Building the New American Economy: Smart, Fair, and Sustainable

  • Jeffrey D. Sachs
Columbia University Press: 2017. 9780231184045 | ISBN: 978-0-2311-8404-5

Jeffrey Sachs agrees with the disgruntled US electorate that significant changes are needed in the US economy. For decades, policies have helped a small percentage of Americans and left the vast majority without hope. In Building the New American Economy, the development economist and sustainability advocate sketches a plan for a system that is smart, fair and sustainable.

Construction of solar panels in the Mojave Desert, California.

In his short, clear, lightly pugnacious narrative, Sachs covers the role of investment, the need to rebuild infrastructure, solutions to inequality, the effects of automation, how trade has hurt US labour and helped labour in developing countries, how to reduce the costs of health care, the need for a transition to renewable energy, and excessive defence spending. He champions education as an engine of innovation, highlights the importance of constructive politics and shows how trust in governance can be restored by improved transparency and effectiveness. Science is present throughout, but this is not a plea for more funding for researchers.

Wise investments in the infrastructure of the US transport system could significantly boost the economy, help workers in construction and industry in the near term, and in the long term enhance capacity and efficiency. Sachs also points out that new renewable-energy investments and energy-efficiency improvements are needed throughout the economy. He gently but firmly argues that there are economic advantages to being a leader on climate-change action, and that bigger problems won't be deterred by denial.

Sachs was director of the Earth Institute at Columbia University in New York City from 2002 until last year. He participated in determining the United Nations' Sustainable Development Goals (SDGs) and served as special adviser to UN secretary-generals Ban Ki-moon and Kofi Annan. This book will surely add to his reputation as an effective communicator of the common good.

However, it will neither inform nor satisfy either critics of neoliberal economics or those who have been promoting alternative social and environmental futures for decades. Sachs provides no deep critique of the economic course that the West has pursued for a quarter of a century, and apparently does not feel that one is needed. He is a pragmatic growthist. The adjustments that he proposes are substantial compared to the record of former US president Barack Obama or to proposals by Hillary Clinton during her presidential campaign. Yet Sachs argues mainly for policies to redistribute benefits along the path that the United States has travelled for a century and a half — that of stressing material output at nearly any cost. Growth remains both goal and means, and Sachs skirts anything radical, including the socialist language used by Bernie Sanders in his bid for the White House.

Sachs admits that economics as a field has erred for 25 years or so, by promoting the globalization of capital without insisting on domestic policies that redistribute the benefits fairly with labour — through free tuition for education and job training, for example. Economists were blinded by their assumptions that labour could and would move freely between types of employment and geographical locations. Had field research not been sacrificed on the altar of mathematics and econometrics, or the disciplinary boundaries not been so tightly guarded, economists would have long ago advised a policy correction. Sachs, however, simply acknowledges professional naivety as uncritically as possible.

Throughout, he refers to the SDGs as appropriate and widely accepted by other nations, without being specific. The goals should have been stated early and integrated with the arguments, rather than left almost to the end. More importantly, the SDGs were developed with insufficient attention to environmental limits, and Sachs does not mention that the estimated US ecological footprint is already double the country's average biocapacity — its capacity to produce renewable resources and absorb waste.

Sachs does not address the warnings of resource strategist Johan Rockström and his colleagues about planetary boundaries that must not be crossed to avoid unacceptable environmental change (J. Rockström et al. Nature 461, 472–475; 2009). Neither does he discuss ideas by thinkers including integrative biologist Anthony Barnosky about environmental tipping points (A. D. Barnosky et al. Nature 486, 52–58; 2012). Environmentally appropriate technologies will surely help. But just as surely, excess consumption by the materially well-off must be reined in. For this, deeper questions about the meaning of life will have to be addressed.