a journal of modern society & culture

Click here to return to the browser-optimized version of this page.

This article can be found on the web at
http://www.logosjournal.com/issue_5.1/blim.htm


Review Essay: Ending World Poverty: Jeffrey Sachs' Millenarian Vision

by
Michael Blim


 

Material Reviewed: 

Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time, (New York: Penguin, 2005)

Jeffrey Sachs, et.al., “Investing in Development: A Practical Plan to Achieve the Millennium Development Goals,” (New York: UN Millennium Project, 2005), www.unmillenniumproject.org

Jeffrey Sachs, et.al., “Ending Africa’s Poverty Trap,” Brookings Papers on Economic Activity, 1 (2004), 117-240, www.earthinstitute.columbia.edu/about/director/publicat.html

 

I

s Jeffrey Sachs clear-eyed, compassionate, and practical? Or dewy-eyed, self-obsessed, and naïve?. These competing characterizations are evoked by the United Nations Millennium Project and Sachs’ popular exposition of it in The End of Poverty: Economic Possibilities for Our Time. No one, of course, is against ending poverty but elite enthusiasm does seem muted. Daniel Drezner in the New York Times Book Review notes Sachs’ “technocratic enthusiasm,” and while finding his “missionary zeal is infectious,” worries that Sachs offers unrealistic remedies. He also finds disheartening parallels between Sachs’ prescriptions and those of developmentalists like Walt Rostow a half century ago. If the remedies didn’t work then, Drezner asks, why should they work now? Moreover, he sees no reason to believe that corrupt poor country governments given another chance would do the right thing with new resources.[i]

Even more disdainful is development economist William Easterly who labels The End of Poverty as Sachs’ “Great Leap Forward,” hardly an endearing sobriquet. Sachs commands  “the utopian camp,” armed with a “Big Plan that covers just about everything.” Big plans, says Easterly, are inevitably bureaucratic and out of touch with local knowledge. For Sachs, “poverty is mostly a scientific and technological issue ... in which aid dollars can buy cheap interventions to fix development problems.” Yet ending poverty entails solving intractable problems such as political, ethnic, and regional conflicts, corruption, sparse or inefficient public services, and odd local laws. Life-saving drugs end up in black markets; greedy bureaucrats sell off grain stores in the midst of famine. Easterly instead advocates little steps, intense supervision, and incentives up and down the line to improve compliance. Where Sachs’ proposals for health care, sanitation, and education can be converted into measurable local projects with prudent constraints in place, Easterly is all for them.[ii]

Sachs’ hubris -- he has seen the future and knows how to make it work – annoys reviewers who wonder how he can be so cocksure after helping Yeltsin et.al. make huge mistakes in the Russian “transition” to a market economy.[iii] The breathless eyewitness prose of The End of Poverty describing Sachs jetting in and out of meetings with rulers of many nations - where he discovers poverty among villagers in Africa or squatters in Bombay - creates a narrative more like a personal journey to enlightenment than a dispassionate set of policy prescriptions. The End of Poverty amounts to another in a recent spate of economist confessional tales that includes Sachs critic Easterly[iv] and his Columbia colleague Joseph Stiglitz[v]- a narrative that mixes personal testimony with the old-time religion of mainstream economics.

Like brother-in-arms Bono, Sachs will entice anyone to join his mission, and his support consequently cuts across the usual left-right divide. He managed to join anti-IMF and World Bank conservatives (such as Alan Meltzer) in a report condemning Bretton Woods institutions for overstepping their original mandates. The IMF should stop providing poor country bailouts and cease managing their economies. Its real job is providing emergency loans to countries caught in short-term liquidity crises. The World Bank should focus on the very poor countries, and provide grants instead of loans to the truly needy.[vi]

More important, it seems, is the moral chord Sachs seeks to touch among commentators, even some leaning well to the right. Martin Wolf, chief economic correspondent for the Financial Times, notes that he “cannot but help be moved to advocate doing more for the world’s poor.”[vii] The Millennium plan calls for eliminating dollar-a-day poverty by the year 2025, thereby improving the lives of a billion people, and Sachs wants to enlist us in the quest, a good thing in a world afflicted by “development fatigue.” Sachs and his colleagues at the beginning of the year issued an interim report urging immediate action by nations adjudged able to handle increased foreign aid. This report as well as another devoted to sub-Sahara Africa under the auspices of the Brooklings Institution provide the empirical underpinnings for The End of Poverty. Their efforts to push the issue of poverty onto the world’s front page provide an opportunity for looking more closely at what a serious plan will do, and what it won’t do.

