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TOP 1000 REVIEWERon 28 December 2012
This is a fascinating book: short enough to read in half a day or so, full of refreshingly unconventional views, but clearly aiming for balance. In spite of the provocative, "Buy Me!" title (presumably based on the famous Western movie "How the West was won"), the author does not adopt anything that could be called an "anti-American" attitude. Her thesis is that the West - the USA, UK, Western Europe, etc. - has been steadily losing ground economically to "the Rest" - led by China, and also including China, Russia, Brazil, India, and many other nations. Dr Moyo then takes a deeper dive, divided into the three critical factors of Capital, Labour, and Total Factor Productivity (TFP). In each of those, she claims, the West has been falling behind for well-defined reasons.

Starting with capital, Dr Moyo asserts that the West has seriously mismanaged its capital in several ways. One of the main reasons for this - an idea that crops up again later in the book - is that Western nations lack the political ability to make rapid decisions for the good of the nation as a whole. They are hamstrung by participative democracy and frequent elections. In a passage that, for me, is the most important in the whole book, Dr Moyo explains why "debt is cheaper than equity". All corporations are funded by equity and debt; but those who own the equity are much less risk-averse than those who own the debt. Thus the creditors should exert a restraining influence, forcing management to avoid excessive risk. When government underwrites banks and other enterprises, it removes this restraining influence - leading directly to catastrophes like the financial crisis of 2008. Another dreadful mistake was for governments to encourage home ownership, which merely raised the cost of housing while tying up capital unproductively.

The situation is equally grim when it comes to labour, as demographics mean that the West has an aging population that will become steadily less productive, just as the unfunded promises of future pensions come due. Dr Moyo seems to approve much more of the Chinese way, where individuals mostly have to fend for themselves by saving while they can. The West has also failed on the educational front, both in terms of quality and quantity: standards have fallen in the pursuit of equality and anti-meritocratic policies, while China and India produce far more scientists, technicians, and engineers than the USA or the UK. Moreover, the West is misusing its talent, as the best and brightest make a beeline for Wall Street or the City of London instead of doing something useful with their brains.

Dr Moyo's undoubted expertise seems to have sharply delimited borders. Her only substantial mention of population growth leads to the judgment that the West is at a severe disadvantage due to its slow rate of increase, whereas China is sitting pretty with a much younger demographic profile. Later, she states in passing that the world's total population is "around 6 billion today". In fact, it passed 7 billion the very year (2011) this book was published. To underestimate such a critical number by 16% would be unforgivable, were it not that Dr Moyo is clearly an economist with little knowledge of, or interest in, ecology. Nevertheless, one may question the value of a book that carries economic analysis to a considerable depth while utterly ignoring the wider context which may render pure economic analysis worthless. In another example, she declares that Africa contains 80 percent of the world's "untilled arable land", suggesting that it could be cleared of trees and used to grow crops. But experience has shown that, in tropical forest, this often leads to laterization, after which the land won't grow crops, trees, or anything else.
When it comes to politics, Dr Moyo appears to be almost as naive. She writes, for example: "The US needs to make sure the benefits of its consumption accrue to the broadest number of its citizens". But this assumes that there is such a single entity as "the US", and that it is interested in the welfare of all its citizens. Even given that the USA is a functioning democracy (a big assumption to make) why would the rulers behave altruistically, rather than favouring their sponsors?

The book has been poorly (or at least unevenly) edited, as several schoolgirl clangers have got through. For instance, it is claimed that the UK's 62.8 million credit cards and total credit card debt of £63.6 billion represent "over one card and one pound for every Briton in the country". It doesn't build confidence when a professional economist confuses millions with billions! On page 77 of my edition, Danish researchers are quoted as saying that every second baby born today in "developed, industrialized nations" will live to 100. Well and good - but then on page 122 we are told that "across the industrialized West many medical practitioners agree that this generation of six-years olds will be the first to live less long than the generation that preceded them". On page 123 I was surprised to read that, " nuclear molecule provides many hundreds of times of kilojoules of energy than its closest competitors". I quote those mistakes only to demonstrate that the author, the editor, or both were inattentive at times.

