Who Is Jeffrey Sachs?

I - Decimating the Bolivian Working Class

“Widely considered to be the leading international economic adviser of his generation” (in the words of his official bio on the Columbia University website), the notorious Dr. Sachs was contracted by hard-line capitalist regimes from Bolivia to Russia. His task: to design an economic “shock treatment” that produced misery and death for untold numbers of working people.

Jeffrey Sachs gained notoriety for advocating and implementing what is now called “neoliberal” capitalist economics with a vengeance. Following in the footsteps of Milton Friedman’s “Chicago Boys” – who helped the dictator Augusto Pinochet in mid-1970s Chile starve workers and the poor for the greater glory of the “free market” – Sachs first made the spotlight as leader of the “Harvard Boys” who brought shock treatment economics to Bolivia in 1985.

Determined to smash the combative tin miners who were the backbone of the Andean country’s radical labor movement, newly elected president Víctor Paz Estenssoro and his ally, former military dictator Hugo Banzer, put forward a “new economic policy” which – in the words of the standard history of U.S.-Bolivia relations – “had a certain ‘made in the USA’ stamp about it”:

“Its primary architect was Jeffrey Sachs, a bright, brash, young Harvard professor whom the Los Angeles Times called ‘the Indiana Jones of economics.’ Its domestic manager was Planning Minister Gonzalo Sánchez de Lozada, a businessman who had spent so much time in the United States that he spoke Spanish with an accent....

“The social costs...were immense.... Paz passed the costs of stabilization on to the lower classes. In the new era [of neoliberal economics], Paz looked to Sachs and Machiavelli.... The statistical details roll by too quickly for an outsider to fully grasp the human costs. In 1986 the purchasing power of the average Bolivian was down 70 percent.... Unemployment reached 20-25 percent, and nearly all social welfare benefits to workers were swept away.”

– Kenneth D. Lehman, Bolivia and the United States (1999)

The assault on Bolivian workers was embodied in the most hated piece of legislation in the country’s history: Supreme Decree 21060, which virtually illegalized strikes while shutting the mines, firing the vast majority of miners and “relocating” more than 20,000 of them to tropical areas. “Following the advice of Harvard economist Jeffrey Sachs, whose neoliberal ‘shock treatments’ would later be applied to Eastern Europe and the former Soviet Union to devastating effect, [it] cut government spending, overhauled the monetary system – thereby bringing a halt to hyperinflation while plunging the economy into recession – and encouraged foreign investment...” (Forrest Hylton and Sinclair Thomson, Revolutionary Horizons: Past and Present in Bolivian Politics [2007]).

Just as Milton Friedman was able to turn Chile into a laboratory for neoliberal economics only through the Pinochet dictatorship, Sachs’s prescription for Bolivia could only be fulfilled through massive state repression. When the Bolivian Labor Federation (COB) called for a general strike against Decree 21060, the government declared a state of siege and exiled 175 labor leaders to a remote jungle prison camp. It brought out the army to crush a desperate March for Life led by women of the mining camps. By 1991, at least 45,000 jobs had been lost in mining and the public-service sector, plus 35,000 more due to factory closings.

In 1997, Gonzalo Sánchez de Lozada – who had since become Bolivia’s president with the support of a coalition of center and right-wing parties – visited Harvard’s Kennedy School of Government, where “Jeffrey D. Sachs, director of the Harvard Institute for International Development (HIID), introduced the president as one of Latin America’s boldest and most creative leaders,” calling the president and his advisers “the main authors of economic reforms for Bolivia.” Sachs added: “My role was partly to motivate the idea of quick stability, and to help with technical aspects of the reform” (Harvard University Gazette, 8 May 1997).

With Sachs’s help, Bolivian mines, nationalized in 1952, were largely privatized, opening the door to Wall Street investors. Known derisively as el gringo Goni, Sánchez de Lozada launched a massacre against miners, indigenous peasants and the urban poor in October 2003. However, he failed to crush the “Gas War” uprising that eventually overthrew him and drove him into exile in Miami. (See “Bolivia Aflame: Gas War on the Altiplano,” The Internationalist [October 2003] on line at http://www.internationalist.org/boliviaaflame1003.html.) In Bolivia, Sachs’s accomplice Goni is a wanted fugitive, charged with crimes against humanity, who remains free only because the U.S. refuses to extradite him.

