Interview: Jeffrey Sachs

Article First Published 8 November 2012 19 November 2012

World-leading economist Jeffrey Sachs talks to Iravati Guha about development, economics and climate change

Jeffrey Sachs, named “probably the most important economist in the world” by the New York Times, is director of Columbia University’s Earth Institute, Special Advisor on the Millennium Development Goals to UN Secretary General Ban Ki Moon, and author of three New York Times bestsellers in the past seven years: The End of Poverty (2005), Common Wealth: Economics for a Crowded Planet (2008), and The Price of Civilization (2011).

Two years remain until 2015, the year by which the Millennium Development Goals are meant to have been met. Were the goals too optimistic? If not, what went wrong?

Well, first of all, we count it as three years and not two, we include the year 2015. We’re still encouraging governments and partners in all sectors to make a major effort to speed the accomplishment of the Millennium Development Goals. On the whole, I think that it has been a remarkably salutary experience. The MDGs have focused the world’s attention on extreme poverty, and they have really become embedded in the policies and the operating procedures of governments around the world, especially in the poor countries, but also in the development agencies of the rich countries. And they’ve become also become a focus of non-governmental organisations and civil society. It’s clear that they will not be achieved in many places, but I would say that in general – even in the most laggard cases – there’s been progress and improved focus. Sometimes it came late, and sometimes it was interrupted by conflict or by international crisis, but there has been progress almost everywhere – though in many cases by far not enough. The MDGs require a lot of organizational effort, and a lot of local systems building to deliver better healthcare, to ensure that children are at school, to promote safe water and sanitation, and so on. And they really do require a proper compact between rich and poor countries, so that if and when poor countries are organized to scale up their efforts, they have the financial help to do so. This has been one of the areas that absolutely most lagged in the process – the rich countries by and large never came through. Their promises to increase aid were derailed by the Iraq war, by lack of political interest in the United States and other countries, and by the financial crisis – but in the end they did not materialise, and that’s probably been the major reason for falling short in a number of areas.

Tell us about the Millennium Villages Project. Are there plans to expand the project, and how does the Earth Institute go about getting the funding?

The aim of the Millennium Villages Project is to demonstrate that local systems can be built to deliver low cost healthcare, low cost educational improvement, low cost agricultural upgrading, and so on. The idea is that low cost local systems of delivery are practical and sustainable. We’re in the second phase of the project now – it was financed at about $60 per person per year in the villages between 2006 and 2011. It’s being financed by something like half that level right now, a significant cut back. Part of the cutback is planned in the sense that the idea of the project is to scale back that external help. Part of the cutback is not planned, in the sense that we’re always trying to raise revenues to finish the project properly, and that is an ongoing challenge. We started with the idea that there are many things that can be done in impoverished areas, especially in rural Africa, I would say more generally in five key sectors: agriculture, health, education, infrastructure and business development. Then we identified what we’d call the quick wins, like distributing anti-malaria bed-nets, and we showed that those could be done. And then what we did as time went on was to move beyond these specific interventions themselves, like distributing bed nets, to more and more focus on building the local systems. The host governments really do like the project, and a number of them have asked the Earth Institute to help them to take the project to a national scale. So we’re trying our best to do that, in Nigeria, in Senegal, in Rwanda and in other places. I would expect that more and more of the work, especially as we get to 2015, will be on this national scale of local systems.

Private philanthropy is on the rise in the West – the Gates foundation, for example, has a massive endowment. In the developing world, governments are now more involved in giving foreign aid. How can billionaires in the developing world be encouraged to donate money to development programmes?

Well, they need to be. I believe that rich people need to do a lot more in general. They can do it through philanthropy, they can do it through paying taxes – I think that some combination of the two is the right approach. What is intolerable in my view is a world in which rich people have absolute ability to put their money tax free into one of a hundred havens around the world, and think that they have no responsibility whatsoever to this. And there are a lot of people like that, and there’s a lot of breakdown of the tax system that is certainly not being compensated by philanthropy right now. So I’m a believer in this dual approach, and we need to keep making the case. You can’t have a world of billionaires and starving people at the same time, and expect it to operate with any kind of decency and stability.

Moving onto your own career as an academic – you spent almost three decades of your life studying and then teaching at Harvard. What sparked your move to New York in 2002?

