Socialism is the Best Medicine

Socialism is the Best Medicine

Investing in Poverty

April 1, 2006


Book Review: Jeffrey Sachs (2005) The End of Poverty: Economic Possibilities for Our Time. Penguin Press.

World poverty is a major problem. More than a billion people struggle to survive on less than one US dollar a day. Every year, nine million people die from hunger and other preventable causes – the equivalent of eight World Trade Center bombings every single day.

There is no need for such poverty. The World Bank estimates that $124 billion, little more than $100 per poor person per year, would solve the problem. This sum is less than 0.7 percent of the GDP of the 22 rich ‘donor’ nations.

Washington pledges foreign aid with such fanfare that most Americans think the United States spends more than 20 percent of its budget to help poor countries. In fact, the U.S. donates just 0.12 percent of its GDP to foreign aid. Eradicating poverty is not a priority because the poor provide cheap labor, which is the key to higher profits.

Jeffrey Sachs is an economic adviser to the United Nations. Sachs warns that too much poverty threatens the security of richer nations, causing wars and insurrections that cost more than it would cost to reduce poverty. Sachs does not call for an end to poverty; he wants a more sensible capitalism. As he says,

“The goal is to end extreme poverty, not to end all poverty, and still less to equalize world incomes or to close the gap between the rich and the poor. This may eventually happen, but if so, the poor will have to get rich on their own effort.(p. 289)

Sachs calls for charity, not justice. He thinks the rich should help the poor out of “enlightened self-interest,” not because the rich owe reparations to the poor for growing rich at their expense. Sachs absolves the capitalist class of any responsibility for creating poverty.

“Africa’s problems, I have noted repeatedly, are not caused by exploitation by global investors but rather by its economic isolation, its status as a continent largely bypassed by the forces of globalization.” (p.356)

Sachs does not deny that Africa has been devastated by three centuries of slavery, a century of colonial rule, post-colonial exploitation, and crushing debt. Nevertheless, he thinks that these burdens do not explain Africa’s “long-term developmental crisis.”

Sachs argues that the economic Grand Canyon between Africa and the United States is the result of different growth rates – Africa is poor because it grew slowly, while the U.S. is rich because it grew more quickly. He admits that having more wealth to start with contributes to faster growth, yet never links America’s faster growth with the massive wealth it accumulated from the labor of African slaves! His racist (and historically mistaken) conclusion is that Africa has been “poor since time immemorial.”

Sachs urges more multinational corporations to invest in poor nations, offering reassurance that such investment would be profitable. As he stated in the British Guardian,

“Ending poverty is a grand moral task, and a geopolitical imperative, but at the core, it is a relatively straightforward investment proposition.”

Sachs calls on rich and poor to come together in “a common bond of humanity, security, and shared purpose across cultures and regions.” Such cross-class unity would preserve the wealth and power of the capitalist class by perpetuating the poverty and oppression of the working class.

Sachs would like to see more industrial free-trade zones run on low-wage labor, in the belief that “sweatshops are the first rung on the ladder out of extreme poverty.” To Sachs, working in a sweatshop is preferable to dying from starvation, as if that were the only alternative.

The working class have created more than enough wealth for the capitalist class. The real alternative to poverty and starvation is not sweatshop labor but socialist revolution, removing from private hands what should be socially shared.

Sachs accuses the anti-globalization movement of being “too pessimistic about the possibilities of capitalism with a human face.” He advocates nine steps to “heal the world” including “Redeem the Role of the United States” as a “leader and inspiration in democratic ideals,” and “Rescue the IMF and the World Bank” by restoring their roles as “champions of economic justice and enlightened globalization.”

Socialist revolution would be more realistic.



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