Economic Sachs-down!

Economics

 

Originally posted on May 1, 2009 on PEN American Center's blog

 

To a less-than-full audience this afternoon at CUNY's Graduate Center, Columbia Professor and all around economic guru Jeffrey Sachs delivered sobering assessment of humanity's collective plight. That what Sachs says is "news" or salient or motivational or innovative or "right" is both inspiring and frustrating.

 

Inspiring because finally maybe the American public and our politicians are waking up to serious problems with attainable solutions.

 

Frustrating because sociologists, economists, political scientists, environmentalists and others of the so-called "radical" Left have been ringing alarm bells on this same stuff (and more!) for decades. (This is a dirty, open secret).

 

Alas, we are where we are. Or, in this case, Sachs is where he is, and it's time to get Americans on board.

 

Globalization is not a new phenomenon. As long as humans have been around their known worlds have been connected. Were not the ancient South American, Roman, and Chinese civilizations globalized worlds in their own rights? Of course, their worlds were significantly smaller realms than today's interconnected planet, but the idea of globalization-connections, exchanges, and varying levels of dependence on "outsiders"-has always been with us.

 

The problems today, according to Sachs, is not so much the connectivity of 21st century Earth, but our profound incomprehension in how real and significant the linkages are-from Main Street to Wall Street to a little walled, main street in Malawi, we are inextricably knit together. This lack of understanding, among other things, must change if we as a species are to see the 22nd century. As if to underscore just how coupled every human and village is to every other human and village and how every action has a reaction, Sachs' lecture covered a wide array of topics. I half-attempted a tally, here's a partial list of items touched on: swine flu, bird flu, AIDS, SARS, the Democratic Republic of Congo, Malawi, Nigeria, Iraq, Afghanistan, Pakistan, China, India, Mexico, Somalia, the American Midwest, oil, pirates, nitrogen fertilizers and cycles, bed nets, the Ganges, Yellow River, Rio Grande, Wall Street, JFK, Reagan, Clinton, both Bushes, Obama, and Kruschev (of course!). When was the last time you attended a lecture by an economist and heard the terms zoonotic diseases and Anthropocene used confidently before ending with a recitation of a speech on peace by JFK? First time for everything...

 

But back to the point of Sachs' discussion. Essentially, he says, there are three core problems infecting the global population: free-market instability, massive unfairness and inequities, and unsustainable environmental practices. I haven't read Common Wealth, but it's fair to assume that if you want details on his thoughts they can be found in his book.

 

A very quick and dirty breakdown of Sachs' ideas...

 

On free-market instability: it's an unhealthy market ideology pervading the thinking of American politicians on both sides of the aisle. Both major parties are guilty of handing over the reins of our economy to the bigwigs at Goldman Sachs and Citibank, who in turn, deregulate and privatize like there's no tomorrow. The eventual result-our current economic meltdown-it seems was never a question of if, but when. Well, now.

 

On massive unfairness: there is no incentive in capitalist free-market economies to take care of the poor. Notions of fairness and equity are kicked to the side and social safety nets dismantled. Markets, in short, are not geared to help people without money. This must be reversed if we are to pull poor Americans and destitute people around the world out of poverty. On the environmental crisis: Well, what do we expect when we try to feed six billion people, plus provide manufactured goods for them? We plunder the environment, push people into once marginal habitats (making it easier to contract animal-borne diseases like swine flu), dam rivers so that major waterways no longer flow to the ocean, deplete water tables, and saturate the lands and waters with nitrogen heavy fertilizers. These destructive practices must be reversed if we desire to keep living on this small, shared planet.

 

Sachs' solutions (for Americans)? Two fold: One, create social and legal institutions with teeth to properly regulate and mitigate for the problems listed above, and two, come to the realization that global problems (and they all are global) can have local effects (see AIDS for example). Only then will at least Americans be able to turn a corner and get a grip on these conundrums. I get the feeling, however, that Sachs doesn't even think we are at level zero on these fronts, a troubling thought.

 

When he was finished scaring them, Sachs took a couple of questions from the audience. I didn't get to ask mine, so I'll take the opportunity to do so here (because I know you are reading, Sachs!!).

 

Professor Sachs: 1. You mentioned that in the past couple of decades high-flying executive got their kicks acquiring multiple homes, private jets, and in general accumulating massive amounts of material wealth, that they saw this as the point of their economic behavior. You called this, in essence, a misplaced mentality. Question: What do you believe is the point of an economy? What is an economy's reason for being?

 

2. Considering free-market capitalism is slow on the draw, do you believe the climate change problem is urgent enough to warrant creating and nationalizing an alternative energy industry? Feel free to post your answers below, take as much space as you like!