Jeffrey D. Sachs Interview Summary -- Blue Planet Prize, October 15, 2015

Professor Jeffrey Sachs (U.S.A.)

Director, The Earth Institute, Colombia University
Economist (Development Economics, International Economics)
Born in Detroit, Michigan, USA, in November 1954
His wife is Sonia Sachs, a pediatrician
As an economist, he was influenced by Paul Samuelson and John Maynard Keynes.

Childhood

I was born in Detroit, Michigan in 1954. When I was growing up, Detroit was the 4th or 5th largest city in the United States and was the heart of the automobile industry. I was very proud as a young boy to be from Detroit, and felt that I was in an exciting place.

May father was a labor lawyer representing trade unions. My early childhood coincided with the beginning of the civil rights movement in the United States. My father strongly supported civil rights, and this instilled in me a sense of social justice. This was a part of my family's values and part of my upbringing.

In 1967, when I was 13, Detroit was embroiled in a race riot that resulted in a lot of deaths and a lot of buildings being destroyed over course of several days. The huge divides between the white and the African-American communities, one of American history's biggest challenges, was fueled by the history of slavery, post-slavery discrimination, and the lack of civil rights, all culminating in the civil rights moment.

It was a turning point for the city. The internal divisions were quite serious and the white and the black communities pulled apart. At the same time, international competition heightened when Japanese cars were introduced to the US market. Detroit was experiencing a long phase of decline. I think that when you have social divisions, it's harder to respond effectively to competition.

My research attempts to understand economic failure and bankruptcy, and, of course, what can be done about it. Detroit was encountering these problems at that time.

An experience that influenced my interest in economics was a visit to then the Soviet Union with my parents when I was in my sophomore year of high school. That was during the Cold War, and competition between two different economic systems, capitalism and socialism, was obvious. I was a young boy who only knew my own society and understood very little about this, but I knew I was seeing something that was of stunning importance; and it raised in me two questions that I continued to ask for the next 45 years: "What makes a good society?" and "Why do some places operate in certain ways, and other places in other ways?"

When I was in Russia, I met a young man from East Berlin. When I graduated high school, I went to visit him in East Germany; and that was even more of an eye-opener for me. I was a little bit older and even more intrigued about the big issues of Capitalism, Socialism, Marxism and other theories of society.

That is when I knew what I wanted to study. That was 43 years ago, and I'm still intrigued by this fascinating field. I've spent my whole life trying to understand these ideas; what they mean, and why different countries choose different courses. I've come to understand how complicated these questions are, and I've tried to explain in 40 years of writing why we should embrace their complexity, why we should try to understand the world as a complex set of historical, geographical, physical, technological, social, geopolitical, and economic forces.

University: Harvard University, Faculty of Economy

After graduating from high school in Detroit in 1972, I went to Harvard University and stayed there for 30 years. I didn't know that was going to happen, but I fell in love with Harvard. Fortunately, they liked me. I started as an undergraduate, and then went on for my masters, and then PhD. Upon graduation, I became an assistant professor, then associate professor, and finally a full professor.

The reason I chose economics was that it could help us understand the world and help solve its problems. I wanted to understand its tools; and if I could be like a doctor curing a disease, or a lawyer representing someone in trouble, then I would feel fulfilled.

First, I chose to study the international monetary economics. It was a very tumultuous period when I entered college in the 1970s. It was when we went from a fixed exchange rate system to a floating exchange rate system. It was also when the big oil crises struck and drove up the price of gasoline. I tried to understand how it happened, which I believe contributed to society.

An important part of international monetary economics is the flow of capital between countries, especially how countries that have excess savings invest in countries that have deficit savings, or too little capital, and how countries borrow in order to invest and develop. So, my early work focused on trying to understand economic development and growth. I also wrote my first papers on the problems of developing countries and their indebtedness, which I would become more involved with later.

I had an experience as a graduate student that would have a significant influence on my future direction. It was a backpacking trip through India in 1978 when I was 23 years old. I saw "extreme poverty" on the streets of Delhi for the first time and it blew my mind. I saw beggars, handicapped people, and impoverished people. People lying on the sidewalks. This was a completely different world for me.

I visited lots of places during my month in India. I also bought The Asian Drama by Gunnar Myrdal, a Swedish Nobel Laureate in economics.

Myrdal introduced me to the idea of economic development, which was a unique idea - the drama of economic growth from poverty to prosperity. How is it done? What are the political challenges? What are the economic challenges? What are the social challenges? This book was also a great window on the world, and a great inspiration.

