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Shock Full of Nuts

January 18, 2012

No crisis of economy would be complete without a couple of cents from Jeffrey Sachs. The godfather of shock-turned-bleeding heart advocate for poverty eradication has simply dominated development economics – in both theory and practice – for the better part of the past two decades.  From his days pimping out neoliberal privatization programs to the world’s poorest countries, to his more recent stint as passionate advocate of kinder, gentler, but equally fraught policies of external debt cancellation, Jeff Sachs – as he never tires of telling us – has been all over the map.

Sachs is best known as a crusading activist for eliminating poverty who enlists the help of folks like Angelina Jolie and Bono. But his fame circumvents an understanding of his economic theories, which have been applied with disastrous consequences. He first came to global prominence in the mid-1980s as the wunderkind of Harvard University’s econ department. He became one of the school’s youngest tenured professors at twenty-eight, and quickly sold himself as an advisor to struggling governments dealing with crises of hyperinflation, a topic about which Sachs boldly claimed to know “just about everything that is needed to be known.” It was during this period that the young economist fashioned his unique brand of shock therapy – a free market fundamentalism of privatization, deregulation, and government subsidy-slashing for commodities such as oil, met with debt relief and foreign aid – that would later take shape as the Washington Consensus and be subsequently savaged by the likes of Naomi Klein, William Easterly, and Dambisa Moyo. Despite massive policy failures in countries that followed his advice, Sachs has successfully avoided accepting any responsibility for suboptimal outcomes of his theory. On the contrary, he has reinvented himself as an economic tutor to the stars, and now with his new book on how to fix the American economy, his position as the most influential commentator on economic crises is more secure than ever.

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