Mehdi VO: From the Brexit vote in Britain …
Nigel Farage (archive): A victory for real people …
Mehdi VO: … to the election of Donald Trump …
Donald Trump (archive): A new vision will govern our land …
Mehdi VO: … people around the world are rebelling against the ruling elite and increasingly turning to the political extremes. So what lies behind the recent rise in populism and authoritarianism? My guest tonight is an economist, who blames the political establishment in her new book, Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth and How to Fix it. She believes democracy is in crisis and has some pretty controversial suggestions for how to save it.
Mehdi Hasan: I am Mehdi Hasan and today I have come to the Oxford Union to go head to head with economist and best-selling author, Dambisa Moyo. I’ll ask her why she seems to blame democracy for falling economic growth and whether her plan to save democracy – by giving some voters more power and influence than others – could end up killing it instead.
Mehdi VO: Tonight I’ll be joined by Ann Pettifor, author of The Production of Money, and one of only a handful of economists who correctly predicted the financial crisis; Jamie Whyte, director of research at the Institute of Economic Affairs, the IEA, and a former New Zealand politician and philosophy lecturer; and Jason Hickel, an anthropologist at the London School of Economics and author of The Divide: A Brief Guide to Global Inequality and Its Solutions.
Mehdi Hasan: Ladies and gentlemen, please welcome Dambisa Moyo. Dambisa’s first book, Dead Aid, caused waves when she argued that rather than helping Africa, foreign aid was actually making the continent poorer. She is a former Goldman Sachs banker and ex-consultant at the World Bank. Dambisa Moyo, welcome to Head To Head.
Dambisa Moyo: Thank you.
Mehdi Hasan: One of the central premises of your book is that the popular discontent that we see across the West right now, for example, the Brexit vote, the election of Donald Trump, the rise of populist parties, is driven by the failure of governments to deliver economic growth. Yet many experts, pollsters, people who have studied this stuff would say Brexit wasn’t driven by economics, Trump wasn’t elected by the poor or the left behind, it’s a complete myth, it had much more to do with culture and identity issues, which you don’t really address in the book, you focus more on growth.
Dambisa Moyo: I mean obviously my doctorate that I completed here at Oxford a while ago is in economics and so I very much see these issues of challenge, through that lens. I’m not dismissing that there might be other aspects and I’ll leave that to people who are focused on those areas to, to make the case for that. I am concerned about the economics, we do know that real wages have come down, in virtually every developed country over the past 30 years. Social mobility has declined, income inequality has widened, and so the threat of a lack of participation in the labour force, because people have essentially given up on work. All these aspects have created a schism …
Mehdi Hasan: But the link of things like Trump and Brexit, not necessarily true, I get that that’s your prism and that’s your specialism, it doesn’t make it correct. The majority of Americans earning less than $50,000 a year voted for Hillary Clinton, not Donald Trump. The voters in the Rustbelt States who said the economy is the most important issue for the country went with Hillary, not Trump. On Brexit, income, class were not predictors of vote, in fact views of multiculturalism, of feminism, the death penalty was actually a greater predictor of people’s views on Brexit and their economic status.
Dambisa Moyo: Let me clarify a couple of things. So first of all a lot of what you’ve just said, certainly culture, issues around immigration, which have been basically, sort of put forward as a main argument for Brexit and for the rise of Trump and populism more generally across Europe, to me, are masking a more fundamental problem which still has its roots in economics. If people feel that their lives are improving, that the future generations’ lives are improving, I would argue that we would see much more stability. We have seen much more stability in those periods.
Mehdi Hasan: I get that, but then Donald Trump also won more votes from rich people than he did from poor people, he won the majority of college it wasn’t just about stagnating wages.
Dambisa Moyo: I’ll give you a statistic that illustrates the story. As you are aware, the sort of general high-level number is that Hillary won the popular vote by three million. If you take out New York, I’m not talking about the State, just the metropolitan city of New York, and if you take out the metropolitan city of Los Angeles, not California, just Los Angeles, Donald Trump won the vote by over three million votes. That is how split this country is. People in New York City and in Los Angeles are essentially very liberal, tend to be much more wealthy and tend to be deriving their welfare and in terms of their living standards from a global society, and unlike you perhaps, I take the view that there is no point in making arguments that I have no basis in fact or knowledge to make.
