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“Moyo’s diagnosis of the recent disasters in financial markets is succinct and sophisticated...I applaud her brave alarm against our economic and social complacency: her core concerns are sufficiently close to painful truths to warrant our attention.”—Paul Collier, The Observer
“We [in the West] have alienated trading partners and are colluding in the decline of our own prosperity, says Moyo, who sets out strategies for weighting the political seesaw back to our advantage.” —Iain Finlayson, The Times
“This argument...can rarely have been made more concisely...Moyo is a very serious lady indeed.”—Dominic Lawson, The Times
“The sad saga of the recession gives legs to Dambisa Moyo’s provocatively-entitled book, for it goes to the heart of the great economic issue of our times: how swiftly will power shift over this century?”— Hamish McRae, The Independent
About the Author
Dambisa Moyo is the author of Dead Aid. Born and raised in Lusaka, Zambia, Moyo completed a Ph.D. in economics at Oxford University and holds a master’s from Harvard University’s John F. Kennedy School of Government. She worked for the World Bank as a consultant, and also worked at Goldman Sachs for eight years. In 2009, Time magazine named her one of the “100 most influential people in the world.” Her writing frequently appears in publications including the Financial Times, The Economist, and The Wall Street Journal.
Dr. Dambisa Moyo is an international economist who writes on the macroeconomy and global affairs.
She is the author of the New York Times Bestsellers "Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa", "How The West Was Lost: Fifty Years of Economic Folly - And the Stark Choices Ahead" and "Winner Take All: China's Race for Resources and What It Means for the World".
Ms. Moyo was named by Time Magazine as one of the "100 Most Influential People in the World", and was named to the World Economic Forum's Young Global Leaders Forum. Her work regularly appears in economic and finance-related publications such as the Financial Times and the Wall Street Journal.
She completed a doctorate in Economics at Oxford University and holds a Masters degree from Harvard University. She completed an undergraduate degree in Chemistry and an MBA in Finance at the American University in Washington D.C..
The world's most economically powerful nations have seen their wealth and dominant political position decline to the point where, today, they are about to forfeit all they have strived for - economic, military and political global supremacy, according to Dambisa Moyo in this book. The author explains that capital, labour and technology have been the pillars on which economic growth has been built, then goes on the describe how mismanagement of these factors is leading to certain decline.
Capital has been misallocated as a result of government policies supporting subsidized home ownership, encouraging a culture of debt and diverting capital away from productive investment in business. Labour has been misallocated by failing to take account of future pension costs, failing to educate sufficient people in useful professions like engineering, and encouraging people into the wrong pursuits by grossly overpaying sports stars. Technology has been misallocated by giving it away to Chinese manufacturers in return for cheap goods, rather than protecting it.
If we stick with the status quo, then all is lost, according to the author. China could falter, but that is an unlikely scenario. The US and Europe could fight back, but at present America does not appear to have the mettle. The author's preferred approach seems to be for the US to default on its loans, reckoning that China will suffer more than America.
As was the case with her previous book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, the author's diagnoses of the problems have some merit, although they are overly dramatic, but in my opinion her proposed solutions leave something to be desired. The book is an entertaining read, and the issues are presented in a way that will make the reader sit up and take notice.
What is disturbing about this book is not the argument Dr Moyo purports to make but the inadequate manner in which she makes it. Perhaps it's a reflection of Americans' self-critical mood at the moment that Amazon.com reviewers have heaped the book with praise, leaving only one reviewer level-headed enough to award the book just one star.
'How the West Was Lost' reads uneasily, shifting from a mildly didactic tone to energetic advocacy to journalistic analysis. It combines sweeping generalizations, a somewhat confused and tendentious reading of what constitutes the economic and social challenges currently facing the United States, and a cherry-picking approach to conditions in other countries, both developed and developing. It runs through the usual list of economic, financial and social difficulties now facing the United States, asserting that 'radical solutions, many of them offered in this book' must be adopted quickly before it's 'too late' (p xiii) to save the west 'from oblivion' (p 181). The reader then has to wait patiently for these radical solutions, which are offered briefly in the last few pages of the book. They include ' a serious revaluation of the US's role as virtually the sole underwriter of global public goods', by which the writer seems to be alluding the size of the Pentagon's global operations and budget; accepting the likely benefits of economic protectionism; addressing growing income inequalities in the US, and growing US welfare costs; saving more and spending less; and investing in the US to create a more skilled labor force and new technologies. She also proposes that the US defaults on its external debt so as to break the 'stranglehold of debt and dependence' it is, she says, gripped in by China and others.Read more ›
The basic idea of How the West Was Lost is that Western democracies (especially the US) are basically throwing away all the advantages they built up in the last century. Asian countries are going to dominate not because they are better...but because we are being stupid. I don't agree with all the book's arguments, but I think it raises some very good points.
The best points are about what the author calls misallocation of both labor and capital. What this really comes down to is bad incentives. I think Moyo's argument that the US puts way too much emphasis on real estate is dead on. Building homes or fancy commercial buildings does not really create much innovation as compared with investing in industry or technology. Yet, real estate has always been THE way to get rich, and the investment capital flows accordingly. The result is inflated home and property values instead of new job-creating industries.
Moyo makes a similar argument about labor. She emphasizes sports stars, but I think a better example is Wall Street attracting so many smart people that could otherwise do something more productive. And then there's real estate again. How many people have jobs in construction, real estate agents, loan agents, title companies and everything else? Now of course, a lot of those bubble jobs are gone. I live in the SF bay area and know at least one person with a PhD in engineering who left working in tech to become a real estate agent back in 2005 because she could make so much more money. That is true misallocation of talent.
One important issue is how the incentives for the people at the top help create these problems.Read more ›