The End of Poverty: Economic Possibilities for Our Time

Nonfiction | Book | Adult | Published in 2005

A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.

Download PDF

Summary

Chapter Summaries & Analyses

Introduction-Chapter 4

Chapters 5-7

Chapters 8-10

Chapters 11-14

Chapters 15-18

Key Figures

Themes

Index of Terms

Important Quotes

Essay Topics

Themes

The Extreme Poor Need Only the Opportunity to Escape Poverty

Sachs’s main argument is that countries in extreme poverty need only the opportunity to get a foothold on the ladder of economic development. This theme contains two points that are crucial throughout Sachs’s argument. First, the countries that are currently suffering extreme poverty (that is, where resources are so low that daily survival is a struggle and incomes are roughly a dollar a day or less, on average) do not need the rich countries to give them enough money to make them immediately wealthy. Instead, they just need enough to begin taking actions that will allow them to grow economically.

Second, countries in extreme poverty literally cannot begin to improve their condition because of the “poverty trap,” which means that their poverty is not generally a result of being lazy or irresponsible, and they generally will improve their economic state (often permanently) as soon as they have the opportunity. Stated in more traditional economic terms, the theme expresses Sachs’s point that those in extreme poverty require assistance because they have no means of obtaining the minimum capital necessary to kickstart the economic growth that rich countries have enjoyed for 200 years. These concepts, which are well supported with empirical data and illustrated with anecdotal accounts, form the foundation of Sachs’s argument.

There is the counterargument that getting poor countries to that first rung is prohibitively expensive. Sachs refutes this point, arguing that the cost of eradicating extreme poverty is relatively low, while the benefits of doing so are significant and widespread. It’s estimated that the funds necessary to lift the extreme poor to the first ladder rung is a net aid transfer of $135 billion to $195 billion annually. This number is less than what rich donor countries have already pledged.

In addition to emphasizing the actual cost of ending extreme poverty, Sachs highlights the benefits of providing aid to these nations, suggesting that doing so will have global economic benefits like increased trade. This also supports Sachs’s discussion of the sources of state failure and terrorism aimed at rich nations, as ending global poverty can be viewed as an essential part of a robust national security plan for the United States. All these points build on the metaphor of climbing a ladder toward economic progress, as fostering growth in the poorest countries helps all nations ascend toward increased development and prosperity.

Social Progress Should Be Universal

Sachs draws on the Enlightenment tradition, empathy, common humanity, and sense of basic fairness to cast the extremely poor as victims of circumstance who suffer not because of blameworthy choices but because of physical and historical realities beyond their control. In sum, he argues that social progress should be universal, but the tools to achieve it have been unevenly distributed by factors like geography. His discussion of African nations in several parts of the book makes this clear, and it echoes in other discussions, such as the chapters on Bolivia and China.

Sachs argues that technological innovation has also occurred unevenly across the world, often due to those same historical and geographical limitations. The countries that have experienced unprecedented improvement in quality of life over the past two centuries were fueled by scientific advances and relatively open political structures. We can trace this progress through the Age of Enlightenment and the Industrial Revolution in Europe and the United States. Sachs contrasts these prosperous countries with poorer nations like India and China. Progress in India was suppressed by British imperialism, while China’s development was delayed by its 500-year policy of isolation. Challenging geography also barred both countries from sharing in the benefits of certain technological advances. Sachs cites the rise of the steam engine and previously inaccessible energy sources, such as coal, as examples.

Near the end of the book, Sachs expressly ties his ideas to the work of Thomas Jefferson, Adam Smith, and Immanuel Kant, as well as the less widely known work of Marie Jean Antoine Nicolas de Caritat, Marquis of Condorcet. In doing so, he connects the Western hemisphere’s prosperity and improved quality of life to the Enlightenment ideals that undergirded the Industrial Revolution. Sachs references Enlightenment thought and ideals throughout the book, subtly and not-so-subtly suggesting that the very concepts upon which the rich countries have developed their robust economies and democratic societies require that we continue the work by making the opportunities and benefits we have enjoyed available to all nations.

In the final chapter he makes this argument explicit: Ending extreme poverty is an extension of the Enlightenment ideals that shaped the two centuries of prosperity in the West. By tracing the influence of Enlightenment philosophy through key social initiatives like the antislavery and civil rights movements, Sachs situates his call to action within the tradition of prior progressive movements, which gives credibility to his assertion that the best way to eliminate poverty at the present historical moment is to end extreme poverty within a generation.

Effective Economic Development Requires Specific “Differential Diagnosis”

To help readers understand the complex process of identifying and addressing the reasons for extreme poverty in various countries, Sachs institutes a medical metaphor in Chapter 4 and extends it throughout the remaining chapters. He introduces the concept of “clinical economics,” arguing that applying certain medical processes and standards to economics would help economists and other leaders to properly treat extreme poverty. One of these processes is differential diagnosis, or the way doctors distinguish one disease from others that cause similar symptoms.

Extreme poverty afflicts many countries, but the causes for that poverty, and the best methods to address it, are unique to each economy. As Sachs writes, “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” (73). In other words, there are endless reasons for poverty, and there is no miracle cure for ending it. Instead, economists must engage with each nation to identify its specific and unique challenges, and then formulate a plan tailored to those circumstances.

Sachs notes that “policy makers and analysts should be sensitive […] to geographical, political, and cultural conditions that may each play a role” in extreme poverty (73). Upon identifying and examining these conditions, economists can use them to determine how to best help a country achieve and maintain economic development. In discussing India’s path toward prosperity, Sachs cites a complex political history (British imperialism), tricky geography (diverse topography and a varied climate), and a segregated social system (the caste) as past and present obstacles. Regarding China, on the other hand, he identifies a lack of foreign debt, overseas communities of Chinese investors, and an accessible coastline as avenues for growth.