Jeffrey Sachs Explained

Jeffrey Sachs
School Tradition:New Keynesian economics
Color:darkorange
Birth Date:November 5, 1954
Birth Place:Detroit, Michigan
Nationality:United States
Alma Mater:Harvard University
Institution:Columbia University
Field:Political economics, International Development
Influences:John Maynard Keynes[1] [2]
Opposed:William Easterly, Dambisa Moyo
Influenced:Nouriel Roubini, Peter Diamond
Contributions:Shock therapy, Millennium Villages Project

Jeffrey David Sachs (; born November 5, 1954, in Detroit, Michigan) is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the implementation of so-called economic shock therapy during the transition from communism to a market system or during periods of economic crisis. Some of his recommendations have been controversial. Subsequently he has been known for his work on the challenges of economic development, environmental sustainability, poverty alleviation, debt cancellation, and globalization.

Sachs is the Quetelet Professor of Sustainable Development at Columbia's School of International and Public Affairs and a Professor of Health Policy and Management at Columbia's School of Public Health. He is Special Adviser to United Nations Secretary-General Ban Ki-Moon, and the founder and co-President of the Millennium Promise Alliance, a nonprofit organization dedicated to ending extreme poverty and hunger. From 2002 to 2006, he was Director of the United Nations Millennium Project's work on the Millennium Development Goals, eight internationally sanctioned objectives to reduce extreme poverty, hunger, and disease by the year 2015. Since 2010 he has also served as a Commissioner for the Broadband Commission for Digital Development, which leverages broadband technologies as a key enabler for social and economic development.[3] He is a member of the scientific committee of the Fundacion IDEAS, Spain's Socialist Party's think tank.

Sachs has written several books, including The End of Poverty and Common Wealth, both New York Times bestsellers, and his latest one, The Price of Civilization, released on October 4, 2011. He has been named one of Time Magazines "100 Most Influential People in the World" twice, in 2004 and 2005.

Biography

Academic career

Sachs was raised in Oak Park, a suburb of Detroit, Michigan, and graduated from Oak Park High School. He attended Harvard College, where he received his B.A. summa cum laude in 1976. He went on to receive his M.A. and Ph.D. in economics from Harvard, and was invited to join the Harvard Society of Fellows while still a Harvard graduate student. In 1980, he joined the Harvard faculty as an Assistant Professor and was promoted to Associate Professor in 1982. A year later, at the age of 29, Sachs became a Full Professor of economics with tenure at Harvard.

During the next 19 years at Harvard, he became the Galen L. Stone Professor of International Trade, the Director of the Harvard Institute for International Development at the Kennedy School of Government (1995–1999), and the Director of the Center for International Development (1999–2002).

After the Center for International Development failed to attract sustainable funding or broad scholarly involvement, Sachs resigned from Harvard in March 2002 to become the Director of the Earth Institute at Columbia University in New York City.[4] At Columbia he is the Quetelet Professor of Sustainable Development, and is also a professor in Columbia's Department of Economics and the Department of Health Policy and Management. His classes are taught at the School of International and Public Affairs and the Mailman School of Public Health, and his course "Challenges of Sustainable Development" is taught at the undergraduate level.

Shock therapy in Latin America and post-communist economies

Sachs is known for his work as an economic adviser to governments in Latin America, Eastern Europe, and the former Soviet Union. A trained macroeconomist, he advised a number of national governments in the transition from communism to market economies.

In 1985, Bolivia was undergoing hyperinflation and was unable to pay back its debt to the International Monetary Fund (IMF). Sachs, an economic adviser to the Bolivian government at the time, drew up an extensive plan, later known as shock therapy, to cut inflation drastically by liberalizing the Bolivian market, ending government subsidies, eliminating import quotas, and linking the Bolivian economy to the US dollar. After Sachs's plan was implemented, inflation fell from 11,750% to 15% per year from 1985 to 1987.[5]

In 1990, the Polish government introduced shock therapy to break from communism. Sachs and ex-IMF economist David Lipton advised the rapid conversion of all property and assets from public to private ownership. In Poland, Sachs was firmly on the side of rapid transition to "normal" capitalism. At first he proposed US-style corporate structures, with professional managers answering to many shareholders and a large economic role for stock markets. That did not fly with the Polish authorities, but he then proposed that large blocks of the shares of privatized companies be placed in the hands of private banks.[6] As a result, there were some economic shortages and inflation, but prices in Poland eventually stabilized.[7]

