As the "New Economy" Crashes, to What Degree Will Mainstream Economists Change Their Stripes?
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“The central solution to ending extreme poverty,” Sachs explains, “is to empower the poor with improved technology so that they can become productive members of the world economy.” Since the poor cannot afford these technologies on their own and are stuck in “poverty traps,” wealthier nations must provide generous foreign aid to help them to their feet. His heroes in this endeavor are philanthropists like John D. Rockefeller and Bill Gates, who have seen the wisdom of investing in humanity’s common well-being.
Technological boosterism also infects Sachs’ prognosis for global climate change, making him a less-than-convincing environmental guru. Common Wealth provides a familiar overview of the rise in atmospheric CO2 levels and the potentially disastrous consequences of global warming, warning that “a business-as-usual path... will not carry us to safety.” Sachs then preoccupies himself with demonstrating that “powerful technologies”—including improved hybrid cars and devices that can collect excess carbon dioxide from the atmosphere—“will likely be available to enable us to mitigate the climate shocks at a very modest cost.” With some dedicated public effort, “modest economic incentives,” and investment in research and development, he tells us, we can beat global warming on the cheap. As for the type of political resistance that has vexed previous climate negotiations, this, too, can be easily overcome: “Yes, there will be a fight over allocating costs, but it need not be a huge battle,” he imagines.
As his book progresses, not only do Sachs’ reassurances begin to seem Panglossian, but his can-do rhetoric grows bland. Common Wealth suffers from the lack of memoir and storytelling elements that made The End of Poverty appealing, if problematic. The new volume ends up reading something like a political campaign book—perhaps for someone running to head the United Nations Development Program.
Sachs is at his best when he takes up some of the grit of political polemics, like when he blasts the religious right and the Bush administration for undermining U.N. family planning efforts shown to effectively empower women, promote reproductive health, and curb runaway population growth. But lobbyists and special interests are too seldom found in Sachs’ account of political decision-making. Rather, he presents bad policies as the result of “ the declining sense of global responsibility felt by U.S. politicians” —something that can presumably be remedied by his impassioned argumentation, his many charts, his appeals to long-term self-interest, and his quotations from John F. Kennedy.
As global markets weather a new period of turmoil and instability, Sachs’ ultimate confidence in the world economy’s abundance will fail to comfort many. Whereas Sachs dismisses concerns about peak oil on the grounds that “[w]e might run out of conventional petroleum in a few decades, but we have centuries left of coal and other nonconventional fossil fuels, such as tar sands and oil shale”—which new technology, of course, will allow us to effectively exploit—there is no shortage of analysis suggesting that limits on natural resources are real and that the consequences are dire. Likewise, there are ample observers of capitalism’s recurrent downturns who will note that the unfettered market is not just limited in its ability to do good, as Sachs would have it. It can also do ill, creating crises—financial and environmental—virulent enough to raise serious doubt about neoliberalism’s sustainability.
While global capitalism itself may be adaptable enough to survive the demise of its most recent laissez-faire incarnation, the transition will mean real pain for people across the globe. This will be felt by the millions of working people in advanced industrial nations with bad credit and stagnant wages who now face foreclosure on their homes. And it will likely be felt by poor in global South as well—those who receive neither enough aid nor enough income to escape hunger and disease. These people will be denied because countries that are clashing over oil resources and adopting beggar-thy-neighbor economic policies in an attempt to soften the downturn at home are those least likely to engage in Sachs’ cooperative, multilateral campaign to end poverty.