By PAUL RYAN, WSJ
Free enterprise has never lacked for moral critics. In the mid-18th century, for instance, the French philosopher Jean-Jacques Rousseau rejected the proposition that the free exchange of goods and services, and the competitive pursuit of self-interest by economic actors, result in general prosperity—ideas then emanating from Great Britain. In a commercial society, according to Rousseau, the people are "scheming, violent, greedy, ambitious, servile, and knavish . . . and all of it at one extreme or the other of misery and opulence." Only a people with "simple customs [and] wholesome tastes" can be virtuous.
In "The Price of Civilization," Jeffrey Sachs carries Rousseau's argument into the 21st century. Mr. Sachs, a development economist at Columbia University, believes 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." The book's veneer of economic analysis cannot conceal what is essentially a crusade against the free enterprise ethic of our republic.
Only through a reshaping of our principles and a reordering of the American economy, Mr. Sachs believes, can we become "a mindful society." We must abandon a culture that is defined by hard work and the striving for upward mobility and an economy that has unleashed unparalleled prosperity. Hard work impedes leisure. Ambition is a vice. Economic growth hurts the planet.
The corporation is the antagonist in this morality play. Mr. Sachs refers early and often to widespread "suffering from the decline in corporate tax rates" and properly identifies a pernicious trend that both political parties have fallen victim to over the years: crony capitalism. But it is not just the rapaciousness of corporate interests that disturbs the author. He sees a deeper conspiracy at play. The marketing industry is referred to as the "dark arts of manipulation," and television has been dangerously left "almost entirely to the private sector." Our commitment to limited government and free enterprise has allowed "market values [to] trump social values." We are scolded time and again for letting business interests encourage our faults and fallibilities.
"Through clearer thinking," Mr. Sachs writes, "we can become more effective both as individuals, and as citizens, reclaiming power from corporations." This reclamation will come primarily from punitive tax and regulatory measures. Mr. Sachs is undaunted by any thought that such a regime might worsen unemployment. The trained economist assures us: "Economic theory indeed supports the view that high tax rates can actually spur, rather than hinder, work effort." He argues that financial incentives ought not to matter in a mindful society and is confident that well-intentioned social engineers can suspend the laws of economics.
One need not look far to find the inspiration for the America that Mr. Sachs seeks. He is explicit about his ideal, and it is Europe. America should match the high tax and "active labor market policies" found in the German and Scandinavian economies. The Constitution imposes too many restrictions on government interference for Mr. Sachs, and we'd be better served if we moved toward a "French-style" constitution that consolidated the executive and legislative branches and empowered experts to help us manage the "complexity of our economy." On the most effective means of petitioning one's government, Mr. Sachs sounds eerily Greek (A.D. 2011, not 500 B.C.): "A new political party can be combined with other forms of political agitation—consumer boycotts, protests, media campaigns, and social networking efforts—to put the most egregious leaders of the corporatocracy on notice."
Advocating for the European model seems particularly ill-advised at the moment, given the current state of affairs across the Atlantic. Yet Mr. Sachs is untroubled by the contradictions between the Europe of his imagination and the crisis-ridden continent as it exists today. He writes: "The countries that failed to raise taxes adequately—such as Greece—are now paying the price in a massive fiscal crisis, as in the United States." Too many industrialized countries, in his view, have fallen victim to the "race to the bottom" mentality of lowering corporate tax rates and depriving their governments' coffers of the money needed to pay their mounting bills.
The "price" of civilization, we find out, is quite steep.
A "civilized" society will cost Americans roughly $12 trillion in higher taxes over the next decade. Mr. Sachs concedes that he could lower the bill if the economy were to grow fast enough to stabilize the debt, at which point a roughly $8 trillion tax hike would suffice. The proposed means by which the federal government can expand as the economy shrinks: raise corporate tax rates (and plead with our global competitors to stop reducing their business taxes); raise the top individual income tax rate; raise taxes on investment, energy, bank balance sheets and financial transactions; and impose a national sales tax.
Mr. Sachs is honest enough to acknowledge that the "rich" are not nearly rich enough to pay for his ever-expansive vision of government. We're told that "each of us with an above-average income" (i.e., $50,000 per household) must "understand that if we are prudent, we can make do with a little less take-home pay."
Such appeals to the citizenry to make sacrifices might be more compelling if Mr. Sachs coupled them with calls for spending restraint in Washington. Instead, his budget proposal insists on the need to "augment" government spending by trillions of dollars in the years ahead. Thus the sacrifices of citizens are to be made to increase the size and scope of a federal government that Mr. Sachs admits has demonstrated little aptitude for allocating resources efficiently or even fairly. This conundrum leads him to a conclusion that would be comical if he were not deadly serious: "Yes, the federal government is incompetent and corrupt—but we need more, not less, of it."
Yet at its core "The Price of Civilization" is not about taxes or economics. It is about the "pursuit of happiness" as one academic understands it.
