The Nation - October 31, 2005
Bono Meets Dr. Shock by DOUG HENWOOD
ne of the stranger duos in the performing arts hit New York City on October 5: Jeffrey Sachs and Bono. The economist delivered the inaugural Daniel Patrick Moynihan lecture at New York University, and the rock star was his warm-up act. Their common theme was the moral urgency of relieving African poverty, but all the fans and TV cameras dogging Bono made it easy to overlook that.
It's not often that an economist attracts a follower and promoter like Bono, lead singer of the bombastic Irish rock group U2. The pairing, and their common theme, seem especially odd to anyone who remembers Sachs's history from the late 1980s and early '90s, when he earned the nickname Dr. Shock.
In thinking about the New Sachs, it's worth recalling the Old Sachs. His debut on the global stage was as an adviser to Bolivia, where he recommended a combination of tight fiscal and monetary policy, which came to be known as "shock therapy," that helped bring down the country's inflation rate from 11,750 percent in 1985 to a mere 15 percent in 1987. That's not a wholly bad achievement--almost no one likes hyperinflation--but the disinflation did nothing to change Bolivia's status as one of the poorest countries in the Western Hemisphere.
That alleged "success" attracted the attention of politicians and development officials as Communism was about to make its extremely troubled "transition" to post-Communism. Sachs was hired as an adviser to several governments, most famously Poland and Russia. Living up to his nickname, Sachs generally advocated a rapid transition to a market economy, featuring overnight privatizations and the freeing of long-regulated prices. Poland is counted by some as a "success" story, even though unemployment and poverty rose. But Russia endured one of the worst economic and social collapses in history. Several years ago, when I asked Sachs to comment on Russia's sorry outcome, he blamed the Yeltsin government for failing to take his advice. Apparently this is an old Sachs ploy; he told the banking magazine Euromoney in 1992 that the problems with Poland's less than happy transition were the government's fault, because it failed to privatize quickly enough.
Ah, but that's history, as we like to say when we consign inconvenient facts to the trash. Pursuing a musical conceit, Bono referred to Sachs's "early works" in Russia and Eastern Europe, forgetting that those works helped throw millions into poverty. Bringing that up might have interfered with the performance of their mutual boy-crush. Bono called Sachs "my professor, my teacher, my rock star"--and he confessed to being jealous of Sachs's latest celebrity sidekick, Angelina Jolie. When Sachs took the stage, he returned the flattery by declaring that Bono should win not one but four Nobel Prizes: in economics, literature, peace and, most surprising, in physics--because just as Einstein demonstrated curvatures in space, Bono proved that in politics right can meet left. Someone should tell George W. Bush!
It's easy to make fun of this vain duo--and, frankly, it's hard to stop--but it must be admitted that they're doing good work. Several years ago Bono, purportedly a devout Christian, managed to convince Jesse Helms that Jesus would want him to support assistance to Africans with AIDS (which is presumably what inspired Sachs's strange remark about the curvature of political space). And Sachs's tireless lobbying for debt relief for the world's poorest countries (most of them in Africa) is highly admirable; no one of comparable stature in his profession comes close (though it doesn't seem as though he's winning any converts among the movers and shakers). He's also a tough critic of the invasion of Iraq and of the neocolonial brutalities of IMF austerity programs, using language far stronger than any that Paul Krugman would ever deploy. Still, Sachs hasn't completely severed his links to orthodoxy. His thinking about the situation of the so-called middle-income countries, like Mexico and Brazil, is fairly conventional, though they too suffer from heavy debts and the toxic legacy of colonialism.
But he is right about the misery of the billion people who live on a dollar a day or less. We could end extreme poverty in the world for what would amount to pocket change for the rich countries; we could pretty much eliminate the malaria that's endemic in Africa for even less. But we don't, because no one cares enough. Sachs and Bono (and Jolie) are doing their best to make us care. It would all go down a lot better, though, if Sachs would admit how wrong he was about Russia.