Economics and Ethics:
The Price of Civilization By Jeffrey Sachs, Random House Canada, 2011, 320 pp.
Can we create the good society?
Reviewed by Ted Schmidt
Jeffrey Sachs is what they call a big thinker—the best that the USA has to offer— an economist committed to the health of the earth and the overall well-being of people..
Named twice to Time magazine’s list of 100 most influential world leaders, he taught at Harvard for 20 years and now heads the Earth Institute at Columbia. His goal (remember the big picture) is ending extreme global poverty. His latest book, “Economics and Ethics: The Price of Civilization” is a veritable cri de coeur on behalf of the globe. What distinguishes Sachs (and his Nobel American confrère, Joseph Stiglitz) is that they have little time for American romance, the preening exceptionalism which has beguiled the USA in the post-Reagan era.
This book’s theme is identified in its first sentence: “At the root of America’s economic crisis lies a moral crisis.” The author laments the terrible loss of “civic virtue” and “social responsibility” echoed in the work of American sociologists such as Putnam, Bellah and Sennett.
This book is a brilliant excursus into the many ailments that have driven America into becoming a pathetic, wounded behemoth on the world stage. Sachs has little time for American hagiography—as a macroeconomist, he dissects the economic choices made from the Reagan era to the present. For him the Republican Party is “owned by Big Oil” and the Democrats by Wall Street. This situation has resulted in a corporatocracy where the elites have abandoned any semblance of social responsibility. Sachs pleads for the return of “the good society” where government is a vital agency in the health of the commons.
Having worked in Latin America and Eastern Europe as an economic advisor, the author brings much cogency to his own country’s massive economic failures that paved the way for the global meltdown of 2008.
“The Great Reversal” came under Ronald Reagan with his mantra “big government is the problem” and the simplistic answers of cutting taxes, shrinking civilian government, deregulation, outsourcing government services and rolling back welfare. Marginal personal income tax rates fell from Republican Eisenhower’s 90 per cent to below 40 per cent under Reagan-Bush, resulting in a lot of lost revenue! The amount of spending on public goods fell drastically. The great disaster, however, was the deregulation of financial markets and the environment. Both have been catastrophic. Particularly grievous for Sachs was the naiveté that business, taxed at a much lower rate, would invest in decent jobs. The money, of course, fled offshore and greed became a way of life among the corporatocracy.
One area in which the author excels is his understanding of how advanced capitalism dumbs down and distracts a population. His chapter on The Distracted Society is a wake up call to us in Canada as well.
Sachs refuses to let the citizenry off the hook. “They have allowed themselves to be manipulated by corporate propaganda.” He points out that millions are over-consuming—overeating, over-borrowing, over-gambling and giving in to excessive TV watching—not to mention other addictions. This makes for a poorly informed and overly entertained society. This analysis helps “to get our heads cleared of deceptions. The $300 billion advertising industry is easily manipulating citizens’ demands. The United States leads the world in hours worked. In other words, no time to think or analyze their plight. The enticement of modern media…” is sapping critical thinking.
This is a very readable book on the interface of economics and ethics.