Belmont Club

The Coffman Cartridges

Jesse Jackson Jr has been reviled for suggesting that the solution to unemployment consisted simply in outlawing poverty. Jackson argued that if everyone were given a guaranteed standard of living through a Constitutional Amendment, there would be such a demand-driven burst of growth from building houses, providing schools and supplying health services to the poor that joblessness would be permanently ended.

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Here is what Jackson Jr said in the video:

JESSE JACKSON JR.: Mr. Speaker, I believe that the answer to long-term unemployment is actually in the Constitution of the United States.

Well, let me say that a little differently. It’s not in the Constitution of the United States. It should be in the Constitution of the United States, and one of these days we’re going to get there. …

We need to add to the Constitution the right to a family to have a decent home. What would that do for home construction in this nation? What would that do for millions of unemployed people?

He says we need to add to the Constitution the right to medical care. How many doctors would such a right create?

He says we need to add to the Constitution of the United States the right to a decent education for every American. How many schools would such a right build from Maine to California? How many people would be put to work building roofs and designing classrooms and providing every student with an iPod and a laptop? How many ghettos and barrios will actually be touched by such an amendment?

In fact, very little that we pass in the Congress of the United States even touches the long-term unemployed. Only thing that touches them that this Congress has access to, that can actually change their station in life, is the Constitution of the United States. …

Mr. Speaker, there’s an even greater America that’s in front of us. It’s the America that adds to our founding document these basic rights.

His speech was characterized as ludicrous. Yet the same basic argument was made by Jeffrey Sachs in a 2006 Time Magazine issue. In it, Sachs, then Director of the United Nations Millennium Project, argued in dead seriousness that in order to end global poverty the simple solution was to give people enough to jumpstart their lives.

Solving poverty was not a conceptually difficult, Sachs said. In fact, he offered to guide readers through a process of how it could be done. “This is a story about ending poverty in our time,” he said. “It is not a forecast. I am not predicting what will happen, only explaining what can happen. Currently, more than 8 million people around the world die each year because they are too poor to stay alive.” His solution was conceptually identially to Jesse Jackson Jr’s:  raise the standard of living of the poor to the point where they could shift for themselves. It was like pushing a stalled car. Give it enough of a shove and the engine will sustain itself. The only difference from Jesse Jackson’s proposal was rather than giving everyone a laptop and an Ipod, they were to get fertilizer, free medicine and electricity. It was easy. Sachs counseled the US to just do it.

our generation, in the U.S. and abroad, can choose to end extreme poverty by the year 2025. To do it, we need to adopt a new method, which I call “clinical economics,” to underscore the similarities between good development economics and good clinical medicine. …

The sources of poverty are multidimensional. So are the solutions. In my view, clean water, productive soils and a functioning health-care system are just as relevant to development as foreign exchange rates. …

We need … what I call the economic plumbing … A few centuries ago, vast divides in wealth and poverty around the world did not exist. Just about everybody was poor, with the exception of a very small minority of rulers and large landowners.

Spread the wealth, he counseled and when enough wealth had been spread around, once a threshold had been crossed, then things were bound to take off. Like a fire, economic development spread from woodpile to woodpile until the whole scene was ablaze in the glow of wide-screen televisions, computers and mall lighting. This is what had happened historically in the West.

Both population and per-capita income came unstuck, rising at rates never before imagined. The global population rose more than sixfold in just two centuries, while the world’s average per-capita income rose even faster, increasing around ninefold between 1820 and 2000. In today’s rich countries, the economic growth was even more astounding. The U.S. per-capita income increased almost 25-fold during this period. …

This could happen in the developing world, too. But many poor countries made “poor choices”, probably by listening to the wrong people in the West and adopted “socialist economic models”. These unfortunates found themselves stuck beneath the level required to generate spontaneous combustion and found themselves in permanent doldrums. And now, according to Sachs, much of the Third World is so poor they’ll never get a spark going. They are  mired in poverty and there they will stay until somebody hands them a match — the macroeconomic equivalent of Jesse Jackson’s free Ipod.

Ironically, Sachs used Kenya as an example of a country which had made “poor choices”, little realizing that the son of one of the bureaucrats who embraced “socialist economic models” would become President of the United States. However that happened, he described the shambles that he found.

When our village meeting got under way, I canvassed the group and got very perceptive accounts of the grim situation. Only two of the 200 farmers at the meeting reported using fertilizer at present. … If the rains fail, the households face the risk of death from severe undernutrition. Stunting, meaning low height for one’s age, is widespread, a sign of pervasive and chronic undernutrition of the children.

The real shocker came with my follow-up question. How many farmers had used fertilizers in the past? Every hand in the room went up. Farmer after farmer described how the price of fertilizer was now out of reach, and how their current impoverishment left them unable to purchase what they had used in the past. …

The dying village’s isolation is stunning. There are no cars or trucks owned or used within Sauri, and only a handful of villagers said they had ridden in any kind of motorized transport during the past year. Around half of the individuals at the meeting said that they had never made a phone call in their entire lives.

This village could be rescued, but not by itself. Survival depends on addressing a series of specific challenges, all of which can be met with known, proven, reliable and appropriate technologies and interventions.

