Last night Policy Exchange hosted Dambisa Moyo, the Zambian-born economist and author whose views on international aid in her first publication, “Dead Aid”, have earned the opprobrium of the Left and the aid lobby. She was there to publicise her latest book, “How the West was Lost”, which tackles – in her trademark broad-brush fashion – another area of geo-political controversy: that the West needs to address its failings that both led to, and arose due to, the financial crisis.
She is particularly scathing of the US and cites the multi-decade subsidising of the housing market that ended in the property bubble which when it burst almost took the West’s financial system down with it. It was not the banks’ fault; they were simply operating within a regulatory system whose rigour had been cast aside in the soft-headed assumption that booms and busts had been abolished. She is also critical of the moral hazard – by not allowing any financial institution to fail – that has flowed from the crisis. As with her criticism of aid: it is not the motives of those whom she attacks, it is their blindness to the unintended consequences of their action that she despairs of. At base, it is the feckless attachment by the West to policies that can be evidenced as failing that she rails against. Unless the West applies some clear-thinking remedies, it will lose out permanently to the “guided capitalism” of the countries like China.
But her solutions will not be palatable fare for free trade capitalists and globalisers: for example, she urges trade protection on the US. But nor are her arguments always consistent. She told us of her conversation with a senior Chinese government minister whom she can’t name. He told her that the Chinese privately offered the US government to fund the rebuilding of America’s crumbling infrastructure in return for getting the construction contracts. The horrified reaction from his US counterpart about the political impossibility of hiring China to rebuild America was surely just the protectionism she urges on the US in the book? But it did pointedly illustrate the current inflexion point that the World is at: the US continues to moulder physically while China invests in gleaming new infrastructure for both itself and a – reasonably – grateful Africa.
Her individual arguments are not new but she has the ability to draw together themes in a compelling way – depending on your view. She was undoubtedly brave, in “Dead Aid”, to take on the shibboleths of the massive international aid movement and has earned her permanent place as a hate-figure of the left: she says she now regularly faces boycotts and bans by her opponents. I can’t imagine what the reaction would have been if she was not a black, African woman! In person she came across as a thoughtful, clever, non-ideological challenger of complacency and comfortable group-think.