Mehdi Hasan: Okay. You seem to treat growth as some sort of magic bullet, and yet if you look at some of the biggest problems facing the world today, problems you recognise in the book, income inequality, climate change, more and more economic growth has not only failed to solve those problems, many would argue, experts would say, it is in fact a driver of those very same problems. Would you accept that?
Dambisa Moyo: I would not and I would not accept it because I think one of the key points that people tend to miss is not that we have not gained from a model where we have depended on growth. We have failed to redistribute that growth in a way that actually enhances the lives of many people around the world. If I think specifically of some of the examples of this, there are many policies today that have short-term gains, particularly in Western societies, but have very deep, long-term problematic consequences. I’ll give you one example: trade protectionism. The fact that the United States, through farm subsidies, and Europe through the Common Agriculture Policy, have locked out the goods that are produced in places like Africa and South America, have essentially created an environment where we have not only created more impoverished people but we’ve also created or fed into issues of political instability.
Mehdi Hasan: I’m saying deal with the real world, not your aspiration, noble aspiration, which is more growth, more growth …
Dambisa Moyo: Look at the Oxfam report every January. They’re putting out reports and saying the world is growing, we know that, I think the estimate for this year is that the eight wealthiest people in the world have more wealth than the bottom 50 percent of the world, and so …
Mehdi Hasan: More growth doesn’t cut inequality. In fact it increases it.
Dambisa Moyo: I was very clear, I said that the point is not about growth, the fact is that how we redistribute that growth.
Mehdi Hasan: And on climate change, you talk about the edge of chaos, but what about climate chaos? Isn’t it irresponsible to talk about growth, growth, growth, given experts like Kevin Anderson at the Tyndall Centre for Climate Change Research have said that continuing with economic growth over the coming two decades is incompatible with meeting our international obligations on climate change?
Dambisa Moyo: Well, there’s a whole literature, which obviously you haven’t cited or perhaps you’ve not seen, which is focused specifically on what we call green growth. There’s massive discussion around this and in fact you talked about China earlier. China is quite a lead ahead in terms of trying to ensure that …
Mehdi Hasan: On the environment?
Dambisa Moyo: Of course they are. Have you been there recently? Beijing has more solar panels than most of the other countries around the world.
Mehdi Hasan: And yet the UN’s Environmental Protection Index, formulated by Yale University, puts China at 120 out of 180 countries in the world.
Dambisa Moyo: Listen, China is the second largest economy in GDP terms. It’s ranked near number 100 in per capita income terms. This is one of the poorest countries on that metric. The notion that somehow they should wake up, and have an economy that’s functioning at the highest levels is absurd. The United States, even in the last 20 years, they’ve had cities where there’s been mass pollution, just Flint, Michigan is not 20 years ago, where they polluted water, and the notion that you’re putting all this pressure on China, which is still a nascent economy in many respects, to me is foolhardy.
Mehdi Hasan: I’m not putting pressure. You cited China. I think you were talking about green growth. Well you were talking about green growth, you don’t advocate for green growth in the book.
Dambisa Moyo: I sure do. I sure do.
Mehdi Hasan: How many times is climate change mentioned in your book?
Dambisa Moyo: Have you read my book?
Mehdi Hasan: Yes, how many times …
Dambisa Moyo: Have you read my … no, seriously.
Mehdi Hasan: Okay, let’s ask you a question …
Dambisa Moyo: I’m a bit worried you may have just read some reviews.
Mehdi Hasan: Well, let’s have a test, let’s have a test on your book. How many times have you mentioned climate change in your book?
Dambisa Moyo: Well, there’s a whole section.
Mehdi Hasan: How many times, it’s a very simple question, how many times do you mention climate change?
Dambisa Moyo: There’s a whole section, I’ve mentioned it multiple times.
Mehdi Hasan: You mentioned four times, the words climate change appear in this 200 multiple page, four times.
Dambisa Moyo: What pages?
Mehdi Hasan: I can give you the pages, but it’s only four.
Dambisa Moyo: I’d love to check.
