March 26 (Bloomberg) -- With the U.S. military burning through some $500 billion a year, it's startling to think we could end extreme world poverty for half that amount.

That's what Jeffrey D. Sachs estimates in ``Common Wealth: Economics for a Crowded Planet,'' a book smartly balanced between apocalyptic warnings and cautious utopianism.

Sachs made his name by prescribing economic shock treatment for countries such as Bolivia, Poland and Russia. He later turned his considerable brain power to the question of how to end the poverty, hunger and disease that grip the world's poorest 1 billion people. He now directs the UN Millennium Project and the Earth Institute at Columbia University in New York.

``Common Wealth'' addresses threats ranging from global warming to Earth's bulging population (brace for 9.2 billion by 2050), building a compelling case against our despoliation of the very ecosystems that sustain us.

His thesis: Mankind faces catastrophe unless we work together to adopt sustainable energy, decelerate population growth and help the poor escape the poverty trap. The solutions are within our reach, he says, and the costs will be relatively modest.

Converting to a sustainable energy system to control climate change would probably require ``well under 1 percent of annual world income,'' he writes. Slowing population growth would cost ``less than one tenth of 1 percent of the annual income of rich countries.'' As for ending extreme poverty, Sachs pegs the price at ``less than 1 percent of the annual income of rich world.''

Add it all up, and the bill reaches $840 billion a year to cover the pledges donor nations made as the millennium dawned -- or just 2.4 percent of rich-world income, as Sachs puts it.

Broken Goodwill

``We don't need to break the bank,'' Sachs assures us, ``we only need common goodwill.''

Note that last word. Goodwill is rooted in trust -- the same trust broken by corrupt African leaders who fatten their private bank accounts with aid money. Sachs tends to skirt that issue.

He asserts, for example, that Africa's ``triple whammy in economic development'' -- pitiful farm production, rampant disease and appalling roads and railways -- can be surmounted ``at a remarkably low cost.'' Yet what good is aid in Zimbabwe so long as President Robert Mugabe continues to grind the former breadbasket into a millstone of hopeless poverty?

``While in a handful of cases the limiting factor is poor governance, in most cases it is finance,'' Sachs says.

Dirty Money

A handful? Raymond Baker touched on this in ``Capitalism's Achilles Heel.'' Western countries sink some $50 billion in aid into poorer countries annually, he wrote, then take back 10 times that amount by laundering dirty money fleeing those lands. Keeping that $500 billion at home in poor countries could do more to alleviate poverty than all our aid, export promotion, foreign investment and free-trade policies put together, he argued.

Sachs promotes what amounts to a Marshall Plan for the poor -- one big donor offensive to pull countries out of poverty. It's a seductive concept, and I for one will increase my charitable contributions. Yet he displays too much faith in handouts and too little faith in markets, smacking down the invisible hand with assertions that ``market forces alone'' won't save the day.

Of course they won't. But even political theorist Benjamin R. Barber, a stern critic of capitalist excess, recognizes that the developing world represents a vast, untapped market. The poorest 1 billion people are 1 billion potential consumers for basic goods such as mosquito netting to ward off malaria. Consider African cell-phone service MTN Group Ltd.: It has amassed 61.4 million subscribers in Nigeria in just a few years.

$2.3 Trillion

Nor does Sachs adequately address the critique that former World Bank economist William Easterly directed at massive aid in ``The White Man's Burden.''

Easterly toted up $2.3 trillion spent on aid over a half- century and concluded that it didn't promote economic growth and often reinforced corrupt governments. Sachs parses that figure, saying it averages out to only $15 a year per aid recipient.

Sachs concedes that much aid has been wasted, citing fat payments for Western consultants and food shipments. The two men also agree on what kind of aid works -- getting the poorest people ``such obvious goods as the vaccines, the antibiotics, the food supplements, the improved seeds, the fertilizer, the roads, the boreholes, the water pipes, the textbooks and the nurses,'' as Easterly wrote.

If we can distill Sachs's vision into aid that has specific goals and can be monitored, we might just save the planet.

``Common Wealth'' is from Penguin Press in the U.S. and from Allen Lane in the U.K. (386 pages, $27.95, 22 pounds)

(James Pressley writes for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this review: James Pressley in Brussels at jpressley@bloomberg.net.

Last Updated: March 26, 2008 02:34 EDT