The Other Summers Controversy
Let's leave aside Larry Summers' remarks about women at Harvard for now. (They deserve a good drubbing, but there are others
better-equipped to do that sort of thing.) Instead, Lindsey Beyerstein dredged up
something just as interesting: An infamous (though new-to-me) 1991 World Bank memo in which Summers (who was the Bank's chief economist at the time) notes that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable." Oh no
! Not again!
Er, except that if you read the actual memo, his logic is
impeccable. There really are possible trade-offs between pollution and growth (or, if you prefer, between social goods and economic goods), and some developing countries may well choose a little black lung in exchange for higher wages. This is basic stuff. The only way to refute Summers here would be to convincingly show that such trade-offs don't actually exist
, which seems like a tall order. Barring that, this is bang-on: "The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity." Presumably, though, the World Bank doesn't think this way or Summers wouldn't have had to write the memo. And it's awfully odd that the World Bank doesn't
think this way.