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I Read a Book: The End of Poverty

I just finished The End of Poverty: Economic Possibilities for Our Time by Jeffrey Sachs. I began it before Christmas last year, but finally got around to reading the final chapter. If you want to understand why sending lots of cash to Africa is sometimes a bad idea and why capitalist business solutions is sometimes a good idea, read this book.

Sachs is highly educated and was an economic whiz in the Ivy Leagues before he consulted with countries like Bolivia, Chile, and Russia on how to get their economies in order. Sachs takes issues with institutions like the World Bank and the IMF, but doesn't just complain - he prescribes solutions that just might work.

There are over 2 billion people in the world that are in abject poverty and live at what is called the "Bottom of the Pyramid." The name comes from the idea that as you go up the economic ladder, fewer and fewer people make increasingly more money.

The Bottom of the Pyramid is a term that you'll hear more and more of very soon. This massive group of people is now being seen as a viable group of consumers with, believe it or not, purchasing power. This theory has been confirmed by folks like Nobel Prize Winner Muhammad Yunus, who gained notoriety with his microlending programs in Bangladesh that have lifted people out of poverty.

Sachs' chief analogy is that of a ladder. For him, alleviating poverty in a meaningful way is to get people 'on the ladder' so that they can begin the climb towards prosperity. While this idea sounds sort of like 'pull yourself up by your bootstraps' garbage, Sachs understands that some people don't have boots. He comes up with ways to get boots to the people who need them by a combination of individuals, NGOs, businesses, and governments.

If you want to know one reason for the economic divide in the world, Sachs offer this:

Americans believe that they earned their wealth all by themselves. They forget that they inherited a vast continent rich in natural resources,with great soils and natural rainfall, immense navigable rivers, and thousands of miles of coastline with dozens of natural ports that provide a wonderful foundation for sea-based trade.

Sachs' analysis of the poverty problem is dead on. His pinpoints key causes with sniper-like accuracy. There is room for debate over his solutions, particularly in who should be in charge of what in terms of economic relief. But, his courage to think outside of the box is exactly what is needed to help kids reach their fifth birthdays and ensure a roof over their heads when they do.

Read this book. It will make you smarter.