The Price of Civilization_ Reawakening American Virtue and Prosperity - Jeffrey D. Sachs [15]
Achieving Society’s Triple Bottom Line
The majority of Americans support the idea that America should aim for three goals—efficiency (prosperity), fairness (opportunity for all), and sustainability (a safe environment for today and the future)—rather than the single-minded libertarian objective of tax cuts and a shrinking government. Americans are eager to support effective public policies to achieve the three objectives. The question is how best to achieve those goals.
A free-market economy is not enough. A key lesson of economic theory and of two centuries of experience with market economies is that a combination of market forces and government actions is needed to achieve these three simultaneous goals. If we were to close down the government and leave everything to the marketplace, society could not achieve even one of the three core objectives. Only a mixed economy, one that is part business-led and part government-led, can achieve all three goals. Americans agree. According to a Pew Research Center survey, a solid majority of Americans, 62 percent to 29 percent, concur that the “free market needs regulation to best serve public interest.”11
The marketplace does have some elements of basic fairness: hard work can produce a higher income; laziness is punished. A lifetime plan to study hard and get a good education produces an economic reward for the individual as well as a sense of fulfillment. But the fairness of the marketplace should not be exaggerated. Many people are simply unlucky. Market forces such as foreign competition may turn against them (such as when a technological change wipes out an industry in a gale of “creative destruction,” as the economist Joseph Schumpeter called it). Others are born poor to parents who lack the education and skills to escape from poverty. Still others have disabilities and diseases that are no fault of their own. Some live in places hit by earthquakes, tsunamis, droughts, floods, or other hazards and depend on government to survive and recover. Whole regions of America and other countries have faced deep economic crises because of shifts in global market conditions that are far beyond anyone’s control. In all of these cases, the marketplace can be brutally unsentimental, leaving the poor to starve or die from illnesses and neglect, unless society steps forward through government or charitable relief.
Just as there are many people who don’t deserve their poverty, there are many others who don’t deserve their wealth. Many great fortunes, such as the Koch brothers’, are inherited. And of the fortunes that are ostensibly earned, many are not really earned at all. Wall Street bankers took home tens of billions of dollars in Christmas bonuses each year in the lead-up to the 2008 financial meltdown, just as they were driving their firms toward bankruptcy. Several of America’s best-paid CEOs in the past decade led their companies into illegality, bankruptcy, or both.
Amazingly, even when Wall Street required government transfers to stay alive in 2009, the megabonuses persisted (and the White House looked the other way because Wall Street had financed Obama’s 2008 campaign). Oil companies often owe their profits to bribery (like Halliburton in Nigeria), cushy government contracts, specially tailored tax breaks, the lack of environmental regulations, and the backing of the U.S. military in the Middle East, all of which occurs without any reimbursement from the oil industry, other than the campaign contributions that continue to flow.
Despite the claims of free-market advocates,