The End of Poverty: Economic Possibilities for Our Time

“Our generation’s challenge is to help the poorest of the poor to escape the misery of extreme poverty so that they may begin their own ascent up the ladder of economic development.” 

This quotation builds on the first and expresses Sachs’s view—and a major basis of his main argument—that people in rich countries should feel a sense of obligation born of history to address the miserable circumstances of those in extreme poverty. Further, it asserts that the obligation is not merely to temporarily alleviate suffering but to allow the continued growth that will expand the benefits of modern economic development overall.

“[T]he real story of modern economic growth has been the ability of some regions to achieve unprecedented long-term increases in total production to levels never seen before in the world, while other regions stagnated, at least by comparison. Technology has been the main force behind the long-term increases in income in the rich world, not exploitation of the poor. That news is very good indeed because it suggests that all the world, including today’s laggard regions, has a reasonable hope of reaping the benefits of technological advance. Economic development is not a zero-sum game in which the winnings of some are inevitably mirrored by the losses of others. This game is one that everybody can win.” 

This quote expresses several of Sachs’s key points. First, it is not the extremely poor’s fault that they are in that condition, and blaming them is not only cruel but also useless. Second, it is not necessarily the rich’s fault that extreme poverty still exists because it reflects upon growth in some regions rather than decline from exploitation in others. That said, the third point is that we should not view the matter as one of competition because we do not gain from the persistence of extreme poverty. Rather, the economic growth of all regions can occur without detriment to any of them from the fact of such growth itself. Thus, Sachs sets the stage for viewing the end of poverty as an unmitigated benefit for all of humanity.

“So 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? The richest countries were able to achieve two centuries of modern economic growth. The poorest did not even begin their economic growth until decades later, and then often under tremendous obstacles.”

This quotation importantly attributes the persistence of extreme poverty to two related forces. First, it originates from historical circumstance. Second, the circumstance of growth, where it has occurred, is compounding, which has produced the extreme gap between rich and poor over time.

“Over the span of two centuries, the innovation gap is certainly one of the most fundamental reasons why the richest and the poorest countries have diverged, and why the poorest of the poor have not been able to get a foothold on growth. The rich move from innovation to growth to further innovation. The poor do not. Fortunately, there are a few opportunities for innovation, although these are not as robust as we would hope.” 

This quote provides a more in-depth picture of the circumstances highlighted in the previous quote by explaining the “innovation gap” as the means by which growth compounds over time. That innovation gap helps explain why the difference in quality of life in the richest and poorest nations is now so extreme.

“In short, there are myriad possibilities for the persistence of poverty even in the midst of economic growth. Only a close diagnosis of particular circumstances will allow an accurate understanding. Policy makers and analysts should be sensitive, however, to geographical, political, and cultural conditions that may each play a role.” 

This quotation signals the shift from large-scale understanding of the global circumstance over historical time to the more precise assessment of particular circumstance needed to address real problems in particular locations. This quote expresses what Sachs calls “differential diagnosis.”

“The main objective of economic development for the poorest countries is to help these countries to gain a foothold on the ladder. The rich countries do not have to invest enough in the poorest countries to make them rich; they need to invest enough so that these countries can get their foot on the ladder. After that, the tremendous dynamism of self-sustaining economic growth can take hold. Economic development works. It can be successful. It tends to build on itself. But it must get started.” 

To some extent, this quote speaks for itself. What is most notable, perhaps, is that it expresses how strongly Sachs believes in the self-driving power of economic development and growth. This is the prevailing view among economists and is very much in line with the Enlightenment tradition with which Sachs identifies.

“Problems of geographic distress became a centerpiece of my thinking over the fifteen years because once I starting thinking about the economic forces of geography, it was hard not to think about it. Countries are shaped profoundly by their location, neighborhood, topography, and resource base. […] It bothered me greatly that the most basic and central features of economic reality could be overlooked by academic economists spinning their theories from thousands of miles away.” 

This quote signals Sachs’s shift toward a more practical, site-specific approach to economic development. For purposes of the argument he is making, it provides a clear statement of the importance of geography in determining who has gained from economic growth to date and who remains in poverty.

“Geography, as usual, showed its power to shape economic events in the east [of Europe]. The farther a postcommunist country was from Western European markets, the lower the foreign direct investment (FDI) per person that flowed into the country.” 

This quotation, and the point it expresses, provides what may be the most striking evidence to support Sachs’s view of the importance of geography. It shows that geography is not only a physical force but also one that affects the behavior of societies toward each other in a manner that magnifies its effects.

“China’s reforms are reshaping the global economy and global politics. Soviet reforms beginning in the 1980s and changes in India in the early 1990s were no doubt inspired in part by China’s successes.” 

Sachs suggests the tremendous importance that China is coming to play in the global economy. Moreover, the quote shows the potential of a rising tide of countries traditionally excluded from the benefits of a growing global economy.

“The return of China and India to global economic prominence in the twenty-first century is likely to reshape global politics and society. The overwhelming dominance of the West, which lasted half a millennium, is probably passé. We should view these developments not only with awe, but with anticipation.” 

This quote builds on the previous one by showing the growing impact of economic development in parts of the world that remained poor. That is, the economic growth of previously poor countries will have huge social and economic effects globally, in Sachs’s estimation.

“[T]he more I saw, the more I realized that although predatory governance can soundly trounce economic development, good governance and market reforms are not sufficient to guarantee growth if the country is in a poverty trap.” 

Sachs reinforces his argument that the poorest countries need assistance by reiterating that we cannot blame their political and social choices alone for their poverty. It is important to distinguish this point, however, from the point that once poor countries reach the ladder of economic development they can continue to grow on their own.

