Good morning (over here) Keith,
I'll say a little more about Sachs and then quit. I've looked him up on
Wikipedia, which describes him as being a "from the top" kind of development
economist. His solution to countries mired in poverty and chaos is applying
some form of "shock therapy" by hitting them with massive aid or the
redistribution of property. That was the solution he advocated for Russia in
the early 1990s but it simply couldn't work. The place was too chaotic and
still too bound to communist modes of doing things. An attempt was made to
privatize state property by distributing shares to the general public, but the
shares ultimately wound up in the hands of the nomenklatura, the people who ran
the Soviet system. When I was in Russia in 1994 there were lots of stories
going around about how people traded their shares away for a bottle of vodka.
And who could blame them? The state and its enterprises were crumbling.
Better to watch it happen in the comfort of vodka.
The Wikipedia item suggests that William Easterly is one of Sachs' primary
opponents in what should be done about countries that are stuck in poverty and
chaos. I have his "White Man's Burden" and have read parts of it (I never
finish a book). Easterly recommends that the foreign aider should spend some
time a the country at street level and find out what the problem really is
before aid is applied. To be effective, it should often be administered from
street level rather than the top. At street level it can be used to create
small banks and businesses that gradually pull people out of poverty.
Dambisa Moyo, a Zambian, is another opponent to the Sachs approach. In her
"Dead Aid" she advocates stopping all aid that is dumped from the top. It
simply doesn't work and a lot of it is siphoned off to Swiss bank accounts.
Ed
----- Original Message -----
From: Keith Hudson
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, , EDUCATION ; Ed Weick
Sent: Thursday, October 07, 2010 2:00 AM
Subject: Re: [Futurework] FW: [CC] America's Deepening Moral Crisis (fwd)
At 16:54 06/10/2010 -0400, Ed wrote:
Keith, I'm not an authority on Sachs nor do I know very much about him.
What my comment addressed was that you seemed to expect Sachs to speak like an
economist even if he didn't feel like doing so:
""Unless we break the ugly trends of big money in politics . . ." I
agree, but what specific proposal does Sachs have in mind? Is it too much to
ask an experienced professor of economics?"
Maybe he just wanted to speak like an ordinary person so that ordinary
people would read and understand him.
But he's not an ordinary person -- that's the whole point. For one reason or
another (some praiseworthy no doubt) he's gained the inside track into the
academic and political elite. This doesn't give him the right to appropriate
some sort of superior morality in a patronizing way above ordinary folk.
And yes he may have been paid to write the article or he may not have.
I've published quite a number of things over the years and not been paid for
any of them.
Well, I might have been maligning Sachs. Perhaps he gives his journalistic
earnings to charity. But I would bet otherwise. This is why I pay much more
attention to those economists who write for nothing out of a genuine search for
truth (either in academic research papers or on Futurework) than those who rate
themselves as public economists but may have other agendas.
Keith
The application of "shock therapy" in Russia under Sachs guidance didn't
work but then, as I said, nothing worked in Russia until what amounted to a
dictatorship was restored under Putin. I spent some time in Russia shortly
after the collapse of communism and know first hand that nothing could have
worked there at the time. It was a chaotic mess. However, what little I know
of Bolivia is that "shock therapy" had something of a positive effect there in
ending hyperinflation and I do believe that Sachs was involved.
I very much agree that it would be nice to have a stable global currency
but, honestly, I can't see that happening for a very long time and probably
never. Governments use their currencies strategically both domestically and
internationally and would not likely want to give up doing so. We mustn't
forget that the Bretton Woods agreement was formulated in a world of hope and
positive expectations. The war was over and rebuilding had to commence. For a
time Bretton Woods and the dollar pegged to gold worked, but then it no longer
could when Nixon took the dollar off the gold standard because he needed to
print large amounts of money to fight the war in Vietnam. Frankly, I think we
just have to put up with the messy old world as it is. There are no final or
ideal solutions.
Ed
----- Original Message -----
From: Keith Hudson
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION ; Ed Weick
Sent: Wednesday, October 06, 2010 3:31 PM
Subject: Re: [Futurework] FW: [CC] America's Deepening Moral Crisis (fwd)
At 12:15 06/10/2010 -0400, Ed wrote:
Sachs is an economist and a very good one, but he is also a person who
speaks out of a deep compassion for the world's poor. Is an economist not
allowed to do that?
Of course he's allowed to do that, but millions of people in the West
also have a great deal of compassion for the poor (and give far more aid than
their governments). But for someone who writes so very frequently about the
plight of the poor (for which he earns money in addition to his academic
salary, or perhaps both of them) then if Sachs wants any stars from me I would
expect him to be associated with some sort of practical project that actually
succeeds.
