Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Saturday, December 17, 2005

Jeffery Sachs: East Coast Elitist Interventionist Who Knows How to Solve the World's Problems

Professor Jeffrey Sachs, Columbia University, is a very smart man. He knows a lot and knows how to express himself better than I could ever hope to. I recently listened to the interview with Sachs on It was everything I expected.

The solutions to world poverty (and other problems) proposed by Sachs are vague. They sound great, in that they involve promoting investment (he explicitly mentions building roads) and holding project managers accountable.

You know what? That is pretty much the same stuff we were taught by east-coast liberal interventionists 40 years ago, when I was an undergraduate. They know best.

Here is an interesting example: Sachs seems to think malaria would be wiped out if people would just donate a buck or so to help buy mosquito netting for all the poor people in Africa. And just what does Sachs think would happen to this netting? I am willing to bet that after a year, less than a third would still be in use as mosquito netting.

My solution to world poverty? There clearly are no quick fixes, but here are some things that will help future generations:
  • Stop listening to planners and interventionists who, no matter how sincerely they care, will end up enriching themselves and, especially, society's rent-seekers.
  • Create secure property rights and legal entitlements. Exchange and growth cannot be fostered without these as part of the framework.
  • Promote free trade, both internally and externally.
Along these same lines, in a recent editorial in the NYTimes [reg req'd], Tim Harford (the Undercover Economist) points out that reducing internal barriers to trade would go a long way toward improving efficiency and promoting development in many countries.
Part of the problem, of course, is that landlocked African countries are linked to the outside world by long, decrepit roads and underdeveloped ports in neighboring countries. But determined growers can move bananas along even lousy roads. The real problem is elsewhere: three-quarters of delays are the result of red tape, not port handling or inland transport. These delays, caused by senseless bureaucracy, unnecessary forms and archaic inspection practices, can often be eliminated with a stroke of a pen by a country's chief executive. Even the more sophisticated reforms, like introducing electronic filing, or using software to guide sensible risk-based customs inspections, require only small outlays. What's more, such reforms increase the interception of smuggled goods and discourage corrupt customs officials.
And therein lies the difference between The Economic Way of Thinking and the Elitist Interventionist Way of Thinking: Sachs wants to build roads; Harford wants to cut red tape.

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