Saturday, January 7

At 10:15 in the large Sheraton (Boston) Constitution Room I attended the informative and inspiring Economists for Peace and Security (EPS) Roundtable, Grand Strategy Against Global Poverty, organized and chaired by Jamie Galbraith. The program featured two Nobelists, Amartya Sen and Joseph Stiglitz, Richard Jolly, and Nancy Birdsall, the President of the Center for Global Development. I had known Sen personally from occasional conversations with him about his anti-poverty and economic development work at Harvard’s Institute for International Development (now defunct) over the last 15 years, had tried to involve him in my and my company’s overseas development work in Eastern Europe, Africa, and Asia, and was eager to hear his latest views on the worldwide anti-poverty campaign that had preoccupies me and my company and colleagues at Abt Associates for 40 years.

But the choice was not so easy, because my other personal preoccupation for four decades with the economics of defense and arms control was being addressed simultaneously in an American Economics Association session at the Hynes Convention Center next door on The Economics of National Security, with Martin Feldstein presiding and interesting discussants Peter Garber and Alan Krueger.

At first I thought I would try shuttling between the two simultaneous sessions in two adjacent buildings. I went to the the EPS Roundtable room first, 15 minutes early, and found the large room half empty except for the first few rows. I put down my overcoat and papers on one of the few empty front row seats, went up to say hello to Jamie and Amartya, and told them I’d be back.

Then I started to rush to the Hynes for the other session with Marty Feldstein on the economics of national security, but as I did so I encountered a steady stream of economists of all ages rushing toward the room from which I had just emerged.

“Wait a minute,” I thought, “maybe I ought to reconsider my shuttle strategy.” I stopped in the hall and reviewed the Feldstein session's papers more closely. They were by academics unknown to me on topics I had already studied for years. By now it was 10:10. The light bulb went off, my choice was simplified, I was relieved of my strenuous and frustrating shuttle diplomacy, and turned quickly around and strode back to the EPS Roundtable.

Imagine my surprise when, approaching the room, I found people lined up in the hall outside the room. I looked at my watch: 10:15! “Uh-oh,” I thought, “I may be late.” I shouldered past the waiting line, remarking on the way to the scowls of those passed by that I was returning to my already taken seat. The room was absolutely packed with over 250 people, and 50 more standing in the hallway, while I retained a front-row seat at what was to be the most memorable discussion of global poverty reduction and development I had yet heard, by four top economists.

What did they say? I wish I had taken better notes, scrawled in my 372-page program book, and will try to summarize it all, but first I want to record how I felt about it. Over the last few years I had shifted my interest in domestic and international anti-poverty development to public health and defenses against deadly contagious diseases, following my lifelong career’s policy of always addressing the chief threats to human welfare, from nuclear war to poverty and revolution to bioterrorism to natural emerging disease pandemics. Domestic and international economic development, both in theory and practice, had come to seem to me a failed dream, with little real measurable progress relative to the magnitude of the socio-economic problem, both by its theoreticians and practitioners, and by my colleagues at my company and me, in the last two decades. As the saying goes, the rich got richer and the poor got children - many of them starving or succumbing to preventable diseases. Hence my shift to focusing on public health, and indeed also that of over half my colleagues at the Company.

So I was not optimistic, yet still hopeful that at least these very top economists on the topic would throw new light and perhaps even re-inspire me to give global anti-poverty efforts another chance. In this I was not disappointed.

What did they say? Human development requires goal setting not only for material wealth but also for freedom, justice, and human rights. Quantitative measures are needed for all these goals to measure progress, and we need to develop further and pay attention to the human development index that is the combination of the two. Amartya and Nancy both pointed out that the error in concentrating on the Millennium Development Goals’ declarations is not just a matter of material progress but also of human rights and values. Here Amartya ventured another comparison of China and India in which he suggested that the overall economic growth in China was retarded by their relative neglect of human rights.

I learned from Joe Stiglitz’s talk that resource rich countries do worse in economic reform and growth than resource-poor countries, much to my surprise, because, as he said, there's more to steal, and hence more corruption. He also reiterated his belief, not shared by all, that market failures in less-developed countries require greater government investment to avoid knowledge market failures. Nancy Birdsall had a great idea for the people of Iraq and domestic government of Iraq: sharing their oil resources for greater accountability. She also pointed out that donor nations are not the key players in development, but should concentrate on the experiments and evaluations of local efforts.

The next great learning opportunity of this great Saturday feast of reason was the 6:30 EPS annual dinner in honor of our trustee, Amartya Sen. Introductory remarks were made by Sir Richard Jolly, Nancy Birdsall, John Lord Eatwell (who had worked for me as a graduate student in the sixties, and we exchanged some fond memories), Diana Strassman of the International Association for Feminist Economics, Harvard President Larry Summers, and Nobelist Joseph Stiglitz. Larry Summers made the best speech, pointing out Sen’s two great contributions to human rights and economics, only one of which I had known about (that there was no world food shortage, starvation being the result of poor distribution rather than scarcity). Sen identified the fact that 100 million women were missing in the world’s population data - think of it, 100 million women unaccounted for!

Sunday, January 8

Sunday there were two great EPS panel discussions: one on the costs of war, and another the economics of national security. (I also got elected to the board of directors of EPS, at the annual Fellows’ meeting.)

The 8AM meeting on the Costs of War featured a presentation by Joe Stiglitz and Linda Bilmes on the cost of the Iraq war and its aftermath, which they estimated conservatively as between 1 and 2 trillion dollars for the US alone. That finding was featured in Boston Globe, NY Times, and London Financial Times articles. William Nordhaus, in his paper, “Is Military Spending Justified by Security Threats,” made the telling point that too little is written on the costs of war. Allen Sinai of Decision Economics showed with his macroeconomic model of the US economy that the war thus far probably depressed the GDP about one to two percent, despite other growth areas.

At the 1PM EPS Economics of National Security Roundtable, I learned from MIT Prof. Carl Kaysen that the alleged economic bargain of nuclear weapons - the fifties touted “more bang for the buck” - simply wasn’t. It turned out on analysis that nuclear weapons and their associated systems had absorbed fully 30% of US defense budgets since 1945, without ever being used except twice in 1945. Kaysen concluded that they they were no bargain. He also showed some of the thinking in the Kennedy Administration (in which he took an important part) about the enormous nuclear buildup responding to the alleged but absent missile gap.

All in all, an inspiring three days of learning that at least some economists of great intelligence and good will have much to offer the world for peaceful and secure poverty reduction. There’s much good work being done, and much more to do.

Dr. Clark Abt is the founder of Abt Associates in Cambridge, MA.