In late 1991, the Russian government invited Harvard to give advice on reproducing the Polish experience. Harvard economist Andrei Shleifer advised President Boris Yeltsin on privatization and macroeconomic issues during the early stages of Russia's reforms. Sachs advised Russia (under the Yeltsin administration) for two years from December 1991 to January 1994.[8]

Work on global economic development

More recently, Sachs has turned to global issues of economic development, poverty alleviation, health and aid policy, and environmental sustainability. He has written extensively on climate change, disease control, and globalization, and is one of the world's leading experts on sustainable development.[9]

In his 2005 work, The End of Poverty, Sachs wrote "Africa's governance is poor because Africa is poor." According to Sachs, with the right policies and key interventions, extreme poverty — defined as living on less than $1 a day — can be eradicated within 20 years. India and China serve as examples, with the latter lifting 300 million people out of extreme poverty during the last two decades. Sachs believes a key element to accomplishing this is raising aid from $65 billion in 2002 to $195 billion a year by 2015. He emphasizes the role of geography and climate, with much of Africa suffering from being landlocked and disease-prone. However, he stresses that these problems can be overcome.[10]

Sachs suggests that with improved seeds, irrigation, and fertilizer, the crop yields in Africa and other places with subsistence farming can be increased from 1 ton/hectare to 3-5 tons/hectares. He reasons that increased harvests would significantly increase the income of subsistence farmers, thereby reducing poverty. Sachs does not believe that increased aid is the only solution. He also supports establishing credit and microloan programs, which are often lacking in impoverished areas.[11] Sachs has also advocated the distribution of free insecticide-treated bed nets to combat malaria. The economic impact of malaria has been estimated to cost Africa US$12 billion per year. Sachs estimates that malaria can be controlled for US$3 billion per year, thus suggesting that anti-Malaria projects would be an economically justified investment.[12]

From 2002 to 2006, Sachs was the Director of the UN Millennium Project and Special Advisor to then Secretary-General Kofi Annan on the Millennium Development Goals. Sachs founded the Millennium Villages Project, a plan dedicated to ending extreme poverty in various parts of sub-Saharan Africa through targeted agricultural, medical, and educational interventions. Along with philanthropist Ray Chambers, Sachs founded Millennium Promise, a nonprofit organization, to help the Earth Institute fund and operate the Millennium Villages Project.

Now a Special Adviser to current Secretary-General Ban Ki-moon, Sachs is still a leading advocate for the Millennium Development Goals, frequently meeting with foreign dignitaries and heads of state. He has also become a close friend of international celebrities Bono and Angelina Jolie, both of whom have traveled to Africa with Sachs to witness the progress of the Millennium Villages.[13]

Sachs has been a consistent critic of the IMF and its policies around the world. He has blasted the international bankers for what he sees as a pattern of ineffective investment strategies.[14]

Criticisms

One of Sachs's strongest critics is William Easterly, a professor of economics at New York University. Easterly reproached The End of Poverty in his review for The Washington Post, and Easterly's 2006 book White Man's Burden is an even more thorough rebuttal of Sachs's argument that poor countries are stuck in a "poverty trap" from which there is no escape except by massively scaled-up foreign aid, though Sachs himself has clearly emphasized the need for a complex, multifaceted, clinical and unique approach to economic development, of which increased and responsible foreign aid is nearly always a necessary but insufficient part.[15] Easterly presents statistical evidence that he claims proves that many emerging markets attained their higher status without the large amounts of foreign aid Sachs proposes.[16] Other evidence is included in Easterly's previous work, The Elusive Quest for Growth.

