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Professor Sachs Places a Price on Civilization

May 30, 2012

In the opening sentence of The Price of Civilization, Professor Jeffrey Sachs posits that “at the root of America’s economic crisis lies a moral crisis: the decline of civic virtue among America’s political and economic elite”. A macroeconomist, he states, “must look at the big canvas, in which culture, domestic politics, geopolitics, public opinion, and environmental and natural resource constraints all play important parts in economic life”.

The inescapable influence of history on our present culture is largely omitted from his brief.  Except for a few comments about how we are now living through “a new Gilded Age, exceeding the excesses of the 1870s and 1920s”, and the effects of the Great Depression in the 1930s and the New Deal, the reader is unable to see these periods in a robust context. As a society since 1776, we have lived through all this before. During the Revolutionary War, only 1/3rd of the population in the 13 Colonies supported its aims. Another 1/3rd actively backed the British. They were sent packing to Canada after the War.  The remaining 1/3rd sat on the fence, watching to see which side would win.

Our great grandfathers from that era morphed into the infamous 1% of the population–each of whom was eventually tamed by the free expression of ideas. Ida Tarbell’s expose of John D. Rockefeller and Standard Oil led to the break-up of that monopoly and to the creation of The Rockefeller Foundation. It went on to eradicate hookworm in America’s South. The economic burden of this disease was so large that it accounted for one-fifth of the income difference between the Wealthier North and the impoverished South.  The publication of Upton Sinclair’s The Jungle was sufficiently embarrassing to the Administration of Theodore Roosevelt that it created the Food and Drug Administration.  The Delanos of New York built their nefarious fortune on ‘the China trade’, but in time of dire national need, this family gave us one of America’s greatest presidents: FDR.

The Chapter on ‘Paying for Civilization’ is relentlessly prescriptive. He recommends that savings from “cutting 2.5% of military outlays from GNP and another 1% on true health care reform, etc” could trim 3% of current GNP.  This would provide additional spending of 0.5% for job training; 0.3% for primary and secondary education; 1% for modernization of infrastructure; 0.4% for higher education, etc”. One has to conclude that civilization, like any other commodity, can be purchased by simply reducing some elements of the Federal budget relative to GNP and adding the sum to his programs.

Some of his comparative analyses are of imputed values. For instance, when he comments that America’s public schools are falling behind in science, reading, and math, the comparison is with Shanghai, which is ranked #1.  Comparing a country of 312 million to China’s most cosmopolitan city of 23 million has little merit. Perhaps a more useful comparison would have been to weigh unemployment among recent college graduates: it is higher in China than the U. S.  Or, to inquire: why have more Chinese students matriculated at U. S. universities in 2011 than ever before? The premise of the book is that we are in “a moral crisis”. Where does that put China with its denial of Human Rights, political freedoms, and a draconian one child per family policy …yet the world’s 2nd largest economy and a contemporary exemplar in the global development community of best practices!

He comments that the Scandinavian countries “run their health care systems at roughly half the cost of the United States and with much better results in life expectancy and reduced infant mortality”.  As a macroeconomist, he could have mentioned that the U. S. is the only country in the world with mandatory mal-practice insurance; that permits the accelerated depreciation of plant and equipment as tax deductions; that includes in its GNP the contributions of health personnel to their 401 (k) retirement programs; includes the income from millions of foreign patients that come here for their health care needs—even though they would be covered free of charge in their home countries; and the 12 million illegal immigrants who receive health care at no cost to themselves, a total greater than the combined populations of Norway and Denmark.

During our recent national healthcare debate, President Obama visited the Cleveland Clinic to make the point that “there are examples of such successes in the U. S.”. But can the Cleveland Clinic be considered an example of success when extrapolated to the subject of national health reform? While it receives a steady flow of income from various insurance programs, including Medicaid to Medicare to provide the highest quality of care, it is also the recipient of huge inflows from foreign patients who pay whatever price the market will bear, as well as U. S. patients who have Executive Health Plans, or desire 2nd opinions. Physicians deem it a most desirous place to practice medicine … because they can actually do that at the Clinic. Other personnel handle billings, appointments, vendors, catering services, cleaning and housekeeping, inventory control, maintenance and upkeep of facilities, etc. In many practice sites outside of the Clinic, private physicians either do some of these things or dilute their clinical time with patient care to supervise others.

Prof. Sachs has put a premium on his justifiable mastery of macroeconomics and applies it to the concept of paying for civilization, or as he states: “prosperity regained”. The dominant themes in The Price of Civilization can also be found in the tradition of an early 20th Century writer, Frank Norris. When he wrote The Octopus, The Pit, and A Deal in Wheat, depicting the rapacious greed of railroad barons and their grip on the pricing of basic commodities, this can be compared to Prof. Sachs’s descriptions of the role of big money in politics via those who lobby government for corporate gain. The overriding message in Norris’s novels was how, in the end, civilized man overcame the inner “brute”, his animalistic tendencies. Baked into our DNA as a people, there awaits in patient and infinite ranks that spirit which has prevailed in times worse than now.  When summoned, perhaps through the conditions documented by Prof. Sachs, it will ignore the corrosive behaviors that have bred indifference and coarseness in our leaders and bring forth once again that better angel to emerge from this present shallow cauldron of venality. Still, ‘civilization’ is the story of human achievement in all its bewildering developments. It can’t be purchased by moving around decimal points in our GNP to develop a Federal budget for “The Millennial Renewal”, though the substance in that concept is in and of itself well worth the national purpose and of value to our children.

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