Common Wealth by Jeffrey D. Sachs

Author:Jeffrey D. Sachs [Sachs, Jeffrey D.]
Language: eng
Format: epub
ISBN: 9781101202753
Published: 0101-01-01T00:00:00+00:00

PART FOUR

Prosperity for All

Chapter 9

The Strategy of Economic Development

THE TWENTY-FIRST CENTURY CAN BE a century of shared prosperity, a great convergence, as we termed it earlier. The global economy can be marked by a narrowing of the income gap between rich and poor countries, not because of a decline in incomes in the richer societies but because of a rapid catch-up by the poor. Shared prosperity would not only mean the end of massive and unnecessary suffering among those who are now trapped in extreme poverty but would also mean a safer and more democratic world as well, with rising incomes underpinning political stability and increasingly open societies. Moreover, resentment along class and ethnic lines would diminish if all income groups and cultures had the chance to share in a growing global economy. It is when one region or group is excluded that hatred and unrest are likely to follow.

The fundamental reason for believing that prosperity can spread to all corners of the world is that the very science and technology that underpin prosperity in the rich world are potentially available to the rest of the world as well. If the rich countries are rich because they have adopted these improved technologies—power generation, medicine, transport, construction, and much more—the same improved technologies can also be adopted in today’s impoverished countries. As we noted earlier, technology has the wonderful property of being nonrival; each person, business, or country can adopt the technology without limiting the ability of others to adopt the technology as well. Unlike a given number of barrels of oil, which are available either for you or for me, but not both, the fruits of scientific advancement such as the human genome or the Internet are available for any and all, without the need to ration the knowledge. Moreover, for many advanced technologies—the Internet, computer operating systems, vaccinations, insecticide-treated bed nets, mobile phones—the benefits are greater the more that others are using the technology. Such technologies are often called network technologies, and the benefits of mass use are called network externalities. Fittingly, we live in a networked age, where the advent of such technologies has soared.

Note that the focus on technological improvements is starkly different from the failed Marxist notion that the rich are rich because they successfully exploit the poor. If the rich get rich only because the poor get exploited, then world income would be roughly constant, and all of the economic action would be about the distribution of a given level of economic output. That, indeed, is what Marx had in mind. But world output is not constant, precisely because technological improvements allow the world to get a lot more economic value out of a given level of inputs. We’ve already seen how the world average income per person rose from around $650 in 1820 to around $6,000 in 1998, an increase of nine times.

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