Mehdi Hasan: So all I’m saying is, it’s great, please do check, go home, buy the book. Tell me now though, what is your position on growth and climate change? Summarise it for us in a sentence.
Dambisa Moyo: Well, as I said, I think the framing is around green growth. We have 90 percent of the world’s population that lives in the emerging markets, 90 percent. Those people, including myself who comes from Africa, have been assured, have been encouraged that we can live like Americans, live like British people. If you decide you want to go and put the genie back in the bottle, good luck.
Mehdi Hasan: I do want to go to the panel on this, but just before I do, one last question, I must ask this to you. You were working at Goldman Sachs back in 2008 when …
Dambisa Moyo: Yes, for ten years actually I worked there, almost ten years.
Mehdi Hasan: But you were there in 2008 at the time of the financial crash that Goldman Sachs helped cause, which killed growth. Many might argue that, are you really the right person to be writing a book about growth given the association with Goldman Sachs?
Dambisa Moyo: I don’t understand the connection.
Mehdi Hasan: The question is if you work at an institution and you’re part of an institution that did so much damage to the global economy and then you come around and say these are the solutions for growth, the biggest hit to growth came from the banks and from Goldman Sachs.
Dambisa Moyo: You know, what you’re exhibiting is a pure lack of understanding in how the global economy works. So let me just …
Mehdi Hasan: So Goldman Sachs didn’t pay a five billion fine and say we were responsible for that?
Dambisa Moyo: Let me elucidate for you, many governments, not just this government in this country but also governments in the United States, is a good example of this. They have a clear and stated policy called housing for all. This is a policy where they deliberately encouraged everybody to own a house. It doesn’t matter what your income is and your ability to pay …
Mehdi Hasan: So this is the argument that the government was to blame?
Dambisa Moyo: I’m not saying the government was to blame, we’re all to blame because we essentially, many of us …
Mehdi Hasan: But Goldman Sachs didn’t have a special role to play?
Dambisa Moyo: I think to …
Mehdi Hasan: It’s a very simple question. Does Goldman Sachs have a special role to play? They paid a five billion dollar fine and said we accept our role …
Dambisa Moyo: Many institutions pay fines, I’m trying to help you become a bit more educated in this field because …
Mehdi Hasan: You can keep insulting me. I’m just asking a very simple question.
Dambisa Moyo: I’m not. I’m just saying that we all have to take a responsibility. I know you want me to give you a one-liner.
Mehdi Hasan: Yeah, I want a yes or no, does Goldman Sachs have a special responsibility?
Dambisa Moyo: No, there’s no special responsibility.
Mehdi Hasan: Got it. Okay, let’s go to the panel. We have an excellent panel here, waiting to join this very interesting discussion, I’m joined by Ann Pettifor, who’s the author of The Production of Money, one of a handful of economists, as the newspapers often remind us, to correctly predict the financial crisis. Ann, what do you, when you hear the arguments about the importance of growth, as presented by Dambisa, both here and in the book, what’s your response?
Ann Pettifor: Dambisa, you said governments should be making, formulating public policy. Policy requires boundaries. Capital hates boundaries. Goldman Sachs hates boundaries. It wants to go where it wants to go and where it can make the biggest profits. And you were advocating essentially a globalised economy where boundaries won’t matter, where governments won’t matter, where public policy will not have an effect because markets will decide and I find that there is a really deep hypocrisy in that. You’re, on the one hand, trying to blame governments. On the other hand you are mostly in favour of markets making the most important decisions that affect millions of people across the world.
Mehdi Hasan: Do you want to respond?
Dambisa Moyo: Yes, I’d love to respond. I am a supporter of this idea of globalisation, the movement of trade and goods and services, movement of capital, but also the movement of people, as an immigrant. However, we know that what is defined and explained in textbooks does not actually happen in real life, because public policy and imperatives and trade-offs and real politique, the fact that especially democratic governments want to win elections, means that these things do not apply in real life.
Mehdi Hasan: Jamie Whyte’s with us, who’s a director of research at the Institute of Economic Affairs, the IEA, he’s also a former New Zealand politician and philosophy lecturer. David Attenborough, Sir David Attenborough, one of Britain’s great naturalists, says, “Anyone who thinks you can have infinite growth in a finite environment is either a madman or an economist”. Do you agree with him?