The move was certainly not pre-meditated. We had just finished building a new library in our home near Harvard and thought that that was it for the long haul. And then came two calls simultaneously, one from Kofi Annan, then Secretary General of the UN, to help advise him on the Millennium Development Goals, and the second from Columbia University, to come and direct the Earth Institute. I found the combination thrilling and compelling. It was also in the wake of 9/11, and my was to help the UN to bolster global law and peace. And so all of those things together led me to leave Harvard after thirty years, which were a very good thirty years, and to come to Columbia and the UN. And I’ve been absolutely thrilled with that, I have just finished my tenth year as director of the Earth Institute and ten years as advisor to two UN Secretary Generals, and I find it extraordinary gratifying.

Your work today is highly inter-disciplinary: it spans the fields of development, poverty alleviation, healthcare and aid policy, environmental sustainability and so on. Would you still label yourself as an economist?

. Well, I don’t know whether my colleagues all do. You know, my career has been an adventure, never quite predictable. I fell in love with the subject of economics forty years ago, and became fascinated with the question of disparities in the world, and the different strategies for politics and economics, and that fascination has absolutely never wained. For the first thirteen years of delving into these questions, from entering Harvard College as an undergraduate to becoming a professor there, I followed a fairly standard academic career in economics, with good rigorous training and a lot of journal articles and mathematical studies. But my life changed in 1985 when I began work as an advisor to the government of Bolivia, ending a hyper-inflation. The different orientation of being an academic researcher and being a practical problem solver was very, very great for me. The main thing I learned in doing the practical work is how little I understood of the problems unless I was actually enmeshed in the problem solving itself. But always, the idea that bringing academic scholarly knowledge to bear was important. It wasn’t just practical knowledge, it was the knowledge of history, it was the theoretical knowledge, and so forth, that I think helped me to do the practical work.

So do you think that economics faculties in the major universities, both in the States and here in the UK, need to place more emphasis on sustainable development?

I would say two things. One is that in terms of the substantive challenges we face, sustainable development is a huge, correct, crucial organizing principle – societies face a tremendously complex challenge of integrating economics, social inclusion and environmental sustainability. So I think that the holistic view is vital given the nature of the complexities that we face. The second thing I would say is that I think that economics departments also need a new and more satisfactory approach to knowledge. I think that the strategies that we have in economics as an academic discipline are not up to the task right now. The profession is too insular in a lot of ways, too narrow in its focus, too theoretical. Economics is an extraordinarily complicated subject. Because ground’s always changing, especially as technology and demography and now the physical environment itself change, the nature of the economy changes in very basic ways. And so one approach that economics has taken to that constant change is to remain pretty theoretical and pretty abstract, and that I think is a shame. It’s a kind of defense against the fact that if you study any particular sector, that sector may look completely different in ten or twenty years time, and so you don’t want to get caught out on those changes. But remaining so abstract is not serving the purpose of economics, because it means that the tools that economics develops are not keeping up with the challenges that we face. In this sense, as a problem solving field, I think economics can do better.

You’re in the middle of a fierce hurricane at the moment. Do you think that Hurricane Sandy, and the increasing number of natural disasters in general, are caused by climate change?

One of the privileges of being director of the Earth Institute is that you get to ask people who are at the cutting edge of such questions. When I canvassed the leading expert on hurricane dynamics yesterday, he said, “Don’t know, can’t say”. In the case of this particular event, which he said is an extremely rare event of a hurricane and an extra-tropical trough combining into a mega-storm, there’s no way to tell if it is caused by human induced climate change. On the other hand, there is overwhelming evidence that humanity is changing the climate in a dangerous way. Definitely, the world is getting warmer, and definitely with that warming are coming many, many changes, in precipitation patterns, heat waves, drought frequencies, extreme precipitation, rising sea-levels, retreating glaciers and many other phenomena. So whether Hurricane Sandy is or isn’t part of that process, a very large and active scientific discipline has made clear that the process of human induced, long-term climate change is real, and is extraordinarily dangerous.

With the hurricane, classes have been cancelled and you can’t travel. Are you spending the free time writing?

. That’s a very good point. We’re watching the storm outside, and inside I’m typing away, trying to finish a book by the end of the year. So I’m excited about the book, and I’ve had a little bit of quiet time to work on it.

Can you tell us a bit about the book?

It’s a little unusual. The book is looking back fifty years, at the period from the Cuban Missile Crisis, through the end of President Kennedy’s life, on building the Nuclear Test Ban Treaty. I’m fascinated by how we went from the brink of annihilation to a major treaty during that period, and what kind of leadership was needed to bring that about. It’s historical, but is also very much about my interest in what political leadership can do. I think this period exemplifies what positive readership can do, and that’s why I’m writing about it.

Iravati Guha

Article First Published 8 November 2012