Introduction to Jeffrey Sachs
When I announced via Facebook that I had just recorded an interview with Jeffrey Sachs, and that I was rather soft on him, a little firestormlette ensued. Should I have given him a hard time, demanding penance for the harsh deflationary advice that he gave to Bolivia, Eastern Europe, and Russia, or should I let is slide because he’s doing pretty good stuff now. I went for the latter, but filed my reservations in the introduction to the interview. Here’s what I said. For more, see my review of his 2005 book.
My next guest is the economist Jeffrey Sachs. Sachs teaches at Columbia University, where he directs The Earth Institute, a multidisciplinary center that gathers together social and natural scientists and policy wonks to devise approaches to poverty, environmental degradation, and disease.
Sachs is a problematic guy. He rocketed to fame in the mid-1980s, when he helped engineer the shock therapy—a term he hates—that took Bolivia’s inflation from 20,000% to 0%, while leaving Bolivia a very poor country. As the 1980s turned into the 1990s, he advised governments in Eastern Europe and Russia on how to turn capitalist practically overnight. The changes caused enormous dislocation and impoverishment. Sachs denies any responsibility for those bad outcomes—in fact, when I interviewed him ten years ago, he blamed the Russians for not following his advice. Many people who worked with him at the time regarded him as an arrogant, know-it-all outsider who applied textbook economists to societies he didn’t understand.
But over the last 10 years, Sachs has changed. (He denies that he changed, but most outsiders think he did.) He has become more and more critical of economic orthodoxy, both in the poorer parts of the world and now increasingly in the U.S. As you will hear, he’s extremely critical of the oligarchy that’s run the U.S. into the ground—in terms not unfamiliar to listeners to this show. (For an in-depth look at Sachs’s evolution, see my review of his previous book.)
So what are we to make of this? Some of my friends and colleagues think that Sachs should do penance for his past before we applaud his current work; others think that acting as a high-profile critic of orthodoxy is penance in itself. I thought I’d lay out the dilemma before playing the interview. We report, you decide.
Speaking of textbook economics, here’s a fresh parable for the holiday weekend.
Sachs wouldn’t be allowed to promulgate his rather weak penance if he hadn’t proven his stuff to the ruling class in the 90’s. This is a rather common trend in our culture in general. It usually applies to business tycoons, who rake in billions through their exploitive endeavors and then becomes ‘softer’ in their older age and donate to charities and are feted in the liberal establishment. Carnegie, Gates, and even Buffett, are some examples. Sachs is part of the same continuum – though in his role as a head servant.