From the archive, originally posted by: [ spectre ]
Economist Jeffrey Sachs: The Eternal Optimist
BY Edmund Conway, The Daily Telegraph | May 7, 2008

Never has the challenge of saving the world felt as simple as it does
right now. Sitting on the sofa in front of me, Jeffrey Sachs is
leaning back, gingerly sipping his coffee and sweeping away some of
the most intractable problems facing our planet with the barest waft
of his palm. Poverty and a billion starving people in Africa? Whisked
away like dust. Overpopulation and water shortages? Waft, waft. Global
warming and climate change? A little brush and they’re gone.

It would all seem rather utopian did Mr. Sachs not share that Clinton/
Blair-style knack of making almost anything seem completely do-able.
Unlike so many economists, who tend dismally to explain why things
will fail and why good intentions almost invariably go to waste; Mr.
Sachs, the director of the Earth Institute at Columbia University and
the head of United Nations’s Millennium Project, is Professor
Optimism. For evidence look no further than the title of his first
book, “The End of Poverty,” or the fact that he has become the poster
boy for can-do economics, or witness the adulation he inspires in
everyone from undergraduates to film and rock stars.

This is not to say he in any way plays down the magnitude of the
threats the world is facing. In fact, along with other renowned
economists such as Nobel prize winner Joseph Stiglitz, he fears the
combined set of economic crises facing us right now are more severe
than perhaps any in recent history. We’re not talking about the credit
crunch here, though that could prove a dangerous distraction and

The Sachs thesis, laid out in his latest book, “Common Wealth,” is
that the world could stumble blindly towards further conflict unless
it addresses some key problems: global warming; the population
explosion in the developing world, and poverty in Africa and central
Asia being chief among them. “This is not an argument about doom —
it’s an argument about changing course,” he said. “You can be
pessimistic about the current trajectory, but also optimistic about
the solutions.”

Though, while we’re on the subject of doom, his fears about the worst-
case scenario are terrifying — particularly coming from an eternal
optimist. “For me, the nightmare concept of the modern era is 1914,
when an age of globalization slips away — not only into a disastrous
bloody war but also into 75 years of consequences to that — the
Bolshevik revolution, the Great Depression, World War II. It takes
generations to surmount that disaster and tens of millions of deaths
in between. “If I were a grim novelist of an Orwellian bent, my novel
would be called 2014. That’s possible still: in an age of
globalization, where everything seems inevitable — scientific
progress, nanotechnology, the information age, breakthroughs in
neuroscience — we could blow it all.”

For swirling beneath our feet is a potent cocktail of threats —
everything from massive income inequality to rising food prices —
which could erupt with violent consequences. “What I am trying to say
as an economist is: if we choose the bad course, let’s be clear it’s
not because the good course would break the bank. It’s because we
failed to take them.” When it comes to climate change his argument is
quite simple: most scientists are now agreed there is a problem, and
that levels of carbon dioxide in the atmosphere need to be contained,
if not fall. However, no one in government has actually provided a
simple instruction manual of what to do about it.

Green taxes and markets for carbon are “secondary issues” behind the
question of developing new green tools, he insists, convinced that
there could be “silver bullet” technologies — if only the Government
would invest the cash in researching them. In case you hadn’t
realized, Mr. Sachs is firmly of the view that these solutions won’t
be produced by the free market. The leading research projects into one
of these technologies, carbon capture and sequestration, have been
scrapped on both sides of the Atlantic, while he bemoans the lack of
progress in developing decent, cheap solar thermal power plants. “I
believe we also need safe nuclear,” he said, running through his
ministerial instruction manual.

“We need carbon capture and sequestration; long distance automobiles
like plug-in hybrids. I believe we need to examine the potential for
biofuels which do not compete directly with foodstuffs.” The problem
is that many of the new technologies may not work. For the past
quarter century, for instance, nuclear fusion has been held up as the
pollution-free power source of the near future but its development has
taken decades longer than anyone anticipated and it is still
generations from completion.

And even if these technologies do exist, so do intractable barriers at
every level from between different disciplines of science and
squabbling government departments on the minute scale to, on the
global level, a system of multilateral institutions which is at its
lowest ever ebb — not to mention the war on terror which is “a
disastrous distraction from real problems.”

