A few months ago my brother told me to watch a PBS documentary called “Commanding Heights“. I did. And I enjoyed it. The documentary begins at the dawn of the 20th century, when Europe first attempted globalization through colonization and the foundations of macroeconomics were being laid by John Maynard Keynes and Friedrich von Hayek.
The documentary covered the rise of capitalism and globalization at the beginning of the century, then shake up after the first World War and rise of communism and fascism after the war. It then covered the “revival” of capitalism and globalization in the early 90s, after the fall of communism, through case studies of India, Bolivia, China and Poland. The documentary is presented in an exciting format where we see the tides of world change from one ideology to another.
Around the time when the documentary is discussing the failure of communism, we are introduced to Jeffrey Sachs. Sachs, an economist, shared his experience as an economic adviser for the Bolivian and Polish governments, where he helped draft plans that controlled inflation and ultimately saved lives. These stories were amazing to hear in the documentary, but when I encountered The End of Poverty by Sachs in a local book store, I had to get it.
I had an immediate connection with Sachs. Sachs provided me with an refreshing way of thinking that was both blindly idealistic and extremely pragmatic. This is been a balance I’ve been trying to strike in myself for years and I found a model in Sachs. From Wikipedia:
Since 2002, Sachs has been Director of The Earth Institute at Columbia University, and a professor in Columbia’s Department of Economics, School of International and Public Afffairs and Department of Health Policy and Management; in 2003 he became Quetelet Professor of Sustainable Development. He is also Director of the United Nations Millennium Project and Research Associate at the National Bureau of Economic Research. Previously, Sachs has been an advisor to the IMF, the World Bank, the OECD, the World Health Organization, and the United Nations Development Programme.
It was inspiring to see someone who’s ideology is to simply save lives. No complex ideas on how “things should be” or ways to build a Utopian society. Nope, it is simply save lives. Sachs specializes in “modernizing” governments by advocating for free markets, and generally focuses on encouraging the “world community” to cancel debts for struggling countries and encouraging countries to open up its borders to foreign investment.
I might share the same ideals as Sachs for what a modern governments and economy should look like, but when it about saving lives I think the solution which prevents hundreds of thousands of people from dying every day is the best solution. What I find inspiring is that Sachs has found his tool, capitalism, and he has fine tuned it to deal with different situations. The tool is not what he is advocating for, but instead he is advocating for the results.
Here here a few bookmarks I’ve saved that have more information on Sachs.
Oooh, Jeff Sachs.
I don’t actually know much about him but I listened to a great forum on The Future of Africa that took place at PopTech last year. You can get free mp3 feeds from here
http://www.itconversations.com/series/poptech2005.html#downloads
A young activist and entrepreneur from (I think) Tanzania asked:
“Why does Jeff Sachs get more access to my government than I do… and without any proven track record?”
I personally agree that there are many things that the West and outside world can and should do to eliminate poverty, especially in Africa.
At the same time, infrastructure and economic models must originate from WITHIN Africa if they are to have a long term chance of success.
I’m naturally skeptical of one man running around the continent claiming he has the magic elixir.
Like, you, I hope he’s right, or at least moving toward rightness, but it’s a good question: where can he demonstrate success?
anybody know?
You might want to read “End of Poverty” to get a better idea, but he’s had success in Bolivia, Poland, China and India. He had less success in Russia.
In 1985 the inflation rate of Bolivia was at 23,000% (cite). Sachs helped Bolivia reverse inflation and cancel its debt.
Since 1985, adult literacy rose from 74% to 87%, infant mortality dropped from 87/1000 to 56/1000. Bolivia is still extremely poor (the poorest country in South America), but conditions are improving. Also, Bolivia is completely landlocked, after it lost its coastline to Chile, so the issues run deeper than simply economics.
But this is the point that Sachs drills home: every country is different and you have to look at geography, natural resources, geopolitic issues etc, in order to really come up with something that works. See, the alternative is to remain frozen while you try and decide how to fix everything at once or ignore those factors and try an clone the existing models. That’s not going to work. We’ve seen this tried all over the world. The important thing is to take action with the tools you have presented to you at the time.
I just watched all of Commanding Heights – it is an excellent documentary, though of course it left me with lots of questions…
Among those brought to mind: in an entirely free market system, what’s the role of the sovereign state? I’ve never really seen this addressed. Is it a free market system if you have any of 1. tariffs, 2. industry subsidies, 3. tax incentives? I’m not entirely convinced we should pioneer a system we’re not willing to explore, or be so willing to instigate ‘shock therapy’ test cases we would never subject ourselves to. About the state’s role generally in an entirely free market economy – what do they do if roads/schools/etc. are all privatized? Who ensures human rights, and where human rights mandates apply and what the penalties are for violations?
Shock therapy destroyed millions of lives. We have entered an age where the disproven game theory of the mentally diseased John Nash is the foundation of society even though he himself dismissed it as nonsense after he was cured of his mental illness. The class system of the middle ages is being re-established by implementing unsound models of society, which in turn is changing society. Ironically economists never consider the effect of their pet theories. And for the record, psychologically an economist is a close match to a psychopath. [Ref BBC The Trap]