Jamie Whyte: Well, infinite of course not, you can’t have it, but I really couldn’t agree more with Dambisa. The era of globalisation, imperfect as it’s been, has seen billions of people lifted from poverty. It’s really been the most astonishing period of success in human history. In 1980, 40 percent of the world’s population lived, on today’s money, two dollars a day or less. Today, it’s about eight percent, I think, and it’s coming down, down, down. That is a fantastic achievement, which we should be celebrating and all these funny little, I mean, I find it astonishing that people are hostile towards the processes that have brought about what is close to a miracle.
Mehdi Hasan: Okay, let me just bring in Jason Hickel, waiting very patiently there, anthropologist at the London School of Economics, author of The Divide: A Brief Guide to Global Inequality and it’s Solutions. Jason, I’m interested in the climate argument, because Dambisa has very forcefully rejected the idea that there is a clash there. You can focus on green growth. What do you think about that?
Jason Hickel: So it’s interesting because the only reports that were published by international institutions on green growth were done in 2012 for the UN summits on sustainability. What’s interesting is that they did not cite any substantial models to justify this idea that rich economies, can manage to grow while at the same time massively reducing material consumption of emissions down to the current budget of two degrees Celcius. Since then, fortunately, there have been a number of key studies, which I write a lot about, and literally every single one of the models that has been developed shows that, uh, that green growth is not a thing, it’s literally physically impossible to have exponential growth at the same time as reducing material consumptions and reducing emissions fast enough to stay within the two degree Celsius carbon budget and, to me, it’s fundamentally irresponsible to have a book out there promoting endless growth in rich nations where it’s not necessary in the face of all the research we have about planetary boundaries.
Dambisa Moyo: So who has promoted endless growth in developed countries? That’s not my book. I don’t know whose book that is, but just to be absolutely clear, that’s not mine.
Jason Hickel: It’s very clear in your book that you’re talking about the United States, you’re talking about nations like the UK, we’re talking about Brexit and you’re talking about Trump and you’re trying to say these people are upset because there’s not enough growth. You’re trying to say what we need is more growth in these countries.
Dambisa Moyo: No, thank God I’m here, because if I were dead you’d be saying these things and I wouldn’t be here to defend myself, so I’m glad I’m here. And I don’t worry about the United States growing at three percent, I worry about emerging countries, and I talk about this very explicitly, about emerging countries growing below seven percent. You need to grow at least seven percent to double per capita incomes in one generation. I’m desperately worried when South Africa, Russia, Brazil, are growing at one, two percent, I am worried that India’s growing four, five percent, that’s not …
Mehdi Hasan: But you also are worried about America and the UK. Otherwise why talk about Trump and Brexit?
Dambisa Moyo: Only to the extent that public policy is derived …
Mehdi Hasan: We’ve got to move on in the show, we’re going to run out of time. Let’s talk about public policy, but the most provocative chapter of your book, that’s got the most attention of the reviewers and people who’ve read it so far, is chapter seven, which is called Blueprint For A New Democracy. In it, you talk about various proposals for the form.
Dambisa Moyo: Ten proposals.
Mehdi Hasan: And you say, quote, “Radical reform of democracy is needed to save it from decay.” One of your most contentious proposals is to have voters in the West pass a test, a knowledge test, a civics test, in order to gain the right to vote. Surely you must see how tests of that kind, could be deployed, probably would be deployed to disenfranchise, the poor, those with less access to education, minority communities?
Dambisa Moyo: Absolutely, and I talk about that. I mean obviously I am black, obviously I’m a woman and obviously I’m from Africa. If I were to purport and to support types of, regimes or systems that actually do not allow people to vote, based on a whole list of adjectives, race, gender, wealth, land ownership, I’d be the first person that’d be disenfranchised, so it’d be crazy, and I’ve been accused of being crazy. I’m not that crazy to suggest that I should not be allowed to vote …
Mehdi Hasan: But you are suggesting …
Dambisa Moyo: And just to be clear as immigrants, and I’m sure there are many immigrants in this room, they will tell you, if you want to be a citizen in this country, you want to be a citizen in the United States, you have to pass a test. It is already the case, so I don’t know if people aren’t aware of this …
Mehdi Hasan: For immigrants, not for people who were born here.
