The Living Room

by Jeffrey D. Sachs

India’s great moral leader Mohandas Gandhi famously said that there is enough on Earth for everybody’s need, but not enough for everybody’s greed. Today, Gandhi’s insight is being put to the test as never before.

The world is hitting global limits in its use of resources. We are feeling the shocks each day in catastrophic floods, droughts, and storms – and in the resulting surge in prices in the marketplace. Our fate now depends on whether we cooperate or fall victim to self-defeating greed.

The limits to the global economy are new, resulting from the unprecedented size of the world’s population and the unprecedented spread of economic growth to nearly the entire world. There are now seven billion people on the planet, compared to just three billion a half-century ago. Today, average per capita income is $10,000, with the rich world averaging around $40,000 and the developing world around $4,000. That means that the world economy is now producing around $70 trillion in total annual output, compared to around $10 trillion in 1960.

China’s economy is growing at around 10 per cent annually. India’s is growing at nearly the same rate. Africa, long the world’s slowest-growing region, is now averaging roughly 5 per cent annual GDP growth. Overall, the developing countries are growing at around seven per cent per year, and the developed economies at around 2 per cent, yielding a global average of around 4.5 per cent.

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