Let us assume here that the Millennium plan Sachs advocates is implemented. That is, rich countries fund it, and states, international organizations, non-governmental agencies execute it.  Will it end world poverty?  Further, will their program create greater global justice? Before answering these questions, let us examine  Sachs’ diagnosis and cures.

 

Sachs’ Program In Brief

Sachs’ diagnosis is straightforward: poor countries are caught in poverty traps. The key problem is lack of economic and human capital, which snares them in cycles of economic despair. Poor countries sell their few assets, usually natural resources (primary commodities), thus depleting their capital stock, and then are unable to stem a dire blend of high birth rates and high and early death rates.  Ill-nourished, medically underserved, and poorly educated, their populace is a burden rather than advantageous human capital. Foreign investors pass them by because a lack of infrastructure proves a deterrent to profit-making. No production, no savings; no savings, no capital investment. No capital investment, no productivity increase. No wealth. This is what has happened to most of the world south of the equator.

Sachs is especially concerned, and rightly, with the plight of sub-Saharan African, the poorest region in the world. The poverty it suffers, according to Sachs, is not the fault of its governance or of social pathologies one might ascribe to poor people. These states, he argues, are no worse at governing than others in Asia and Latin America, or the old Eastern bloc. The key problems are structural: bad geography and colonialism have led to small, inaccessible economies in small states - markets whose boundaries are “unnatural,” in that they owe more to the machinations of colonialism than anything else. Especially costly has been the technological neglect of African agriculture, which did not benefit from Green Revolutions as have other parts of the world.

Sachs and his diligent collaborators have mapped the sorry geography of poverty and its disadvantages globally. They charted the drift and severity of malarial outbreaks and other pandemics. They can even put dollar figures to the costs of human disasters, and to the cost of their remedies. One can no longer say that the problem of global poverty is unfathomable. Instead, we might ask how we can do nothing knowing as much as we know. Thanks to Sachs, we can now measure both the costs and benefits of inaction and hypocrisy.

 

Sachs’ Solutions

As the problems are knowable, Sachs believes so too are solutions. Raise incomes by improved productivity that derives from greater investment in economic and human capital. It takes national planning, significant increases in foreign assistance, and an effective downwardly driven globalization in which “the village” is integrated with the world market. Sachs expresses  confidence that we have the technical know-how, built on decades of development experience, to do the job. The key now is to take the prescriptions and “scale up,” that is, universalize them.

Good as far as it goes, and better than merely good. For several solutions, almost by virtue of the investigators’ serious pragmatism, offer opportunities for not only eliminating poverty but for creating greater equality in poor societies. The first of these is their recommendation for universal access to basic health services, ungoverned, or best said, unrationed by user fees. The emphasis  is on village level services delivered by paraprofessionals, barefoot doctors in all but ideology, focussing on common treatable conditions for women and children, and on epidemic diseases. Their proposals hold great promise for saving lives and increasing life expectancy. Health centers rather than hospitals, rural as well as urban areas, training and deploying mass professionals rather than disease experts – these can help redirect a world health system decidedly skewed toward the rich.

The call for universal primary education (with a bow to Amartya Sen’s work) is both an egalitarian necessity and an economic resource. They also argue for increased access to secondary and postsecondary education. In each of these contexts, though, they recognize the need to provide incentives for ensuring gender equality in the use of educational resources.  In these two important arenas, then, Sachs and his team advocate solutions that would generate greater equality. Although the solutions are not novel. one might respond with Sachs that really doing them universally would be new, and profoundly improve the human condition.

In addition, Sachs calls for building viable infrastructures in energy, transportation, and communications so that private investors will be lured into providing capital necessary for industrial development. International trading rules too can also be revised to help poor countries sell what they now have as well as expand their range of products for the world market.

