Book Review:

April 1, 2012

The Price of Civilization

Reawakening American Virtue and Prosperity

By Jeffrey D. Sachs

Published By: Random House Publishing Group

On: October 4, 2011

Buy Here $14.5

Reviewed By: Graham Norwood

In the wake of a difficult decade that witnessed costly foreign policy blunders, increasing gridlock in the halls of government, and an historic economic collapse, books about the decline of America have become a veritable cottage industry.  The Price of Civilization: Reawakening American Virtue and Prosperity is noted macroeconomist Jeffrey D. Sachs’ recently-published attempt at tackling the subject; and like all his books, it is a compassionate and heartfelt effort, brimming with the clarity of both thought and prose that has made Sachs such a respected voice over the past three decades.1 However, while Sachs’ sincerity and obvious personal investment in the issues at hand makes for compelling reading, the book ultimately fails to reach the lofty aims of its subtitle.  This is due in part to questionable use of data, and also in part to the author’s insistence on justifying his policy prescriptions in moral terms, rather than simply letting their efficacy speak for itself.  Moreover, The Price of Civilization struggles because Sachs chronically underestimates the role of the people in the American political system, mostly absolving the electorate of its complicity in creating the current crisis, and ignoring the demographic divisions that continue to threaten the situation moving forward.  In the end, the book succeeds at tracing the reasons for America’s decline into its current economic and political quagmire; but it falls short of providing the actionable roadmap to renewed success that its author seeks to offer.

“At the root of America’s economic crisis,” writes Sachs, “lies a moral crisis: the decline of civic virtue among America’s political and economic elite.”2 Very well: but how does one solve a “moral crisis?”  Who determines which morals are correct, and which are corrupt?  What constitutes “virtue?”  Although Sachs himself is a paragon of classic liberalism, arguing strenuously and continuously throughout his career for a more activist government, it is no exaggeration to say that the above quotation could just as easily have come from a staunch conservative, on the other side of the aisle, with an entirely different moral calculus.  The point is that a book that situates a moral crisis at the heart of what is troubling America is inherently on shaky rhetorical ground: the resolution of such a crisis is an elusive goal because it presumes the presence of universal moral standards.  The much-ballyhooed culture wars raging in America today in the form of heated disputes over contraception, gay marriage and other sensitive issues, offer ample evidence that arguing on moral grounds is a recipe for discord, not conciliation.  

The author seeks to sidestep the issue of objective morality by insisting that Americans are actually far more united in their views than they appear.  “I think [the] view of a nation in a fundamental and irreconcilable divide is wrong,” he writes, insisting that “there is much more consensus than meets the eyem.”3 To demonstrate this consensus, Sachs marshals a battalion of recent polling data throughout his book.  More than two and a half times as many people have a negative view of such entities as Congress, the Federal government, corporations, and banks as have a positive view, he notes.4  Moreover, a similar proportion (62%) feels that “the free market does need some regulation to best serve public interest.”5

These and numerous other statistics are intended to corroborate Sachs’ thesis of American consensus; but the evidence is at best circumstantial.  Instead of grounding the author’s arguments in the bedrock of objective facts, the use of such data gives at least a faint impression of what several previous reviewers of The Price of Civilization have somewhat disparagingly called “a veneer of science.”  Worse, Sachs’ frequent reliance on polling data comes without any sort of interrogation of the source material.  The author at one point cites a survey claiming that 95% of Americans agree with the statement that “one should always find ways to help those less fortunate than oneself:” but is this really a meaningful statistic, indicative of a broad-based consensus amongst the American people?6 Or is it merely a self-fulfilling prophecy – a question asked in such a way that the answer was preordained and thus irrelevant?

Dubious as the use of polling data may be, however, it is the author’s inability or unwillingness to properly interrogate the role of the people in American politics that is the greatest weakness of The Price of Civilization.  A major theme of the book is that the expressed preferences of “the people” are constantly and consistently shunted aside by a government enslaved to big money special interest groups (“the corporatocracy” is Sachs’ chosen epithet).  But while the author does a fine job of exposing the many ties that bind the government’s actions – Big Oil, Wall Street, a corporately controlled media, a well-heeled and deeply entrenched lobbying culture – he offers only an occasional and halfhearted acknowledgement of the people’s complicity as architects of the current crisis.  Indeed, in one troubling phrase, he notes that the people get to play their part in American democracy “on one day every two years,” as though American voters are merely there for politicians to check in with from time to time while they go about the business of running the country.7  Given that any truly substantive change in contemporary American political culture must necessarily come from the people, it is unfortunate that the author more or less avoids discussing the power of the electorate until his book’s final chapter.  Worse, his eventual treatment of the issue mostly amounts to kicking the proverbial can down the road by heaping the hopes for true political change on “the millenials,” by which he means voters aged 18-29 in the year 2010.  

Of course, The Price of Civilization is more than just an analysis of the present and troubling state of American politics.  Sachs rightly realizes that the roots of today’s crisis extend back into the nation’s past, and he offers a largely fascinating tour through eight decades of American history.  He examines the activist spirit that undergirded the New Deal, and explores the “golden age” of American prosperity that held sway for two decades following the close of World War II.  The turbulent 1970s are seen in hindsight as a transitional period, culminating with the ascendancy of the conservative movement and its figurehead, Ronald Reagan, in the 1980 presidential election.  

