Tag Archives: economy

Book Review: The Price of Civilization by Jeffrey Sachs

Just finished reading Jeffrey Sachs’s awe-inspiring The Price of Civilization.

I picked up Jeffrey Sachs’ The Price of Civilization mainly because I opted for economics this time as opposed to science and philosophy (what I read, mostly). I had to decide between the Nobel-prize winner in economics Paul Krugman’s End This Depression Now! and this book. I picked Sachs’ for 1) his substantial experience in macroeconomics and shaping/reforming economies abroad (though I disagree – or does not know how I feel – about shock therapy as a solution to hyperinflation); 2) his background in development, sustainability, and developing political economy/economic theories; 3) being a globalization guru when talking about economy and politics; and, lastly 4) where he stands politically, socially, and environmentally (I did not sense any glaring biases in his analysis towards any party – he equally criticized both as argument demands).

In part one of the book, he diagnoses the economic crises, addresses Washington’s disconnect from the public, dissects “the free-market fallacy” in light of globalization and its effects on American society, politics, and good citizenship. Part two of the book is titled “The Path to Prosperity.” Prosperity that is lost in today’s economy. He argues that it is only with a mindful society, informed citizenry, and politically active public that we can move forward. He is very optimistic with the change our generation, The Millennial generation, will bring about. One that I personally look forward to.

Apart from that, he brings up an interesting point that the government, or various administrations, is not the only one to blame (though it’s got the lion’s share) for the economic mess we inherit; the public also shares some responsibility. The public has long lost its trust in the government, disengaged and polarized politically and socially; one argues for more government while the other argues for little to none. This left us fragmented, distracted, and simply unaware of powerful lobbing at work. Corporatocracy has distractedly and wrongly told the public that over-commercialism, over-consumption, low taxes, and short-sightedness are the solutions to our problems. These “solutions” augment our problems rather than remedy them, and he explains why.

The not-so-economics-savvy me found this book enlightening on so many levels. While I recognize America’s economic plight, I did not know, or was simply oblivious to, the core problems that spiraled us down (aside from those on the surface such as Wall Street market collapse of 2008, housing bubble, etc.). In a nutshell, the book strongly argues for a mixed-economy (the middle path as one may put it), one that has the private sector as well as the government wheeling the economy forward. Sachs recognizes, however, that the current government and political system, corporatocracy as he puts it, are not only incompetent but greatly corrupted by lobbies vested interests. It is imperative then that the reforms he puts forward include reforming the government through “honest, open, and transparent problem solving,” taking money out of politics, etc. I wholeheartedly agree that we need to move from short-term planning with little execution, to long-term planning and actually execution. America’s infrastructure is deteriorating, so as its healthcare system, science and engineering sectors, and its standing as the world’s leading economy. I think it is important to note that Sachs is not socialist, but a hardcore capitalist who believes that economic forces are not sufficient to run a marketplace.

My views resonant with those of his in that in order to live a healthy, sustainable, and happy life we need “to be ready to pay the price of civilization through multiple acts of good citizenship: bearing our fair share of taxes, educating ourselves deeply about society’s needs, acting as vigilant stewards for future generations, and remembering that compassion is the glue that holds society together.” He beautifully explains the challenges, and solutions, surrounding taking this route.

So, all in all, Sachs’ book gives us a clear, honest, and socially-responsible diagnosis of our political and economic crisis. It also provides a road-map, if you will, that walks us through how to get out of the pit.

Strongly recommended!

The Distracted Society

I’m almost done reading The Price of Civilization by Jeffery D. Sachs. I have to say that this book is invaluable to learn a LOT about not only mixed-market economy, but also why America’s economy and politics are crippled. He does not take the usual government is bad, deregulation is bad, capitalism sucks type argument. Instead, he outlines how globalization, society (us, people!), and government share some responsibility as to how we got awry economically, politically, and socially.

Here’s an excerpt which I like and thought about sharing. It argues that the “Age of Information” may/does not necessarily mean we are more educated, prosperous, and have peace of mind.

