The Price of Civilization, Jeffrey D. Sacks, 2011
Sacks quotes Supreme court justice Oliver Wendell Holmes Jr.; “I like to pay taxes. With them I buy civilization.” Hence the title of his book and its subtitle “Reawakening American Virtue and Prosperity.” Fortunately, Holmes, who died in 1935, would not live to see the death of his ideal in the current age of unfettered greed.
Sacks begins by citing the guiding economic principles of his mentor Paul Samuelson of MIT whose textbook Economics, first published in 1948 has been used in most introductory economics courses including this reader’s ever since.
Markets are reasonably efficient institutions for allocating society’s scarce economic resources and lead to high productivity and average living standards.
Efficiency, however, does not guarantee fairness (or “justice”) in the allocation of incomes.
Fairness requires the government to redistribute income among the citizenry, especially from the richest members of the society to the poorest and most vulnerable members.
Markets systematically underprovide certain “public goods” such as infrastructure, environmental regulation, education, and scientific research, whose adequate supply depends on the government.
The market economy is prone to financial instability, which can be alleviated through active government policies including financial regulation and well-directed monetary and fiscal policies.
Sachs goes on to give the reasons why income inequality is at historic high levels, and yet taxes on wealth are historically low, why government is doing virtually nothing about redistribution and is providing almost none of the things government is uniquely required to provide like support for research, education, environmental regulation, infrastructure, etc. The picture is predictable awful.
He joins other writers disillusioned with an Obama that he supported. He details how health care “reform” was decided in secrecy in negotiations with the insurers and pharmaceuticals and in complete disregard for public option that wanted at least a public option. He goes on to show how Obama and lawmakers disregard public opinion in issue after issue, from environmental reform to energy policy to banking re regulation and wall street makeover. The voters are clearly the disenfranchised as the administration and Congress listen only to powerful interests and the elites.
But Sachs is ever the optimist and in part 2 he attempts to demonstrate that things can change for the better. He goes through an obscure numbers exercise to show that things can improve with modest changes – no need for radical overhaul. Unfortunately his exercise doesn’t really address the fundamental problem of income redistribution and the proper role of government called for by Samuelson. But how can even the modest goals be met in our current state of political paralysis? Sachs suggests maybe a third political party will arise miraculously from the ashes to save us. Yeah right. Or maybe the Millennials (those born after 1992 with their inadequate and partial educations thanks to our dysfunctional governments) will save us. American society does everything it can to destroy the future prospects for the next generation and then expects them to come save us from ourselves?
This reader enjoyed the clear, simple writing to explain where we are and how we got here, but the solutions, unfortunately are also simple (as in retarded).