The energy had been frittered away; the opportunity squandered. But answer were simple, said Sachs. Give them a second chance; free them from the poor choices by funding the right path. Boost agriculture by supplying inputs, financing and technology. Improve basic health by providing government clinics and “free” medicine. Invest in education by building more schools. Give every village electricity; electrify the country. Provide clean water and sanitation. It was Hope and Change on a global scale.  Once this was done, people could escape the cycle of poverty and be on their way to becoming the next China, Japan or Singapore. Don’t listen, he said to those who argued that corruption was the problem. No. The difficulty was poverty itself. Sachs wrote:

The claim that Africa’s corruption is the basic source of the problem does not withstand serious scrutiny. During the past decade I witnessed how relatively well-governed countries in Africa, such as Ghana, Malawi, Mali and Senegal, failed to prosper, whereas societies in Asia perceived to have extensive corruption, such as Bangladesh, Indonesia and Pakistan, enjoyed rapid economic growth. …

Put enough thrust behind a barn door and you could make it fly supersonic. The only problem was the stinginess of the International Donor Community, which provided a mere 1/15th of what was needed to send these economies into escape velocity. What an opportunity was being missed! If only the International Donors realized what a huge return on investment their aid dollars would bring, then they would realize the end of global poverty was not only possible, it was almost certain.

The U.S. has promised repeatedly over the decades, as a signatory to global agreements like the Monterrey Consensus of 2002, to give a much larger proportion of its annual output, specifically up to 0.7% of GNP, to official development assistance. The U.S.’s failure to follow through has no political fallout domestically, of course, because not one in a million U.S. citizens even knows of statements like the Monterrey Consensus. But we should not underestimate the salience that it has abroad. Spin as we might in the U.S. about our generosity, the poor countries are fully aware of what we are not doing.

Sachs had anticipated Jesse Jackson Jr’s anti-poverty strategy by years and cast it moreover, in the most respectable and analytically plausible terms. If anything, it showed that the only thing wrong with Jesse Jackson’s argument was that it was not pitched large enough. Because the size of the anti-poverty effort, like the stimulus, was the key to its whole success. Give a man an Ipod and it would not be enough; it might entertain him for an afternoon. Give him a whole new world and he will rise to the occasion.

The only problem with both the Sachs and Jesse Jackson Jr. thesis is that they might be betting the farm on the wrong horse. Pump priming the environment of the chronically poor is an attractive idea, but what if it didn’t work? What if it was not addressing the correct variables. What if instead of saving the world it poured trillions down a rathole?

Surely some societies found the formula to economic success. Sachs himself described how “the U.S. per-capita income increased almost 25-fold during this period”. It had done something right. But the question today’s economic crisis raises is why the same US cannot pull out of an economic tailspin and into the presence of all that wide-screen television glow, computer illumination and mall lighting with a multi-trillion dollar stimulus. The Kenyan bureaucrat’s son believed it was possible to “invest” in a recovery. And surely if mere expenditure were all that were needed to bring about economic development then boundless prosperity was just around the corner. Yet something else had happened in the meantime to the engine of growth which neither Sachs nor Jesse Jackson’s theory is adequate to explain. And now the problem is how to restart the motor.

In the classic movie, The Flight of the Phoenix, James Stewart had only five Coffman cartridges to start the salvaged aircraft engine which alone could save them from certain death in the desert. And he barely succeeded in the movie’s dramatic finale. Fortunately, Sachs gave his readers nine starting cartridges, and we can surely succeed with that. They are:

  1. Organizational commitment like that of Oxfam;
  2. Adopt the UN Millenium Development Goals;
  3. Raise the voice of the poor;
  4. Redeem the US role in the world;
  5. Rescue the IMF and the World Bank;
  6. Strengthen the UN;
  7. Harness Global Science;
  8. Promote sustainable development; and
  9. a personal determination from each individual to act now.

With this roadmap, how could poverty not be vanquished? What could go wrong? But maybe it’s easy if you don’t know how.  No should imagine that Sachs-type solutions have gone out with the 1990s.  If anything, people are even more certain about what it takes to fix the world.  Take Peter Holliday, head of the National Grid, one of the world’s biggest power utilities. Holliday understands that once the “developed world” gives up enough — enough energy, enough carbon, enough money — then things will be right as rain. Here he is discussing the plans which the “new President” has enabled in the US.

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He is currently selling public on a new feature: blackouts. It’s a mistake, he says, to believe electricity should be there when you need it. It should be used when it’s available.

The grid is going to be a very different system in 2020, 2030,” he told BBC’s Radio 4. “We keep thinking that we want it to be there and provide power when we need it. It’s going to be much smarter than that. …

“We are going to change our own behaviour and consume it when it is available and available cheaply.”

Holliday has for several years been predicting that blackouts could become a feature of power systems that replace reliable coal plants with wind turbines in order to meet greenhouse gas targets. Wind-based power systems are necessary to meet the government’s targets, he has explained, but they will require lifestyle changes.

But what about those Ipads? What about those laptops? Jesse Jackson, where are you when you are needed most? Come to think of it, Jesse Jackson Junior’s speech is sober, thoughtful and considered in comparison to the savants who now guide our world.


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