HOW THE WEST WAS LOST – FIFTY YEARS OF ECONOMIC FOLLY AND THE STARK CHOICES AHEAD
By Dambisa Moyo
You may be forgiven for thinking you heard all of this twenty years ago – the story of how America, grown soft and lazy, is having its lunch eaten by a rising Asian economic power. Only the names have changed, this time with China taking the place of Japan as the leading threat to the reigning global hegemon.
Zambian-born, Oxford-educated economist Dambisa Moyo lays out the case. While making gestures toward a battle royale pitting the West (Europe and North America) vs. the Rest (the so-called BRIC countries: Brazil, Russia, India and China), her focus is squarely on a U.S. vs. China showdown. Surveying the current economic landscape, she is not confident the champion can meet the challenge.
The U.S., despite giving itself a big head start after the end of WW2, has squandered its advantages through a half-century of bad policy decisions. For too long it has been living beyond its means and now finds itself mired in bad debt, saddled with a poorly educated and unmotivated labour force, and holding a shrinking technological advantage over the developing world.
In China they order these things differently. They have grown their economy by emphasizing saving over consumption and investing in education and infrastructure, not expensive entitlement programs. In particular, the state is able to move “unilaterally and decisively” so that “the greater good of society trumps the desires of the individual.” They can “make the harder, tougher decisions, and have the authority to implement them in less time than their Western counterparts.” In the West, governments are shackled by a tradition of individualism and a corporate culture which privileges the short-term bottom line of shareholders over long-term social benefits.
Having said this, it’s still unclear whether Moyo wants Western governments or the free market to take the lead in crafting solutions. She also admits that there are other factors in play – especially demographic and environmental – that might upset any predictions. Taking these into account it’s clear that the U.S. still holds the upper hand. China and the Rest have been enjoying a tremendous ride and doing a lot of things right, leading to a probably inevitable period of relative Western decline. But it’s hard to imagine the West not still being on top twenty years from now.
Review first published March 19, 2011.