poverty_2226036b1Over at the New York Times, economist Jeffrey Sachs opines about the need for greater measures to “end poverty” in countries across the world where people are truly suffering. Using data from the World Bank, Sachs reports that the proportion of households in developing countries below the extreme-poverty line has declined sharply from 52 percent in 1980, to 43 percent in 1990, 34 percent in 1999, and 21 percent in 2010. Sachs then explains what is needed in order for this to continue:

Here are the basics: economic growth, and hence a market economy, is vital. Africa’s poverty is declining in part because its growth rate picked up from 2.3 percent per year during the lackluster years of 1990-2000 to 5.7 percent during 2000-10. Without economic growth, there cannot be sustained gains in income, health and other areas. Continued progress depends on heavy investments in major infrastructure — water, electricity, waste management — and these in turn depend on large-scale private financing, hence a suitable market framework.

So anti-market sentiment is no friend of poverty reduction. But neither is free-market fundamentalism. Economic growth and poverty reduction can’t be achieved by free markets alone. Disease control, public education, the promotion of new science and technology, and protection of the natural environment are public functions that must align with private market forces.

At this point we can begin to see the lack of social imagination in the goal of simply “ending poverty.” The Christian tradition, instead of focusing on only two spheres of society — government and the economy — pushes the conversation forward toward human flourishing and sustainable economies because people are made for more than simply living in a less-bad world. Christian teaching places emphasis on the moral, social, political, and economic contexts that contribute to societies where humans can flourish in morally excellent ways consistent with their creational design. Sachs completely misses, then, the importance of mediating institutions.

While Sachs gives a helpful nod to the role of free markets, he still needs to be pressed on whether or not the state is the best institution to manage a nation’s healthcare, technological innovation, education of children, and natural resources. Since “The Great Society” policies of FDR, the American progressive experiment and the failures therewith should make Sachs reconsider his confidence in intimating that many of these are best handled by the state. What is worse is that Sachs is blind to the role of mediating institutions as a necessary pillar to sustainable economies, not simply so that people stay out of poverty but that they flourish in the long term. Intermediate institutions such as guilds, churches, the family, and culture-making activities are essential to cultivating the types of values that allow societies to be more than merely materially less bad but also promote virtue, freedom, and sustainable innovation.

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  • Curt Day

    But perhaps Sachs is missing on free markets as well. Some will debate what has been called free markets are actually free markets. For example, in India earlier this century, markets agriculture markets were “free” to sell American products. Because American agriculture products are subsidized and because of the costs that Indian farmers incurred while using American products from fair trade agreements to produce their crops, the Indian farmers could not compete with American agribusiness. Many fell so far into debt that there were thousands of suicides. And yet it was all called free market. India is not the only nation that has had competition problems on the free market with American agribusiness.

    I agree here that Sachs misses the point by focussing only on two spheres. But how we advance the spheres is an issue because any people’s ruler is that on which they are most dependent. And History is more than replete with the number of times the Church used its privileged ruling status to dominate. And what America is now dealing with is being ruled by financial elites. So the listing of other institutions along with the Church is really good. I just wished that free markets would be defined rather than assumed because of what is happening in the world today.

    • Judyallbrite

      What you are describing is not a free market, so how can that be held against what a free market is? Who cares if someone calls it a free market. It clearly isn’t one. That may be free trade, but it isn’t free from government interference.

      • Curt Day

        Judy,
        First, I agree that it isn’t a free market. THat has been the complaint from the Left for a while. But the issue is whether the impetus for the non free market that is advertised as a free market comes from the private sector as they are seeking advantages over competitors through gov’t help or comes from the public sector as they are seek advantages over the private sector?

  • Judyallbrite

    ‘Guild’ is not a commonly used word. What is meant by that in this article. I know the dictionary definition but don’t understand exactly what he means here.

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