The price tag for the fully implemented Millennium Project is a mere $135 billion a year, less than 1% of the combined gross product of the rich countries. The sum is about double what they allocate for poor countries now in non-military aid. Oddly, although Sachs was advisor to the international Jubilee campaign to cancel poor country debt, debt reduction does not figure in his scheme. This is a crucial omission. The so-called “G8” summit of rich countries in Scotland during July offered $1 billion a year in debt relief, a sum to be parceled out to countries that meet criteria set by lending countries and the IMF. Considering that sub-Saharan Africa pays out $8.6 billion a year in interest payments, this is paltry. Considering the poor world pays out an estimated $250 billion in public and private debt payments a year, it is obscene.[viii] Sachs limits his comments to some success in 2000 in getting the U.S. Congress to move affirmatively on debt reduction.[ix]

 

Will It End Poverty?

The short answer is no: it will only end “dollar-a-day” poverty. Another one and a half billion poor persons living on between one and two dollars a day will remain. Still, moving a billion people out of extreme desperation would be a remarkable accomplishment.

The long-term answer, unfortunately, is no as well, for several reasons. First, for all the emphasis Sachs places on structural solutions to the economic problems of poor countries, there is a discomfiting omission of analysis of the structures of disadvantage in which poor people are historically embedded. The ravages of colonialism are duly lamented, but no assessment is undertaken of the damage rich countries have done to poor countries over the postcolonial era, or how they might be continuing to do harm. While Sachs is a trenchant critic of Western moral indifference, he and his cohort are unwilling to analyze the degree to which the economic interests of the rich countries are connected to why the world’s poor are poor. Continued Euro-American exploitation of their spheres of economic interest in Central and Latin America, Africa, and Asia goes  unmentioned. The punitive efforts of international organizations like the International Monetary Fund and the World Bank to apply one-size-fits-all remedies to poor country problems are deplored, but are chalked up to technocratic blundering and conservatives’ magical thinking. The organizations’ role as economic and political instruments of Euro-American imperialism is ignored. Nor does Sachs train attention on the historic actions of Euro-American firms to armor themselves in First World protectionism while extracting energy, metals, and other commodities from poor countries at predatory prices. Nor is much made of how the rich countries used the World Trade Organization to procure advantages for their multinationals in new industries such as services, finance, and patent-driven technologies such as information, biotech, and pharmaceuticals. As much as Sachs wants to relieve poor countries of the inhumane accusations of blame for their plight, as in “their cultures make them do it…,” he is unwilling to attribute any responsibility to the rich for how the poor get and stay poor. And, Sachs’ otherwise compassionate account quickly reaches its limits in a shopworn gospel of self-help:

“…the goal is to end extreme poverty, not end all poverty, and still less to equalize world incomes or to close the gap between the rich and the poor. This may eventually happen, but if so, the poor will have to get rich on their own effort.” (End of Poverty, 289)

The cost of not digging deeper into the reasons for world poverty, it seems, is a reversion to poor-house logic.

Second, inside poor countries, there is a similar disconnect with likely causes. It is as if poverty were some sort of natural, pre-takeoff state of being. There is no discussion of how poverty is an effect, the result, not the cause, of enormous economic and social inequalities. Overlooked is how upper and middle classes in poor countries, to the extent that they exist, have constructed an economy and a system of rule that directs what surplus is available to them, and thus makes and keeps people poor. While one obvious definition of poverty is the absence of money, the absence becomes causal only after people have been deprived of adequate livelihoods in the first place.

This in no way suggests that poverty in poor societies would vanish if resources were distributed equally. As Sachs rightly notes, there are too few assets to go around. But it does imply that simply raising the level of resources, read here as money and human capital, in poor societies will not create universal well being for all citizens unless the social structures that create inequalities within societies are changed as well.