Reagan’s rise to the highest office in the land is a watershed moment for Sachs.  The author repeatedly returns to Reagan’s election as the dividing line between what he calls “the Paul Samuelson Era” (a reference to the author’s economic mentor, who was a leading advocate for the kind of mixed economy policies Sachs himself espouses) and the policies that have governed America since.  With his famous campaign statement that “Government is not the solution to our problems: government is the problem,” Reagan ushered in a new era of deregulation in the American economy, and more or less created an anti-tax narrative that has persisted and intensified over the past thirty years, robbing American government of the revenue base once used to underwrite the proactive social policies of Sachs’ golden era.  Reagan even played a decisive role in halting the nascent environmental movement championed by Jimmy Carter in the 1970s, rolling back Carter’s energy legislation and symbolically removing the solar panels that Carter had installed on the roof of the White House. 

All these actions, Sachs asserts, follow from a fundamental misdiagnosis made by Reagan and his staff.  The author argues that the upheavals of the 1970s were not, in actuality, indicative of a failure of the mixed economy system favored by Paul Samuelson and other leading economists of the day.  Rather, they were the unhappy consequences of a number of extraordinary and often exogenous macroeconomic phenomena.  In particular, the breakdown of the Bretton-Woods financial system and the dual oil crises of 1973 and 1979 were international, and not domestic, events.  Sachs argues that Reagan and his advisers blundered by attributing these and other troubles to American government policies, and implies that the mixed economic system that had been in place since the New Deal was still the best option in spite of the shocks.  

But while he may be right about the economics, this is just another example of Sachs’ consistent underestimation of the role of the people in America’s political system.  Preserving the status quo while the U.S. economy gasped and wheezed into a new decade was simply not acceptable to voters in 1980.  To borrow a bit of economic terminology, there has always been a level of “structural” political division in America, dating back to the country’s founding as a Hamiltonian federation tempered by Jeffersonian republicanism.  It was practically inevitable that voters would look for a new solution in light of the nation’s dire predicament in 1980; and thus it was all but certain that the country would turn away from the mixed economy system that had presided over its decades of great progress after the Second World War.  

Given Sachs’ slight treatment of the mood of American voters in 1980, it is perhaps not surprising that he mostly skirts the issue in discussions of the present as well.  But this is a major problem, for while his various policy recommendations throughout The Price of Civilization may indeed be well-reasoned, he fails to answer what is perhaps the most important question of all: where will the political will to enact such changes come from?  It is here that his failure to properly account for voters in the American political system is most problematic; because it is difficult to imagine the kinds of significant changes the author favors occurring without equally significant changes in the way voters view and interact with politics.  The discussion of millennial voters in the book’s final chapter opens the possibility for such change, but does not offer any sort of timeframe for when it may occur; and in any case, it’s far too speculative a foundation on which to build a plan for American renewal.

Sachs’ failings in situating his arguments on moral (rather than more pragmatic) foundations, in misreading and misrepresenting his data, and above all, in fundamentally misapprehending the role of the people in American politics are deeply disappointing, because they undermine a lot of otherwise valuable contributions his book makes.  When he is focused purely on economics, he writes with contagious conviction.  He lays out a compelling case for a renewed sense of social activism in government, arguing that the unregulated market system in vogue since Reagan fails in several key ways; such a system not only under-provides public goods like infrastructure and basic scientific research, but also fails to take into account externalities like the societal costs of pollution.  Through a meticulous examination of the Federal budget, the author provides ample evidence to support his statement that “the notion of closing the deficit through budget cuts alone is a fantasy, though a popular one.”8  He then proceeds to offer a number of sound, specific solutions for ways to generate revenue through taxes targeted at those companies and individuals who can most afford to pay them.      

This focus on skimming a little off the top from the haves in order to help the have-nots has long been a common thread in Sachs’ writings, running through previous best-sellers like The End of Poverty (2005) and Common Wealth (2008).  It is especially prevalent in The Price of Civilization, where the titular “price” seems, as much as anything, to refer to the higher taxes the wealthy (people and firms alike) must pay to restore America to its former glories.  And it is especially timely: the book was published in October, 2011 – the same month that the now ubiquitous Occupy Wall Street protests first began to receive major media attention.  This timeliness is unquestionably a point in the favor of The Price of Civilization. In demonstrating his farsighted grasp of America’s socio-political zeitgeist, and in particular focusing on America’s ever-widening wealth gap, Sachs earns an extra boost of credibility.

Even here, however, there is a fundamental problem: The Price of Civilization is much better at identifying problems than it is at solving them.  The book does a marvelous job of tracing the roots of today’s crisis, and Sachs is to be commended for providing such a thorough and wide-ranging analysis.  But the author’s persistence in basing his arguments on moral as well as factual grounds, coupled with his occasionally questionable use of data, undermines his analysis throughout.  Moreover, while he offers a number of well-conceived suggestions for helping America to reverse its recent decline, his proposals largely fall flat because he fails to properly assess the role of the people in determining the course of American politics. It is thus often impossible to distinguish which of his prescriptions for American renewal are achievable, and which are merely illusory.  In the end, The Price of Civilization is a useful contribution to scholarship on American decline, but a failure in its attempts to reverse the trend and put America back on the road to prosperity.  

Notes & References

  1. Sachs, Jeffrey D. "The Price of Civilization: Reawakening American Virtue and Prosperity", (New York: Random House, 2011): 3
  2. Ibid., 3
  3. Ibid., 79
  4. Ibid., 12
  5. Ibid., 39
  6. Ibid., 80
  7. Ibid., 106
  8. Ibid., 214