Economist Jeffrey Sachs
posted by dennisn on November 13th, 2008 at 11:57PM
posted by dennisn on November 13th, 2008 at 11:57PM
Economist Jeffrey Sachs is allegedly a really smart dude. One of the youngest (economics) professors from Harvard no less, he has tasked himself with nothing short of solving all of the world's economic problems. In fairness, who else but the supposed smartest student from the world's supposed smartest school should consider the challenge?
Well, when comparing developed free-market economies, Jeff asserts that those that have high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. Jeff asserts that poverty rates are lower, median income is higher, the budget has larger surpluses, and the trade balance is stronger (although unemployment tends to be higher). Jeff concludes that von Hayek was wrong when he said that high taxation would be a threat to freedom; but rather, a generous social-welfare state leads to fairness, economic equality, international competitiveness, and strong vibrant democracies.
This clearly puts Jeff in opposition with libertarian economists, such as the Austrian School, to which our slandered Von Hayek was a member. One of the main criticisms of our Austrian friends is their refusal to use "rigorous" maths to "justify" their theories. They use words instead. Words like "get rid of central banks", or "end inflation", or "protect private property", or "protect individual liberty"--and, well, these words just can't be converted into mathematical models that would satisfy our benevolent dictators. ([benevolent dictator asks]: Our economy isn't doing well, and my subjects are becoming restless. How can we fix it?... [austrian school's response]: Abolish your job, and free the people.)
Jeff uses maths. It's all he knows, and all he believes in. Whereas our Austrians start with fundamental (word) principles of individual liberty, Jeff starts with x. Jeff has no way of expressing the beauty and essence of individuality as a mathematical variable. Instead he uses values like "util", an actual rigorous attempt at quantifying satisfaction of one decision over another. If a particular policy subtracts 75utils from one person, and adds 50utils to two other people, it is a good policy, since the net "util" is +25. Hurray.
Why doesn't Jeff get it? I can understand why many other people don't get it--they're too stupid, or they've given up trying to reform the system and are simply taking advantage of it--but what's Jeff's problem?
Well, when comparing developed free-market economies, Jeff asserts that those that have high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. Jeff asserts that poverty rates are lower, median income is higher, the budget has larger surpluses, and the trade balance is stronger (although unemployment tends to be higher). Jeff concludes that von Hayek was wrong when he said that high taxation would be a threat to freedom; but rather, a generous social-welfare state leads to fairness, economic equality, international competitiveness, and strong vibrant democracies.
This clearly puts Jeff in opposition with libertarian economists, such as the Austrian School, to which our slandered Von Hayek was a member. One of the main criticisms of our Austrian friends is their refusal to use "rigorous" maths to "justify" their theories. They use words instead. Words like "get rid of central banks", or "end inflation", or "protect private property", or "protect individual liberty"--and, well, these words just can't be converted into mathematical models that would satisfy our benevolent dictators. ([benevolent dictator asks]: Our economy isn't doing well, and my subjects are becoming restless. How can we fix it?... [austrian school's response]: Abolish your job, and free the people.)
Jeff uses maths. It's all he knows, and all he believes in. Whereas our Austrians start with fundamental (word) principles of individual liberty, Jeff starts with x. Jeff has no way of expressing the beauty and essence of individuality as a mathematical variable. Instead he uses values like "util", an actual rigorous attempt at quantifying satisfaction of one decision over another. If a particular policy subtracts 75utils from one person, and adds 50utils to two other people, it is a good policy, since the net "util" is +25. Hurray.
Why doesn't Jeff get it? I can understand why many other people don't get it--they're too stupid, or they've given up trying to reform the system and are simply taking advantage of it--but what's Jeff's problem?
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