An example. Three quarters of the world’s poor still lives in the countryside, and as Sachs reports, half of the chronically hungry in poor countries are agricultural smallholders.[x] The goal of the Millennium Project is to make them more efficient farmers, an initiative that would also free surplus labor to produce profits in factories and cities (assuming the surplus is welcome and absorbable). The recommended strategy is largely technical: a new Green Revolution for neglected staples, irrigation, and fertilizer. Absent is any consideration of land reform. Why there is too little land and too many landless or nearly landless hands working it, is indeed a complicated question, for which there is no single cause or solution. The growth of large estates for export crop production, population pressure, inheritance practices that divide land into smaller and smaller parcels, and soil exhaustion led to widespread dispossession of the world’s peasantry, and reduction of the remainder to the barest of subsistence livelihoods. Suffice it to say that land reform was an indispensable instrument in the Asian economic success stories of Japan, South Korea, Taiwan, and China, so that there would seems every good reason to include it in the Millennium agenda. Without it, even the robust technical fix envisioned by Sachs and his colleagues won’t dent rural poverty.

A second Green Revolution, too, may deliver less than did the first. Spectacular yield increases marked the first 20 years since the introduction of hybrid staple seeds, fertilizer, and irrigation (starting in 1965), but have given way to slowing growth over the past 15 years. Even in Green Revolution success stories, yield growth slowed even as intensive irrigation and chemical fertilizer use caused significant environmental degradation. Moreover, while the Green Revolution reduced rural poverty, it did not produce greater economic equality in the countryside.[xi] 

Third, despite the Millennium Project’s acknowledgment of the need for state planning, and notwithstanding their admission that key Asian tigers long protected their industries from competition, there is a disappointing paucity of industrial ideas that Sachs leave poor states to ponder. Justifiably leery of letting “the market” decide – if markets functioned efficiently, poor countries would be awash in capital as investors chase higher margins associated with cheap labor and cheap start-up costs – Sachs urges poor countries to pursue export-oriented, labor-intensive, “light” manufacturing, typically focussed on shoes, textiles and apparels, which are the traditional first steps. The success stories of Bangladesh and Taiwan are cited. The problem with this solution is that everyone is doing it, and onrushing giants like India and China have just begun to exploit these niches. Due to the phasing out of the international textile agreement, these two producers threaten to wipe out manufacturers in Africa, Central America, Latin America, and Bangladesh.  The United States and Europe are mindful of the damage to their own producers and seek protection for them.  So the question for poor countries is what kinds of new export markets at the lowest end of the manufacturing process can support their development. If Bangladesh, among 15 other poor countries, must appeal to the U.S. Congress to protect their garment production from being annihilated by China and India, what room at the bottom of the industrial ladder is left for a Togo, Chad, or Mali?[xii]

To be sure, Sachs’ inadequacies on this score are our own. But it does raise the question of why those who care about the fate of poor people in poor countries don’t opt for the path of stimulating investment and production in basic goods for local markets. Let the countries protect their markets, as the Asian tigers did, and see where it leads. Not a sure-shot option, but then, there are none, in a global economy constantly teetering on the brink of massive over-production.

 

Poverty Ending and Global Justice

Ending extreme poverty is a necessary but not sufficient step toward global justice. Moving up to two-dollar-a-day poverty is a great but finally mean achievement. From an ethical standpoint, how can one be at ease when many people’s lives are so disadvantaged? There is also a practical matter of power: How can poor people inside poor countries defend their gains, however slight, against their own predatory classes, let alone ours? The abyss between rich and poor countries will persist under Sachs’ scheme, as will the power differential.

And the differential matters. The case of US economic policy since the nineties is instructive. Even as the domestic distribution of wealth and income has become more unequal and the poor both absolutely and relatively poorer, our government drained resources from the poor through “welfare reform” and gave away resources to the rich through tax cuts. On the foreign side, when financial crisis hit the Pacific Rim in 1997, Washington encouraged the IMF and World Bank to impose draconian reforms that only made the poor worse off.[xiii]  As poor-house arrangements offer no rights, the poor lack structures or resources with which to defend themselves. Greater economic equality – both between rich and poor countries and between rich and poor in poor countries – is the only way to assure that people can hang to and improve upon their gains.