I left India with a strong desire to do something for the development of international society. I also experienced the importance of observing things with my own eyes and talking with people directly. I wanted to visit other places too. I developed a new perspective on economic growth. I also started realizing that there were extreme differences in poverty in the world.

I started studying these issues in earnest about seven years after that. But for me, the trip to India and reading The Asian Drama were the starting point.

Experience in Bolivia

My life as a researcher changed dramatically when I was invited to Bolivia in July 1985.

It occurred coincidently. I was becoming more-well known within the academic world for my research on international trade, and I had received tenure in 1983 at the age of 28. A group from Bolivia had come to Harvard to give a seminar for the faculty, and I was asked to attend.

When I arrived, I was surprised to find that only two of the faculty that had been invited to the seminar had shown up. The group explained Bolivia's political and economic situation, and the country's problem with hyperinflation. During our discussion, I spoke briefly about what I thought may be causing their problem. When I finished, one of the visitors said, "You certainly seem to have a clear understanding of the problem and what to do about it. It would be great if you could come to Bolivia to help us." I laughed, but at the end of the seminar, he came up to me and said, "No, I'm absolutely serious about your coming to Bolivia."

Truth be told, I had to go home to look at a map because I really had no idea where Bolivia was. The next day, I told them that if they won the election that was going to take place in a couple of months, and they still wanted me to, I would be happy to go. They won the election, and I went to Bolivia.

When I arrived, it was something new, something different from what I had seen. Bolivia was very poor, and it was economically chaotic. There weren't a lot of experts around either.

I had never helped a country before; but when I went to work, it became clear what needed to be done. Over the next 12 months, I worked with the new government and made a revolutionary proposal for that time.

The rate of hyperinflation was a stunning 24,000%, but it was stopped within a week after we implemented a program of economic reform. The hyperinflation had been caused by the country's serious debt. At the same time, the International Monetary Fund (IMF) was asking Bolivia to pay down the interest on the debt, something that would retrigger hyperinflation at that stage. Therefore, I advised the government to say "No" to the IMF and instead ask the IMF to cancel the debt.

If you look at the history of economics, you come to understand a lot of things. For example, you can understand how to remedy hyperinflation, how bankrupt countries negotiated to reduce their debts during the Great Depression, and how debt crisis ends. John Maynard Keynes also said in his very famous book, The Economic Consequences of the Peace, published in 1919, that if you impose too much debt on a country, you will break it.

I showed the government examples of debt cancellation and methods of risk prevention that had been employed in the past, and said, "You should not repay this debt. It needs to be cancelled." The IMF's response was, "No, that's not how it works. Of course, the debt must be repaid." This was the beginning of a kind of clash between the IMF and me.

I was young and a bit brash, but I was also tenured. I could speak my intellectual mind, and so I took the basic position that the rich world could and should help this country. The information and knowledge I had led to the conclusion that we should not sacrifice a country based on the greedy principle that countries have to pay their debt no matter how poor they are. Bolivia had suffered 24,000% inflation, the government was bankrupt, and people on the street were desperate. I felt that we were morally obligated to help them.

In the end, the IMF recognized that Bolivia was bankrupt, and that reducing its debt was essential to rebuilding the country's economy. My experience in Bolivia was dramatic and emotionally moving. This was the reason that I had decided to keep studying economics. It was my first experience, but my success gave me the chance to work with other nations experiencing similar problems. This was an experience that changed my life, and an experience that taught me so much.

My policy is to observe the actual conditions on the ground, understand the issues, do my best to comprehend their history and context, make a diagnosis, and take a moral position. It is also important to view issues with emotion. This is not a game, but something that happens in the real world. It is important to view issues from both the moral and the intellectual sides. This approach to solving problems started in Bolivia, and I have gradually improved on it since then.

Experience in Poland

I went to Poland to help them to solve their debt problems. I first visited the country in April 1989, during a trip I had made to attend an academic conference in Moscow. Coincidently, it was the day that the communist regime had come to an agreement with the solidarity trade movement, which was led by Lech Walesa, the man who had fought for freedom against the communist regime.

My own heritage is Eastern European. My family had come to America two or three generations earlier. My wife was born in Prague, what was then Czechoslovakia, but now the Czech Republic. Therefore, I was very interested in Eastern Europe.