Dambisa Moyo: And it doesn’t matter. It doesn’t matter.
Mehdi Hasan: Well, it does because citizenship requires …
Dambisa Moyo: I said it doesn’t matter what your income or your origin or your race or gender is. When you’re an immigrant that shows up in these countries, you have to take a test. All I’m suggesting is the test is designed to reward people for engagement.
Mehdi Hasan: You mentioned reward. Many people would say voting is a right not a reward, a lot are, and second of all …
Dambisa Moyo: People aren’t using that. Forty-two percent participation rates doesn’t mean a lot are, 42 percent …
Mehdi Hasan: Where’s 42 percent?
Dambisa Moyo: The average across Europe. The United States, 50 percent, 30 percent of people who are low income. We do not want that situation.
Mehdi Hasan: So the idea is then you make it harder for them to vote by putting a test in front of them?
Dambisa Moyo: Hold on, hold on …
Mehdi Hasan: That’s a weird way of getting people to vote.
Dambisa Moyo: Well, you don’t understand the book, once again, I’m desperately concerned.
Mehdi Hasan: I don’t understand the book?
Dambisa Moyo: Well, because the argument was very clear …
Mehdi Hasan: Maybe I’ll fail your test then as well.
Dambisa Moyo: Yeah, you probably would.
Mehdi Hasan: Just deal with the discrimination point, you say you’re a black woman from Africa. So then why propose a test when in the US Deep South literacy tests were explicitly used to disenfranchise black voters?
Dambisa Moyo: Because, once again, you’re not appreciating what I’m trying to do, of which there are two goals. Number one, we want to increase participation rate. We want to ensure that the idea of one man one vote, which is essentially the mantra that everybody’s been told for many years about liberal democracy, we want that to hold, as many people must vote, but we also want to make sure that the people who are voting have some good knowledge of what exactly we’re voting on. The day after Brexit, I’m sure many people know this, apparently the most Googled term was “what is Brexit” or “what is EU”?
Mehdi Hasan: That’s a bit of an urban legend.
Dambisa Moyo: Well, it may be but, you know what, in a world of fake news, even urban legends become facts and I think that whatever the case …
Mehdi Hasan: In a world of fake news, what was that, urban legends become facts?
Dambisa Moyo: I just want to be clear, and by fact, I don’t mean they become true. What I mean is that it goes around, as you said, urban legend, people start to quote it like myself and I was very clear, I said …
Mehdi Hasan: Why quote something that’s untrue?
Dambisa Moyo: I don’t know it to be untrue. Do you know it to be untrue with certainty?
Mehdi Hasan: Well, yes, actually. Google did a study and a thousand people only asked Google, if you’re going to extrapolate from a thousand people to all of the people who voted, so all of the people that voted for Brexit were thick, is that what you’re trying to say? I don’t understand what the point of that question is.
Dambisa Moyo: The point of the matter is I was trying to explain to you that the book is designed to target two things, participation rates and to ensure that we have a knowledge …
Mehdi Hasan: Got it. Okay, so let’s deal with the more controversial proposal. You say that not just people should pass a test, but people who are more qualified or more knowledgeable should have more votes or more influence. You say, quote, “three tiers of voters: the unqualified, the standard qualified voter and the highly qualified voter”. In a world of Brexit and Trump and populism in the far right, do you really think giving some people more votes than others, based on education, will stop populism or help populism?
Dambisa Moyo: Okay, so let me take a step back and explain exactly what this chapter seven is doing. Chapter seven offers ten proposals. These proposals are not supposed to be taken in wholesale, because countries have different levels of democracy, but also very importantly they all have some precedence somewhere in the world. So you’re picking on a specific point around this question of ranking voters, that already exists, already in the United States, in the Democratic Party, super delegates have a bigger weight. In Switzerland, there is a massive movement by the young parliament there to actually increase the participation, in fact the weight of young peoples vote between 18 and 40, so that it’s double the weight of people over 60 …
Mehdi Hasan: You don’t think people will go crazy if certain people get more power, more votes than them based on their education or qualifications? Nor do you think that will increase inequality?