Another Sachs critic is Amir Attaran, a scientist and lawyer who holds the Canada Research Chair in Law, Population Health and Global Development at the University of Ottawa. Sachs and Attaran have worked closely as colleagues, coauthoring a famous study in The Lancet documenting the dearth of foreign aid money to fight HIV/AIDS in the 1990s, which led to the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria. But Sachs and Attaran part company in their opinion of the Millennium Development Goals (MDG), and Attaran argued in a paper published in PLoS Medicine and an editorial in the New York Times that the United Nations has misled people by setting specific, but immeasurable, targets for the MDGs (for example, to reduce maternal mortality or malaria).[17] Sachs dismissed that view in a reply to PLoS Medicine, saying that only a handful of the MDGs are immeasurable, but Attaran then cited the United Nations' own data analysis (which the UN subsequently blocked from public access) showing that progress on a very large majority of the MDGs is never measured.[18]

Sachs has also been criticized by leftists for having an overly neoliberal perspective on the economy. Nancy Holmstrom and Richard Smith pointed out that, in advising implementation of his shock therapy on the collapsing Soviet Union, Sachs "supposed the transition to capitalism would be a natural, virtually automatic economic process: start by abandoning state planning, free up prices, promote private competition with state-owned industry, and sell off state industry as fast as possible…". They go on to cite the drastic decreases in industrial output over the ensuing years, a near halving of the country's GDP and of personal incomes, a doubling of the suicide rate, and a skyrocketing unemployment rate.[19] The Lancet[20] has recently reported that rapid privatization of the Soviet Union caused a 12.8% death rate increase among males in just two years,[21] a claim that The Economist attributed to alcoholism, though The Lancet article attributed the rise in alcoholism to changes in the economy.[22]

Accolades and affiliations

Sachs has received many awards and honors. In 2004 and 2005, he was named one of the 100 Most Influential People in the World by Time Magazine. He was also named one of the "500 Most Influential People in the Field of Foreign Policy" by the World Affairs Councils of America.[23]

In February 2002, Nature Magazine stated that Sachs "has revitalized public health thinking since he brought his financial mind to it." In 1993 he was cited in the New York Times Magazine as "probably the most important economist in the world." In 1994, Time Magazine called him "the world's best-known economist." In 1997, the French magazine Le Nouvel Observateur cited Sachs as one of the world's 50 most important leaders on globalization.[24]

In 2005, he received the Sargent Shriver Award for Equal Justice. In 2007, Sachs was awarded the Padma Bhushan, a high civilian honor bestowed by the Government of India. Also in 2007, he received the Cardozo Journal of Conflict Resolution International Advocate for Peace Award as well as the Centennial Medal from the Harvard Graduate School of Arts and Sciences for his contributions to society.[24]

From 2000 to 2001, Sachs was Chairman of the Commission on Macroeconomics and Health of the World Health Organization, and from 1999 to 2000 he served as a member of the International Financial Institution Advisory Commission established by the U.S. Congress. Sachs has been an adviser to the World Bank, the Organization for Economic Cooperation and Development, the World Health Organization, the International Monetary Fund, and the United Nations Development Program. He is a member of the Institute of Medicine; the American Academy of Arts and Sciences; Harvard Society of Fellows; the Fellows of the World Econometric Society; the Brookings Panel of Economists; the National Bureau of Economic Research; and the Board of Advisers of the Chinese Economists Society, among other international organizations.[24]

Sachs has received honorary degrees from Connecticut College; Lehigh University; Pace University; the State University of New York; Cracow University of Economics; Ursinus College; Whitman College; the Mount Sinai School of Medicine; Ohio Wesleyan University; the College of the Atlantic; Southern Methodist University; Simon Fraser University; McGill University; Southern New Hampshire University; St. John's University; Iona College; University of St. Gallen in Switzerland; the Lingnan College of Hong Kong; and the University of Economics Varna in Bulgaria.[24]

Sachs is first holder of the Royal Professor Ungku Aziz Chair in Poverty Studies at the Centre for Poverty and Development Studies at the University of Malaya in Kuala Lumpur, Malaysia for 2007-09. In addition, he holds an honorary professorship at the Universidad del Pacifico in Peru. He has lectured at the London School of Economics, the University of Oxford, and Yale University, as well as in Tel Aviv and Jakarta.[24]

In early 2007, the Sachs for President Draft Committee was formed to encourage Sachs to run for President of the United States in the 2008 election.[25]

In September 2008, Vanity Fair magazine ranked Sachs 98th on its list of 100 members of the New Establishment.

In July 2009, Sachs became a member of the SNV Netherlands Development Organisation's International Advisory Board.[26]

Publications

Sachs is the author of hundreds of academic articles and many books, including two New York Times bestsellers: (Penguin, 2005) and Common Wealth: Economics for a Crowded Planet (Penguin, 2008).

