How the West Was Lost: Fifty Years of Economic Folly — and the Stark Choices Ahead, by Dambisa Moyo (Farrar, Straus, 240 pp., $25)
It does not diminish the force and elegance of Dead Aid, the 2009 polemic against Western foreign-aid practices, to acknowledge that the book’s influence was less a product of what was between its covers than of who was on its cover: The author, Dambisa Moyo, is a Zambian, a woman, an economist trained at Oxford and Harvard, and a veteran of Goldman Sachs. Her argument in Dead Aid — that government-to-government aid from the West to Africa does more harm than good, by providing vast opportunity for corruption and blunting the edge of reform — is elementary public-choice economics, but the world of politics and policy is strangely sentimental, and the fact that this familiar observation was being made by an African woman lent it a moral authority that the policy solons find difficult to discover in, say, a Milton Friedman or a Gordon Tullock. In the marketplace of ideas, marketing matters, and it is a lucky thing for the world that such a clear-eyed view of foreign aid is being advanced by such a potent advocate.
Turning her attention to the Western world’s own economic unease in her latest book, How the West Was Lost, Ms. Moyo proceeds along two distinct lines of argument: Austrian and then Malthusian. Offering a short history of the U.S. housing bubble and the subsequent financial crisis, she composes variations on a theme from the Austrian school of economics, identifying a massive misallocation of capital caused by malinvestment in housing as the fundamental problem. From that jumping-off point, she launches into a curiously zero-sum account of the modern global economy, a Malthusian meditation on depleted resources and feral competition for them. Unhappily, we get less of Moyo the economic realist and more of Moyo the Goldman Sachs dealmaker, one who sees the past, present, and future as a grand global corporate-strategy exercise — the Great Game meets Let’s Make a Deal. She deploys this method of analysis in the service of the most voguish of contemporary phobias: the purported decline of the U.S. vis-à-vis China. Relying, it seems, more on her MBA than on her economics doctorate, she analyzes the relationship between the West and “the Rest” as though it were thoroughly a matter of balance sheets and personnel-development programs, of China Inc.’s good investments and America Inc.’s underperforming ones.