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on 14 March 2017
A fantastic reading time! As with every book of professor Sachs.
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on 27 October 2011
The title of Jeffery Sachs' book is taken from a quote by Oliver Wendell Holmes Jr:

'I like to pay taxes. With them I buy civilisation.' (P210)

That is the key theme of this book. Although centrally concerned with the current state of the USA, it is clear that many of his criticisms of the USA can also be levelled at other countries that have embraced the neoliberal doctrines of the 1980s.

The book starts by charting the, by now, well mapped route that has led us to the current economic mess. Things started going seriously pear-shaped in the 1970s, with Nixon effectively tearing up the post-World War 2 Bretton Woods agreement:

'...the Bretton Woods dollar-exchange system collapsed, basically because America's inflationary monetary and budget policies during the Vietnam War era were destabilizing the world economy. The United States abandoned its monetary links with gold on August 15, 1971. Inflation soared worldwide as the major market economies searched for a new approach to the global monetary system.' (P29-30)

Later in that same decade, of course, came the dreaded 'stagflation' as oil prices surged. In the UK we saw, on the one hand, a rise in union militancy and, on the other, a growing disillusionment with and a reaction against state planning and the 'mixed economy'. In economics, the ideas of Hayek and Friedman appeared to offer solutions - minimising the role of the state would allow the creativity of the free market to regenerate the economy. These ideas neatly coincided with the individualism of the time and the stage was set for Reagan in the US and Thatcher in the UK:

'Together, Reagan and Thatcher launched a rollback of government the likes of which had not been seen in decades. Many of the measures of the Reagan presidency, notably the sharp cut in the top tax rates and the deregulation of industry, won support throughout the economics profession and the society.' (P30)

There was a huge antipathy towards government and a belief that 'society could benefit most not by insisting on the civic virtue of the wealthy, but by cutting their tax rates and thereby unleashing their entrepreneurial zeal.' (P31)

Or, to put it another way, 'Greed Is Good'.

All this has been documented many times before, albeit from different angles. For example, Sachs refers to the rise of Multi-National Companies or MNC's. Colin Crouch similarly notes their growing dominance but refers to them as Trans-National Companies, or TNCs. To my mind, this is not simply a difference of terminology. Sachs himself recognizes that these TNCs no longer hold any loyalty to any national polity - they are, in Crouch's term, 'trans-national' - across and above any local loyalties. Countries find themselves competing to attract these TNCs in the hope that they will pay taxes and provide employment - but, in order to attract them, taxes are lowered, employment legislation limited or repealed. There is, as Sachs says, a 'race to the bottom'.

Of course, money can be converted into power and vice-versa. Sachs details the huge rise in political lobbying. Again, this is not new - Thomas Frank's excellent 'The Wrecking Crew' covered this back in 2008, just before the onset of the current malaise. Sachs refers to a 'corporatocracy' - what others have referred to as oligopoly or even (and quite possibly more accurately in my opinion) kleptocracy.

As far as the political parties are concerned, however heated the debates might appear on the surface, there is little real difference between them, as Colin Crouch has also pointed out, albeit in a different context. Sachs suggests that the Republicans are dominated by 'Big Oil' (besides the obvious - Bush, Cheney et al - Sachs, on two or three occasions, refers directly to the Koch brothers who also help fund the Tea Party) while the Democrats are dominated by 'Big Finance' and Wall Street. The revolving door between lobbying companies, Wall Street and Washington is well documented, executives from Goldman Sachs providing many notorious examples.

The American political system is particularly susceptible to lobbying companies and the associated corporatocracy because, unlike a parliamentary system, the executive is separate from the political parties. This means that members of both houses can put their individual interests ahead of the parties'. Additionally, campaigning costs are so huge that donations from corporations are essential, donations that are considered to be 'investments'.

Sachs considers the role of globalisation. It is interesting to compare Sachs' views with those of Dani Rodrik ('The Globalization Paradox'). Rodrik suggest that there are three areas of globalisation - trade, finance and labour, with labour being the least globalised of the three. It was the globalisation of finance that really started destabilising the system, as money could be moved into and out of countries at the click of a mouse. But Sachs considers the effects of globalisation on labour. Relatively low skilled jobs are easily exported to low wage economies, leaving the less skilled in the developed economies such as the US (and UK) under- or unemployed. The roll-back of state provision of education has exacerbated the effects of this, as poorer students drop out of college, unable to continue their studies.