II – Implementing Counterrevolution in Poland and the Ex-USSR

Having earned his spurs in Bolivia, Sachs was invited to help U.S. imperialism implement capitalist counterrevolution in the former Soviet bloc. “In the former Soviet Union and Eastern Europe he and a handful of other Harvard economists introduced so-called ‘shock therapy’, characterised chiefly by instant and massive privatisation and the simultaneous removal of all price controls,” noted the London Independent (13 April 2007). His first job: helping Lech Walesa’s Solidarność carry out a “rapid transition to ‘normal’ capitalism” in Poland.

At first, Sachs proposed “U.S.-style corporate structures, with professional managers answering to many shareholders and a large economic role for stock markets.” When this failed to catch on, “Sachs came back with a Germanic idea – large blocks of the shares of privatized companies would be placed in the hands of big banks,” as Left Business Observer (August 2005) noted (“The Long, Strange Career of Jeffrey Sachs”). Lionized by anti-communists, Walesa’s capitalist restoration meant mass unemployment (even the Gdansk shipyards, the birthplace of Solidarność, were shut down), the destruction of social benefits, and a rampage of anti-woman, anti-worker and xenophobic reaction that continues to this day.

For Sachs, Poland was a stepping stone to the former Soviet Union, where he served Boris Yeltsin from 1991 to 1994 as the Russian president, George Bush Sr.’s man in Moscow, consolidated capitalist counterrevolution. The shock treatment’s result in Russia “was a thorough disaster, one of the worst collapses in human history,” notes the same Left Business Observer analysis. “Living standards fell and the population shrank, almost an unprecedented event in a country not at war.... In the words of former World Bank economist David Ellerman... ‘Only the mixture of American triumphalism and the academic arrogance of neoclassical economics could produce such a lethal dose of gall’.” This produced millions of deaths, as the gross domestic product of post-Soviet Russia was slashed in half, poverty increased tenfold, health care services were devastated, mortality rates for workers shot up by 75 percent (from 800 working-age adults per 100,000 in 1989 to 1,400 in 1994) and life expectancy for Russian men fell from 67 years in 1989 to 60 years two decades later.

In recent years, Dr. Shock has sought to rebrand himself as a liberal neoliberal with hipster cred. MTV broadcast a multipart “Diary of Angelina Jolie and Dr. Jeffrey Sachs” touring Africa, and the singer and philanthro-pundit Bono wrote the introduction to a book by Sachs titled The End of Poverty. The fact that Jeffrey Sachs would qualify for a Nobel Prize in Poverty Creation was supposed to be erased. Lately, he has taken to denouncing Republican/Tea Party economic nostrums, and criticizing their reflection in the policies of the Obama administration.

But Sachs’s criticisms of corporate funding of political campaigns, proposals to “tax the rich” and calls to “rebuild America at home” will do exactly zero to get rid of mass poverty and the exploitation of workers, which are inherent in the capitalist system of which he is a staunch defender. Defending the capitalist system is, after all, what this capitalist economic hit man has always been about.

 “This Man Is A Criminal Enemy of the Working Class”

At an October 7 conference on “Defending Public Higher Ed,” organized by the Professional Staff Congress union of faculty staff at the City University of New York (CUNY), speaker after speaker praised the Occupy Wall Street protest, while a CUNY Internationalist Clubs activist warned that the protests are dominated by bourgeois populism. Minutes later the word spread that Sachs was speaking at OWS. Hastening to the square, Internationalist supporters saw Sachs, having finished his presentation, chatting with the crowd.

A CUNY adjunct who teaches Latin American history and has written extensively on the struggles of Bolivian miners broke through the atmosphere of adulation to denounce Sachs: “What about Bolivia? What about the shock treatment you put into effect there? This man is a criminal enemy of the working class. He brought incalculable misery to the working people. He was the adviser to the presidents who unleashed bloody repression against the Bolivian miners, their wives and their families.”