Books of Interest
Website: chetyarbrough.blog
Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It
By: Dambisa Moyo
Narrated By: Pamala Tyson
Dambisa Moyo (Zambian-born economist and author with a BS and MBA from Harvard, former World Bank consultant to Europe, Central Asia and Africa.)
“Edge of Chaos” is a revelatory and intelligent analysis of economic rewards and risks of democracies and dictatorships. Fundamentally, Moyo argues failures of government economies are related to societal instability and short-term government economic policies that are disproportionately influenced by monied interests and kleptocratic political leaders. Rich corporations and kleptocratic leaders distort economic opportunity, create chaos while producing and exacerbating economic inequality. She argues America is at the edge of chaos because of a flawed democratic election system that is biased toward short-term rather than long term economic policy.
Moyo identifies the Gini index of income inequality to show that there is little difference between the rich and poor in China and the United States despite their government leaders’ differences.
China is a dictatorship while America is a form of democracy. They are nearly the same on the Gini index scale of citizen inequality while South Africa, Zambia and Brazil are at the bottom. Slovenia, the Czech Republic, Slovakia, Belarus and most of the Scandinavian countries show the lowest differences in citizen’ economic inequality. Mayo argues the difference has little to do with their forms of government except in relation to their government policies. In her opinion, China and the United States could improve their citizen’s Gini index position if their government policies would focus on income equality.
Both China and America have relative stability but with different forms of government.
Unquestionably, freedom is the sine non quo (indispensable ingredient) of America, but it is income inequality that causes the chaos Moyo alludes to in her book. That chaos is not overtly apparent in China because of dictatorship but one who has traveled to China feels there is a similar level of discontent, if not chaos, among its citizens over economic inequality.
Moyo’s solution for reducing America’s growing chaos seems difficult but not impossible to implement.
Dambisa Moyo’s solution revolves around the following 8 recommendations.
- Make voting compulsory to increase voter participation more representative of the people.
- Make election to the House of Representatives a six-year term like the Senate to encourage longer term economic goals but limit the number of terms one can be in office. (Eliminate career politicians.)
- Increase the pay of politicians to what successful private sector leaders receive.
- Establish policy making agencies that can focus on long-term policies without being threatened by near term election cycles.
- Invest in the education of future leaders of the political system.
- Encourage public officials to focus on economic diversification with an educated understanding of technological change in the world.
- The wealth of the nation should be focused on reduction of economic inequality.
- Strategies to manage natural resources should be developed to focus on sustainability.
Fair trade is where America is on the wrong side of history according to the author.
Adam Smith believed in fair trade.
Adam Smith argued for removing trade barriers like tariffs and quotas because of limited natural resources. He explains resources are more efficiently allocated, product production is increased, and economic growth is improved with free trade. As inferred by Moyo, American chaos is partly a result of ignoring Adam Smith’s prescient understanding of economics.
America democracy has journeyed a long way since 1776.
America’s fundamental success came from its emphasis on freedom within rules-of-law organized around the “checks and balances” of three distinct branches of government, i.e., the executive, congressional, and judicial branches. This is the strength of American Democracy that has offered stability. The inference made in “Edge of Chaos” is that America’s stability is at risk if it does not adapt to technological change wrought by A.I. and global interconnectivity.
Technology is changing the nature of American productivity from material products to service. With the help of A.I., America can begin to address many of the service needs of its citizens. From aid to the homeless, to education for service to others, to drug treatment of the addicted, to improved health care for all, the prosperity and income of Americans can be more equitably shared.
Global interconnectivity requires greater acceptance of fair trade as originally described by Adam Smith.
Today’s alleged protection of worker employment by using tariffs to restrict foreign production is shooting citizens in the foot by artificially increasing the cost of living. Re-education for service to the public by using A.I. to make citizens more human-centered offers an alternative to 21st century American chaos.
These are intelligent observations by a very young and well-educated author.
REVIEWS AND VIEWS OF LIFE 