Dambisa Moyo and the decline of the West

After her bestseller "Dead Aid", Zambian author Dambisa Moyo has presented her second book, "How the West was Lost: Fifty Years of Economic Folly--and the Stark Choices Ahead".
While "Dead Aid" was entirely focused on development in Africa, Moyo now turns to the industrialized West and diagnoses it with 50 years of paralysis.
Working along the terms capital, labor and productivity, Moyo says that the West and in particular the US (but also the UK) have failed in all three regards.

• With regard to capital, the US went deeply into debt by borrowing from China and investing into housing.
• As far as labor is concerned, Moyo holds that Western pensions, health care and education are seriously underfunded, and disregarded in the democratic four-year cycles of most Western countries.
• Productivity gains in the West, finally, have stayed far below those in China. Western countries do not try to use education to produce higher-quality products and services, but fail to reform their systems, meaning that they are headed to compete with China on the same playing field: labor cost.
  

Although not saying that democracy is harmful, Moyo points out that four-year election cycles reward Western politicians for short-term thinking. To get out of decline, she proposes to either reform political systems in favor of a more long-term view, or to build strong incentives that encourage innovation and education. Or both. Without innovation, she says, countries will engage in a struggle for a shrinking amount of resources which is necessarily a zero-sum game and will produce bitter struggles.

If you want to listen to the full speech that Moyo recently gave at the LSE, you can do so here:



Picture Source: Amazon