“The Millennium Declaration […] sets forth a series of quantified and time-bound goals to reduce extreme poverty, disease, and deprivation. Those goals were subsequently excerpted from the Millennium Declaration to become the eight Millennium Development Goals. [The MDGs] are bold commitments to achieve sustainable development for the world’s poorest people.” 

This quotation highlights the importance of the Millennium Development Goals, which were Sachs’s primary entry point into the UN system and the focus of much of his work at the time of this book’s publication. The MDGs are arguably an expression of a goal very similar to Sachs’s goal of ending poverty.

“Analytical deliberation—the process of finding a cooperative approach to complex problems by building consensus around a shared vision and understanding of the challenges—lies at the core of the UN Millennium Project. […] it was to bring the major policy makers and practitioners involved in poverty reduction to search in a fact-filled process for a […] consensus [… through] ten task forces that covered the very wide range of problems embodied in the Millennium Development Goals.” 

This quotation is important because it expresses the methodology for bringing together various interests to create a plan to solve poverty, which Sachs illustrates repeatedly in the book. It also hints at the breadth of the work that would be involved in fully realizing Sachs’s vision of poverty eradication.

“The end of poverty will require a global network of cooperation among people who have never met and who do not necessarily trust each other.” 

This quote builds on the previous one, in a sense. The process that Sachs describes for the UN Millennium Project is essentially one that would need to be replicated many times over and globalized to end poverty. Here Sachs suggests just how difficult such a task might be in a social and political sense.

“The end of poverty must start in the villages of Sauri and the slums of Mumbai, and millions of places like them. The key to ending poverty is to create a global network of connections that reach from impoverished communities to the very centers of world power and wealth and back again.” 

Building on the prior quotations, this excerpt shows Sachs thinking through the practical arrangements necessary to create the potential to actually end poverty. It specifically recognizes the challenging political aspects as well as the global scope of the endeavor.

“At the most basic level, the key to ending extreme poverty is to enable the poorest of the poor to their foot on the ladder of economic development. The development ladder hovers overhead, and the poorest of the poor are stuck beneath it. They lack the minimum amount of capital necessary to get a foothold, and therefore need a boost up to the first rung.”

Sachs returns to the metaphor of aiding the extreme poor to reach the ladder of economic development. It is important because at this stage of the book, Sachs is unifying the theory developed earlier in the text with the practical approach developed through the later discussion of his experiences.

“First and foremost, scaling up is possible when it is backed by appropriate and widely applicable technology, organizational leadership, and appropriate financing. […] In the case of the Millennium Development Goals, the promising technologies exist, but have not yet been scaled up.” 

Sachs describes the practical processes that must happen for technology to play the role he believes it can in ending poverty. It also suggests the type of assistance that Sachs believes is needed from rich countries.

“Extreme poverty is a trap that can be released through targeted investments if the needed investments are tested and proved and the investments program can be implemented as part of a global compact between rich and poor countries, centered on a Millennium Development Goals-based poverty reduction strategy.” 

This quote uses economic terms to express Sachs’s views about the use of technological scaling up and other forms of assistance from rich countries. It also identifies the political focus that he believes can make such a project successful.

“The more one looks at it, the more one sees that the question isn’t whether the rich can afford to help the poor, but whether they can afford not to.” 

One of Sachs’s key points is that mounting the effort necessary to end poverty is well within reach and will not be overly expensive for rich countries. Another important point is that extreme poverty breeds many of the ills that were very prominent in the wake of September 11, 2001, such as terrorism. This quote brings those two points together.

“As the rich countries continue to get richer, the share of the extreme poor in the world population continues to decline, and the income of poor countries rises so that they can cover more of their own needs, there will gradually be a declining need for foreign assistance.” 

This quote illustrates the type of rational analysis that Sachs uses to construct a politically saleable argument for ending poverty. It also provides an undergirding for his major theme that the poor need only a boost onto the first rung of the ladder of economic development. The important point is that assistance will be temporary and produce long-term benefits.

“Our generation is heir to two and a half centuries of economic progress. We can realistically envision a world without extreme poverty by the year 2025 because technological progress enables us to meet basic human needs on a global scale and to achieve a margin above basic needs unprecedented in history. The technological progress has been fueled by the ongoing revolutions of basic science and spread by the power of global markets and public investment in health, education, and infrastructure.” 

Sachs expresses one of the important historical points that recurs throughout the book. He emphasizes that our current quality of life is a result of technological progress and market economies over time. This view is an essential component of his argument for ending poverty in that a favorable view of technology suggests the poor will develop if they can, while his emphasis on the quality of life in rich nations as unprecedented supports a perspective in which aiding the poor benefits all.

“A fourth overarching Enlightenment vision joins Jefferson’s vision of human-made political systems, Smith’s rationally designed economic systems, and Kant’s global arrangements for perpetual peace: that science and technology, fueled by human reason, can be a sustained force for social improvements and human betterment.” 

This quote clearly identifies the Enlightenment ideals that Sachs identifies as the context and foundation for his call to end poverty. That call, in his presentation, grows out of these four broad ideals and is, therefore, a continuation of the tradition.

“One of the deepest and most abiding commitments of the Enlightenment was the idea that social progress should be universal, not restricted to a narrow corner of the world in western Europe.”

This quote draws on the broad admiration for Enlightenment thinking in rich Western countries to urge adoption of the perspective seeking universal benefit. It also suggests that there should be a sense of obligation among, and a recognition of probable benefit for, rich countries to continue spreading the approaches that have worked to improve quality of life until the fruits can be enjoyed by all people.