William Easterly
Economist; Profesoor of Economics, New York University
05:45

The Vision of Jeffrey Sachs

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Easterly takes on his intellectual rival.

William Easterly

William Easterly is Professor of Economics at New York University, joint with Africa House, and Co-Director of the NYU Development Research Institute. He is also a non-resident Fellow of the Center for Global Development in Washington, D.C. Easterly received his Ph.D. in Economics at MIT and spent sixteen years as a Research Economist at the World Bank. He is the author of The White Mans Burden: How the Wests Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Penguin, 2006), The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics (MIT, 2001) and over 50 published articles. Easterly's areas of expertise include the determinants of long-run economic growth and the effectiveness of foreign aid. He has worked in most areas of the developing world, but most notably in Africa, Latin America, and Russia. Easterly is an associate editor of the Quarterly Journal of Economics, the Journal of Economic Growth, and of the Journal of Development Economics.

Transcript

Topic: The Vision of Jeffrey Sachs

William Easterly: Well I think that Jeff Sacks makes two fundamental errors, I think. People might feel some qualms about us having such a vigorous debate about this, but my feeling is the poor deserve vigorous debate just as much as the rich country tax payers vigorously debate domestic programs on whether they’re working or not. And just like we vigorously debated whether hurricane Katrina victims were being helped or not, I think we should vigorously debate whether foreign aid victims . . . victims of poverty are being helped by foreign aid or not. And so Professor Sacks makes two fundamental errors, I think. First is with Professor Sacks, it’s all about the money. It’s always about the money. It’s just, you know, spend more money and that will solve the problem. But we’ve already seen $2.3 trillion spent, and that has not solved the problem. You know two million babies are still dying from dehydration. Another million are still dying from measles for lack of a simple vaccination. Economic growth and living standards of the average African was basically zero in the four decades since independence despite Africa getting $568 billion dollars of that 2.3 trillion in foreign aid. So we’ve seen this movie already Professor Sacks, and it didn’t have a happy ending. We’ve seen the movie in which money was spent and yet it didn’t reach the poor. And yet he seems to want to reinvent the wheel and say, “Oh yes. Let’s just spend more money,” and not paying attention to the history where we’ve already spent money and it didn’t reach the poor. And then the second mistake that I think he makes is to assume that expert plans can solve poor people’s problems. His approach to ending world poverty was to assemble 300 of the world’s leading experts on all fields that affect poverty: agriculture to talk about green manure; and infant care to talk about breast feeding and infant formula; and agriculture to talk about nitrogen and fixing leguminous trees to restore soil fertility . . . and get all these experts together and draw up an expert plan that was designed by 12 task forces of 300 experts that produced a 3,000 page report. “And this is our expert plan that we’ve devised in New York at UN Headquarters to end world poverty.” Well that’s just ridiculous. That’s not how you solve the problems of poor people. They’re not solved by expert plans. That’s not how the problems of poor people have ever been solved anywhere else. The poor in Asia who have escaped poverty were not rescued by an expert plan. They were rescued by market driven, free trade driven, economic growth. We just have to look at ourselves even. The people of West Virginia, my home state, were not rescued by an expert plan. They were rescued by American economic growth over the last two centuries. And even though West Virginians are still only 80 percent of U.S. per capita income, it’s a much, much higher per capita income – 20 times higher than it was at the time of our independence. And that’s what rescued West Virginians out of poverty. And that’s how poverty has always ended. It’s through private sector, free market, economic growth, Not through expert plans devised by experts who think that they know poor people’s problems better than the poor people do themselves. Well I think it’s making it a two-sided debate. Jeff Sacks and the people who think like him have gotten sort of a free pass for quite a while in the media, because they’re intentions are definitely very good and very admirable. And people tend to give you a lot of slack if you have good intentions. There’s something about me that I’m not willing to give people with good intentions a lot of slack if they’re not getting good results. I think if the good intentions are to help poor people, I’d like to see good intentions plus results, not just intentions. And so far we’ve seen lots and lots of intentions, and very little by the way of results. And I think it’s time that we called the Jeff Sackses and the Bonos of the world on that. I think Jeffrey Sacks view is actually pretty much a minority view within the economics profession – that it requires some kind of top down administrative plan to solve poverty. I think myself as just being a spokesman and a popularizer for the mainstream economics’ view – that the end of poverty is achieved through homegrown free markets. Poor people are their own best resource in escaping poverty. They are very resourceful. They are already conquering problems every day that are many times greater than you or I ever have to face. That’s how resourceful they are. And they are surviving, and they have a life, and I respect them. I’m not going to be patronizing and say, “Here I am the 21st century of the white man’s burden coming in to save you,” which I think is the problem of people like Jeff Sacks and Bono. I want to be helpful, but I don’t want to be patronizing.

 

 

Recorded On: 7/6/07


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