Post 6 Week 7: Sachs vs Easterly

Jeffrey Sachs and William Easterly have been arguing for years about the efficacy of foreign aid programs, whether or not they can be successful in helping people across the globe. Sachs, one of the masterminds behind MDG’s and SDG’s, has long been fighting against poverty in the world, rallying nations to gather aid. Easterly, his rival, is actually against giving aid to these countries, he suggests relying on the free market for these people to help themselves.

“Easterly has one piece of expert advice – freedom. Freedom means both as much political freedom as possible and economic freedom, ‘the most underrated of human inventions’, that is, free markets…Free markets will give would-be entrepreneurs opportunities to start their own ventures and create wealth if they are successful. As a committed demand wallah, Easterly also wants governments to stop pushing education and health care on an indifferent populace but rather allow them the freedom to find ways to get themselves educated and healthy, through their own collective action.” Easterly believes in the power of people’s own motivation and innovation, but I really don’t know if that’s enough. These people have usually been caught in a system of corruption, how is just “opening up the market” going to get these people to move forward? If problems like health and education are left up to these people themselves, I don’t think they will have the resources to improve their quality of life. Easterly does point out that these free markets may not work for the poor because they may not be able to participate in it. Also he points out that these markets can’t function without some rules, it would be madness.

Now Sachs, he stands on the other side of the debate. Sachs is a proponent of using foreign aid to help these people get out of their situations. Sachs likes to talk about the “poverty trap” and I do believe it is a real phenomenon. Poverty is a cycle, and I think factors like health and education are a huge part of the debate. Until these people are healthy and educated, I think that it will be really tough to get these countries out of poverty. Sachs supports using foreign aid because these people need a slight boost to advance themselves, to become active members of the free market. Empowering these people to succeed is important, their present conditions aren’t exactly conducive to a strong economy. By investing in specific, goal oriented projects, Sachs argues that progress can be made in the fight against poverty.

Me personally, I think that a combination of these two approaches is critical to achieving success. Foreign aid is crucial to giving these people the opportunity to help themselves, but also can be a very slippery slope. Factors like bad governance and corruption can seriously negate the effectiveness of aid. Not to mention the tendency for people to rely on this aid, there are simply too many ways for aid to lose its ability to actually help people. Rather than throwing money at these impoverished nations, I think direct goals like SDG’s are going to empower these people to achieve their own success. Nothing is ever really going to stick around in these countries if they people don’t have the motivation to improve their own quality of life. I think inspiring scalable, sustainable growth with small businesses is how to help them. Put the tools in people’s hands, and I do think they can do incredible stuff based on their own volition.

The first SDG, ending poverty in all forms everywhere, is quite an undertaking. I think it’s a very broad goal, and I’m not sure it’s achievable. No matter what, bad things will always happen. People will always fall on hard times, the key is having systems in place to bring them back up. The goal is more general than that I think, getting rid of systemic oppression that keeps these people mired in poverty, not just making people not poor. Now goal number 2, ending hunger and achieving food security, that is already achievable. There is more food being produced right now than can even be eaten by people, the problem is distribution. I think if we realized that wasting food because of profit is wrong, we could feed the people that need it. Throwing away food you didn’t sell, as a restaurant or grocery store, should be a crime like in France. That is valuable capital being thrown away, while people are literally starving for anything to eat. If we can eliminate that waste, it would go a long way in solving world hunger, and through that creating productivity in the market. People can’t work efficiently when they are hungry! Not that every problem boils down to capitalism and production, but it is the system that most of the world works inside. Throughout Poor Economics, I do think Banerjee and Duflo address these issues pretty thoroughly, I couldn’t tell you an aspect of the issue that they didn’t cover. They use pretty relevant examples for their arguments, and present the shortcomings of theories they present. Global poverty is obviously a huge issue to tackle, but I think they do a great job of zooming out and looking at the big picture, but also zooming in to individual cases. The thing is, as Easterly points out, there is no one-size-fits-all solution. Each nation has different cultures and needs, so their problems have to be approached differently. Agricultural techniques in South American jungles, for example, have no use in sub-Saharan Africa where water can be scarce and the soil difficult to grow in. Countries need individualized plans to approach their problems, and I think Banerjee and Duflo acknowledge that. Factors like sanitation, medical care, and educating the populace are integral to maintaining long term success, not just a short term bubble of growth. I don’t think these measures taken right now are sufficient, (as poverty isn’t quite done yet, is it?) but I think if resources were allocated more effectively that real progress could be seen.

How to solve global poverty is a huge question, so it will never have some short easy answer. The road will be long, and probably filled with potholes, but I think there is actually a great destination at the end. There is no reason that the world’s collective power can’t lift humans out of poverty. If we as humans fill in those potholes, there’s no reason we can’t have a nice smooth ride.


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