Maybe it’s not surprising that media coverage of Larry Summers’s resignation as Harvard University’s President has focused on his personal style. After all, Summers–by most accounts–alienated many with a manner widely seen as bullying, arrogant, divisive. But, as my former colleague, longtime Russia watcher and ex-Nation blogger Matt Bivens reminds us, where’s the media reporting on Summer’s infamous World Bank memo and, of special interest to me, his role in Russian corruption during the Yeltsin years. After all, as Bivens describes below, these incidents illuminate Summers’ character as much as his bully boy tactics as Harvard’s soon-to-be-ex-President.
The infamous Summers Memorandum
At a time when he was the chief economist of the World Bank – a powerful post at what bills itself as the premier organization for assisting poor countries – Summers sent an internal memo to colleagues at the Bank arguing for shipping pollution to the Third World.
In Summers’ analysis, the cost of a person’s premature death was measured by the loss of potential earned income. So if living next to a dioxin-emitting plant takes five years off the average life expectancy of a relatively well-paid American, that is far more significant an event than if a similar plant causes the same damage to, for example, the average African. “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [less developed countries]?” Summers wrote. “The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to it.”
When the memo was outed by environmentalists, it provoked headlines around the world — including the memorable “Save Planet Earth from Economists” in the Financial Times – and responses from many disgusted world leaders, including the Brazilian Cabinet minister who observed that Summers’ argument was “perfectly logical but totally insane.”
Summers responded that it had been an ironic exercise, a game to encourage more rigorous thinking at the bank. As Summers’ political star rose – from the World Bank he became a Deputy Treasury Secretary under Clinton, then Treasury Secretary, and then President of Harvard – the “Summers memo” dogged his footsteps. When asked about it, Summers usually concedes a general error — “when I make a mistake, it’s a whopper” – and then refuses to discuss it further, or, worse, mumbles something oddly qualified – i.e., the memo’s “sentiment” is “all wrong” even though there are “real issues about trade-offs between growth and the environment.”
As the mThe New Yorker reported that a young economist working at the time for Summers was the *real* author; to hear Summers and his young protégé tell it, this was a heart-warming story about how Summers was a stand-up guy who was careless about what he signed. A few years later still, the story of the memo was that it had been “doctored” from a long half-joking critique of current economics into “a deliberate fraud and forgery to discredit Larry and the World Bank.”