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Book Review: The Price of Prosperity: Why Rich Nations Fail and How to Renew Them, by Todd G. Buchholz

Why Rich Nations Fail

Why Rich Nations Fail and How to Renew Them—John Peeler

Prominent economist, adviser to the first Bush, successful hedge fund operator, Todd Buchholz gives us a wide-ranging answer to the problems posed by the unevenly distributed prosperity that comes from globalization. This is gracious, since he’s been an active participant in creating those problems. Well-written for a general audience, it is a pleasure to read, gliding gracefully like a figure-skater—and it doesn’t go deep. I should say that I remember Todd Buchholz as a student at Bucknell, where I taught: he was among the sharper conservatives on campus at the time, and our writing program apparently did him no harm.

The basic thesis is that throughout history societies that prosper tend to fall apart because of problems created by that very prosperity. In the first part he explores five problems that emerge from prosperity:

  • falling birth rates,
  • globalized trade,
  • rising debt,
  • eroding work ethics, and
  • the challenge of maintaining patriotism in a multicultural country.

A great deal of the world as we presently experience it works to dissolve the bonds of our society, to cause us to risk failure, even as we have prospered from it.

The problem is that a great deal of the world as we presently experience it works to dissolve the bonds of our society, to cause us to risk failure, even as we have prospered from it. Brief examples from earlier societies such as Sparta, Venice, and the Habsburg and Ottoman Empires make the point that this is a general pattern: prosperity tends to generate its own destruction. But we may be sure that historians of any of those earlier societies will find much to criticize in Buchholz’s facile generalizations.

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The second part addresses how strong leaders have pulled their societies out of such downward spirals. Case study chapters go into some depth about Alexander the Great, Atatürk, the Meiji Revolution in Japan, José Figueres in Costa Rica and Golda Meir in Israel, each of whom is depicted as having, more or less single-handedly, led their countries out of the morass and started them on an enduring path of renewal and new beginnings. Each case study is interesting in its own right, and historically minded readers will learn something, but should not imagine that they are getting the whole story from Buchholz. For example, Figueres is certainly the seminal figure in the establishment of one of the most stable democracies in the western hemisphere, but Buchholz neglects to tell us how much Figueres’ rise to power owed to US support in the context of the early Cold War.

I wonder whether Buchholz the conservative thinks Donald Trump represents one of these regenerative leaders. He doesn’t say.

The concluding chapter (“Do Not Go Gentle”) turns away from the emphasis on strong leaders to plead for a cultural renaissance and a renewal of patriotism:

“Here is the problem for the United States and most of Europe: at the very time that the economic forces I discussed earlier in this book are working to shatter nations, many of their citizens reject the very principle that fellow citizens should feel patriotic.” (299)

Here is a man who has built his entire, very successful career on driving those economic forces he cites, on dissolving the bonds of patriotism, and nonetheless exhorts us to find patriotism in our hearts. Following Socrates in Plato’s Republic (he probably read that at Bucknell!), he urges that we bracket out what we know about our own history to tell “noble lies” that help to hold the society together, lies like Columbus discovering America, or the Pilgrims at Thanksgiving.

I wonder what he thinks of “fake news” and the persistent, calculated lies that we saw in the recent presidential campaign, lies intended to divide, not unite us. I hope he would admit that they are ignoble lies, one more sign that we are still falling apart.

john peeler

John Peeler