Despite its imperfections, I encourage you to read this book. I don't think it has any answers, but it asks some very pointed and interesting questions.
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TOP 500 REVIEWERon 19 February 2013
This book promises a lot but sadly delivers little. As an analysis of the sub-prime melt-down and the general structural economic decline of the 'West' and the USA in particular, it has it's merits.Yet the premise is a faulty one.Her view roughly summarized, is that the barbarians are at the gates, so we had better look out.

The USA after the setting up of the Bretton Woods agreement in 1944 became ascendant in the World Economy.The dollar replaced the £ as the currency of international choice,the US military had few if any direct competitors and the British bankrupt, whilst the Europeans needed American cash to rebuild.Meanwhile, American trade policies were implemented by Western instruments such as the IMF and GATT and American multinationals gained new markets in territories opened up to them after the war us military presence overseas. The immediate post -war period was the time of unrivaled American economic dominance until costly ventures like the Vietnam war and consequent American leaving of the 'Gold Standard' in 1971, coupled with the oil price shocks of 1973, indicated that a fundamental shift in America's global position was not not only possible but likely.(Most of this goes unmentioned by Ms Moyo)

History tells us that empires can't last for ever.Empires are created it could be said, by strength of arms, leadership and some sort of economic system that supports civil society and pays for the imposition of order at home and abroad. When the system can't support the military or vice-versa,the end is never far away. Either complacency, a penchant for luxury,some sort of external shock or the arrival of a foreign competitor spells the disillusion of the current hierarchy to be replaced by another. So it's not surprising, although to Ms Moyo it is, that the 'American Century' had to end sometime.

Where her argument is sound, is the fact that the 'West' has become economically degenerate. Debt and the love of debt to fund individual life styles (especially housing)and the black holes of government projects such as pensions ,welfare payments, bank bail outs,military adventurism and the like are not supportable by the economic underpinnings, then eventually the money must run out. As a result of the failure of the West to invest in education, innovation and infrastructure there has been a consequential weakening in America and the West's ability to compete with the emerging regional big guys like India, Brazil and of course China. So,like many an empire of old, collapse or retrenchment must follow- as slackness within and competition from without must make change inevitable. Productivity, creativity and enterprise mean success,it's lack- failure.

She is also right to point out that the Chinese especially have played a good hand- gradual relaxing of state control,looking at long term investment not short term consumption and using currency as a way of making her goods competitive. Yet also the Chinese have built up relations with countries in Africa and Asia to secure mineral and food supplies rather then relying on the vagaries of the market.The Chinese have been smart, the West complacent. In addition, the Chinese and Indians have moved their production up the 'value chain' , so that now they can produce complex high tech products and offer services such as IT, competing in West's backyard.

The meaning of all this gloom and doom is that governments can no longer support the generally liberal welfare systems of yore. Plus, something more needs to be done then hacking at the welfare budget: Ms Moyo claims to have some radical ideas here. Sorry to report but the most important part of the book is where I have to fundamentally disagree with the author. Protectionism she thinks is the answer: - the USA should in some way decouple (autarky)from the World trade system that it helped set up in the first place and debt default. Also government should reign in commitments like pensions and welfare and invest much more heavily in R and D. Fair enough, but how is this to be done? She also thinks that Europe ought to be left to drift off into oblivion as a failed trade bloc, to die slowly of its own self-inflicted wounds, unmourned and irrelevant.

How about a more constructive approach?- engagement and negotiation. Governments in America and the West should look at the tax avoidance of multinationals and the super-rich,look to cooperate with the emerging nations and where possible learn from them. Perhaps there should be an acceptance that the era of mass -consumption in the West is over. Citizens should look to care much for themselves in return for lower tax and regulation. Citizens should prepare to be more occupationally and regionally mobile, looking to create or find opportunities for themselves.

