Book Title - Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth – and How to Fix It
Rating - 4.6/5
Sometime in May, I attended a talk by the amazing Dambisa Moyo and it was absolutely inspiring. Moyo is easily one of my favourite economists, for obvious reasons. Harvard & Oxford-trained award-winning global economist; Moyo is a force to be reckoned with. From her audacious and incredibly honest book "Dead Aid" to "Winner Takes All", she has become a highly acclaimed figure in the ongoing global policy and economics debate.
In Moyo's new book Edge of Chaos, she highlights several barriers to economic growth and ultimately democracy. These 'hurricane headwinds' as she terms them, include the impact of population growth, climate change and declining productivity. Interestingly, many of the headwinds she identifies were an impetus for growth in the past decade. But now, they have become budding threats in many economies across the world. For example, the technological advancement that once facilitated rapid growth and increased productivity now has the potential to render millions of people unemployed in the coming years. Moyo believes that there is a need to radically modify the quality of governance if countries are to witness any visible improvement in growth and development.
From the role of automation in labour productivity to the increased popularity of China's state-led development model, Moyo does a thorough job in creating a solid foundation for her arguments. She also uses statistics, facts and a range of reliable sources to justify her ideas.
Moyo expresses that the public is too shortsighted to make effective decisions regarding economic policies that will produce long-term growth and prosperity. “Political myopia is the central obstacle on the path of growth in advanced economies", she argues. Politicians are reluctant to make hard yet beneficial decisions because they do not want to lose votes. As a result, short-termism is weaved into the fabric of governments of liberal democracies.
Is Democracy a Pre-requisite for Economic Growth?
Moyo clearly does not think that democracy will drive growth; particularly because the current practice of democracy is flawed. Instead, she argues that economic growth is the sine qua non and without it, democracy cannot prevail.
In the absence of democracy, countries like China have exhibited a rapid and remarkable level of growth and development. China has managed to move 300 million people out of poverty in just twenty years while practising a system of state-directed capitalism. Although Moyo praises China's achievements, she expresses her concern that if democracy is not fixed, China's model of development could become the norm; which has severe ramifications for individual freedoms.
Blueprint for a New Democracy
Towards the end of the book, Moyo unveils 10 reforms to resuscitate the quality of decision-making and combat the plague of political myopia that has infected many democracies. She divides the remedies into two; six of them are targeted at politicians and political institutions, and the remaining four are focused on the voters themselves. Moyo states that the suggested reforms are intended for mature democracies like America, Canada, Western Europe and so on.
The ten reforms also target two main issues: dealing with political myopia and improving the quality of decision-making to tackle emerging threats to the health of the global economy. Moyo believes that by enacting long-term policies, sustainable economic growth can be achieved.
While some of the reforms were conventional, others were somewhat controversial. For instance, she suggests an increase in the political terms of lawmakers to ensure that they commit to long-term policies that drive growth; as opposed to short-term policies that get them re-elected. Moyo also advocates for an increase in the pay of policymakers. This is based on the rationale that a competitive salary makes public service more attractive.
We currently live in a society where "intellectuals" possess a substantial amount of influence across different spheres, and this is considered in one of Moyo's solutions. An interesting argument she puts forward is that of weighted voting. She proposes that we give more voting power to the educated and take it away from those who are not politically informed. Now on the surface, the problem with this is that it directly contradicts the idea of 'democracy' that she advocates for in previous chapters. However, she believes that it would lead to improved electoral outcomes and weed out those who are disconnected from public debates. With the rise of populism and the occurrence of Brexit, Dambisa's idea does not seem completely bizarre.
Overall, I enjoyed her writing and I thought it was a great book. Edge of Chaos is highly thought-provoking, extremely informative and a definite page-turner. Moyo rigorously diagnoses the issues facing many liberal democracies today and puts forward some noteworthy solutions. Regardless of the controversial nature of some of these policies, I believe they are all feasible if applied in the right context. In the end, she left me with so many thoughts and questions and forced me to actually consider an alternative view of certain economic and political practices.