Saturday, May 17, 2008

Sachs Refutes Easterly With Trenchant Anecdote

OK, I haven't read the book, but the NYT book reviewer notes the following:
In a particularly trenchant passage, he gently fillets critics, like William Easterly, who have argued that foreign aid doesn’t work. (Aid money spent bringing fertilizer to India in the 1960s, Sachs notes, yielded spectacular returns.)

Sheez. I hope there's more than this. Easterly notes that we've spent like 1 Trillion dollars on Africa, with zero, if not negative returns. And Sachs refutes Easterly's criticisms with a specific subsidy that worked. Well, with 1 trillion, I would hope he would have several anecdotes.

But the reviewer, Daniel Gross, reveals his hand when he notes:
And it’s refreshing to hear a distinguished economist declare that markets alone can’t get us out of the mess markets have created.

The old straw man that the other side says markets are sufficient to fix everything. No one who believes in market solutions thinks they are perfect, or don't require good institutions, which necessarily involve governments. It amazes me how incredibly dumb such people can be, yet write for the New York Times book review, surely one of the mosts prized positions in book reviewing. And people complain that our process for choosing a President is suboptimal.


Unknown said...

The reviewer isn't dumb, he has an agenda he is advocating.

J said...

Sipping fair-trade coffee, nibbling organic carrots and pausing to catch the headlines on National Public Radio, the reviewer is not advocating anything (except buying the book). He writes - trenchantly - for the fully-paid bien-pensant classes.

Anonymous said...

To be fair, Jeff Sachs would be one of the foremost to understand that markets are not the divine path to equilibrium that economists seemingly need to defend at every turn. With his forays into Bolivia, Poland and (unfortunately) Russia, he has seen both good and horrific market reactions to the "shock therapy" medicine he doled out. Who would have thought institutions in Russia would be so important?