The Price of Prosperity paints a bleak picture of America's future. It also explains the increasingly angry tenor of the nation's political "dialogue"—if you can still call it that.
What is the price of prosperity? Author Todd Buchholz argues that prosperity creates the conditions that lead to its own unraveling. Rich nations fail because, having become rich, they invariably experience falling birthrates, rising debt loads, and eroding work ethics. Add a dash of globalized trade and a pinch of cultural fracturing, and these entropic forces will shatter even the most prosperous of countries.
Buchholz, a former Harvard economics professor who later served in the White House as a policy aide to President George H.W. Bush, draws equally from pop culture and history to explain and illustrate his points. One minute Buchholz is channeling Jerry Seinfeld or quoting a line from the Planet of the Apes; the next he's delving into the Meiji Revolution circa 19 th century Japan.
All of this is designed to educate the reader while avoiding any hint of having to labor over anything so tedious as a textbook.
In sum, this isn't your typical economics tome. But it is typical of Buchholz. His books are always entertaining, often insightful, and sometimes downright scary. What they never are is boring.
Readers of The Price of Prosperity will become well acquainted with how a handful of powerful forces are relentlessly splintering rich nations. Ultimately, Buchholz' thesis relies on a single, lengthy causal chain. He writes:
Let me explain a big problem in seven simple sentences. As countries grow rich, their birthrates fall and the average age of the population climbs. In order to keep up a lofty standard of living, citizens need workers to serve them.... This requires an influx of new workers, which means opening up the gates to more immigrants. Unless a country has strong cultural and civic institutions, new immigrants can splinter the dominant culture. Thus countries face either (1) declining relative wealth or (2) fraying cultural fabric. Prosperous nations cannot enjoy their prosperity without becoming multicultural. But if they become multicultural, they struggle to pursue unified, national goals.
Buchholz devotes the lion's share of his book to fleshing out those seven sentences.
Why are birthrates low in rich nations? Buchholz is brutally honest. He writes, "In the modern world, we think of children as needing insurance, in case something goes wrong. In earlier times, children were the insurance." He adds, with prosperity "children stop looking like nifty manual workers and obedient field hands and instead begin to resemble luxury goods, much like pets or handbags."
Why does globalized trade and immigration fray a rich nation's cultural fabric? Buchholz offers several compelling arguments, but his bottom line is that "Workers feel threatened by a combination of foreign machines and foreign people."
Why do rich countries load up on debt? Because they can! Also, as fertility rates fall and "the ratio of retirees to workers increases, they must access more goods without actually producing those goods." Buchholz also postulates—in one of the book's few weak arguments—that "as nations grow richer, the bonds that tie future generations frequently begin to fray."
After nearly three hundred pages about why rich nations are all but doomed, Buchholz offers hope. That hope comes in the form of a dozen or so public policy proposals to maintain "our emotional attachment to each other and to the country." (Buchholz is, after all, a former professor and government economist. What did you expect if not policy proposals?)
One of Buchholz' better proposals would eliminate "licensing requirements for nonhazardous jobs, which dramatically raise the cost of learning and practicing a trade." Say goodbye to Arizona's licensing requirement of 1,600 hours of classroom instruction at an approved cosmetology school before an aspiring hair stylist can be let loose upon the world.
The Price of Prosperity paints a bleak picture. But it's no cheap, paint-by-the-numbers, Walmart knockoff. It's a Buchholz original—suitable for framing.
James E. Carter was deputy assistant secretary of the Treasury and deputy undersecretary of labor under President George W. Bush.