I know he screwed up rather badly in advocating "shock therapy" for
Russia after communism collapsed. It didn't work, but then nothing else worked
at the time either.
In previous years he'd also brought Bolivia to a low pass by advising
them to tie their currency to the dollar, which left them in a worse employment
situation than when he was first consulted. Some of his other projects have
also been strongly criticised by experienced, qualified people. He's a very
clever chap and very good at making himself noticed in high places with many
consultancies (and perks also?) but I regard him as naive. He reminds me of
another notable economist (also compassionate about the poor) who also has a
large income from journalism (and recently bought a luxury apartment in a nice
part of New York).
And yes indeed it would be nice to have a stable world currency, but
then it would also be very nice to have a world stable enough to use a single
world currency. How many light-years are we from that?
I think you have this the wrong way round. If we had had a stable world
currency in the past 70 years and not the US dollar which was persistently
devalued in order to pay for America's trade deficits (in effect causing other
countries to pay for its prosperity and also its foreign wars) then it would
have given other countries a better opportunity to have had a stable economy.
How many light years are we away from that? you ask. Not long I suggest.
China isn't waiting for America to get its house in order for much longer. The
American dollar is now devaluing so fast it can no longer be the world trading
currency as was imposed by force majeure at Bretton Woods in 1944. China,
Russia, Brazil and several Asian countries are already beginning to use the
renminbi for their bilateral trade, and half-a-dozen of the largest Western
banks such as JPMorganChase and HSBC are also promoting the renminbi as a
currency for wider international trade. To mix metaphors, they can read the tea
leaves and know what side their bread will be buttered in future years. With
the Fed and Western central banks this year trying to buy back what they've
been anathematizing for the last 50 years, the Asian-instigated new world
currency will probably be gold-backed this time and not subject to the whims of
one single nation.
Keith
P.S. whenever someone like Sachs talks of morals I'm reminded of
Hemingway: "About morals, I know only that what is moral is what makes you feel
good after."
----- Original Message -----
From: Ray Harrell
To: 'Keith Hudson' ; 'RE-DESIGNING WORK, INCOME
DISTRIBUTION,EDUCATION'
Sent: Wednesday, October 06, 2010 9:08 AM
Subject: Re: [Futurework] FW: [CC] America's Deepening Moral Crisis
(fwd)
Well said Keith,
REH
From: [email protected]
[mailto:[email protected]] On Behalf Of Keith Hudson
Sent: Wednesday, October 06, 2010 6:57 AM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION
Subject: Re: [Futurework] FW: [CC] America's Deepening Moral Crisis
(fwd)
Unfortunately, Jeremy Sachs cannot tell us what practical policies he
would adopt if he were in a position of power. His final paragraph is a real
peach:
<<<<
The world should beware. Unless we break the ugly trends of big money
in politics and rampant consumerism, we risk winning economic productivity at
the price of our humanity.
>>>>
"The world should beware". Half the world's population are already
living in a state of misery, despair and semi-starvation. Why should they care
about America's moral decline? It would make no difference to them whatever
condition America's economy or moral economy was in.
"Unless we break the ugly trends of big money in politics . . ." I
agree, but what specific proposal does Sachs have in mind? Is it too much to
ask an experienced professor of economics?
"Unless we break the ugly trends . . . of rampant consumerism,"
Rather patronizing, isn't it? I don't think consumers should be condemned any
more than Sachs should be for receiving a fee for writing his article (that is,
in addition to his academic salary).
". . . we risk winning economic productivity at the price of our
humanity." There is no risk at all of any economic productivity being gained in
the near future until the present devaluation war (led by the dollar) stops and
we have a stable world currency system. America has been poo-pooing this for
years in order to retain the hegemony of the dollar. But times are so bad now
that even the (Washington-dominated) IMF will be proposing a world currency
based on the (already gold-backed) SDR at next month's G-20. But China, Russia
and Saudi Arabia, already buying gold hand-over-fist at every dip in the market
price -- thus having no principled objections to a gold-backed world currency
-- won't go along with anything that will continue to be controlled by America.
Keith
At 17:02 06/10/2010 +0800, Michael Gurstein wrote:
Interesting, particularly given the source.
M
---------- Forwarded message ----------
Date: Tue, 5 Oct 2010 21:13:36
From: Portside Moderator <[email protected]>
To: [email protected]
Subject: America's Deepening Moral Crisis
America's deepening moral crisis
The language of collective compassion has been abandoned in
the US, and no politician dare even mention helping the poor
By Jeffrey Sachs
guardian.co.uk
October 4, 2010
http://www.guardian.co.uk/commentisfree/belief/2010/oct/04/americas-deepenin
g-moral-crisis
President Barack Obama is likely to face difficulty passing
progressive
legislation after the November elections.
