The Price of Civilization: Reawakening American Virtue and Prosperity

Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.

Jeffery Sachs, an economist at Columbia University, is worried about the state of America. He sees a nation in which incomes for many have been stagnant since the 1970s in real (inflation-adjusted) terms, increasing income inequality, a chronic budget deficit and resulting increase in government debt, increased poverty, crumbling infrastructure, and an unwillingness to deal with climate change.

The Price of Civilization is a well documented book with end notes and a list of sources consulted, as

Jeffery Sachs, an economist at Columbia University, is worried about the state of America. He sees a nation in which incomes for many have been stagnant since the 1970s in real (inflation-adjusted) terms, increasing income inequality, a chronic budget deficit and resulting increase in government debt, increased poverty, crumbling infrastructure, and an unwillingness to deal with climate change.

The Price of Civilization is a well documented book with end notes and a list of sources consulted, as well as a guide to further reading. The body of the text contains many charts, often comparing the United States with other wealthy nations. Sachs also cites much opinion survey data.

Sachs appears to be an unusual figure, a liberal non-Keynesian. He appears to believe that attempts to stimulate economic growth through increased government deficit spending will fail. Although I was aware of the converse of Sachs, conservative Keynesian economists such as Gregory Mankiw at Harvard and John B. Taylor at Stanford, Sachs was a new category in my taxonomy of economists.

Sachs blames our lack of response to these problems indirectly to a public too distracted by mass media to pay serious attention to politics, and more directly to the dominance of a small number of powerful lobbies representing the financial, health care, and defense industries. Other contributing factors include the Civil Rights movement of the 1960s, which resulted in the Republican Party becoming dominant in the Sunbelt, and the relative increase in the population of Sunbelt states.

Apparently the main way out of this sad state of affairs is for Americans to bestir themselves and become better women and men, focusing less on accumulating material goods and more on the common good. Fortunately for Sachs, the survey data he cites indicates that they share his values. I have some doubts about this, partly because the views of voters rather than the general public is more important and not necessarily the same, and partly because I suspect people are rather more willing to say they are in favor of government spending when they are not confronted with the bill, In any case, it appears that the increased “mindfulness” of the American population is supposed to result in public campaign financing, the provision of free media time, ban campaign contributions from lobbying firms, and shut the revolving door from government to interested firms (pages 244-245.) I wonder how much of this would be deemed constitutional by the Supreme Court. Sachs says he has been told in the past in his work in other countries that such changes were politically impossible (and were then enacted) but I wonder how many of those nations were under the gun of the International Monetary Fund, World Bank, or some other creditor.

His main budget policies would appears to be a reduction in military spending, an increase in domestic discretionary spending on research in renewable energy and on maintaining and improving our infrastructure. He would change the Obama health care legislation by either adding a government plan or moving towards a single payer plan – I’m not clear which. Other goals would be to increase the percentage of Americans in their late 20s with a bachelor’s degree to 50% by 2020, improving test scores (I assume for high school students) relative to other rich nations, and bringing unemployment down to 5% by 2015. To do all this, federal taxes would increase from about 18% of gross domestic product (GDP) to about 24% of GDP. Part of the increase in taxes would be used to funding programs at the state and local level, as Sachs believes that leaving taxation to local or state governments encourages a “race to the bottom” among these entities. Sachs does not believe that the Medicare or social security programs offer much scope for budget cutting without harming the beneficiaries.

I have reservations about some of Sachs goals and themes. I have doubts about his goal of increasing the percentage of people with bachelor’s degrees and more importantly about his proposal to do so by increasing financial support for students. From my reading of Crazy U: one dad’s crash course in getting his kid into college by journalist Andrew Ferguson, it would appears that increasing financial aid merely results in a quick dollar for dollar increase in tuition, leaving students where they were before. From my reading of Launching the Innovation Renaissance: a new path to bring smart ideas to market fast by the economist Alex Tabarrok, it would appear that we have gotten more people with bachelor’s degrees in the last few decades, but they have been in non-technical areas which don’t make the recipients of these degrees much better off financially and which don’t contribute to increased technical innovation, a useful way of increasing economic growth. Therefore, I don’t think that merely having more people go to college is useful. Given our poor high school graduation rate, discussed in Tabarrok’s book, I think improving that would be a better first step. I also suspect that Sach’s support of government supported job training is misplaced in the American context, where actual training seems rather uncommon; see Gordon Lafer’s the job training charade.
Sachs places much hope in the Millennial Generation, those between 18 and 29, supporting his policy views. He cites polling data suggesting that they are more tolerant on issues such as gay rights, and that they support “a bigger government providing more services” (p. 254.) He also notes that the proportion of African-Americans and Hispanics is larger in this age group. Aside from the last point, which may offer some hope for Sachs to the extent that African-Americans and Hispanics are more likely to be poor and thus may believe that they are more likely to benefit from government programs, I find this argument unconvincing when it comes to economic issues. My impression is that people are willing that they are in favor of something (such as steps to ameliorate climate change) as long as they aren’t actually faced with the bill; then they oppose such measures.