Over at the Comment site, I review Dambisa Moyo’s How the West was Lost: Fifty Years of Economic Folly—and the Stark Choices Ahead. In “War of the Worldviews,” I note that the strongest elements of Moyo’s work are related to her analysis of the causes and the trends of global economic power. “Faced with the combined might of the Rest,” writes Moyo, “the West is forced to grapple with a relentless onslaught of challengers from all corners of the globe. And all these countries are growing in confidence, gaining in competence, and jockeying for a frontline position in the world’s economic race.”

A recently released World Bank report echoes Moyo’s sentiments, which are broadly shared by many forecasts. As Motoko Rich at the NYT Economix blog summarizes, “A new report from the World Bank predicts that by 2025, China, along with five other emerging economies — Brazil, India, Indonesia, South Korea and Russia — will account for more than half of all global growth, up from one-third now.”

One way of understanding these trends is that it is simply what you get in an age of global competition. Nations like China, India, and Brazil are increasingly able to make sustained GDP gains because of increased access to global markets, particularly the US. And the US is forced to adapt to remain competitive, and in many cases this hasn’t happened. It’s not clear at all why all this is such a bad thing. After all, it’s not that the US will cease to be affluent in the foreseeable future. It’s just that other nations won’t be as relatively poor.

Even so, Moyo can’t help but cast these developments in negative terms for the West: “…even while globalization could contribute to a rising tide for all boats, it is clear that the relative quality of life will almost certainly have to decline in the West to accommodate a rise in the Rest.” Thus the relatively greater quality of life enjoyed in the West will decline compared to the Rest. But why must this be so dire for the West?

The weakest part of Moyo’s project comes through in her attempts to provide prescriptive guidance for the West to avoid this “precarious path of forecast decline.” All you really need to know about her suggestions appears in this line: “there is, after all, nothing inherently wrong with a socialist state per se if it’s well engineered and designed and can finance itself.”

Moyo wants the US to adopt the Chinese model of state-directed markets because of the “the speed with which policies can be taken and implemented.” Deliberative democracy is just too slow, too cumbersome, and too captive to special interests. We need a lean, mean set of government committees to run the economy properly and efficiently.

What’s difficult for me to understand is why, given the West’s historical success by embodying “a fully fledged capitalist society of entrepreneurs,” we should abandon that model. Moyo should instead be calling the West back to its strengths, its foundations in “democracy and the sanctity of the rights of the individual elevated above all else,” instead of issuing the siren song of state-driven capitalism. If it is really a competition between state-run and entrepreneurial “capitalism,” it’s not clear at all (as Moyo seems to think) that the statists will win.

It seems to me that the West will only truly be “lost” when we give up our commitments to the inherent dignity and rights of the individual, the rule of law, freedom of association, exchange, religion, and expression. The thrust of Moyo’s book is a classic, “It became necessary to destroy the West to save it,” project, and that’s one that’s simply not worth fighting for.

  • Rmckinney

    Nice analysis! I don’t think I’ll read Moyo’s book. She
    makes the typical mistake that all socialists have been making for the past ten
    years. She assumes that the state created China’s
    economic development and not freer markets. Could the state have created the China
    miracle without freer markets? Clearly not or it would have done it before.

     

    Unfortunately for the Chinese and Indians, most people have
    arrived at Moyo’s conclusion: the state did it, not the freer markets. As a
    result their magnificent economic growth will not last much longer.

     

    Moyo is apparently too young to remember similar claims
    about Japan.
    Why isn’t anyone telling us to imitate Japan
    now?

     

    Slightly freer markets will get you only so far, although China
    and India have
    made striking progress. As you note, institutions matter and at some point China
    and India will
    run into the brick wall of their institutions, just as Japan
    did 20 years ago.

     

    Does anyone remember the Asian Tigers? Where did all of the
    promotion of their “system” go?

     

    Unfortunately the US
    and Europe are in economic decline because of creeping socialism,
    but China and India
    will not last much longer unless they make major changes to institutions.
     

  • http://www.remnantculture.com/ Remnant Culture

    From what I’ve read of Moyo previously (Dead Aid, various articles and interviews), this is surprising. Apparently someone is indeed still reading Thomas Friedman.