The price of civilization

Jeffrey Sachs’s The price of civilization; Economics and ethics after the fall is one of many books in recent times attempting to make some sense of and looking for a way out of the financial mess the globe has found itself in since the sub-prime-induced mess of 2007/2008. Although its focus is almost exclusively on the United States it is one of the more worthy of the title and worth a read.

Although it is a very American book ­– in fact the sub-title of the American edition reads: Reawakening American Virtue and Prosperity – there is enough overlap with the general lifestyle and aspirations of South Africans to find a resonance with our readers. It definitely improves understanding about the from where and the why of the present financial crisis.

Although Sachs, a professor in developmental economics and head of the Earth Institute at Columbia University in the US, also attempts to identify cures for the financial and economic ills of firstly America, judged by the reaction in American-based reviews of his book, he is swimming upstream on those.

The title of his book comes from a 1904 quote by US supreme court judge Oliver Wendell Holmes Jr. who famously said: “taxes are the price we pay for civilization”.

Sachs fully agrees with the judge and argues that America’s problem is that its citizens just aren’t paying enough in taxes these days. The wealthy, in particular, aren’t paying their fair share of taxes.

He comes to the conclusion that Americans have grown obese, ignorant and apathetic. The country’s schools are collapsing, its infrastructure is crumbling, its great companies are selfish and predatory. Its politicians have been thoroughly corrupted by power and money and live mainly to serve the interests of their wealthy patrons.

And Americans watch way too much TV. "America has developed the world's most competitive market society but has squandered its civic virtue along the way," he writes. "Without restoring an ethos of social responsibility, there can be no meaningful and sustained economic recovery."

Most of his ire is focused on the nation’s leaders and on the super-wealthy corporations and plutocrats who he claims are the ones who are really pulling the strings because of the intimate intertwining between politicians and the corporate world.

He makes liberal use of statistical evidence to support  his case. He notes the dramatic wealth disparities of US society, and traces them to a 30-year trend of anti-tax, pro-market fervour that started with Ronald Reagan's famous declaration that “government is the problem, not the solution to our problems”.

He also argues that:  "The market by itself is not equipped to achieve the triple bottom line of efficiency, fairness and sustainability. The market system must be complemented with government institutions that accomplish three things: provide public goods such as infrastructure, scientific research and market regulation; ensure the basic fairness of income distribution and long-term help for the poor to escape from poverty; and promote sustainability of the earth's fragile resources for the benefit of future generations."

There is plenty in the book that those of us who were brought up on an economic philosophy with the virtues of free market capitalism as staple could find reason to differ from. Important though is that it forces you to properly rethink and ponder those ingrained believes and their appropriateness in meeting the challenges that clearly lies ahead.

There is also enough other salt-and-pepper tidbits along the way of reading this book, to ensure it remains an interesting, if not a relaxing, read. Did you for instance know that Edward Bernays, the pioneer of public relations and techniques of hidden persuasion was the nephew of the famous and ground breaking psychologist Sigmund Freud?

The Price of Civilization; ISBN 9781400068418, is published by The Bodley Head  and retails in South Africa at about R250.,