The author also forgets that the Chinese and Indians etc are starting fro a low base.They also have problems of their own - asset bubbles,inflation, significant variations in poverty, opportunity and productivity. Also, these governments will be faced with growing demands for higher welfare provision and the break down perhaps in centralist state authority as the economy gets too complex to control by committee.Also, it is a general fact that when governments get their hands on money, arms expenditure and the itch to use those arms gets irresistible.Net result; lots of money thrown at pointless expensive bits of kit that fuel expensive military ambitions. See the pre-1914 Dreadnought arms race. Afghanistan is a great example of where Russia and America thought that dropping bombs changed things 'on the ground', only to find that the costs of such campaigns where much higher than could ever been anticipated at the time.

If we want developing nations and indeed ourselves to prosper we need trade and mutual support. Also,it is no ones interest to have defaults and protectionism ,but the gains from trade have to be more evenly spread.The Chinese aren't the enemy.Trade is not a war, it is an activity for the benefit for both sides. I might sound like a libertarian of the rosy -tinted glasses variety, but I believe that the West has to become more competitive and it's citizens less dependent on government. Politicians have to start telling us the 'truth' before the markets do in the form of higher prices. Hard choices await us. Hiding behind protectionism does nothing but make the world a less safer and poorer place.

'How the West was Lost' is a good 'light' read, rather repetitious and short on sensible policy suggestions.It makes some worthwhile points, but is rather too keen to 'big up' the emerging nations and down play the very real strengths of Western political economy - respect for property,transparency and soundness of government coupled with formidable technical and human capital. Read Ms Moyo by all means, but beware of the significant limitations of what she has to say. Remember, the Chinese don't have all the answers and the West might be in a bad way, but the patient ain't dead just yet!
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on 16 September 2012
How The West Was Lost
Dambisa Moyo

I recall reading somewhere that after the end of WWII the Japanese were advised by Americans to focus on rebuilding their economy by producing rice and other food products so that they would be able to afford to buy American cars. The Japanese rejected the advice, set up MITI and today most cars produced in America and the UK are Japanese. Judging by the message in this book the West learned nothing from that lesson.

Dambisa Moyo demonstrates that the lesson is being repeated, but this time by Chinese teachers. The lesson is that the western model of capitalism is being displaced by state driven capitalism. While the West clings to an economic model based on the fallacy of Ricardian comparative advantage, and profit maximisation with the market as the guide, state capitalism operates on principles of absolute advantage and volume maximisation under state guidance. Consequently, whereas China has clear long-term economic strategies the West follows the vagaries of short-term market indicators.

The author makes her case effectively using statistical illustrations to compare America and China, with America presented as an exporter of capital, living on credit supported consumerism and neglecting its crumbling infrastructure. China, on the other hand, is an exporter of consumer goods with low levels of consumption and credit at home, and is investing enormous amounts in infrastructure. Moyo mentions in passing that the UK operates on the American model.

`How The West Was Lost' is one of several recent books presenting a similar warning message to which western politicians appear deaf. Although Ms. Moyo suggests some remedies that America could turn to I do not believe her advice will be followed, not least because the USA has traitors within the gates: those nominally American international corporations that benefit from the existing situation and are the paymasters behind western politics. Nevertheless, this book is a cogent and powerful contribution to the debate and should be read by anyone interested in the future facing them and their children. I recommend it strongly.
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on 13 March 2011
This was an entertaining read. It has a wealth of insightful analysis of things the West has done wrong and the consequences of having squandered such potential. The book is generally very clear and easy to follow, albeit a little academic in some places.

Ms Moyo is convincing in explaining the west and the consequences of its actions. However the conclusions and predictions seem selective and overstretched resulting in a few rather dry and not very convincing scenarios.

Ms Moyo seems not to recognise the inherent risks in the "rest of the world" while neglecting strengths in the West. An example is that a pensions liability in practise exists in both China and in the West and that a 1 child policy China will needs to fund the care of its pensioners. Whether pensions are funded by a Government or their private citizens, in both cases neither seems likely to be saving enough and economic activity will likely be depressed.