Enshrined in the country's founding documents, "the pursuit of happiness" has long been recognized in America as a natural right to be secured by good government. As the Founders understood it, "happiness" referred to human fulfillment, to a well-lived life of virtue in this world and ultimate fulfillment in the next. In ensuring that its citizens are free to seek their happiness, government was to promote neither hedonism nor materialism. It was to secure the right to pursue happiness by not interfering with either normal commercial transactions or freedom of worship.
In "The Price of Civilization," Mr. Sachs is asking the right questions. What is a life well lived? What should our government's role be in building a more virtuous society? What policies should it pursue to promote fulfilling lives for its citizens? If such questions direct us to the moral wisdom of our cultural traditions, they can indeed help to balance the excesses of capitalism and so help us to extend its benefits to all.
Yet Mr. Sachs's gospel of happiness draws not on the inspired tradition of the Founders but rather on the Utilitarian philosophy of Jeremy Bentham. In the 1780s, Bentham proposed that "happiness," which he equated with "pleasure," could be mathematically measured. It was not sufficient, he thought, for government to protect our rights if it was to vouchsafe our pursuit of happiness. Government must instead quantify "the greatest happiness of the greatest number" and set policies and goals accordingly. There was a science to satisfaction, Bentham claimed, and it was a puzzle that trained experts could solve.
Channeling Bentham, Mr. Sachs calls for the establishment of a national metrics for life satisfaction and sets a 10-year goal to "raise America's happiness." Although the specific measures are hazy, the steps are clear: For people to be happy, their government must increasingly shield them from the challenges of life. The good life is thus defined as one of ever-more pleasure at the expense of work.
But happiness in this world results not from avoiding challenges but from meeting them. Happiness is the recompense of real effort, whether intellectual or physical, and of earned success. It comes from achievement—from doing something of economic, artistic or emotional value. The satisfaction to be taken in producing valuable things brings with it a lasting sense of personal fulfillment. Mr. Sachs's design for paternalistic government will only impede the pursuit of happiness.
Mr. Sachs is more accurate when he argues that economics is not merely about making money. It must serve the higher cause of human well-being and moral development. He is right to dislike the greed and vulgarity that can accompany bourgeois life. But he is wrong to attribute these phenomena to capitalism uniquely. Discord and imperfection arise from human nature. The question is how they can be contained and redirected. Capitalism, together with our moral traditions, has long offered a solution consistent with individual freedom. Mr. Sachs's approach does not.
Mr. Sachs likely overstates Americans' enthusiasm for restrictions on work, for the denial of constitutionally protected freedoms or for government controls over media and technology. His conception of the good life could perhaps be mutually agreed to in a small, isolated and homogeneous society. But here in the United States it would have to be imposed on a diverse and globally integrated nation of more than 300 million people. That is neither possible nor desirable.
The freedom and independence of the American population can best be guaranteed by allowing the people to govern themselves through their elected representatives; by keeping limits on the size of government; and by encouraging each of us to take responsibility for our own well-being. We can best be aided by our families, communities, churches and local institutions—and by the government only as a last resort.
For, ultimately, Mr. Sachs's quarrel is with our founding principles of equality and liberty. Underlying the arguments in "The Price of Civilization" is a contention that the Constitution is too conducive to freedom, that it endorses an economic system too friendly to growth and the satisfaction of appetite, that it creates political institutions too inattentive to our national character.
In his first inaugural address, Thomas Jefferson defined "a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." The contrast with Mr. Sachs's idea of "good government" could not be more stark.
The Founders thought of America as exceptional, but Mr. Sachs thinks that this claim is a myth and that the country's present greatness a historical aberration. Our decline is, thankfully, inevitable, he says: "America will not again dominate the world economy or geopolitics as it did in the immediate aftermath of World War II. That was a special historical moment; we can be glad that economic progress throughout the world is rapidly creating a more balanced global economy and society."
It is through this prism of decline that we may better understand Mr. Sachs's calls for an overbearing government to take more earnings from you and make more decisions for you, as well as his instructions for hard-working Americans to restrain their ambitions and accept their current place in life. He seeks nothing less than to replace the vision of the Founders—the ideals of individual liberty that have enabled America to achieve the unrivaled social, material and spiritual flourishing of the past two and a quarter centuries—with one that relies almost solely on the wisdom and beneficence of an intrusive, unlimited government.
The dialogue between capitalism and its critics is an old one, and it will continue. But as citizens of a self-governing nation, Americans must choose from time to time between alternative visions for our future. This book's budget proposals and economic policies are profoundly revealing. They lay bare the real agenda of those who wish us to abandon the American idea and consign our nation to the irrevocable path of decline. If only in that sense, "The Price of Civilization" is a useful contribution to the conversation we must have in order to make informed political choices in the years ahead.
Mr. Ryan represents Wisconsin's First Congressional District and is chairman of the House Budget Committee.