From Prof Jeffrey D. Sachs.

Sir, Many respondents to my Comment (August 18) on the transatlantic economic crisis have assumed that I was opposing globalisation. The FT originally titled the article "The failure of globalisation" but then upon my suggestion renamed it "Tripped up by globalisation". A careful reader will discern that I am not calling for a reversal of globalisation or declaring it a failure (and I certainly agree with many respondents that globalisation has raised incomes in the low- and middle-income countries, such as China). I am calling, rather, for its proper management.

Globalisation has raised serious adjustment challenges for the high-income world, and most high-income countries, notably the US, have failed to meet those challenges. The challenges include the loss of jobs and incomes of lower-skilled workers, a shift of manufacturing sector investments away from the transatlantic towards the emerging economies, a rise in energy costs occasioned by rapidly growing energy use in Asia, and an explosion of income and political power at the top of the income distribution, stoked by international tax havens and tax competition between jurisdictions.

The Scandinavian countries have done best in addressing these challenges, by emphasising skills and training for all of society, including poorer households; the development of renewable energy sources; social support for those displaced by globalisation; and norms and policies against the runaway pay and political power of chief executives and others at the top of the heap. The US, alas, has done the worst, allowing its society to splinter into rich and poor, with the federal government increasingly a plaything of the rich.

Jeffrey D. Sachs,

Director, Earth Institute,

Columbia University,

New York, NY, US