Dambisa Moyo: You’re not listening, you’re not listening. Nobody said anything about education. Once again, the test is based on participation not on education. You’re taking sentences out that have a broader context.
Mehdi Hasan: Let me just read to you, in context, page 201; “Weighting could also be tied to one’s professional qualification, such as certification as a doctor, teacher, lawyer, employment status, level of educational attainment, on the assumption that excelling in these domains makes one more likely to make well informed choices in the voting.”
Dambisa Moyo: And once again, I’m saying to you…
Mehdi Hasan: Do you stand by that?
Dambisa Moyo: I’m explaining, if you actually read the paragraph before that, you’ll see that I was essentially saying here is how the argument goes, the argument would be that you could have votes based on education and if you read that part after that paragraph, I quickly dispel that
Mehdi Hasan: Okay, let’s go to our panel. Ann, you were eager to come in there. What do you make of this?
Ann Pettifor: Well, I wanted to just remind Dambisa of why we had the French Revolution and why Thomas Paine wrote his book, The Rights of Man, and why Mary Wollstonecraft wrote, The Vindication of the Rights of Women. But I think, I find the book disappointing in that it was shallow. It’s true that participation rates have fallen, but I think the question to be asked is why have participation rates fallen? And that’s not asked in the book, instead you’re trying to tell, patronise the public, tell them that they haven’t got it right and they need to be tested and trained in order to vote, instead of asking why they’re not participating. They’re not participating because they find that markets, invisible, unaccountable, remote markets are making decisions that affect their livelihoods …
Mehdi Hasan: Jamie is shaking his head.
Jamie Whyte: I don’t want to be diverted by this funny idea that markets make decisions. Only people make decisions. I think that there is a problem with voter ignorance. Since each vote has very little influence on the outcome of the election, it’s not worth investing a lot of time and effort to get the knowledge you would need to be an informed voter. And I think it’s very interesting that lots of people come up with ideas about how to deal with this. I’m not actually all that keen on your specific ones, not all of them, but I think it’s a very worthy area of enquiry and we don’t want this kind of hysterical reaction to any proposal that it’s undemocratic or all democratic systems have undemocratic elements in them otherwise they wouldn’t function at all. I think we’ve got way too much democracy now, in the sense that far too many decisions are collectivised and they’re made by people that are ill-informed and it’s wonderful to see somebody trying to engage with these issues. We’re not going to answer it tonight obviously.
Mehdi Hasan: Jason, “we have too much democracy”, Jamie says.
Jason Hickel: Yeah, so I actually think that you’ve done yourself a disservice Dambisa because your last chapter is full of these interesting proposals about gerrymandering, about media regulation, etcetera, but then you give this kind of absurd proposal about weighted voting, which overshadows all of that and no one’s talking about any of your actual good reforms. So I think you should probably renounce the position and then talk about the other bits you have …
Dambisa Moyo: Oh my God, who has never heard about gerrymandering and campaign finance reform? I mean, I wanted to be innovative and now I’m being crucified.
Jason Hickel: The crucial point I want to make here is I think the biggest issues about democracy you actually failed to address at all that is this: if we’re talking about the global economy, we have to look at the institutions that are governing global economic policy, like the World Bank and the IMF, where voting power is monopolised by the US and a handful of rich nations. Where the global South, which has 85 percent of the world’s population has less than 50 percent of the vote on crucial decisions on macroeconomic policy that affects them.
Dambisa Moyo: I have written extensively about this. My book Dead Aid was specifically targeting international institutions and the fact that the policy-making decisions were centralised in a particular place where are very much removed from recipient countries.
Mehdi Hasan: You say in the book, you’re very critical of professional politicians, as are many people, and you talk about how to raise the standard of people in public office, that they should have experience outside of politics, have real world jobs. How do you feel about the president of the United States? Did electing a CEO billionaire make America more stable, less corrupt, in your view?
