The Great Global Schemer
Thursday, July 17, 2008
Economics for a Crowded Planet
By Jeffrey D. Sachs
Penguin Press. 386 pp. $27.95
One cannot fault Jeffrey D. Sachs for lack of ambition. In his last book, "The End of Poverty" (2005), the Columbia University professor and director of the (modestly named) Earth Institute offered a plan to eliminate extreme poverty by the year 2025. In his latest book, Sachs ups the ante. He argues in "Common Wealth" that the problems of global warming, biodiversity, water scarcity, overpopulation and global poverty all can be solved in an affordable manner.
In laying out this case, Sachs makes a significant contribution to a peculiar genre of nonfiction: the Great Global Scheme. Economists ranging from Hernando de Soto to Joseph Stiglitz have written in this genre, in which (typically) a great economist diagnoses the world's ills, then proposes sweeping policies to cure them. Political scientists often read the prescriptions with amusement because the author almost always relies on the "political will" of leaders. Indeed, by Page 11, Sachs has already declared, "We don't need to break the bank, we only need common goodwill." This is a polite way of hoping that powerful politicians will ignore powerful political incentives.
To be fair, Sachs deploys a number of gambits to make the case for the political viability of his plans. The first is to stress past examples of international cooperation. As he repeatedly observes, there have been successes: the so-called green revolution in crop yields, the eradication of smallpox and the protection of stratospheric ozone, for example.
The second gambit is to embrace technological optimism. Sachs is a big fan of carbon capture and sequestration and other innovations that could reduce the emission of greenhouse gases. He also thinks genetically modified crops could help reduce the use of water in agriculture.
The third tactic is to stress the relative affordability of his plans. Sure, trillions of dollars might sound like a lot of money, but Sachs stresses that his proposals would cost only about 2 percent of global income per year.
Yet his book's argumentation is open to question. On international cooperation, Sachs tends to highlight past successes rather than failures. Still, he cannot help but note some dismal outcomes, such as that the United Nations biodiversity convention "has now disappeared from the world's radar screen entirely" and that global population policy "has been hijacked by shortsighted ideology."
Sachs's technological optimism is refreshing, but it is unclear whether even his ideological allies -- environmentalists, U.N. enthusiasts, the rock star Bono (who wrote the foreword for his last book) -- would concur. The transgenic crops that "Common Wealth" touts are a big no-no in the European Union, for example. More generally, many environmentalists reject the idea that technology alone can cure man's sins. "Common Wealth" echoes their moralistic outlook: "Our own species' hunger for resources," Sachs writes, "has led us to become the single most destructive force on Earth for the rest of life." That does not inspire much confidence in technological solutions.
On the price of curbing global warming, Sachs asserts that, "Yes, there will be a fight over allocating costs, but it need not be a huge battle." To appreciate the cognitive dissonance required for that statement, consider that the so-called Doha round of world trade talks has lasted seven years so far, with no resolution in sight. Trade liberalization is a negotiating process that countries ostensibly view as having a win-win outcome. If the great powers cannot agree to reduce agricultural subsidies, is it realistic to think they will easily agree on how to tackle global warming, when the costs are higher and the benefits more ambiguous and long-term?
There are times in "Common Wealth" when this reader began to wonder if Sachs's plan to generate political momentum for his solutions was to bore his critics to death. The problem is not excessive economics jargon; Sachs makes the economics of his argument accessible to everyone. No, the problem is that he feels the need to explain the relevant science in as pedantic a manner as possible. We learn about the wonders of the triple bond that holds two nitrogen atoms together, the significance of the Earth's albedo and the stunning fact that "without drinking water there is no survival beyond a few days."
Still, Sachs identifies problems that range from serious to grave, and some of his solutions might well be achievable. His proposals on population, for example, include reducing infant mortality, increasing education for girls, fostering another green revolution and promoting urbanization. A few of his other ideas, such as a global version of the National Institutes of Health, are worth pondering.
The book's biggest flaw is that it does not seriously address the question of global governance. At the outset, Sachs acknowledges the problem of "outdated institutions." This matters a lot, given the necessity of effective multilateral institutions to implement all of his grand schemes. In the end, "Common Wealth" blithely assumes that the United Nations system will be capable of running the show. Instead of addressing the knotty question of how to improve global governance structures, Sachs detours into superfluous and unoriginal critiques of U.S. foreign policy.
"Common Wealth" is likely to go the way of other Great Global Schemes: dismissed as unrealistic and quickly overtaken by events. Economists like Sachs need to acquire a better feel for the politics that underlie the status quo they detest, or the rest of us will be buried under these ineffectual tomes.