“It’s an American habit,” he concludes. “We seem to move from defining
an enemy to defining an enemy. The idea of my book is that we all have
common interests and common problems, and it’s trying to surmount them
for future generations.”




Jeffrey Sachs
email : director [at] ei [dot] columbia [dot] edu / sachs [at] columbia [dot] edu

from 5 May 2008

Q. Are we entering a depression that will be the worst since the
1930s? – Anita R, Brighton

A. The Great Depression was caused by a series of historical
cataclysms, many related to the First World War, followed by massive
policy failures of central banks, compounded by the lack of
international co-operation and a breakdown of trade. There is no need
to repeat such a massive debacle. We are facing financial
mismanagement following deregulation, natural resource scarcity and
environmental threats – which are very big challenges but don’t
translate into disaster unless we profoundly mismanage them. I believe
there is considerable vigour in the world economy and potential to
address our environment and resource problems. Our best hopes are cool
heads, avoiding violent conflicts and protectionism, and working co-
operatively on challenges.

Q. Should central banks be bailing out institutions who were the
victims of their own greed? – NIGEL EVANS, Sheffield

A. We need to avoid financial panics that become self-fulfilling
crises, while not bailing out poor management and recklessness. The
usual idea is for central banks to ensure liquidity but not ensure
against insolvency, and to keep markets liquid without stoking
inflation. The US skirted close to the line with the partial bailout
of Bear Stearns. It is also flirting with overly-inflationary monetary
policies. Central banks are close to the margin between being
guardians against panic, and becoming agents of moral hazard and

Q. Have the IMF and World Bank caused more poverty than they have
cured? – Daniel Finnie, London

A. The IMF took on the control of low-income African and Latin
American economies in the 1980s and 1990s, and did a poor job of it by
emphasising extreme belt-tightening rather than debt relief. It had
almost no knowledge of real development challenges. Since early this
decade, it’s mainly gotten out of the way to the benefit of the
institution and the countries. The World Bank has similarly had a poor
run since 1980 by its excessive zeal for free-market policies in
countries which need huge increases in public investments. It forgot
that the private economy needs complementary public investments,
especially in infrastructure, environment, education, public health,
and agriculture. The Bank now seems to be reforming well. The world
needs a healthy IMF and World Bank, and both seem on the mend.

Q. With inflationary pressures in China, is it the end of its great
growth? – Usman Butt, London

A. China still has phenomenal growth potential, based on rapid
technological upgrading and massive savings rates. It faces serious
challenges of environmental management. As China gets richer, its
growth rates will decline to those of high-income countries, but I
still expect 7 per cent per year in the years ahead, possibly higher.

Q. What happens when the oil runs out? – Dotun Fara, by email

A. If oil production peaks abruptly and begins to decline, we will
have a very serious period of readjustment as more expensive
alternatives and oil-saving technologies are brought on line. For
example, coal can be liquefied but at a high cost. If we anticipate
the peak of oil and it is delayed by a decade or two, we can have
smooth adjustment to alternative energy, plus energy-saving
technologies in automobiles, buildings and industry.

Q. Can economic development and the fight against climate change co-
exist? – Simon Routledge, Fulham

A. It is possible to combine economic development and climate change
mitigation (the reduction of greenhouse gas emissions) by turning to
low-emission energy technologies and energy-saving technologies. The
potential for solar power is vast. If we invest heavily in these
alternatives, there are enough prom-ising options that we should be
able to find our way through this maze.

Q. Is it possible for the whole world to be rich, or does capitalism
need failures? – Janice Taylor, by email

A. The whole world could be rich, since wealth depends on
productivity, not on the presence of the poor. By spreading better
technologies in all parts of the world, all the world can share in

Q. Should we be realistic and admit the Millennium Development goals
will never be reached? – Donald Hayman, Runcorn

A. The Millennium Development goals are still achievable, but we are
surely running out of time, especially in Africa. In 2002, the rich
countries promised a significant increase in aid, to reach 0.7 per
cent of GNP of the donor nations, but that has not occurred. The donor
promises were reiterated again at Gleneagles in 2005, when the
participants and millions of activists vowed to “make poverty
history.” Yet even those promises have not been fulfilled. We should
remember how fast progress can be by noting that Unicef and others
have helped Africa to reduce measles deaths by 91 per cent since 2000.
Food production in Africa could be doubled by 2015. Children could be
in school, receiving midday meals, de-worming, and proper textbooks
and educational instruction. If we understand the goals as requiring a
set of interconnected public investments carried out in a businesslike
way through a shared effort of donor and recipient governments, the
2015 goals are still feasible. The limiting factor in most cases is
lack of donor follow-through. In some cases, like Zimbabwe, the
limiting factor is despotic rule.

