I attended a talk by Jeffrey Sachs given to an audience of several hundred
at Microsoft yesterday, and I thought I'd share my notes with people on
this list. (Any misrepresentations and omissions are, obviously, my
mistake.)
The talk was centered on ideas from his new book "Common Wealth..." as
well as his experiences of implementing those ideas, that people in the
audience asked him about.
I found it enlightening and at the same time heart-breaking to hear some
of the stories he had to tell - of the huge gaps in what's possible versus
what's being done in reality.
Valentin
---
"Common Wealth: Economics for a Crowded Planet"
Jeffrey Sachs
Apr 10, 2008
The poorest of the poor in the world are farmers, subsistence farmers, who
can't grow enough -- mostly due to lack to technology. The technology
they miss is largely fertilizer and high-yield seeds. The bottom of the
pyramid is not represented by India, but rather villages in Africa.
The developing world is characterized by annual incomes from $0-$10K.
This is a very broad range -- people at the very bottom live in radically
different conditions from those near the top of that range. Microfinance
tends to not work well at the very extreme bottom of the pyramid. The
reason is that the associated risks cannot be assumed successfully at that
level: for those at the very bottom, there is no buffer, as any natural
disaster can mean wiping out large portions of a population.
Poor people can't get credit (they're not creditworthy), can't save
(because they need every bit of what they make for sustenance), even
systematically reduce the quality of resources (extracting more than can
be recovered), and having extra high fertility rates (in hopes of
overcompensating for the risks of children dying; 1 out of 5, typically).
Turf wars -- fighting over nothing of substance -- and politics block most
of creative initiatives for helping solve the problems for the poorest of
the poor.
The world is richer than ever before, and has been getting richer faster
than ever before. This would continue due to increased productivity and
technology. There are two problems with that (detailed in Sach's book
"Common Wealth"):
- The technologies now are heavily resource-using technology (e.g.,
electricity, etc.).
- The technologies don't reach the poorest of the poor.
Markets have no incentive to manage the commons. The atmosphere and
oceans have become dumping grounds.
As one example, malaria bed nets cost $5 each, last 5 years, and there are
300M of them required in the malaria regions of Africa. This amounts to
$1.5B over 5 years, compared to $1.9B of Pentagon budget each day (!).
The world economy is $65T, but somehow people aren't able to see how to
convert a small portion of that to aid the poorest of the poor and help
them lift themselves out of poverty. 10M children die each year of
poverty-related causes, half of those in Africa.
The claim is that there are enough resources -- solar energy, aqua
cultures, etc. -- to solve the problems of the poorest of the poor. But
purely market forces won't reach that goal by themselves.
Ultimately, there is nothing intrinsic that stops these problems from
being solved, but getting an agreement and a plan for moving forward --
from the rich countries -- has been stopping progress. Technology has a
role in providing solutions -- opening up kiosks that would ensure higher
accountability of distribution channels.
The ultimate problem is not corruption but lack of systems (that support
transparent operations). Information flow combined with mobile phones is
the technological enabler of solving these problems. With that
foundation, the rest would flow more easily.
Health, education, agriculture, and infrastructure (power and
connectivity) represent the basic pillars of where help can be provided.
These core investments would cost (an estimated) $60-$70 per person per
year.