Freakonomics podcast host Stephen Dubner speaks with economist Jeffrey Sachs about the Pope’s recent drubbing of markets.
Several things about this rubbed me the wrong way.
First, the quote from the Pope (in the linked Freakonomics blog post) starts off with “Some people continue to defend…” As I wrote here, readers deserve to know who the Pope is talking about.
Second, Jeffrey Sachs tried too hard to clean up the Pope’s words. Around the 16-17 minute mark, Sachs comes out with ‘getting people into positions where markets work for them, and not against them, is extremely important.’
Granted, I think somewhere Sachs admitted that he switched to his view, not necessarily the Pope’s, but I think the podcast was about making sense of the Pope’s opinion.
This even seemed to annoy Dubner, as he replied:
Of course, that makes sense. But compared to what the Pope has written about capitalism…it was much heavier on the can’t work part and here’s why it doesn’t work. What is the Pope actually calling for?
Third, Sachs complains that the Global Fund to Fight AIDS, TB and Malaria, a fund he helped “architect 12 years ago” (a little self-promotion never hurts), recently fell short of its funding goals. I wasn’t clear on who they were going to for ‘replenishment’, but it sounds like bureaucrats in government.*
When it [the Fund] came to the replenishment, just now, it couldn’t raise the funds for the minimum package. It was saying that it needed at a minimum to fight these three diseases $5 billion a year, mind you hundreds of million of people and their lives are at stake. $5 billion we know in macroeconomics is nothing in this world, and yet they could not raise $5 billion a year. They raised $4 billion a year.
And that may not sound so consequential [You’re right, especially since one sentence ago you said $5 billion is nothing, that would mean $1 billion is even less] when you’re in a village and the rapid diagnostic tests aren’t there or there’s a medical stock out…this is life and death [oh, that’s when it become consequential, in micro]. Since I’m living in a neighborhood, if not down the block, then a few blocks away, or a couple miles away [let’s keep hedging on terms] are billionaire hedge fund owners taking home personally paychecks of a billion dollars for the year, the fact that we can’t come up with $5 billion for this institution from all worldwide sources (governments?) is the globalization of indifference.
Too easy to pick on unpopular hedge funds, many who put their own skin in the game. Let’s not mention sacred cows like taxpayer funded sports venues, where billions of taxpayer money is tied up so team owners can afford to pay millions, even hundreds of millions, to the best kids game players. Soon the team owners will want to offload the liabilities of sports injuries on taxpayers, too.
I wonder if he also views that as a marker for the ‘globalization of indifference’.
Of course, you can probably also tell by the comments I inserted in the quote that Sachs’ verbal fitness annoyed me in how he framed $5 billion as inconsequential in macro, but a billion very consequential in micro in the span of three sentences.
My BS detector rings off when someone tries to sell me on something because, well, it’s just not that much money. Of course, it’s always enough that they can’t come up with it themselves.
*Sachs said “George Bush said, ‘we won’t let money stand in the way, you show that this works and the money will be there'”. So, I’m assuming it’s folks like Sachs trying to convince bureaucrats how to spend taxpayer money, rather than raising money from individuals. Which is the last thing that I found annoying that I will comment on.
I often hear folks say that people with a high school diploma today cannot expect to do as well as folks did with high school diplomas in previous generations.
One cause offered to explain this is less opportunity because good manufacturing jobs have gone to machines and foreign competition.
More likely, K-12 education hasn’t evolved to teach students skills that are valued in today’s economy. I got this idea from Jeffrey Sachs, this week’s guest on EconTalk. I didn’t agree with everything Sachs had to say, but I did agree with this and recommend listening to the podcast.
Also, maybe education has evolved away from teaching such skills as curriculum designers have included things thought to enrich and broaden the students lives, but really just serve the personal preferences of those designers.
When I was truly on my own for the first time, I remember thinking how ill-equipped I was to determine something as practical as how much house I could afford, even though I did know what Keynesian multipliers were. Luckily, I educated myself by turning to personal finance magazine and books and asking friends and family. I wasn’t surprised later when it became clear with the housing crisis that many others also did not have this practical knowledge, either.
I was also annoyed that I learned in school how important it was for me to exercise my right to vote, but there was no mention about doing my homework on the issues and carefully considering who I voted for.
It is also more likely that a high school diploma, once viewed as a reliable indicator of demonstrated mastery in skills, knowledge and behaviors that were of some value to employers, is now viewed as a participation trophy — a mere bauble to add to the recipient’s trophy case — as standards have slipped and the purpose of a high school diploma have changed.
I believe the purpose of the high school diploma was to reward the folks who tried. Somewhere along they way, however, that got too hard. We didn’t want to tell someone they didn’t deserve something because they didn’t put in the effort or meet the standard. Rather than expect them to rise up to the standard, we lowered it for them.
Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable – all are to take a back seat.
Both rebuttals are worth a read. Here’s a sample from Boudreaux:
…libertarians argue that these other values and causes are best promoted by individual liberty, and that too many people who insist that achieving these other values requires the suppression of liberty are cynically seeking convenient cover for their own self-aggrandizement.
Horwitz makes the same point (though I can’t see that site now because of the Sopa protest).
Jeffrey Sachs wrote what bugs him about libertarianism. Here’s one passage:
Suppose a rich man has a surfeit of food and a poor man living next door is starving to death. The libertarian says that the government has no moral right or political claim to tax the rich person in order to save the poor person. Perhaps the rich person should be generous and give charity to the neighbor, the libertarian might say (or might not), but there is nothing that the government should do. The moral value of saving the poor person’s life simply does not register when compared with the liberty of the rich person.
While I find this to be an unimaginative and simplistic false choice, I’ll play along.
I’m assuming Sachs believes it is moral for the government to tax the rich person to “save” the poor person. In other words, it’s moral to force the rich person to do something.
The question I have for Sachs is whether he also thinks it’s moral to force the poor person to do something? For example, can the government force the poor person to give two hours of his labor to the rich person in exchange for receiving the tax?
Keep in mind, the poor person would not have a choice in the matter, just like the rich person. The poor person wouldn’t be able choose not to work in order to not receive the tax. The poor person would be forced to work and to receive the tax, just like the rich person would be forced to give up some of the proceeds from his work effort.
Is that moral? Why or why not?