Sachs also turns his attention to the media, to consumerism and to what he terms 'hypercommercialization' (P146). Going back to Edward Bernays, Sigmund Freud's favourite nephew, he charts the rise of manipulative consumerism and the concomitant fall in communality, as people retreat to their homes, fragmented and isolated. Again, none of this is particularly new (see, for example, Sold on Language) but by bringing it in, Sachs usefully deepens and extends his analysis.

At the end, what Sachs considers is fundamentally lacking from American society at the moment is a sense of 'mindfulness' and balance. Extreme free market libertarianism only benefits a small elite, such as the Koch brothers. On the other hand, too much state control suffocates individual creativity. A middle way must be found:

'Two of the great ethicists in human history, Buddha in the East and Aristotle in the West, hit upon a remarkably similar prescription for the long-term happiness of humanity. "The Middle Path," said Buddha in the fifth century B.C., would keep humanity balanced between the false allures of asceticism on the one side and pleasure seeking on the other...Aristotle gave his fellow Greeks a similar message, that "moderation in all things" was the key to eudemonia, or human fulfilment.' (P162)

In his latest book, Will Hutton argues for a return to Enlightenment values. Really, both Sachs and Hutton are arguing for the same thing. It's also interesting to see writer like Michael Sandel drawing upon Aristotle for theories of justice.

Sachs goes on to propose some rather more concrete actions to get America and, by implication, much of the rest of the world, out of it's self-destructive course - but his underlying principle is one of balance and this 'middle way'. He frequently cites Scandinavian countries - Sweden, Denmark and Norway - as examples of societies where citizens accept high taxes and government involvement in the day-to-day running of society and consider it the 'price of civilisation'. Sachs feels, and quotes statistics to back up his feelings, that there is support for such an approach in the US. His approach is rather more holistic than, say, Dani Rodrik's who sees governments' role as one of curbing the excesses of globalisation, and it is rather more optimistic than Colin Crouch's, who considers governments to be pretty much corrupted by, or subsumed into, trans-national corporations and who looks to external pressure groups and activists (such as, perhaps, the 'Occupy Wall Street' demonstrations) as an alternative.

Frankly, I don't really find any of them finally convincing. I agree with Colin Crouch (and Peter Oborne) that there are now unaccountable ruling elites, thus I don't hold out much hope for Dani Rodrik's idea that governments will be able to control the pace and direction of globalisation. I agree with Sachs that there is a ground swell of support for government intervention, particularly amongst the 'Millennium Generation', but I don't see the ruling kleptocracies relinquishing their famed 'vampire squid'-like hold any time soon. On the other hand, as Vladimir Lenin reminded us, "The Capitalists will sell us the rope with which we will hang them."

All in all, though, a very readable and thought-provoking book. :-)
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on 17 December 2011
This is one of the best books I've read in a long time. The world at times seems to have gone crazy and Jeffrey Sachs, who I've long admired from his stints on Bloomberg, diagnoses the problems. He always strikes me as an inherently decent and compassionate person and this comes through in strong measure in the book. Whilst it is nice for people to be wealthy this cannot be achieved in a vacuum separate from society, and ultimately happiness comes from family and societal behaviours rather than immense wealth. Sachs illustrates countless cases where the obvious and democratic choices are completely ignored by the American ruling elite of both parties as they strive to keep their funding base happy and appease short-termism constantly with vote grabbing tax cuts, with little done to maintain or enhance the underlying fabric and long term pillars of society. The rampant commercialism that has been unleashed over the last 40 years is laid bare along with a host of statistics and graphs to prove his points. The first half of the book may make you angry however only by knowing the facts and seeing with clearer vision can we move forward in the second half Sachs details measures he believes will help address the malaise. Overall, a superb read.
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TOP 500 REVIEWERon 9 November 2012
I wanted to take Jeff Sachs's course in college, but he was never there to teach it. He was too busy saving the world, and the Eastern Block countries in particular, to turn up for his fall semester class in International Economics.

