The End of Poverty: Economic Possibilities for Our Time | Jeffrey Sachs

The End of Poverty: Economic Possibilities for Our Time | Jeffrey Sachs | thumping is not reading

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The End of Poverty...

	The End of Poverty: Economic Possibilities for Our Time Jeffrey Sachs Penguin (Non-Classics), 2006 - 416 pages average customer review:based on 115 reviews view larger image
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highly recommended

This book challenged my self image as a hard-nosed realist

This book changed my outlook in two ways.

First, it redefined what I think of as poverty. For me and I'm sure for many others who haven't thought about it deeply, "poverty" called up images that ranged from trailer parks to ghettos to third-world sweatshops to famine stricken villages. When Sachs speaks of ending poverty he is referring to extreme poverty of famines and state failures only, and not the relative poverty found in affluent countries. While someone born into a ghetto may not have the same opportunities as someone born in a suburb, they are unlikely to die because of a lack of food, water, or shelter. In countries stricken by extreme poverty, by contrast, millions die each year because "they are too poor to live."

By concentrating on just this set of extremely poor people, Sachs usefully narrows the scope of the problem he wants to address. As a hard-nosed realist, I would take issue with anyone utopian enough to think that relative poverty can be eliminated, especially after the disastorous attempts to do just that by the Communist countries of the last century. But Sachs does not want to give every sweatshop worker a BMW or every trailer park dweller a diamond ring. He wants us to take on the task of restructuring the world so that death because of want no longer happens. It's something that we in the first world have proved is possible, since we have already done it for our own citizens.

This leads to the second way this book changed my outlook. Sachs spends the majority of the book showing how most of the extremely poor people of the world live in countries that simply do not have the capability of helping themselves. Most countries, even those in the third world, have entered the "virtous cycle" of capital accumulation and investment. But in the extremely poor countries all existing capital is consumed simply to stay alive. Indeed, in many cases the amount of capital per person is decreasing thanks to a growing population or environmental degredation. The problems that I had always thought of as the key factors to helping these countries, such as less corruption/better governance or culture factors like women's rights, are not at the root of poverty. In fact, given the in-depth explanations in this book I am now convinced that it is possible to have a perfectly governed, free, and equitable country that is nonetheless doomed to unending poverty and suffering.

The only way out of the poverty trap is an infusion of capital from outside to pay for basic infrastructure and development. That is where our task, and our moral responsibility, begins. If, like me, you always considered poverty an unfortunate but unavoidable condition of the world at large I urge you to read this book. It makes a clear and compelling case that if we commit ourselves we can make the world a radically better place.

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thumping is not reading

This book describes one of the screwiest situations in human history. Here it is: About one billion people (1/6 of the Earth's population) live in crushing poverty, without reliable access to food or medical care. A second group of people control most of the Earth's resources, and they have come to power by publicly touting their devotion to a religion whose central message is about fighting poverty. You would think that would be good news, but it's not. The problem is that the people who control everything, despite all the religious jibber-jabber, spend most of their time arguing about whether or not flag-burning and gay marriage should be legal. They also like to blow stuff up.

The odd thing is that fighting poverty is much cheaper than blowing stuff up, and it's not just hippy bumper stickers that say so. Jeffrey Sachs estimates the cost of ending extreme poverty at a small fraction of the GDP of the richest nations. He also debunks many of the most common excuses (corruption, culture, infrastructure) that people use to justify the lack of financial aid. These excuses generally explain why the situation is complicated, but not why it is unresolvable. This complexity partially explains why aid to the poor is so seldom discussed in American politics, which has all the nuance of professional wrestling without the speedos.

The complex nature of the problem just means that monetary contributions are necessary but not sufficient. What is also needed is a serious plan to get the job done, and The End of Poverty presents a reasonable first draft. The Plan probably won't work exactly as stated (see William Easterly), but I don't see why the endeavour has to be more complicated than building a space shuttle would have seemed fifty years ago.

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A GREAT ECONOMIST GOES ON THE FIELD TO UNDERSTAND POVERTY

Jeffrey Sachs has for long been a celebrated economist, a leader in the field of development economics. In this book, he focuses on global poverty and tries to draw conclusions from the world's experiences in teh 20th century.

The book is divided into three parts: (1) country analyses, (2) on-the-ground microeconomic problem identification and solutions and (3) ways to scale up the identified solutions on a global scale.

The country sections focus on individual countries, trying to disect a bit of economic and political history to explain why some countries have succeeded instead of others -- the countries analyzed include China, India, Bolivia, Russia, and Poland. In brief chapters, Sachs gives the reader a good understanding of recent history and perspectives of each country.

The microeconomic solution sections are the most interesting I believe. Sachs is on the ground trying to identify why hard working people do not get out of poverty. A few areas are emphasizes, such as agricultural productivity through fertilizers, basic health investments such as bed nets to prevent malaria, education, infrastructure such as roads, communication and power, and safe drinking water.

Last is the section of scaling up such solutions across the poor world. This section is not as interesting as the previous two and fails to recognize the usual agency problem in which donor's money may not reach the poor due to lack of proper incentives along the way.

The End of Poverty is a nice book, a good effort to address certain issues that economists often underestimate. The usual policy prescription of economics are shown to fall far short of realities and necessities on the ground. Growth cannot be sparked by macroeconomic stability, but by a combination of factor which include stability. The other factors are what Jeff Sachs tries to address, quite successfully in this volume.

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Way too easy and simplistic...

Sachs is a generally a good writer (and speaker), which explains how this book can get so convincing. It is even more convincing because it touches upon the West's sense of guilt -- what William Easterly aptly called "The White Man's Burden". The problem with this sense of guilt is that it is easy to convince people in rich country that money can solve poor country's problem.

It cannot. Which is why, neither can foreign aid.

The problem is that Jeffrey Sachs takes for granted a problem that those who study economics was duly warned early on: the principal-agent problem -- both between-country (between donor and recipient country) and within-country (the planner above and the actual poor recipient). At the end of the day, to quote British economist John Kay, "only the poor can make poverty history".

The sharpest, and well-argued, well-researched criticism of Sachs can be found in Easterly's The White Man's Burden (2006). However, for those really interested in understanding the issue, with solid evidence, should instead pick up Easterly's first book -- a masterpiece in development economics -- entitled "The Elusive Quest for Growth".

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