Chapter 8: The Distracted Society

An epidemic of ignorance

Print media continues its long-term decline. In 1960, print delivered an estimated 26 percent of words transmitted. By 2008, that had declined to 9 percent. While TV absorbed 42 percent of the daily hours the average American spends receiving information, print media accounted for a meager 5 percent. Reading for fun is a disappearing practice among the young, and the purchases of books went into a steep decline a decade ago. As Americans stop reading, ignorance of basic facts, especially scientific facts about such politically charged issues as climate change, has soared. Reading proficiency is also plummeting.

It would be a profound irony if the new “information age” in fact coincides with the collapse of the public’s basic knowledge regarding key issues that we confront both as individuals and as citizens. It’s far too early to tell whether the Internet and other connected devices will end up leaving society dumber or better informed. Will video games and online streaming of entertainment end up crowing out more meaningful reading and gathering of information? These risks seem real, at least according to the flood of recent books such as The Dumbest Generation, Idiot America, The Age of American Unreason, and Just How Stupid Are We?

Recent polling data and academic studies do suggest that American lack basic shared factual knowledge. As one author recently put it, “The insulted mindset of individuals who know precious little history and civics and never read a book or visit a museum is fast becoming a common, shame-free condition.”[1] If American high school test scores continue to rank poorly relative to other countries, so, too, will our economic prosperity, sense of economic security, and place in the world. Even more ominously, our capacity as citizens will collapse if we lack the shared knowledge to take on challenges such as balancing the federal budget and responding to human-induced climate change.

The Pew Research Center occasionally surveys the basic knowledge of the American public in its News IQ Quiz[2]. At the end of 2010, only 15 percent could identify the prime minister of the United Kingdom and only 38 percent could choose the incoming U.S. House Speaker from a list of four names. Slightly under half (46 percent) knew that the Republicans would control the lower house of Congress but not the Senate. And 39 percent correctly picked out defense as the largest budget item in a list that included Social Security, interest on the debt, and Medicare. None of these gaps in knowledge is a cardinal sin. As Pew put it, “the public knows basic facts about politics, economics, but struggles with specifics.” But when the country must grapple with complex choices about taxes, spending, military outlays, and the rest, the lack of basic knowledge becomes dangerous. A poorly informed public is much more easily swayed by propaganda and much less able to resist the dark maneuvers of the special-interest groups that pull the strings in Washington.

This book is heavily supported by facts and evidence. I very much encourage you to buy the book if you’re interested in learning about mixed-economy concept, current political and economical deadlock,  and how we can move forward and recover from such crisis.

[1] Mark Bauerkeubm The Dumbest Generation (New York: Penguin, 2008), p. 16.

[2] Pew Research Center for the People & the Press, “Public Knows Basic Facts About Politics, Economics, but Struggles with Specifics,” November 2010.

Book #1 for the Summer . . .

I like to read. A lot.

Sadly because of work and academics I was not able to read as much, leisurely that is. There is something enjoyable and rather connecting about reading a book for fun versus for class. Anyways, I generated a preliminary summer read list (I will post sometimes soon) but could not decide which book to go first.

So I narrowed it down to Paul Krugman’s End This Depression Now and Jeff Sachs’s The Price of Civilization. After some contemplation I chose the latter. It triumphed for not only I think it will help me understand the former better, but also because of two sentences caught my eyes in the preface:

“Let us tip our hats to the young people throughout America and around the world who want to create societies that are fairer, happier, and environmentally sustainable. This book is for them, for they will be the ones to reclaim out shared values and to renew the democratic spirit in the years ahead.” (Sachs. 2011).

And another sentence on page one:

“The economic crisis of recent years reflects a deep, threatening, and ongoing deterioration of our national politics and culture of power.” (Sachs. 2011)

The trick worked. My views resonant with those mentioned above. I’m interested to explore his argument regarding creating a better society and restoring “an ethos of social responsibility.”

Thought I’d share that with the world….