Q. Should I buy food flown in from Africa, or avoid it because of
climate change? – Andy Waller, Southend

A. Yes, buy its products, which raise local incomes and help Africa
get on a path of economic development. The climate-change effects are
small, and the products cannot be produced locally.

Q. With food shortages, how can we avoid “starve thy neighbour”
policies? – ADAM WRIGHT, by email

A. The key is to raise global food production in line with rising
demand, and keep international markets open. The supply side has been
hampered by very low production in Africa and other regions, droughts,
and by the diversion of crop lands to biofuels. We need a three-
pronged supply approach. First, we should implement urgently a fund
for smallholder agriculture in low-income regions to double food
production. Second, we should reverse gover-nment mandates on biofuels
that compete with food production. Third, we should “climate-proof”
crops to economise on water with better crop choices and drought-
resistant varieties.

Q. The earth clearly cannot support this many people. Should we
introduce restrictions on family sizes? – Philippe L, London N1

A. We should encourage all parts of the world to achieve fertility
rates consistent with a voluntary stabilisation of population of no
more than eight billion by the year 2050. That is achievable, though
the current business-as-usual trajectory will take the global
population to well over nine billion. In many parts of the low-income
world, the total fertility rate is more than five children per woman,
and in some places, such as rural Africa, more than six. A rapid and
voluntary reduction of fertility can be achieved through free,
universal, and voluntary access to family planning and contraception;
girls staying in school at least through the secondary level, delaying
the onset of childbirth; child survival, giving families confidence
that their offspring will survive; women’s empowerment; and leadership
in support of familyplanning.

Q. Does aid keep poor countries poor and reliant? – Colin Morgan,

A. If aid is just dribbled out as a handout, there will be no end to
it. If aid is at a robust level to empower the poor to get out of the
poverty trap, then countries will be able to end their aid dependence,
as China has done. A short period of sufficient aid, enough to raise
productivity above poverty levels, can break long-term dependence.

Q. Should we embrace GM crops to solve hunger? – Rihan Coult, by email

A. GM technologies have huge potential in three areas. The first is
where genes from drought-resistant plants are introduced into crops.
The second is improved nutrition (missing amino acids for example) in
food crops. The third is improved pest resistance. Care should be
taken to minimise environmental or health threats but we should not
turn our backs on a highly-promising technological option.

Q. Would you run for office? – Nicola Blakely, Farringdon

A. It’s doubtful, since I have the opportunity to help dozens of
countries now, rather than pursuing the foreign policy of a single
country. On the other hand, the quality of politics in my country
during recent years has been so low that we all feel the need to help
improve US public life. The US can still make a huge contribution to
the world if it turns to global sustainable development and peaceful
problem solving.

Q. Should George Bush go down as one of the worst US presidents in
history? – Laura Grant, by email

A. His administration is considered by many historians about the
worst, in competition with Warren Harding or James Buchanan. One of
the worst seems likely, worst is still in competition.

Q. Can carbon trading work? – Tom Lawrence, Cambridge

A. There is a good case for putting a price on carbon emissions but it
is more straightforward to do it as a tax rather than a system of
tradable permits. It would be easier to tax carbon at source – coal,
oil, and gas companies. Tradable permits or carbon taxes will not help
develop low-emission technologies. We need to combine carbon pricing
with initiatives to promote sustainable energy and farming

Q. Who are your heroes? – Lucas Holme, Manchester

A. Makers of peace. I am gripped by John Kennedy’s last year, between
the Cuban Missile Crisis in October 1962 and his death in November
1963. He helped to save the world from hothead generals and pessimists
by finding a peaceful resolution of the Cuban missile crisis, and then
bravely led the way to the first post-war treaty with the Soviet Union
(the Partial Nuclear Test Ban treaty) insisting peace was possible
through a rational recognition of common interests. He received
invaluable support from Harold MacMillan: the “special relationship”
at its world-saving finest.