What I am currently reading is The Price of Civilization by Jeffrey Sachs.
This financial crisis and the failure to address it effectively is the natural outcome for a society that embraced the golden calf of selfishness and greed, the will to power, and anything goes in the pursuit of wealth, with its roots in the 1980's at least. As we have seen throughout history and in our own experience, the heirs of other people's hardship and unearned wealth through luck or birth often become dissolute and corrupt in their later years. And so it can be with the character of a generation.
As an American economist, Sachs bears some past responsibility for this situation in past actions and advice given. It does seem he has had an epiphany of sorts in the past few years. But one has to wonder if the baggage he carries will permit him to become truly part of the solution. Nevertheless, his points are often well-taken. I wonder if the changes can even begin to come from those who are so vested in the existing system.
The problems are too deeply rooted in corruption to be cured by changing one thing, even a pivotal element such as adopting a different monetary standard, reducing leverage, or the Volcker rule. Those may help but if only it were that simple. And destroying the government to reform it is surely the most naive folly of them all.
How can a gold standard protect people when the financial interests now feel free to loot their accounts of it, and will probably go relatively unpunished? How can the Volcker rule, or any regulation for that matter, protect the public when laws are openly flouted, fraud becomes the general condition, and none are prosecuted for it? What is the deterrent then that provides the law its force in justice and example? There is a certain watershed event in every outbreak of lawlessness that once passed brings an almost inevitable acceleration of the rise of the worst and the decline of civility.
It is not that this generation is worse than any other. Rather, it is because it thinks it is different, better, higher, above all others. And out of this rises the ability to rationalize ideologically, and with lessening pangs of conscience, the worst of their excesses that is frightening. This is the path that allows the most powerful, the Übermensch, to rob, torture, starve, and euthanize the weak at their own discretion, or sometimes merely for the sake of expediency and enjoyment. It is the most virulent moral epidemic of the early twentieth century, and the most pernicious vanity of human history, attempting a resurgence. And the great voices of conscience and cultural transmitters are remarkably silent.
The greatest impediment to reform and renewal is the gullibility, vanity, and meanspiritedness of a self-absorbed cultural elite that pushes beyond all reason, flouting the laws that protect even them, and strikes the Faustian bargain that eventually brings their self-destruction. It is the fall of Rome, the British Empire and the Soviet Union. It is an old story of hubris that leads to downfall and decline.
The Price of Civilization
Reawakening American Virtue and Prosperity
by Jeffrey D. Sachs
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 society of markets, laws, and elections is not enough if the rich and powerful fail to behave with respect, honesty, and compassion toward the rest of society and toward the world. America has developed the world's most competitive market society but has squandered its civic virtue along the way. Without restoring an ethos of social responsibility, there can be no meaningful and sustained economic recovery.
I find myself deeply surprised and unnerved to have to write this book. During most of my forty years in economics I have assumed that America, with its great wealth, depth of learning, advanced technologies, and democratic institutions, would reliably find its way to social betterment. I decided early on in my career to devote my energies to the economic challenges abroad, where I felt the economic problems were more acute and in need of attention. Now I am worried about my own country. The economic crisis of recent years reflects a deep, threatening, and ongoing deterioration of our national politics and culture of power.
The crisis, I will argue, developed gradually over the course of several decades. We are not facing a short-term business cycle downturn, but the working out of long-term social, political, and economic trends. The crisis, in many ways, is the culmination of an era-the baby boomer era- rather than of particular policies or presidents. It is also a bipartisan affair: both Democrats and Republicans have played their part in deepening the crisis.
On many days it seems that the only difference between the Republicans and Democrats is that Big Oil owns the Republicans while Wall Street owns the Democrats. (I beg to differ. The FIRE sector and Big Pharma have considerably diversified their portfolios) By understanding the deep roots of the crisis, we can move beyond illusory solutions such as the "stimulus" spending of 2009-2010, the budget cuts of 2011, and the unaffordable tax cuts that are implemented yea rafter year. These are gimmicks that distract us from the deeper reforms needed in our society.
The first two years of the Obama presidency show that our economic and political failings are deeper than that of a particular president. Like many Americans, I looked to Barack Obama as the hope for a breakthrough.Change was on the way, or so we hoped; yet there has been far more continuity than change. Obama has continued down the well-trodden path of open-ended war in Afghanistan, massive military budgets, kowtowing to lobbyists, stingy foreign aid, unaffordable tax cuts, unprecedented budget deficits, and a disquieting unwillingness to address the deeper causes of America's problems. The Administration is packed with individuals passing through the revolving door that connects Wall Street and the White House. In order to find deep solutions to America's economic crisis, we'll need to understand why the American political system has proven to be so resistant to change.
The American economy increasingly serves only a narrow part of society, and America's national politics has failed to put the country back on track through honest, open, and transparent problem solving. Too many of America's elites-among the super-rich, the CEOs, and many of my colleagues in academia-have abandoned a commitment to social responsibility. They chase wealth and power, the rest of society be damned.
We need to reconceive the idea of a good society in the early twenty-first century and to find a creative path toward it. Most important, we need to be ready to pay the price of civilization through multiple acts of good citizenship...
