IMAGINE if the top Premiership team, instead of honing its football skills, became obsessed by the performance of another, lower-ranking but fast-improving side. Distracted from practice, heads craned over their shoulders to gawp at the new phenomenon, the players’ advantage would dwindle not so much from the growing skill of the newcomers but from their lack of focus on their own performance. Out of shape and badly managed, they would rapidly find themselves relegated. That is the metaphor that Dambisa Moyo suggests to me captures the current predicament of the West.
We have met to discuss her new book, “How The West Was Lost”, which argues that we are losing ground to China and other emerging economies, not so much because they are doing well as because of our own failing performance. And like those forgetful but fundamentally talented players, Moyo believes that if we will only pay attention to ourselves, and institute the economic equivalent of a tough new training regime, all is not yet lost.
Moyo is already controversial as the author of Dead Aid, which dared to suggest that fifty years of aid to Africa may have done more harm than good. Its success still surprises her. She admits that before its release, “I had a couple of conversations with my publisher about pulling it” – in January 2009, with the financial crisis dominating the news, it seemed that few would be interested in discussing the politics of aid. And yet it became an immediate sensation, perhaps because “people were actually questioning everything”.
With her new book, Moyo is hoping to push that questioning spirit even further. She calls herself something of an “accidental” writer, driven by irritation over the treatment of the issues rather than longstanding literary ambitions. And she is certainly a passionate defender of her analysis, her hands reaching out to emphasise her points. If her two books seem on the surface far apart from one another in subject matter, for her they are deeply connected by the power of unintended consequences – the dangerous way good intentions can lead to bad outcomes. Often, as she points out, these problems can be traced to the choices of the same actors, the same generations of policymakers encouraging huge government to government aid flows into Africa and calling for subsidised house purchasing and unfunded pension entitlements at home.
What has happened to the West? When Moyo turns her gaze from the rising stars of the East she sees a civilisation that has failed to take good care of its capital, building up a pension liability “that smells of a Ponzi scheme” and driving unsustainable investment in property, not only creating a disastrous bubble but also leaving ordinary citizens in the West overinvested in a troubled asset class instead of exposed to the upside of globalisation occurring in emerging markets. Meanwhile our human capital, she argues, is poorly educated and blinded by unwise ambitions – too many would-be celebrities and not enough engineers.
So far so troubling, but with the coalition government in the process of cutting public spending and working hard to improve the quality of national education, Moyo’s criticisms are at least in line with some current anxieties. And yet her most extreme solutions are truly explosive – as she says, “nuclear options”. While she stresses that she remains “a free trader”, Moyo argues that the westerner in the street has seen little benefit from globalisation. If Moyo still prefers free trade, she reluctantly concludes that the boldest, surest way for the West to save itself might be to retreat behind trade barriers. She quotes to me from FDR’s first inaugural, delivered in 1933: “Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.”
This is an alarming call to all those, including Moyo, who see the clear benefits of free trade, and she stresses that this is not her preferred answer. Instead, she hopes to see Western nations taking more notice of the problems they have incurred than the success of others, and developing a strategy for sustained growth, while confronting the legacy of a half century of policy mistakes.
It isn’t over for us yet, but if Moyo is right, the West has taken its eye off the ball and is in danger of unnecessarily conceding the game: “It’s the West’s to lose,” she says, a voice of clarity continuing to challenge the conventional wisdom.
“How The West Was Lost” is published by Allen Lane, £14.99.
CV | DAMBISA MOYO
Born: Lusaka, Zambia
Education: BA in chemistry and an MBA in finance, American University, Washington DC; PhD in economics, Oxford University; Masters, Kennedy School of Government, Harvard University
Career: World Bank consultant and Goldman Sachs
Award: Named by Time Magazine as one of the “100 Most Influential People in the World” in 2009
Davos honoree: Nominated to the World Economic Forum’s Young Global Leaders Forum in 2009
Books: “Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa” (2009). “How the West Was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead“ (2011)