October 14, 2011 10:14 pm

The Price of Civilization

Development guru Jeffrey Sachs offers his diagnosis and prescription for America

Jeffrey Sachs has advised so many countries that he may have lost count. In his new book, this proselytiser for economic development plans offers his services to the US.

The Price of Civilization has the air of the world traveller who returns home to find his country a much worse place than he remembered. There is a palpable if ever-so-slight alienation here that suggests his proposals will not gain much traction in America. That would be a shame, for this is an important book.

Sachs manages to paint an alarming picture of the US, while leaving the reader with a sense that its problems are eminently fixable. A second achievement is the sheer sweep of his analysis, which flouts the boundaries of economics to encompass politics, psychology and moral philosophy. The gain in perspective mostly outweighs the loss in authorial authority.

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His book is divided into two parts: diagnosis and prescription. The diagnosis starts with well-known facts – stagnant median wages, rising inequality, bad health and social outcomes. There follows a damning indictment of the culprits, not all of it original. A pernicious view that “government is the problem”, a mismanaged response to globalisation, the corrupting influence of big business on US politics – these are well-rehearsed complaints. But they are familiar because they are largely accurate.

Sachs is no stereotypical leftwing liberal. He welcomes globalisation and free trade but insists that they require very different policies, especially for education and income support. He rejects Keynesian solutions and urgently wants to stabilise the national debt, for reasons economic (costly debt servicing eats away at underfunded public services) and moral (deficits mortgage the next generation). But he thinks that spending can be shifted to better uses and even increased if quite feasible tax increases are adopted.

The diagnosis is peppered with international data highlighting US mediocrity in areas from life satisfaction to health and education. Sachs is also willing to blame voters’ moral failings. Ignorance and a lack of self-control, fuelled by TV advertising, undermine Americans’ ability and desire to monitor their representatives and elect more competent ones.

Middle America, we are often told, does not want to be like Scandinavia – although Sachs shows that the Washington debate can misrepresent popular opinion, which is more tolerant of higher taxes on the rich than one might think. But that does not amount to broad support for his prescriptions.

The second part of the book is less satisfying than the first. The laundry list of reforms ranges from practical ideas, such as cutting defence spending to mid-1990s levels, to pie-in-the-sky ones, such as changing US electoral rules to proportional representation.

Sachs is a phenomenon – one I have been privileged to observe as a former student and colleague. He has long been more than an academic and there is a case for saying that this has made him less of an academic. It is not a criticism of this general-audience book that its use of data sometimes falls short of the scholarly. But it is natural for those who look to him for advice to expect more.

Above all, Sachs is an economic planner. He believes that experts can make economies perform better and that targets can serve to energise. Sachs was instrumental in establishing the Millennium Development Goals, a focal point for international development efforts.

He wants to do the same for the US. The book’s main message is that government can work – indeed, only government can solve our greatest problems. But Washington must radically improve its ability to make and follow long-term decisions. This, Sachs suggests, is only possible if the US population does the same.

Sachs’s enthusiasm for planning is not without its problems. He neglects the cynicism bred by nebulous or missed goals. There is a disquieting scorn for politicians. Of climate change, he writes: “Could one imagine a problem less easily handled by a layman Congress operating on a two-year election cycle?”

Still, the argument that government and individuals alike suffer from an inability to commit to long-term projects is compelling. At a Harvard event a decade ago a prominent policymaker made a speech in Sachs’s honour. He said: “Jeff is sometimes right and sometimes wrong, but never in doubt.” That still sticks. But when he’s right, he’s very right indeed.

Martin Sandbu is the FT’s economics leader writer

The Price of Civilization: Economics and Ethics After the Fall, by Jeffrey Sachs, Bodley Head, RRP£20, 352 pages

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