That said, though the Millennium Project is the most robust and progressive aid-related development program around, and laden with suggested practices that would alleviate the direst poverty. Yet its focus on poverty reduction, not equality, enables economic and political systems to judge themselves by means of a counter-factual of not-poorness. Semantic ambiguities and measurement problems are compounded by rule of thumb judgments that states and their bureaucracies deploy.  On a practical basis, greater economic equality provides a clearer goal and standard than does ‘not-poorness,’ and also is more in line with the growing trend to link development aid to clear-cut outcomes.

Finally, more equal societies are more just societies. The structures of disadvantage are dealt with head-on in achieving equality and better economic outcomes. People can define their lives, free up their creative energies, and defend their own rights – all values that most developmentalists assume are necessary for societal economic successes. Eliminating poverty will not achieve economic equality. The opposite - measures undertaken to foster economic equality - is more likely to work.  Taking structures of disadvantage into account, I believe it highly unlikely that poverty can be eliminated in most societies or the gains of poor people be protected otherwise. Poverty reduction programs lacking clear equality goals will not succeed. Sachs shows us some of what must be done, and he shows us how it can be done. It is surely a compliment to him and his collaborators that we ask him to do more, not less.


 

[i] Daniel Drezner, “’The End of Poverty:’ Brother, Can You spare $195 Billion?” New York Times, April 24, 2005, http://www.nytimes.com/2005/04/24/books/review/24DREZNER.html.

[ii] William Easterly, “A Modest Proposal: The End of Poverty: Economic Possibilities for Our Time,” Washington Post, March 13, 2005, page BW03, http://www.washingtonpost.com/wp-dyn/articles/A25562-2005Mar10.html. Sachs for his part responded angrily to Easterly’s review, calling it a “crude caricature of my ideas,” and calling its author “the cheerleader for ‘can’t do’ economics.” See Sachs’ response, “Up from Poverty,” Washington Post, March 27, 2005, page BW12, http://www.washingtonpost.com/wp-dyn/articles/A64541-2005March24.html.

[iii] Easterly, ibid. See too John Cassidy, “Always with Us? Jeffrey Sachs’s Plan to Eradicate World Poverty,” New Yorker, April 11, 2005, 72-77.

[iv] William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics, (Cambridge: MIT Press, 2002).

[v] Joseph Stiglitz, Globalization and Its Discontents, (New York: W.W. Norton, 2003) and The Roaring Nineties: A New History of the World’s Most Prosperous Decade, (New York: W.W. Norton, 2003).

[vi] Alan Meltzer and Jeffrey Sachs, “Reforming the IMF and the World Bank,” American Enterprise Institute for Public Policy Research, March 8, 2000, http://www.aei.org/include/pub_print.asp?pubID=11425. Accessed July 7, 2005.

[vii] Martin Wolf, “Aid Will Not Make Poverty History – But It Is Worth Trying,” Financial Times, July 6, 2005, 13.

[viii] Eric Toussaint, “Guarantee the Fulfillment of Basic Human Needs for All and Get Out of the Vicious Cycle of Debt,” World Social Forum, (January 31, 2002), http://www.forumsocialmundial.org.br/bib/toussainteng.asp. Accessed January 24, 2002; Jubilee Debt Campaign, “Jubilee Debt Campaign Reacts to G8: Still No Giant Leap,” www.jubileedebtcampaign.org.uk. Accessed July 21, 2005.

[ix] Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time, (New York: Penguin, 2005), 342-3.

[x] Millennium Project, 2005: 65.

[xi] International Fund for Agricultural Development, Rural Poverty Report 2001: The Challenge of Ending Rural Poverty, (Oxford: Oxford University Press, 2001), 127-135.

[xii] Edward Alden, “Fifteen Poorest Countries Lobby US to Give Garment Preferences,” Financial Times, May 4, 2005, 8.

[xiii]See Stiglitz, Globalization and Its Discontents.

 

Michael Blim is Professor of Anthropology at The Graduate Center, CUNY.  He is the author of Equality and Economy: The Global Challenge (2005), Made in Italy: Small-Scale Industrialization and its Consequences (1990), and co-editor of Anthropology and the Global Factory (1992).

 


Logos 5.1 - winter 2006
© Logosonline 2006