I felt confident that I could contribute something useful. What was hard to grasp at that time in 1989 was that a great revolution for freedom was sweeping Eastern Europe. It was sometimes called Annus Mirabilis - the miraculous year, in which democracy was returning to Eastern Europe after almost half a century of Soviet domination. Two years later, the Soviet Union itself collapsed into 15 independent states.

Although I arrived in Poland to help solve their debt problems, I became the main advisor in the economic transformation from central planning to a market economy. I advised that for Poland to make a fresh start following the end of an era dominated by the Soviet Union, its debt had to be cancelled. That was, even in 1989 and after my experience in Bolivia and other Latin American countries, a pretty radical idea.

A statement I made became quite well-known in Poland at the time. I said, "You don't have a debt problem anymore. All you need is 7 postcards. Just send one of those postcards to each of the G7 nations and say, ‘Thank you very much. We are now a free and democratic Poland, and we don't have any more Soviet era debt. Thank you, we appreciate it.'"

In summer 1989, when Poland had gotten its political freedom back after half a century, I was invited to speak to the solidarity representatives at the Polish parliament. There were two speakers that night, Senator Robert Dole, who was the senate majority leader of the United States, and I.

Senator Dole said that this was a historic moment for the world, and that the United States, as the leader of the free world, stood with this new democratic Poland. He said he was there to represent President George W. Bush, to declare that the American people stood with the Polish people and would do what it takes to ensure that Poland's democracy would succeed. They were pretty good words.

They then called me. I stood up and said that this was indeed a historic moment, and that it was a great honor for me to follow Senator Robert Dole, a great senator from the United States representing the President of the United States, and that I was happy to hear Senator Dole declare that America would do what it took to help the Polish people. After this, I said, "I'm sure that Senator Dole will, therefore, agree with me when I say that the American people will forgive your debt and that other countries will follow its lead. I really want to thank Senator Dole for standing with the Polish people to make sure that this can happen." And I looked over to him and saw a rather consternated face. He wasn't quite sure what to make of what I was saying, but he wasn't happy.

Well, it's a long story, but in the end, Poland was able to cancel something like $15 billion of its debt, it was able to get a fresh start, and it was able to get emergency help. I was proud to have helped design a lot of those measures.

What I experienced in Poland at that time was something I had never experienced before. It was not something that happens all the time, not even once in a century. This was not normal politics or normal economics. It required all kinds of knowledge, history and judgments as well as the capacity to advocate, negotiate, and so forth. I know the complexity of it, no great change comes without the interaction of many great forces, but sometimes you can also say, "That was a good decision," or "That was helpful"; and I know of these moments in the case of Poland. I'm very proud of what I have done for them.

Nothing that I've done has come without some controversy. Whenever you have a new idea, you can be sure it's going to face immediate, automatic opposition simply because it's a new idea. In the case of Poland, there were many things that could be discussed over hours, days, and even weeks. As usual, I view issues in an emotional way as well as in an intellectual way. These two factors need to fit together.

Experience in Africa

From 1995, I started working in Africa. When I arrived, I could see that they had been left behind economically, but it was different from what I had imagined.

Africa was in the middle of three massive epidemics; AIDS, TB, and malaria. When I was involved in macroeconomics projects in Zambia, my African counterparts were dying of AIDS. I was shocked by the epidemic. I simply couldn't comprehend the scale of the outbreak. I was also surprised that wherever I was working in Africa, there was malaria. I had thought malaria was a thing of the past; and in spite of the fact that malaria was a curable disease, lots of people were dying from it.

I wondered whether the poverty in Africa was caused by malaria or if malaria spread because of poverty. I wanted to understand more about this. When I started studying about malaria, I found out that the disease was closely related to temperature, ecology, and a particular species of mosquitos in Africa.

Until the end of 1990s, I concentrated on studying about the diseases in Africa. In order for Africa to get out of such deep-rooted economic difficulties, I thought it would be necessary to consider infectious diseases from the viewpoint of public health rather than just from the viewpoint of finance and development. One of the results of this approach was that I ended up helping to clarify the epidemiology of malaria, which made me very proud of myself.

I considered the issue of poverty in Africa from a broad range of perspectives: public health, the geography, history, society, human ecology, and the environment. Among the advice I got, I was moved by the following words: "Keep changing yourself and keep studying to broaden your knowledge and skill so you do not become too focused on a specific field and lose sight of the larger problem." This became my philosophy to ensure a comprehensive view on issues for better solutions to problems.

