A preview of the unpublished book A CIVILIZATION WITHOUT A VISION WILL PERISH: AN INDEPENDENT SEARCH FOR THE TRUTH by David Willis. CHAPTER 1: INDIFFERENCE TO POVERTY (Part 46). This blog is a continuation of the review of The End of Poverty: How We Can Make it Happen in Our Life Time, by Jeffrey Sachs, published in 2005
The cascade of technological change
Living standards began to rise in many parts of the world, even with the brutality and suffering in places where colonial masters grabbed much of the economic output. The single most important reason why prosperity spread, and why it continues to spread, is the transmission of technologies and the ideas underlying them.
The Great rupture
WW I ended the era of European-led globalization. It’s death toll was staggering; it destabilized the Russian czarist regime; created prolonged financial instability in Europe; left a mountain of debt incurred; dismembered the Ottoman and Hapsburg empires; created small, unstable, and feuding successor states; and paved the way for Hitler’s rise to power. The economic instability that followed WW I led to the Great Depression of the 1930s and then to WW II. The Great Depression triggered a calamitous spread of trade protectionism and the rise of Nazism in Germany and military rule in Japan.
The age of European imperialism was coming to an end
By the end of WW II, the pre-1914 global system had gone to pieces. The age of European imperialism was coming to an end, although it would takes decades and many wars for it to end decisively. Standing on the ruins of WW II, the benefits of a global marketplace – with a global division of labor, a peaceful spread of technology, and open international trade – looked long gone, buried under the rubble of two world wars and a great depression.
Restructuring a global economy
Between the end of World War II and the end of the Soviet Union in 1991, Europe, the United States and Japan constructed a new international trading system under U.S. political leadership. The socialist world, forged by Lenin and Stalin, remained cut off economically from the first world until the fall of the Berlin Wall in 1989 and the end of the Soviet Union in 19991. The third world included the rapidly rising numbers of postcolonial countries.
They collapsed under a pile of foreign debt
The post-WW II world evolved on three tracks. The fundamental problem, however, was that the second world and third world approaches did not make economic sense, and they both collapsed under a pile of foreign debt. By the early 1990s, the overwhelming majority of countries of the second and third world were saying, “We need to be part of the global economy; we want our sovereignty; we want our self-determination; economic isolation makes no sense.”
Three big questions
One of my roles from the mid-1980s was to help countries to become sovereign members of a new international system, dealing with three big questions: What is the best way back to international trade? How do we escape from the barnacles of bad debts and inefficient industry? How do we negotiate new rules of the game to ensure that the emerging global economy truly serves the needs of all of the countries of the world, not only the richest and most powerful?
Two hundred years of modern economic growth
This era of modern economic growth has brought higher living standards, a spread of modern technology, and a scientific and technological revolution that still gains strength, but phenomenal gaps between the richest and poorest. Why does a vast gulf divide one sixth of humanity today in the richest countries from the one sixth of the world barely able to sustain life?
Differential diagnosis
The richest countries were able to achieve two centuries of modern economic growth while the poorest didn’t begin till decades later, in some cases facing the brutal exploitation of dominant colonial powers. The poorest faced barriers related to geography, climate, food production, disease, energy resources, topography and proximity to world markets that had not burdened the early industrial economies. They made disastrous choices in their national policies. There are practical solutions to almost all of their problems. But as there is no single explanation for why certain parts of the world remain poor, there is also no single remedy. A good plan of action starts with a good differential diagnosis of the specific factors that have shaped the economic conditions of a nation.