Dambisa Moyo: So I don’t necessarily like the way the president talks about women, in fact I don’t like the way he talks about women at all. I don’t like a whole host of other things. But all I would say is the American economy is functioning. They’re getting stock market highs all the time, their unemployment rate, not just for the average of society, but also for minority groups, is at all-time lows. There are some big concerns that they are dealing with but we all have to accept that Americans have made enormous sacrifices and unfortunately, until European governments start to take more responsibility for what they have to pay and more generally we start to feel a bit sympathetic for what has happened to that economy and that country, I think we’re being a bit too simplistic.
Mehdi Hasan: Okay, on that note, we’re going to have to take a pause. Join us for part two of a very lively discussion here with Dambisa Moyo on Head to Head. We’re going to be talking about China, democracy, development and we’re going to hear from our very patient audience here in the Oxford Union. Here, after the break.
Part II
Mehdi Hasan: Welcome back to Head to Head on Al Jazeera English. I’m here in the Oxford Union with Dambisa Moyo, best-selling author, economist; she’s got a new book out, The Edge of Chaos.
Dambisa, what I didn’t get reading your book is that you heap praise on liberal democracy, on capitalism, you say you want to save it from some of the problems that it undoubtedly faces, its market, but then you also are full of praise on China and you talk about how, quote, “Economic growth is a prerequisite for democracy, not the other way around.” So is democracy, I’m wondering, something you think gets in the way of growth and prosperity?
Dambisa Moyo: So it’s a brilliant question that I’ve talked about. There’s a lot of fantastic research out about this because ultimately we want a democracy that functions and survives. Professor Przeworski, he was a professor in the United States, talks about this. He’s got a model that predicts how long democracy will survive based on per capita incomes in a country. And his argument’s very, which I subscribe to, is very basic which is that if you don’t have a middle class that actually is participating in the process of voting, then you end up with a very narrow set of voters and that is a system you don’t want to support. We want to have a system where the population is at a critical mass to hold the government accountable and I’ve argued in previous work, my book, Dead Aid, for example talked about the failure of democracy in Africa, precisely because of this point. Our governments very rationally are able to pay attention to our foreign aid because they don’t have to rely on the critical mass at home, and so there is I believe a very clear correlation.
Mehdi Hasan: So I know you don’t like simplistic yes or no questions, but are you saying then, just to be clear, that the, say, the Chinese model or the undemocratic authoritarian model, is better for growth for the economy than a liberal democratic model at this moment in our history?
Dambisa Moyo: Okay, so, once again, I do have to explain. There is essentially a comparing apples and oranges, the proverbial apples and oranges. These are two very different ideological systems. Western ideology puts the individual as paramount, the most important entity is the individual. China’s model is based on prioritising society, the entity of society as the most important entity. The reason this is critically important is that there are enormous social costs from a model where you have an individual as paramount. Many of those costs we’ve kind of swept under the rug. Population growth, so the idea that I can have as many children as I want, that’s great, that’s my freedom, that’s my right, I’m not impinging on anybody’s rights in theory, but in practice we know issues of climate change, issues of green growth and the trade-offs around growth, but also in terms of healthcare, there are many ways in which this idea of I can do whatever I like actually does impinge on society’s ability to grow and transform. The Chinese model is not, at the end of the day, the only model and the best model because it also has its own costs, but this is the trade-off that we’re dealing with …
Mehdi Hasan: A pretty huge cost, in terms of human rights abuses. It’s a dictatorship.
Dambisa Moyo: Well, China’s also the largest foreign lender to the United States and so for all our objections, perhaps let’s be very careful about how, first of all, we can go into history and talk about suffrage. 1971 was the first time that in Switzerland women had the right to vote. We can talk about the civil rights movement, which is only in the 1960s in the United States, so let’s not all get hot and bothered about where China is. China is on a path. It does have to do a lot of work on its democratic process. It’s already underwent many democratic …
Mehdi Hasan: It’s under way? Most people say it’s going the other direction. Xi Jinping just made himself dictator for life.
