Something to think about

The recent book from the distinguished pen of Dambisa Moyo makes interesting reading. Since leaving the employment of Goldman Sachs (she also worked for The World Bank) she has become something of an economics ‘guru’, at least amongst those who fear that materialism and its need for finite resources will bring about the end of ‘western economics’ as we know it.

In a review of her latest book (How the West was Lost) Paul Collier, the eminent economist, now back in Oxford after a long stay with The World Bank notes that Dambisa’s theory is ‘interesting’ but is not, in his opinion, the correct interpretation of both history and the way in which the future will unfold.
http://www.guardian.co.uk/books/2011/jan/16/west-lost-dambisa-moyo-review

He ends his criticism with these words ‘ the difference in vision is well illustrated by infrastructure. The consensus among western economists is that infrastructure offers only low returns and so substantial investment is not worthwhile. American and British infrastructure policies over recent decades have reflected this consensus. Yet a distinguished minority argues that the conventional approach to the measuring of benefits misses all the strategic gains. In contrast to the lousy infrastructure of the US and Britain, China is building high-speed railways. As a result of our investment parsimony and Chinese investment profligacy, the current generation of westerners can consume at a level far above that of the Chinese. But will our grandchildren congratulate us on being so smart?’

 


Paul Collier, whose book ‘The Bottom Billion’ should be essential reading for all studying economics, remains just a little sceptical of his former student.



http://www.ted.com/talks/paul_collier_shares_4_ways_to_help_the_bottom_billion.html

But who will be correct? At present two-thirds of global output comes from the developed nations, whilst the emerging markets generate just one third. But in 10 years time this statistic will have been reversed. How will the rich nations acquire essential resources, add value, maintain wealth, employment and security? Who will ‘call the shots’ in diplomacy, or at the UN Security Council? Who and in what ways will influence the fast changing dynamics of the political structures in Africa, the Far East and Southern America?
In fairness, none of us know the answers to such questions but those we teach will both live through these enormous changes in the balance of world trade flows and they will have to seek solutions to the problems that will arise.

Dambisa, quite a good self-publicist can be seen arguing her beliefs in the following:

http://www.youtube.com/watch?v=X7RyJmGHENw

http://www.youtube.com/watch?v=iiTpvfx_7oY

http://www.youtube.com/watch?v=bfKLUP_dTw4

http://www.independent.co.uk/


Fascinating stuff and certainly worth discussing with students, for this is a topic that will shape the world in which they will live

Oh and if you want some theory to underpin this, then why not look on:

http://www.economicsonline.co.uk/Global_economics/Introdution_to_the_global_economy.html
http://www.councilforeconed.org/resources/

You might also like to look at PAU’s site and enroll for the National Teachers Conference on 15ht June – if we don’t earn the wealth then how are we going to pay for our welfare orientated way of life?
http://www.philipallanupdates.co.uk/


As Clinton said "it's the economy, you fool".


Yours,

John