A New Strategy for Global Prosperity: The End of Poverty by Jeffrey Sachs, Review

Celebrating 350 Years in America: Summer 2005

Who is Jeffrey Sachs? He is a Detroiter who became the world’s most famous living economist. He was one of the intellectual stars at Harvard University. He was chosen to be­come the first director of the new prestigious Earth Institute at Columbia University. Kofi Annan, the Secretary-General of the United Nations, appointed him the coordinator of the Millennium Project, an ambitious attempt to rescue our planet from extreme poverty. Time magazine chose to place his latest book, The End of Poverty, on the cover of its journal.

Sachs is the son of one of America’s most respected labor lawyers, the late Ted Sachs. He has been the leading economic adviser to doz­ens of nations. He has transformed the econo­mies of countries as diverse as Bolivia, Poland, Russia, and India. His specialty has been the challenge of taking malfunctioning economies and making them work. Some of his advice and decisions provoked intense controversy.

Sachs now proposes to tackle the most difficult problem of our global economy, the problem of world poverty. One out of every six people on this planet lives in extreme depri­vation. One out of every three people suffers the humiliation of insufficient food, shelter, health care, and education. The dichotomy between the resources of the affluent in the First World and the resources of the poor in the Third World often reaches the ratio of twenty to one. Millions of people in Asia, Africa, and Latin America endure daily suf­fering that we can barely imagine. And their misfortune is aggravated by disease, pollu­tion, and isolation. Although some of their difficulties are the result of bad government, most of their problems cannot be solved by eliminating corruption. Most of these nations are in economic, social, and environmental pits from which they cannot escape through their own efforts alone.

Why should we devote our time, energy, talent, and wealth to a problem that has defied solution until now? Obviously, there are ethical and compassionate reasons. But “spinning your wheels while staying in one place” may salve personal conscience; it does not have much moral value. Without a combination of vision and realism, all noble plans end up mired in fantasy. Jeffrey Sachs claims that he has a real­istic plan. And many expert critics, both liberal and conservative, agree that he has.

Sachs denounces the proposal offered by many economic conservatives (formerly classical liberals) and libertarians to open poor countries to the open competition of the free global market and to the opportunities of foreign markets, foreign investment, and foreign borrowing. This strategy has been recommended by both the International Mon­etary Fund and the World Bank. Taking this advice has yielded disaster. Foreign markets are not readily available for cheap agricultural produce. Foreign investment is scarce because the native infrastructure and judicial systems are inadequate. Foreign borrowing takes place and produces huge debts from which poor nations can never liberate themselves. Mired in loans they cannot repay, they discover that their meager national income is now con­sumed by relentless interest payments. What is a winning strategy for developed nations is a disaster for struggling nations.

Sachs maintains that any successful ac­tion needs the combination of personal deter­mination, state help, and foreign donors. No single factor can rescue poor nations. China and India are perfect examples of the suc­cess that follows this necessary cooperation. There is enough state management to protect a vulnerable economy. And there is enough freedom in the private sector to allow for cre­ativity and to encourage investment. Above all, poor nations need international allies that prevent them from accumulating debts that guarantee failure.

Poor nations that suffer from the mas­sive presence of AIDS and malaria are too depressed and demoralized to sustain any decent level of economic activity. Poor na­tions that are cut off from the global economy because there are no roads, no ports, and no airports cannot join the global world even if they want to. Poor nations that lack any con­sistent system of education for young people are separated from the world of science and technological information, the power base of the modern economy.

“Clinical economics” is the recommended strategy of Jeffrey Sachs. We have to start on the lowest level of economic survival – not cor­rupt governments but poverty-stricken villages. We have to teach the residents how to fertilize their fields, how to provide for sanitary living, how to manage the distribution and sales of their local products. We have to persuade all developed nations to take only 0.7 percent of their gross national product and “invest” it in this noble project. With this minimal and feasible gift, the problem of extreme poverty can be alleviated within twenty years.

Poor nations are a continuous provoca­tion to world stability and world peace. Poor people in poor nations are easily swept away by extremist movements and religious funda­mentalism. Rich nations have a choice. They can cynically hang on to their possessions without sharing and simultaneously endure the misfortunes of hatred and terrorism. Or they can offer consistent and modest help and discover, to their surprise, that they have created wonderful new markets and shrunk violence by providing hope.

The power of Sachs’ message can be ex­perienced only by reading his book, You will be excited by his realism and his optimism.