If this book is any guide, that's quite lucky for me.

The book has two parts. In the first, all 175 pages of it, the author exposes what's wrong with the world. In the second part, a mere 90 pages, he offers his solutions.

One star is probably too generous for part one. If it had been written by a Zen Buddhist monk, I'd have been more lenient, I might even be half-impressed. But if this is the best one of the rock star economists of our planet can do, we're in deep trouble. I'm rather liberal in my leanings, this ought to have been right up my alley. Instead, I found myself thinking I need to take my losses and start reading something else.

EVERYBODY knows there's a case to be made for government, everybody knows CEOs are overpaid, everybody knows politicians can be bought, and quite frankly nobody really agrees with some of the weirder stuff Sachs talks about. I know that giants like John Kenneth Galbraith shared the author's aversion for advertizing, but nine out of ten people you ask would not put the advertizing model in their top 100 problems with today's capitalism. Hell, I like ads! And I have no patience for a globetrotting professor telling me I need to worship Gandhi or Buddah. Not if the book is advertised as an economics book. Jeff Sachs has his place in the pantheon of economists, but for my money (which I forked out to buy this opus) he's a crumby philosopher.

But I finished part one of the book and got to part two and my persistence was rewarded. First, somewhere around page 180 (give or take 20 pages, I haven't got the book here) the author tells you what "the price of civilization" is. It's taxes. Hats off to him for keeping that under wraps that long. Even better, his laundry list of solutions / propositions / answers to the world's ills is thorough and clearly presented and, frankly, at odds with the weirdness of the first part of the book. It comprises a list of necessary areas where we need to spend more, places where we can make cuts and ways to raise revenue, all with estimated numbers attached. I'd give four stars to the second 90 pages, with the fifth star missing because he does not back up the proposals with anywhere near as much oomph as they deserve.

Overall, though, I can't help thinking there's some type of ulterior motive to this book. Don't know if Jeff Sachs is trying to move from Economics to Philosophy or from problem solver to Zen master, but what he's doing here is attempting some type of transformation. Two stars.
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on 15 January 2012
This book is about what to do to correct the three decades of mistakes by Reagan politics which has been characterised by an unprecedented inequality. Tax cut only for the rich, deregulation, and unfettered belief about the market power do everything right has been the dominant ideology among both sides of the Atlantic. This is not a new idea now as we already saw the Occupy movements around the world from London, Seoul to New York. The new point of the author's argument lies with the statement that we are entering a new era where Asia, which before the 18th century accounted for more than half of production of the world, once again becomes a powerful region.Mass job loss and an increasing pay gap between skilled and unskilled labour market are explained in terms of Asia's economic resurgence. During the 1980s developed nations such as the United States should have invested more heavily on education and put in place some job sharing scheme similar to that of Germans. However the United States and the United Kingdom were eager to please business classes. They selected job cuts and tax cut for the rich. The result is mass unemployment among the working class and a new Gilded age for Americans. The author also describes and criticises the moneyed interests of corporate America. Lobbying firms and revolving door system between lobbyists and politicians put American politics in the grip of corporations.

The most powerful is the traditional military industrial complex. They have been thriving on wars in the middle east contracting out defence work project. Financial industry also became a powerful player in Washington. The industry received bailout money and continued massive executive compensation payment. Major reforms, even in the face of financial collapse, were thwarted and postponed or simply labeled as socialistic ideas. Healthcare industry now wields as much political influence in American politics as the military industrial complex. Obama's health care has some benefits for the ordinary people, however the juice of money is for the industry and no reform was instigated for the reduction of health care cost. The oil industry also grabbed the Congress, the Senate as well as the House of Representatives. Sustainable developments and alternative energy development were never raised seriously by the government.

The book's main point is that it provides answers very clearly to the aforementioned challenge. The author emphasises the paramount importance of investment for the future. Early childhood education was mentioned as the most profitable investment by the public sector. The government should provide money and infrastructure for never ending education. Other investment projects such as roads and public facilities should be renewed. His idea of public investment is mentioned not so much in terms of demand boost as in terms of future investment. Active labour market policies is also encouraged to boost employment.
All in all the alternative to today's America is a mixed economy in which the federal government provides money and resources for investment for children and young adults.