Equally framing the analysis with an almost exclusive focus on nation states seems to neglect how individuals and "micro societies" for lack of a better word are likely to shape future global prosperity. A more fluid world suggests a more nuanced approach than the "west vs the rest approach" is needed.
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on 25 February 2011
A superb analysis of the sheer stupidity of US and UK misallocation of investment capital, (for example) in sectors such as ludicrously overpriced Housing, the borrow to consume House of Cards economy, in contrast to other countries that have wisely invested in factories and productive businesses that generate monthly incomes for people. Points out the uselessness of the misdirected (military) spending and stupid military adventure of the US and UK. A very good outline of the World economy as it is now and where it could be headed. The book also points out that the present economic and political structures in Western Europe and the US will not meet the challenges of ageing population, the Black Holes in pension funds and continuation of non-productive economies. Reading between the lines I would say the author questions the wisdom of certain countries even attempting to exist and compete in the same Trading Arena as China. Excellent Book.
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on 4 February 2015
I don't often post a review but I was moved to so by this book because potential buyers need to be warned - it is rubbish, possibly the worst economics book I have ever read. The premise is interesting and summed up neatly by the title but it goes down hill from there. It jumps around incoherently splurging out facts and opinions which lack in originality and are not organised into a solid argument.
The basic idea that the West, particularly the US, is irreversibly declining versus "the Rest" (principally China) has been made many times before but never this badly. The book was published a few years ago and the US is actually looking pretty good right now vs China and the rest of the BRICs which undercuts some of the arguments.
But my real problem is the quality of the arguments and writing - really bad and I don't say that to be mean like a troll or because I disagree.
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on 13 January 2011
How the West Was Lost provides a broad overview of the international economy. Moyo has moved on from the failures of western aid in her last book to some of the most controversial positions and choices of governments and electorates alike. It is incredibly factual and a great historical resource elucidating the last fifty years - the politics, the economics and the social implications. The author concludes with certain Western options to compete against rising Eastern states and inequality. How The West Was Lost is thought provoking and stimulating considering our current economic climate. A must read for anyone interested in the state of the world, the financial crisis and the future of the west - and the rest.
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on 13 January 2011
How The West Was Lost is a lively and potent indictment of some of the political and economic failures and follies of the UK and US over the past 50 years. Although particularly scathing towards short-sighted governments and banks the argument is clear - we are all to blame for the state we're in.

Ms Moyo is not so pessimistic however in that the West cannot change things around, but she is realistic enough to convey how difficult it will be to do so. She also emphasises how we must learn from those we once taught - namely China and India.

Like a good lead article in The Economist How The West Was Lost is concise and powerful synthesis of fact and comment.
Highly readable. Highly recommended.
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on 13 March 2011
This is a thought provoking book about how the West sleep walked into another South Sea Bubble. Only in this one most people wanted to believe Gordon Brown's "Boom and Bust are over" rather than the reality that any property funded boom was bound to collapse sooner or later. With house prices on the slide and likely to accelerate down as the cuts hit home this Summer, a potential Oil crisis and a steady stream of natural disasters, is the West capable of reinventing itself?

Couple of quibbles. Whoever edited the book needs to be shot for allowing too many inaccuracies to creep in. Plus someone should have explained to Moyo that she needed to use a constant financial currency and exchange rate as a base as it's practically impossible to follow some facts and figures as they jump around currencies and times. I suspect a new edition will clean these up, but it's a sign publishers are skimping on editing.
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TOP 1000 REVIEWERon 11 September 2012
Many believe the West will always be on top of the world's economy, as it has been for the past 500 years. However, if the competition for global economic dominance were an upcoming horse race, according to economist Dambisa Moyo's pessimistic read, Europe would face long odds, America would be even money and China would be the hot favorite. Moyo explains why she believes the US and other Western countries' financial fortunes are fading, while the smart money is on China, India and the other "Rising Rest" nations as good bets to come up on the outside. While always neutral about political conclusions, getAbstract recommends Moyo's well-argued - though sometimes feverish - presentation to those interested in considering various scenarios for the global economy's future.
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