America's political and economic crisis is set to worsen following the
upcoming November elections. President Barack Obama will lose any
hope for
passing progressive legislation aimed at helping the poor or the
environment. Indeed, all major legislation and reforms are likely to
be
stalemated until 2013, following a new presidential election. An
already bad
situation marked by deadlock and vitriol is likely to worsen, and the
world
should not expect much leadership from a bitterly divided United
States.
Much of America is in a nasty mood and the language of compassion has
more
or less been abandoned. Both political parties serve their rich
campaign
contributors, while proclaiming they defend the middle class. Neither
party
even mentions the poor - who now officially make up 15% of the
population,
but in fact are even more numerous when we count all those households
struggling with healthcare, housing, jobs and other needs.
The Republican party recently issued a "Pledge to America" to explain
its
beliefs and campaign promises. The document is filled with nonsense,
such as
the fatuous claim high taxes and over-regulation explain America's
high
unemployment. It is also filled with propaganda. A quote from
President John
F Kennedy states that high tax rates can strangle the economy, but
Kennedy
was speaking half a century ago, when the top marginal tax rates were
twice
what they are today. Most of all, the Republican platform is devoid of
compassion.
America today presents the paradox of a rich country falling apart
because
of the collapse of its core values. American productivity is among the
highest in the world. Average national income per person is about
$46,000 -
enough not only to live on, but to prosper. Yet the country is in the
throes
of an ugly moral crisis.
Income inequality is at historic highs, but the rich claim
they have no responsibility to the rest of society. They
refuse to come to the aid of the destitute, and defend tax
cuts at every opportunity. Almost everybody complains, almost
everybody
aggressively defends their own narrow, short-term interests, and
almost
everybody abandons any pretense of looking ahead or addressing the
needs of
others.
What passes for American political debate is a contest
between the parties to give bigger promises to the middle class,
mainly in
the form of budget-busting tax cuts at a time when the fiscal deficit
is
already more than 10% of GDP. Americans seem to believe that they
have a
natural right to government services without paying taxes. In the
American
political lexicon, taxes are defined as a denial of liberty.
There was a time, not long ago, when Americans talked of
ending poverty at home and abroad. Lyndon Johnson's "war on poverty"
in the
mid 1960s reflected an era of national optimism and the belief that
society
should make collective efforts to solve common problems, such as
poverty,
pollution and healthcare. America in the 1960s enacted programs to
rebuild
poor communities, to fight air and water pollution, and to ensure
healthcare
for the elderly. Then the deep divisions over Vietnam and civil
rights,
combined with a surge of consumerism and advertising, seemed to end
an era
of shared sacrifice for the common good.
For 40 years, compassion in politics receded. Ronald Reagan gained
popularity by cutting social benefits for the poor (claiming the poor
cheated to receive extra payments). Bill Clinton continued those cuts
in the
1990's. Today, no politician even dares to mention help for poor
people.
The big campaign contributors to both parties pay to ensure their
vested
interests dominate political debates. That means both parties
increasingly
defend the interests of the rich, though Republicans do so slightly
more
than Democrats. Even a modest tax increase on the rich is unlikely to
find
support in American politics.
The result of all this is likely to be a long-term decline of US
power and
prosperity, because Americans no longer invest collectively in their
common
future. America will remain a rich society for a long time to come,
but one
that is increasingly divided and unstable. Fear and propaganda may
lead to
more US-led international wars, as in the past decade.
And what is happening in America is likely to be repeated elsewhere.
America
is vulnerable to social breakdown because it is a highly diverse
society.
Racism and anti-immigrant sentiments are an important part of the
attack on
the poor ??? or at least the reason why so many are willing to heed
the
propaganda against helping the poor. As other societies grapple with
their
own increasing diversity, they may follow the US into crisis.
Swedes recently gave enough votes to a rightwing, anti- immigrant
party to
give it representation in parliament, reflecting a growing backlash
against
the rising number of immigrants in Swedish society. In France, Nicolas
Sarkozy's government has tried to regain popularity with the working
class
by deporting Roma migrants, a target of widespread hatred and ethnic
attacks.
Both examples show that Europe, like the US, is vulnerable to the
politics
of division, as our societies become more ethnically diverse.
The lesson from America is that economic growth is no
guarantee of wellbeing or political stability. American
society has become increasingly harsh, where the richest Americans
buy their
way to political power and the poor are abandoned to their fate. In
their
private lives, Americans have become addicted to consumerism, which
drains
their time, savings, attention and inclination to engage in acts of
collective compassion.
The world should beware. Unless we break the ugly trends of
big money in politics and rampant consumerism, we risk
winning economic productivity at the price of our humanity.
_____________________________________________
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Keith Hudson, Saltford, England
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