‘That’s how China could finally finish off America, give them aid!’
‘They are pretty much doing that already’
Exchange between Niall Ferguson and Dambisa Moyo
I don’t want to get into the habit of doing this, but this is a book I haven’t actually read. What I have done is listened to a podcast where the author describes the book then debates it with Niall Ferguson and an audience of the public. (See details below)
Dambisa Moyo is an economist from Zambia who has worked at Goldman Sachs and has written a very influential book called Dead Aid: Why Aid is Not Working (review on its way). That was about how aid was causing structural problems that made the problem of poverty worse rather than helping it. That is a big enough subject, but she has set her sights still higher with her latest book.
How the West was Lost tackles what will probably look to historians like the big story of the 21st Century – the loss by the West of the commanding position it has held in the world for two or even three hundred years. With the population of the world heading towards 9 billion and over a billion Chinese aspiring to a standard of living equal to that of Americans and Europeans, there are going to be problems ahead. Moyo thinks that the West’s response is inadequate. We have become obsessed with investing in the wrong assets like property when the priority should have been given to education.
There is a sort of twisted parallel with her earlier book. Africa is failing to develop its perfectly adequate resources because of help in the form of aid that removes the incentive to carry out productive activity. The vast scale of Chinese investment in the West has had a similar effect in depressing productive activity in Europe and America. The result is that unemployment is now a really big issue. Some 30 million Americans are now involuntarily economically inactive.
Globalisation has so far only really benefited the wealthy elites.
Moyo’s suggests that the West should take much more pro-active action than it has so far. Increased investment in education and research and development is needed. Few would disagree with that, particularly if someone else is paying. More controversially she thinks that more effort should be made to protect the West’s intellectual property. She also speaks with approval of the possibility of trade sanctions and even of defaulting on the debt to China to some degree.
A thought provoking lecture that is well worth a listen to. If the book is as good it is probably worth a look at too. I have added it to my list.
(Incidentally if anyone from the publishers is reading this – I’d have it my Kindle already if it were only £5. As the Kindle edition is the same price as the paperback I will wait and buy the paperback – or will I? I have to remember to go to the bookshop and order it, and I have lots of other books I already own that I want to read. A Kindle book isn’t as valuable as a paperback. I can’t sell it or lend it to anyone. Might be worth thinking about whether your pricing policy is actually maximising your income?)
Find the podcast here.
You might also be interested in my reviews of two of Niall Ferguson’s books