Common Wealth: Economics for a Crowded Planet

Jeffrey D. Sachs

This is a very valuable book. It has the following merits: it provides a picture of plausible economic scenarios for the coming decades; it sketches a pathway to overcome current crisis with practical illustrations; it characterize the key obstacle to the solution far away from the resources scarcity factor, and it focus the key issue in what he characterize as an abstract incapacity to collaborate of the leading economies.

The book has a naive technical flavor while addressing the "lack of collaboration" factor - a black box that is one of his pivotal points- and provides a set of strategy recommendations as if the solution of that pivotal obstacle - lack of collaboration- would be solved by some sort of call to reason. In other words, it merit is to show that technical solutions are possible.

What seems to be broken? where are the root causes? Sachs gives a central place to UN sponsored collaboration strategies. The global initiatives cycle in his terms goes like this:
  1. UN sponsored research on a particular critical issue (population, poverty trap, access to water, corruption & transparency, etc)
  2. Constitution of a political forum and development of a political debate
  3. Constitution and funding of political institution
  4. Declaration and signing of Treatises with specific goals
  5. Management of Treaty's Promises
  6. Enforcement of compliance

This UN sponsored global "continuous improvement" cycle has significant flaws. Political agents have multiple way of avoid accountability, slow down agreement on critical issues, subordinate fundamental encompassing global concerns to interest group lobbyist's agendas. Today, Sachs argues, we are in a situation in which a simplistic forecast shows that in the next four decades population will grow about 50% to achieve more than 9 billion people on the planet, that Asia and today developing countries will become dominant actors in global markets, that the global outcome will grow from 65 trillions to over 430 trillions -five time current global output-, that the Living Planet Index is already showing an ecological catastrophe - between 1970 and 2000 there is a 40% deterioration in mayor ecosystem of vertebrae species living in terrestrial, fresh water, and marine habitats-, that we have 1 million human beings trapped under poverty line without any capacity to benefit of the current convergent scenario, and finally, that 10% of today's population living in coastal zones - 600 million people- it is highly vulnerable to climate irruptions such as that of Katrina. This debatable, although plausible forecast -at least in orders of magnitude of basic trends- will produce a stress on our natural environment six times more devastating of what we are producing today.

In contrast with this scenario of human failure, Sachs argues that with resource equivalent roughly to 3.5 % of the annual income of developed countries, critical investment to change these catastrophic trend can be successfully implemented.

While Sachs claim that the main obstacle to an ethical sustainable development strategy for human and non-human is the current obsolete political institutions and system, he doesn't digs in the issue. On the contrary, he step back to the traditions that he already knows are failing: a long list of technically feasible "We should do...this or that" . A hope less "we-should-do-list" that he call "strategies".

Forcing a bit Sachs' story, I interpret what he is saying in the following terms. Our political institutions are collapsing, "business as usual" will derive in an increasingly violent, fragmented, degrading societies. Current political system is a machinery of denial of fundamental trend, for the benefit of small and powerful interest groups. The denial of this denial machinery is a criminal attitude in today world. We inherit the challenge of overcoming citizen numbness and giving birth of a new kind of citizenry. Sachs is making a serene call to citizens responsible indignation.

Here I'm providing a link to a set of valuable reviews of the book.

The structure of the book's story goes like this:

"The challenges of sustainable development -protecting the environment, stabilizing the world's population, narrowing the gaps between rich and poor, and ending extreme poverty- will take center stage. Global cooperation will have to come to the fore. The very idea of competing nation-states that scramble for markets, power and resources will become passe." (p3)

"The defining challenge of the twenty-first century will be to face the reality that humanity shares a common fate on a crowded planet. That common fate will require new forms of global cooperation, a fundamental point of blinding simplicity that many world leaders have yet not understand or embrace." (p3)

"The world current ecological, demographic, and economic trajectory is unsustainable, meaning that if we continue with "business as usual" we will hit social and ecological crises with calamitous results. We face four causes for that potential crisis." (p5)

"Here are six Earth-changing trends, unprecedented is human history." They are: economic convergence, more people and higher incomes, the Asian century, the urban century, the environmental challenge, the poorest billion and the poverty trap.

"The dire threats can be averted if we cooperate effectively. We can, indeed secure four goals in the coming decades." (p6)

"Taken together, the Rio treaties, the Plan of Action on Population and Development, and the Millennium Development Goals can be called our Millennium Promises for sustainable development. They are the promises that our generation made to itself and to future generations at the start of the new millennium." (p13)

"The barriers are in our limited capacity to collaborate. (...) Yet even as the global economy has become more intertwined, global society has seemed to become more divided, acrimonious, and fearful." (p7)

"The conversion of our global energy system, which now threatens devastating climate change, in to a sustainable energy system in which climate change is brought under control, would likely cost well under 1percent of annual world income. The adoption of bold population policy to slow the runaway population growth in the poorest countries would cost less than 0.1 percent of the annual income of the rich countries. And the end of extreme poverty would also require less than 1 percent of the annual income of the rich world to finance the crucial investments needed in the poorest countries to extricate them from the poverty trap. (...) Yet despite the huge imbalance between the modest cost of action and the huge consequence o inaction, the world remains paralyzed. The types of steps needed to avert the worst outcomes are clear to many specialists, though not to the public. The main problem, I shall suggest time and again, is not the absence of reasonable and low-cost solutions, but the difficulty on implementing global cooperation to put those solutions in place." (p12)

A new phenomenology of economic change and economic development is needed. A new "clinical economics". A "combination of theory and practice, general principles, and specific contexts (...) the combination of general training and specific problem solving (...) we need a new clinical approach to sustainable development, and new methods of train the next generation of development leaders." (p15)