Clinical Economics

In approaching problems I have always tried to look at the specific circumstances, historical context and apply general principles to arrive at scientific solutions. I call this Clinical Economics.

I learned this from my wife, Sonia. She's a pediatrician and got lots of phone calls at night from hospitals and mothers of small children. I've watched her answering them over many years, maybe more than a thousand times. They called her because a child had a high fever. She asks each of them questions to find out what was wrong and decide how to treat them.

The questions were asked in a particular order. "Is the child's neck stiff?" This was always question number one. If the neck is stiff, maybe the child is suffering from meningitis. If meningitis is causing the fever, then you have to go to the emergency room right away because it's a life and death situation. You ask questions in a systematic way. The mother on the other end of the phone doesn‘t know the science, but my wife is asking these questions in a very systematic way to save the child. It is always important to find the cause to provide the appropriate treatment.

As an economist, I always ask questions in the same way a doctor does. Over weeks and months, I keep asking questions to find out what is happening, what the real conditions are, and what the particular characteristics of the region are so I can choose the appropriate approach for the conditions of the country. It is also necessary to understand what others think about this because you have to form a broad consensus across many aspects of economic policy. It's not good enough to have a good idea. You have to have people that agree with that idea because that idea needs to be accepted by the government.

When solving problems such as hyperinflation and other financial crises, don't jump at one solution; "Oh, we need market reform," or "Oh, we need to cut the budget." You need to understand deeply what is really involved, and then you can write a good prescription. You should ask proper questions to find the right solutions.

Unfortunately, this is not how economists are trained. Even the elite economists working at the IMF or the World Bank fail to understand the special conditions of each region, which leads to similar prescriptions for all regions in a one-size-fits-all fashion. I think a clinical economics approach is necessary, and have taught students about this approach through the development of a checklist for the inspection of target countries.

WHO, United Nations, Earth Institute – Solving problem with global cooperation

I thought it would be necessary to approach poverty in Africa from the perspective of public health, and I was given a great opportunity. Director-General of the World Health Organization (WHO) and former Prime Minister of Norway Gro Harlem Brundtland suggested that I create a committee to address the issues. We established the Commission on Macroeconomics and Health (CMH), and I became the chairman.

We examined infectious diseases in Africa such as AIDS and malaria from all aspects, including financial resources, debt relief, public health, and so forth. I recommended some measures to African leaders and to the then UN Secretary-General, Kofi Annan.

These were adopted and they were quite effective. For example, they now have a program that helps poor people receive the antiretroviral medicines they need for the treatment of AIDS. About 15 million people are receiving treatment thanks in part to this program. I also helped to design what's now called the Global Fund to Fight AIDS, TB and Malaria.

In 2001, then the UN Secretary-General Kofi Annan asked me to become the UN's advisor on the Millennium Development Goals (MDGs). MDGs were adopted by the UN General Assembly held in September 2000. There were eight numerical goals for various issues, including poverty, that require support from the global society. These were to be achieved in 15 years. For example, they set the goal of reducing the extreme poverty level in 1990 by half, reducing the rate of infant mortality by two-thirds, reducing the rate of maternal mortality by three-fourths, and so on by 2015.

I really liked the idea that these goals were focusing on extreme poverty and that they had set numerical goals to be achieved within a limited period. People suffering from poverty tend to be ignored by the rest of the world. However, these goals applied the concept of fighting against such poverty with global support. I was asked to provide advice to the UN Secretary-General and various organizations. I gave my consent immediately.

I moved to New York to become the Director of the Earth Institute. The Earth Institute was established by Columbia University to create a holistic vision of sustainable development. I was assigned to take the initiative in this large MDGs project as the UN's advisor.

The Earth Institute staff includes climate scientists, energy scientists, public health specialists, economists, lawyers, and so on, which is ideal. We can make complex approaches to big challenges from many different perspectives.

Climate change was not my particular field. However, by the early 2000s, it became apparent to me that this challenge was also fundamentally affecting every other challenge. I was now in a leadership role in the fight against poverty and disease, but climate change could wreck everything. Helping the UN fight hunger would be worthless if climate change was ruining crop productivity. How could I leave such factors as this out of the equation?

I've believed that each major piece of knowledge has to be joined with other components so we can take a holistic approach to complex human realities; and about 15 years ago, I came to think that climate change was central to this.

