QUESTIONS FOR JEFFREY SACHS Poor Man's Economist Interview by AMY BARRETT
This year you moved from the Center for International Development at Harvard to Columbia and started the Earth Institute, which is dedicated to the idea of sustainable development. What is that? Sustainable development means rising living standards for everybody in a way that's not going to destroy our ecosystems, cause mass extinctions and add to enormous problems in climate or water scarcity. The links between the physical environment and the economic environment are much more profound than economists have recognized. If they really want to get to the core of what's happening in Africa, they had better start understanding AIDS, tuberculosis, malaria and nitrogen-depleted soil. These are important phenomena that help to explain why the poorest countries are not achieving economic progress. That seems like common sense. Why do you even need the idea of sustainable development? In academia, the scientists and the policy types rarely deal with one another directly, especially on problems of the poor. The idea of the Earth Institute is to focus not on the disciplines but on the problems and to bring together five main areas in an intensive dialogue: the earth sciences, ecological science, engineering, public health and the social sciences with a heavy dose of economics. The term sustainable development showed up in the 80's, and it wasn't very popular. Why not find another, more marketable, catch phrase? I resisted the term also because a lot of people said what sustainable development means is that the rich have to cut their living standards sharply to make room for the poor. But my own analysis doesn't suggest that the reason that poor people are poor is that rich people are rich. I think rich people are rich because they have developed technology successfully to address a lot of challenges and because they were lucky enough not to have some of the ecological barriers that the poor have. But under the idea of sustainable development, won't Americans have to cut back on their consumption in some way in order to not deplete the planet? We have to cut back on the amount of carbon that we are putting in the atmosphere, but that doesn't necessarily mean that we have to cut back on our living standards. If you develop technology that can capture the carbon, you can have your consumption and your climate too. At some point, though, won't we simply have to stop consuming so much? Actually, one of the surprises of the last couple of centuries is that we are not running out of stuff. Almost every commodity has gone down significantly in price in the last hundred years. Stuff is not driving our economy. More and more of what we do is in bits and information services. You have said that a lot of your ideas came from experience on the ground in poor countries, rather than in the classroom. Are there a lot of theories in economics that just don't work when you go out into the world? Or are completely irrelevant in a particular context, because what might be important in one place may be irrelevant in another place. Differential diagnosis is critical. You have to be open to the wide range of things that can go wrong in the world. Many economists are still very skeptical of the idea of sustainable development. How are you going to sell it? I'm on my way to China this month to meet the Chinese leadership. In January, I'll be traveling to India. Yesterday, I was on video conference with a number of ministers of health from Latin America. So you are a global economic consultant. Well, I call it an adviser, but yes, I've been doing that for a number of years. Columbia has given you an $8 million town house for the use of the Earth Institute. Is there a part of your new job that will be fun, giving dinner parties for dignitaries, maybe having Bono stop by? Of course. I adore the work I do with Bono. He's one of the great people on the planet. To have advised the pope, to be engaged with Kofi Annan -- I think our world's greatest political leader -- it's a joy beyond anything I could have hoped for. To have pulled out of the papal residence in a van with Bono and have the mobs chasing behind us, like in a Beatles movie -- it's fun, I have to say. Did you feel like a rock star? I leaned over to him, and I said, ''Look, they always do that with macroeconomists.'' And he looked at me, like, ''Yeah, right.''
