Revisiting One Lawrence Summers Controversy
Michael KinsleyOpponents of Lawrence Summers for a second turn as Treasury secretary have, of course, brought up his 1991 memo as chief economist of the World Bank, in which he wrote that poor countries need more pollution, not less. The memo was obviously meant to stimulate thinking and not to be implemented as policy. But it also was undeniably correct. Summers's main point was that life and health are worth less in poor countries than in rich ones. He measured that worth by the earnings lost when a person is sick or dies prematurely. But another good measure, maybe clearer, would be the amount a society will spend to save a life. Treatments that are routine in the United States, although they cost hundreds of thousands of dollars, are simply not available to citizens of poor countries. You get cancer and you die. Of course this shouldn't be true, but it undeniably is true, and rejecting the idea of poor countries earning a little cash by "buying" pollution from rich ones will do nothing to make it less true.
If an industrial plant that causes pollution is going to be built somewhere, it ought to be built where life is worth less. This sounds brutal, but it isn't. Or rather, it is less brutal than reality. Turn it around: If a life is worth less, it is also cheaper to save. For what we spend in the United States to save a single life, you could save dozens or hundreds of lives in poor countries. So if the plant is going to be built somewhere, building it in a poor country will enable more lives to be saved than building it in a rich one.
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Every economic transaction has two sides. When you deny a rich country the opportunity to unload some toxic waste on a poor one, you are also denying that poor country the opportunity to get paid for taking the toxic waste. And by forbidding this deal, you are putting off the day when the poor country will no longer need to make deals like this.
In his notorious memo, Summers was doing his job and doing it well: thinking outside the box about how to help the poor countries that are supposed to be the World Bank's constituency. Plenty of outside-the-box thinking will be required from our next Treasury secretary too. Summers is famous for this, and for the abrasiveness that goes along with it. But the Obama administration won't have time, and shouldn't have the patience, for the umbrage game that dominated the recent political campaign. There is no point in making Larry Summers promise to behave himself. That just isn't his style, and if President-elect Obama can't face it, he should choose someone less likely to stir up fusses at regular intervals. That would be a pity.
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