The United States is living through an inequality crisis which is distorting and weakening its society, says renowned economist Jeffrey Sachs.
Photo: AFP
In his long career, the Columbia University academic has been an adviser to governments around the world, consultant to the IMF, World Health Organisation and United Nations, and director of the UN’s Sustainable Development Solutions Network.
He is the author of The End of Poverty, published in 2005.
Sachs argues inequality is a problematic regardless of whether great poverty is involved.
In the United States, he says, some “incredibly rich people” almost own the political process through massive campaign financing.
“Then we have people who are poor and really are neglected, even though this is a rich country.
“It’s become a kind of mean-spirited place at the same time, and so the inequality is distorting our social life.”
Trust and confidence in the US government is falling, he says.
“In a culture which says that money is everything and you’re allowed to do whatever you want because your only goal is to maximise shareholder value … the society ends up being actually gravely weakened.
Sachs points to the World Happiness Report, released by the Sustainable Development Solutions Network each year, which regularly has Scandinavian countries reporting the highest levels of subjective well-being.
These countries keep inequality within limits, by taxation and social attitudes - “if you have money don’t flaunt, it don’t over-consume” – and they thrive, he says.
“Sweden is a very prosperous country with a very high standard of living, a very happy society, a very low level of inequality - also a very dynamic and innovative economy."
He criticises the culture of corporate self-interest and “wealth maximisation at any cost”, and “heartily” backs action such as the New York City government’s move to sue five large oil companies over the cost of damage from climate change.
“In a culture which says that money is everything and you’re allowed to do whatever you want because your only goal is to maximise shareholder value … the society ends up being actually gravely weakened.
“People are a lot less healthy and a lot less happy.”
For sustainable economic growth we have to do things differently, he says.
“We have to, all over the world, change the way our economies work and our societies work.”
“We don’t have to be nasty to the poor, we don’t have to coddle the rich.
“We’ll still have the benefits of our knowledge, of our technology, of our wealth, if we also aim for moderation and responsibility.”
But economic growth can’t continue with the same technologies, nor should we push the fossil fuel age to the last drop of oil or gas, when we know how dangerous climate change is.
Higher material standards of living can still be sustainable if solar power, wind energy and other renewables are harnessed.
“We don’t have to stop driving but we do have to drive electric vehicles. We don’t have to stop flying but we do have to fly using either advanced biofuels or new synthetic hydrocarbons made with renewable energy.”