He writes a monthly foreign affairs column for Project Syndicate, a nonprofit association of newspapers around the world that is circulated in 145 countries.[27] He is also a frequent contributor to such major publications as the Financial Times, Scientific American, and Time Magazine.

Sachs is a frequent contributor to The Huffington Post,[28] where he writes commentary about aid issues such as G20 outcomes, as well as addressing his critics such as Dambisa Moyo and William Easterly.

Selected works

Personal

Sachs lives in New York City with his wife Sonia Ehrlich Sachs, a pediatrician. They have three children: Lisa, Adam, and Hannah Sachs.

See also

External links

Official

Other

Notes and References

  1. http://hinterlandgazette.com/2010/06/keynesian-economist-jeffrey-sachs-says.html Janet Shan, "Keynesian Economist, Jeffrey Sachs Says President Obama’s Stimulus has Failed", June 7, 2010
  2. http://www.opendemocracy.net/openeconomy/simon-zadek/sustainability-and-depression-even-keynesians-dont-go-far-enough Simon Zadek, "Sustainable finance is the way out of crisis", 29 August 2011
  3. http://www.broadbandcommission.org/commissioners.html
  4. http://harvardmagazine.com/2002/09/developmental-troubles.html Harvard Magazine: September/October, 2002
  5. Web site: Inflation, average consumer prices (%). International Monetary Fund, April 2011 World Economic Outlook. Google. 14 August 2011. International Monetary Fund. International Monetary Fund. flash. April. 2011.
  6. http://www.leftbusinessobserver.com/Sachs.html Left Business Observer #111, August 2005
  7. http://www.foreignaffairs.org/19900601faessay5998/jeffrey-sachs-david-lipton/poland-s-economic-reform.html Lipton, David and Sachs, Jeffrey. Foreign Affairs, 1990
  8. http://robertamsterdam.com/2007/04/jeffrey_sachs_on_russia/ Jeffrey Sachs on Russia
  9. http://www.earth.columbia.edu/articles/view/1804 The Earth Institute, Columbia University, 2008
  10. http://www.unmillenniumproject.org/who/sachs.htm United Nations Millennium Project, 2006
  11. http://www.uncdf.org/english/microfinance/pubs/newsletter/pages/2005_04/news_sachs.php Booth, Mindy. UN Capital Development Fund, 2005
  12. http://www.medicalnewstoday.com/articles/74907.php Medical News Today, 2007
  13. http://www.looktothestars.org/news/139-sachs-appeal---who-is-jeffrey-sachs Purcell, Myrlia. Look to the Stars: The World of Celebrity Giving, 2006
  14. http://www.uv.es/~fores/AcosoTextual/sachsbio.html Sachs, Jeffrey. The Financial Times, 1997
  15. Sachs, Jeffrey (2005). The End of Poverty
  16. http://www.washingtonpost.com/wp-dyn/articles/A25562-2005Mar10.html A Modest Proposal
  17. http://medicine.plosjournals.org/perlserv/?request=get-document&doi=10.1371/journal.pmed.0020318 Attaran, Amir. PLoS Medicine, 2005
  18. http://medicine.plosjournals.org/perlserv/?request=read-response&doi=10.1371/journal.pmed.0020318&ct=1 Attaran, Amir. PLoS Medicine, 2005
  19. http://www.monthlyreview.org/200holm.htm Holmstrom, Nancy and Smith, Richard. Monthly Review, 2000
  20. http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(09)60005-2/fulltext Stuckler et al., The Lancet, 2009
  21. News: Privatisation 'raised death rate'. January 15, 2009. BBC News.
  22. http://www.economist.com/opinion/displaystory.cfm?story_id=12972677 Mass murder and the market
  23. http://www.bbc.co.uk/radio4/reith2007/lecturer.shtml British Broadcasting Company, 2007
  24. http://www.earth.columbia.edu/sitefiles/File/Sachs%20long%20bio%20July%202008.pdf The Earth Institute at Columbia University, 2008
  25. http://www.truthdig.com/eartotheground/item/20060828_jeffrey_sachs_president/ TruthDig, 2006
  26. Web site: ?.
  27. http://www.project-syndicate.org/series/7/description Project Syndicate, 2008
  28. News: Jeffrey Sachs. Huffington Post.