Although Ban Ki-Moon followed Kofi Annan as the UN Secretary-General in 2007, I was asked to remain as an advisor on the MDGs. The year 2015 was the goal set by the MDGs, and we were able to achieve wonderful results. Poverty has dropped by more than half. China's great success accounts for a significant piece of that, but we see poverty rates coming down almost everywhere in the world. There‘s been real progress in Africa.

In 2005, I published the book The End of Poverty. I wrote it to highlight the technological trends, the new and better ways to fight disease, to promote education, and to grow crops, ways that we could end extreme poverty in our generation. This book became worldwide best-seller; and I am very happy to know that people all over the world, leaders, students, and many others, read my book and found it helpful and inspirational.

Yet, when I wrote that our generation could end extreme poverty, many people took it as an exaggeration or as a nice, but not very practical idea. Here we are, though, in 2015, and the world is adopting Sustainable Development Goals (SDGs)1 as successors of the MDGs.

The SDGs will apply from 2015 to 2030, and SDG number one is to end extreme poverty. I said, "Oh, that's a goal that really can be accomplished." Now 193 governments have agreed that it is a goal for our generation. In The End of Poverty, I wrote that we could do it by 2025. Well, that's five years of slippage, but I can accept that. Here we have leadership from around the world saying, "Yes, we can end extreme poverty." We can do it, but it's going to take a tremendous amount of effort. So, the whole question of attention span, of intellectual and global commitment is going to show up again and again during these 15 years.

Note 1: This interview was conducted in July 2015. The SDGs were adopted by the UNI General Assembly in September 2015.

About My Work

Since I was young, I've been thinking about things I could do to make the world a better place. I came to economics with a question: "Why are different places in the world doing so differently economically?" and "Which is right?" These thoughts developed from watching my father work and visiting the Soviet Union in my sophomore year of high school. I've been involved in this work for 43 years, but I'm still enthralled by it.

I have had great support from my wife, Sonia, a medical doctor and a public health specialist who has always been completely motivated in the same way as I have been. She was born in communist Czechoslovakia, and her family escaped from a kind of totalitarian rule. She and her family asked the question, "How can we live more civilly, more decently for the betterment of humanity?"

When you're involved in challenges like this, there are a lot of setbacks and you sometimes do not get the chance to implement what you really believe is right; or if you have things that need a lot of cooperation, you don't find the cooperation you need. It's complicated. You move backward as well as forward; but when you're working with your life partner, you have a lot of fantastic built-in support.

What is also absolutely true is that while there are a lot of setbacks and you get a lot of bruises along the way, you also see successes. I'm very proud of the many things that I've been able to contribute to, and that has always given me hope. I've worked with people from all over the world, which is thrilling in and of itself; and I have friends and colleagues in dozens of countries, which is very exciting and gratifying. The idea that you're part of a big, wide, interesting, diverse, complicated world, and that you're able to make a contribution to it can keep you going.

Message

I have one message, and that message is that as complicated as our challenges are, as big a crisis as global climate change is, as daunting as it seems to fight poverty, we can solve these problems. We're living at a time of unprecedented knowledge, a time of incredible scientific and technological revolution. We can do amazing things to network the whole world.

We have seen dramatic changes in economic progress in some countries over short periods of time. Poverty rates have fallen very quickly. We have seen disease that looked uncontrollable came under control.

The key factor is the degree to which we can focus on solving problems. A lot of things are going on in the world. We have so much information coming at us and so many images: watch this game, watch this TV show, listen to this music. We have to make phone calls, we have to fight poverty, and we have to address climate change. It is not easy to focus on the real priorities because of all of these distractions. However, if we seriously work on problems, we can definitely solve them.

What I find most frustrating is that people approach these issues cynically. "Oh, bad things are going to happen and there's nothing we can do about it." "We can never solve that problem." "The poor are always going to be poor." "We're going over the cliff with climate change." To my mind, that's the single most frustrating and incorrect view in the world: the cynical view that surely bad things are going to happen and there is nothing we can do about it.

Let's solve the problems. We can do amazing things. It's really important for our children and for our children's children that we make the world a better place; and if we pay attention, if we take a moral position, and if we mobilize knowledge and the technology, wonderful things can happen. That's the key message for what I can call the age of sustainable development. Sustainable development means prosperity, fairness, and environmental sustainability. We should make a holistic, a moral and an ethical approach to these three goals. Let's do that.

(This interview summary was created by the Japan International Broadcasting Inc. that produces Blue Planet Prize TV programs.)