. “We can consider America’s political system today to be not so much a true democracy as a stable duopoly of two ruling parties, whose members shout at each other from time to time but which both basically stand for many of the same things when it comes to issues touching the interests of business, the rich, and the military,” writes Sachs.
“Both parties are instruments of powerful businesses and the rich. Rather than aiming for the median voter, as in the textbook two-party election theory, both parties actually aim to the right of center to attract high-income campaign contributors. For the Republican Party, this is easy and natural. For the Democrats, who ostensibly represent the needs of the poor, it means party leaders such as Presidents Clinton and Obama, who relentlessly side with Wall Street and the rich and just as relentlessly apologize to their base.”
In an exhaustive examination of the weaknesses in the U.S. economy today, Sachs recounts how the health care industry successfully diluted the reforms of Obama’s health care legislation; how Alan Greenspan’s Federal Reserve stoked the housing bubble with easy credit; and how the big banks unethically exploited lax regulation to wreak havoc in the marketplace. Sachs is not only scathing in his indictment of corporate America, he is also less willing than other progressives to let the government off the hook.
“On issue after issue,” he writes, “Washington politics back the special interests rather than broad public values.” In fact, Sachs spares nobody, harshly criticizing environmental lobbyists, for example, for opposing development of virtually all forms of energy production, including alternatives such as wind and solar. The result is what he calls “the perfect political storm, in which Washington has been overrun, and overtaken, by the lobbies. The wealth/power spiral has continued to amplify the political disaster.”
Okay, by the end of part one, “The Great Crash,” I was convinced, but I was also skeptical, given this analysis, that reform is possible. First, Sachs demonstrates that there are really no critical differences between the economic agendas of the two parties that control the government. Second, he notes that the parties are unable to compromise or collaborate in a meaningful way on difficult issues. Third, he acknowledges that structural reform would depend on those parties working together to pass legislation that would seriously dilute their control, thereby threatening the ability of individual legislators to maintain power. So, why would they do that?
In part two of the book, “The Path To Prosperity,” Sachs lays out his prescription for reform. I found most of his suggestions laudable and logical, but the whole section seems somewhat forced, as though a scholar who laid out a complex, frightening problem felt compelled to offer at least the hope of a solution. This is the case with Sachs’s list of the “Seven Habits of Highly Effective Governments,” which include qualities I can’t quite see catching on in Washington, such as “make multiyear plans,” “end the corporatocracy,” and “decentralize.”
I’ll cite just one example of the many reasonable economic reforms Sachs promotes, this one to reduce unemployment. The Germans, he reports, have had success with job sharing: by reducing the hours of individual workers without reducing the amount of work done, they have increased the number of people employed. “If work hours were diminished by 5 percent, for example, the same total work hours could be parceled among 5 percent more workers. This is not merely a short-term remedy, though it could serve as that; it is also part of a long-term reform to help Americans re-balance work and leisure.” Well, that makes sense to me, but I would not want to hold my breath until U.S. employers, big or small, sign on for the experiment.
This is not to say part two is not full of good ideas, some of them big and bold. I particularly appreciated the chapter called “The Mindful Society,” in which Sachs laments: “The relentless drumbeat of consumerism into every corner of our lives has led to extreme shortsightedness, consumer addictions, and the shriveling of compassion.” I also welcome his call for a renewed commitment to fairness, generosity and honesty in public life, and for the denunciation of unbridled greed in American business.
Sachs places his hope for political reform, and for the massive, creative problem-solving his prescription requires, on America’s youth, the so-called Millennial generation that drives the Occupy movement. This generation is, he writes, “less likely to be divided or even torn asunder by the culture wars of the boomer generation. They will live naturally with diversity. They will accept a more activist government. They will be more attuned to environmental needs. All this points in the direction of the mindful economy, if the healing strengths of the Millennial generation’s tolerance and optimism are mobilized for collective political action.”
That seems like a lot to expect, especially given the record Sachs has already described regarding the impotence of third parties and reform movements in American politics. As much as Sachs is contemptuous of the military-industrial complex and the two-party system, I am equally in awe of the scale of those institutions and their power to sustain the status quo. I find it hard to believe any generation will muster the strength to remain outside America’s mainstream long enough, and simultaneously generate the resources necessary, to overhaul its very foundations. But I also find that “The Price of Civilization” has left me with a valuable hope: the hope that I’m wrong and its author is right.