If we continue on our current course – leaving fate to the markets, and leaving governments to compete with each other over scarce oil and food – global growth will slow under the pressures of resource constraints. But if the world cooperates on the research, development, demonstration, and diffusion of resource-saving technologies and renewable energy sources, we will be able to continue to achieve rapid economic progress. [emphasis added]
A good place to start would be the climate-change negotiations, now underway. The rich world should commit to financing a massive program of technology development – renewable energy, fuel-efficient cars, and green buildings – and to a program of technology transfer to developing countries.
Almost every Sachs book and op-ed contains something like this, which seems to me to amount to little more than hopeful exhortation. The cynical view is that Sachs is involved mostly in signaling. It’s worked well for him so far. But I think he really cares. So a somewhat less cynical view is that Sachs is a grim pessimist who sees catastrophic market failure everywhere and sees immensely improbable global collective action as the only possible solution. Because he is always so incredibly vague about the institutional mechanisms that would be needed to solve the assurance problems necessary to get this kind of enormous cooperative effort off the ground, we ought to infer that Sachs doesn’t know what those mechanisms are, and so he probably suspects that global cooperation at the necessary scale is impossible. That is Sachs’ esoteric doctrine: We are probably doomed. But Sachs, strangely for an economist, also believes strongly in the power of propaganda, especially the power of elevating rhetoric from high-status figures, to transform social norms. It’s a longshot that Bono and Angelina can really bring about a fundamental transformation of public sentiment in a way that makes the global coordination problem tractable, but since it’s the only hope we’ve got, exhortation must continue.
If Sachs straightforwardly said what he really thinks, people would panic, which would be bad. So he really is doing us all a favor.