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Saturday, January 18, 2020

Apocalypse is Nigh

Like the professional pessimists of the 1930s,Jeffrey Sachs prescribes central planning to tide over the crisis

Written by Jaithirth Rao | Published: January 14, 2012 3:23:29 am

This book’s content is pompous,and mostly wrong. Its style is by and large turgid with some passable chapters. The opportunity for a reviewer to be obnoxious and correct at the same time is rare: this is a bad book.

Jeffrey Sachs is obsessed with messianic visions. The global economic problems on the back of a financial crisis that started in 2007-08 are pretty ghastly. But this is hardly the first or the last of such crises. The world was in much worse shape in 1930 and possibly in 1980. And yet Sachs chooses to refer to the current crisis as the “fall”. Sachs’s opening bombast stylistically resembles a Kondratiev or a Marx. His arguments,on the other hand,have little depth or rigour. He attempts a bang and ends up with something less than even a whimper.

The stated objectives of this book are to analyse what went “wrong” in America,to prescribe corrective remedies that Sachs knows will work and to warn other nations not to imitate America. A financial crisis,increased unemployment and a US political system in partial gridlock — these constitute the signs of the end of civilisation as Sachs sees it. Apocalyptic visions lie in the eye of the beholder. Sachs is like the professional pessimists of the early 1930s. At that time also western capitalism seemed to be in a “Crisis”. The Soviet Union had pretty good growth rates during those same years. Sachs’s professional forebears took this to mean that the Soviet system was “superior” to market capitalism and argued that western economies should opt for “central planning” in preference to markets. Doubtless the whole world would have the welfare levels of North Korea today if such advice had been followed.

Sachs’s prescription is no different from those of the leftists of the thirties. He thinks we should go back to “national economic policies” and “central planning” — albeit an efficient one,a system where he hints that persons like himself should be in charge. Sachs admits that central planning has failed before — but this time he assures us that things will be better. He does not tell us why.

Sachs identifies school education as needing attention. His solution is to spend more money. Teachers’ unions which protect incompetent teachers are not a problem simply because Sachs says that they are not a problem. If he were advising the Government of India,I am sure Sachs would be in favour of doubling teacher salaries and not in favour of insisting that they turn up for work. Sachs dislikes television because it encourages “consumerism” and persuades people to save less. Dr Sachs: people will save less if the signals given to them are that they do not need to save. An economist like you should know that.

Sachs is an admirer of Europe and he believes that the economic and political system in the EU is superior to that of the US. One wonders,is this book an elaborate spoof? And then,there is Scandinavia,the utopia of the left-liberal chattering classes. Sachs would like the US to spend less on defence — the Scandinavian prescription. Perhaps he does not know that terrified of Nazi Germany,Sweden remained “neutral” and actively traded with Hitler’s regime. The Swedes have not fought a war since Poltava. If America were to adopt the Scandinavian formula,we may all have to live in a Sinic-Iranian Caliphate.

There is one good chapter in the book where Sachs analyses the regional,demographic and racial electoral strategies of US political parties. Nothing new here — but the analysis is cogent and useful.

Doubtless this will be a best-seller and will misguide millions of readers. A central planner’s dream-come-true!

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