The Price of Civilization: Reawakening American Virtue and Prosperity. A must read I'm buying

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Review by Tiger CK

In the Price of Civilization Jeffrey Sachs makes a powerful call for significant changes in the way the U.S. government manages the economy. According to Sachs, an economics professor at Columbia University, Washington has not devised policies that meet the challenge of globalization. Rather than investing in education and infrastructure, as many Asian countries have during the last twenty years, they have resorted to popular short-term stimulus measures such as cutting taxes and reducing interest rates. These problems have been exacerbated by lobbyists whose influence over Republicans and Democrats has made meaningful change impossible.

Sachs argues that the best solution for these problems is for Washington to move toward a "mixed economy" in which a more effective government plays a larger role in regulating businesses. He believes that the current problems in the American economy are structural and not short-term. With the Republicans and Democrats both seeking solutions that will prop up the economy for a year or two rather than address the structural issues, the United States is on the wrong course and not likely to return to the levels of prosperity it previously enjoyed. These problems can only be solved if the government makes a long-term commitment to investing in industry in part by raising taxes on the wealthy and reducing the growing gap between the rich and poor.

Sachs's bold argument is not likely to be welcome by either Democrats or Republicans. One Republican congressman (Paul Ryan) has already published a scathing review of the book in the Wall Street Journal more or less equating Sachs's proposals with socialism. But I think Americans fed up with Washington and its inability to solve the current crisis will find many of Sachs's arguments very compelling. The majority of Americans do wish that the government could be reclaimed form corporate lobbyists and the people empowered and they recognize that politicians on boths ides of the spectrum are part of the problem.

Is Sachs right? I don't agree with him on everything but I do think he makes many valid points especially on the shortsightedness of our politicians and the methods that they are now using to attack our economic problems. I am not completely sold on Sachs's mixed economy solutions, however. I believe the key to economic policy is not whether we lean toward laissez-fair or a mixed economy. In fact, both of these have been successful in certain situations and may be part of the solutions. The key is that our economic policy be smart and farsighted. In this sense, Sachs's book is at least a step in the right direction.

Review By R. Sampson

In "The Price of Civilization" Jeffrey Sachs, one of the top economists specializing in poor and developing countries, turns his attention to the problems facing the United States, a task that he finds himself "deeply surprised and unnerved" to have to undertake.

Sachs is a strong proponent of the "mixed economy" and argues that while the free market works in most cases, it cannot be expected to solve all problems by itself. Government has a crucial role, and Sachs lists three primary goals: efficiency, fairness, and sustainability. In order to achieve these things, government must provide services like regulation, redistribution of income to protect the most vulnerable, and investment in public goods like infrastructure and basic scientific research.

Sachs argues that, beginning with the Reagan administration, the U.S. government has increasingly abandoned this role, and has been more and more subject to capture by corporations and the wealthy elite. As a result of this, and of a distracted consumption-focused population, policy makers have underestimated the impact of globalization and failed to make the necessary investments and adaptations to insure the country's success in the future.

Sachs' prescriptions include increased public investment, especially in education, and a dramatic reduction in military expenditure. He also argues convincingly throughout the book that marginal taxes on the wealthy should be increased, as the rich are not paying their fair share of the "price of civilization."

One thing missing from the book is a deep discussion of the disruptive affect that advancing technology is having on labor markets. Sachs mentions this in some places, but gives far more emphasis to globalization. The reality though, is that computers and robots are quickly getting better at even more skilled jobs, and this seems likely to accelerate over the next 10 years. For a more detailed look at this issue, I would also recommend reading The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future, which looks at how technology and globalization will shape the future job market.