Tuesday, January 29, 2013

Economics for a Crowded Planet

For Christmas I was given Commonwealth: Economics For A Crowded Planet by Jeffrey Sachs.

This book covers a range of challenges facing the world and is optimistic in suggesting solutions.
Commonwealth  contains a number of startling insights. First, the human domination of major components of our world. Humanity controls 45% of the land, around 60% of the water cycle and nearly 80% of marine fisheries. Agriculture is the principal user of water and uses as much as all the rest of the demand put together. As a result the Ganges, the Yellow River and the Rio Grande no longer reach the sea because the water is abstracted along the way. We are using groundwater, otherwise known as “fossil water” because it’s been trapped underground for millions of years, in the mistaken belief that it’s an infinite resource.

Sachs shows how we can address these problems and in particular the problem of population growth. He shows how government intervention is essential and demonstrates that the free-market economies will not address these problems. He also shows that social welfare economies outspend both free markets and mixed economies on R&D, they contribute more in aid and have the lowest proportion of their domestic population in poverty.

Sachs is an American, but that does not stop him from criticizing his country. He complains that poverty in the US is more widespread than in even the average free-market economy. The US struggles to meet its 0.7% GDP target for foreign aid, yet spent $572bn on the military in 2007. This is nearly as much as the whole of the military spending by all the other countries in the world. Spend on humanitarian and development aid by the US was just £14bn. In Sachs’ opinion, few of the world’s current problems can be solved by military means.

This book was written and published in 2008. It closed on an optimistic note. Sadly the actions which Sachs expected to be taken have not been taken. In many ways the world has gone backwards. He echoes the Stern Report (2006) in saying that immediate action will be much cheaper than if we delay. And yet, instead of a strengthened Kyoto agreement which Sachs looked forward to in 2012, the actual result concluded last December was even weaker than the original agreement, with many decisions postponed for yet more years. Meanwhile, the US shows no signs of moving away from its policy of using military solutions almost regardless of the nature of the problem, the people of Haiti squat in disease-ridden refugee camps still waiting for the aid funds promised more than a year ago and exceptional weather brings fires and flood to Australia, with hurricanes and blizzards attacking parts of the US with ferocity that they’ve never seen before.

I very much hope that Jeffrey Sachs will write a sequel, but we can’t sit around waiting for it. Spread the word. Take action now. At the risk of sounding histrionic, the future of humanity depends on what we do this week, this month, this year. Leave it much longer and it’ll be too late!

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