Inevitably thus we have to search where we can find money for all the social spending. After a careful reading of the book we realises that there's no money left even if we dissect government's budget in detail. The truth is without tax increase for the rich there is no large amount of money for social investment. Tax increase for the rich is essential to cure the United States of this problem.

To do the aforementioned reform he suggest a social movement such as the third party to criticise the right wing two party system, Republicans and Democrats. The young generation, who are socially active and articulate, are encouraged to fight for new America.
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on 16 November 2011
Although this is directed at the United States its diagnosis and conclusions are relevant throughout the developed world. One fears, however, that the malign forces he so skilfully exposes will block the reforms he advocates.
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on 8 January 2012
This book provides an excellent description of the problems America (and other Western nations, perticularly the UK) has with the way democracy works - or, to be more exact, doesn't work. It provides a lot of supporting evidence to back up the central thesis that America is a corporatocracy rather than a democracy and suggests some solutions. It also calls for a rather 'New Labour' approach to economic and social justice issues, perhaps less convincingly in my personal view. One could easily think that the 'New Labour' approach to poverty issues had been a great success in the UK and EU and that the way to eradicate poverty issues was simply to throw money at them - a naive solution, as we increasingly know from our UK experience, since a lot of poverty is not financial in the first place. That said, I have always personally admired the author as a man of enormous compassion and wisdom and this book does not change that opinion of him as one of America's finest.
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on 11 March 2012
Jeffrey Sachs is a macro economist who not only sees the big picture clearly, he writes about it in clear, elegant and easy to read terms. The economic decline of the United Sates started with Ronald Regan in 1980, and has been promoted by every President since. Sachs pilots the reader through the complex socio-economic and political events that led the US and other high income economies to the deepest recession since the Great Depression. Unrelenting greed and the pursuit of wealth have led to the biggest wealth gap in history, and the riches bestowed on the few have been at the expense of many. The first half of this book makes fascinating reading of how successive Governments have sleep walked into a level of decline that is difficult to recover from. The second half explains what can be done to reverse this decline and put the US back on the road to prosperity. Not surprisingly this requires a complete change in human behaviour. Selfishness must be put aside and replaced with a pursuit of the greater good. This will allow a reforming President to introduce a raft of polices that have been blocked for the past 30 years by the ever increasing influence of self interest groups, generously funded by the wealthy who benefit from the acquiescence of successive Governments . This metamorphosis needs to happen quickly, for Sachs has demanding targets to be achieved by 2015 and full recovery by 2020. The transformation needs to be achieved by the time of the 2012 Presidential election for the benefits to be achieved on time. This book is well worth reading, not because it has a recipe for success but because it shows how success will never be achieved. The prosperity of most people in the US will decline and with it the influence that the US has in the world. That influence will move east to Asia and we don't know what that means.
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on 31 December 2011
This is a useful and stimulating book. There is a paradox, though, in its moral concerns about capitalism, in that the book has tried to hide the fact that it is almost exclusively focussed on the USA. It has done this by renaming itself: I bought the book under the title "The Price of Civilization: Economics and Ethics After the Fall", but it is really "The Price of Civilization: Reawakening American Virtue and Prosperity". I was aware of this deception when buying the book, but nonetheless it diminishes the author's credibility.
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on 25 January 2013
An extremely well-written and informative account of the ills which are crippling the polity of the USA. Although democratically elected, the governing institutions of America have fallen under the control of big corporations largely through the exercise of financial power, and consequently have become dysfunctional. The author shows with admirable clarity how this situation has developed and outlines measures by which the governance of the country could be restored to health. The malaise described is frightening in its severity and clearly afflicts to some degree all countries which play host to multinational corporations. The book conveys important warnings but also wisdom and hope. It should be required reading for politicians in all global trading Western democracies. One caveat. Professor Sachs takes the optimistic view that we can and should take steps to counter climate change. We must hope that he is right.
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