What’s the defining issue of our time?

Last December I was lucky enough to have the opportunity of having lunch with Professor Jeffrey Sachs. After ensuring him that he would not have to pay a cent, I persuaded him that he was in fact able to have a free lunch (economics joke). It was certainly insightful although we did not always agree on everything.

Professor Sachs has had a remarkable career with many endeavors, some more successful than others. His critics will let you know how miserably his Millennium Villages Project failed but his supporters will quickly outline how transitioned the Polish economy at the end of the Cold War. In my mind, Sachs is probably the greatest economist of his time. So to have lunch and probe at him with questions I had been pondering on for some time, was enriching to say the least.


Is Capitalism failing us?

Many economists, including myself, would be quick to acknowledge capitalism has its flaws but it remains the best model available to us today. Sachs on the other hand is a huge supporter of the social democracy. Every year Sachs puts together the global happiness report and he loves to ramble on about how happy the Scandinavian social democracies are. I too would love to live in a social democracy but where myself and Sachs differed was that he believes that the social democracy model can in the future be implemented across the globe. I do not think it is a global model and I am not the only to stand firmly against Sachs’ view. Daron Acemoglu, of MIT, also believes that the social democracy is not as scalable as we wish it to be. It is very tempting to take a model that has had success in some parts and try apply it to the whole, but I don’t think we will see the desired outcomes.

What is the defining issue of our time?

My main fields of interest are development and environmental economics and these are Sachs areas of specialization too. I thought it would be simple then to start discussing these fields with Sachs by asking him what is the defining issue of our time. I expected Sachs to say climate change or solving poverty but instead he threw a curveball. ‘Staying Peaceful’ he said. Without peace no progress on any other matters are possible. When a nation is facing civil war, attending conferences to work on climate agreements would be the last on the agenda.

The evidence supports this. If we look at the few nations that sit with United States outside of COP 21 (Paris Agreement), we will find Syria, a country that has been torn apart by civil war. Understandably they have no interest in solving problems of the distant future when they are uncertain what tomorrow will hold. Not only do wars hinder progress but they are able to undo generations of progress by destroying infrastructure, undermining political systems and creating lingering societal and ethnic tensions.

What should then be concerning to the west, and the entire world for that matter, is that violent islamists are taking hold in many African nations while others are going forth with explosive growth. Libya, Niger, north east Nigeria, Central African Republic and Somalia in particular are highly threatened. Governments in these countries are struggling to contain the threats that radical Islamists pose to their populations.

With Africa having the fastest growing population in the world, it is certainly in the interest of the West to assist these governments in curbing the growth of these violent groups. If not assisted, we may see unprecedented waves of refugees headed to Europe in particular over the coming decade.

At the moment these governments are struggling to achieve prosperity for their people or keep them safe, let alone both. Their failure on the former, to a large extent creates the environment for the latter. Now, if forces from the West could only temporarily assist in creating the environment from which the governments are able to restore stability it could be a win-win for all. The key, however, would be for these previously unaccomplished rulers to do their part in achieving prosperity for their people.

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