Dambisa Moyo: First of all, if you go to China and spend time there, which I have, they have democratic elections at the mayoral level. There is innovation already happening in that political system. I would just say, “Physician, heal thyself”. I think this is the problem I want to avoid because we’re very good at spending time talking about countries that are blatantly non-democratic when actually this book, and I think where the focus really needs to be and where the problems have come, just in terms of the rise of populism and also the financial crisis, these are in the West. Let’s solve the problems of the West …
Mehdi Hasan: Earlier on you were telling me your focus wasn’t the West, it was the developing world?
Dambisa Moyo: Yes, it is, ultimately, because public policy comes from the West.
Mehdi Hasan: So you talk about not giving the West a pass, most of the guests on this show have, actually many of them have been from Western governments, I’ve held them to account, but when you say China is masterfully executing a carefully choreographed plan for growth, which is largely attributable to its political system, it does sound like you’re endorsing that political system, which is a horrific dictatorship.
Dambisa Moyo: I’m merely saying, we cannot pretend that over 300 million people have been moved out of poverty in 30 years in China. The bottom line is that has been done and no other country in history or prehistory has ever been able to do what the Chinese have done. I don’t think we should spend a lot of time pointing fingers at China. You know, “Physician, heal thyself.”
Mehdi Hasan: Why not?
Dambisa Moyo: Our economies and our political system in the West …
Mehdi Hasan: I get you’re an economist, but there are people suffering hugely …
Dambisa Moyo: I said economies, if you let me finish, economies and political environment are under siege right now. They are, voter participation …
Mehdi Hasan: Where, in the UK and the US and the West?
Dambisa Moyo: Yes.
Mehdi Hasan: Okay, but we don’t have reeducation programmes. We don’t have a secret police. Things are bad. I’m a big critic of Western democracy, but we’re not on a Chinese level of political …
Dambisa Moyo: Don’t delude yourself. Voter participation rates are low, number one. Number two …
Mehdi Hasan: At least we can vote.
Dambisa Moyo: Money has seeped into the political …
Mehdi Hasan: I mean, this is a bizarre argument.
Dambisa Moyo: That’s all well …
Mehdi Hasan: Can you vote for Xi Jinping?
Dambisa Moyo: That’s all well and good. Vote away then because money, money, money has seeped into the political process, okay, 158 families …
Mehdi Hasan: I’m not disagreeing with anything you’re saying. I’m just saying, we’re not China.
Dambisa Moyo: I’m offering a perspective, I’m offering a perspective. Let’s focus on our own democracies, where we have populism. We have real concerns, we have …
Mehdi Hasan: I get that. I get that, but then I also read your book …
Dambisa Moyo: We’ve got a Hungarian Prime Minister Orban talking about …
Mehdi Hasan: Exactly, exactly, so how …
Dambisa Moyo: We have Russia which is producing 40 percent of the energy into this country, into this region.
Mehdi Hasan: I get that but this is classic what-aboutery.
Dambisa Moyo: It’s not.
Mehdi Hasan: I’m going to ask you a simple question about something you wrote. You’re a very influential woman, you’re a bestselling author, the reason we invited you on this show, you have millions of followers on social media. When you say China’s contemporary economic success is largely attributable to its political system, is that not, some might say that’s irresponsible, because it sounds like you’re saying that’s the system you need for growth, that’s a good system.
Dambisa Moyo: Let me explain what I think the virtues of that system are. That system is a long-term system. We have a fundamental schism between the long-term economic challenges and headwinds that the global economy is facing, led by developed countries, things like debt, etcetera, productivity declines, versus the short-termism embedded in the electoral process. In the United States, they have elections every two years. This is incredibly disruptive and it creates this mismatch between long-term economic challenges and short-termism in the political system. The Chinese model doesn’t have to deal with that. They’re not seduced by today’s voter, or they don’t need to seduce today’s voter in order to remain in political office.
Mehdi Hasan: Let’s go to our panel, Jason Hickel is an anthropologist at the London School of Economics. When you hear Dambisa talking about China in that way, does that make sense, the long-termism?
Jason Hickel: Yeah, it’s actually, I found this argument very frustrating, and the reason is because the book is basically about the value of neo-liberal free markets and you say that we need more of them. Okay, but then you go into quite a lot of detail about how you admire China, you admire the new deal in the US. It’s exactly the opposite economic ideology, so where exactly do you fall on this? I mean it’s quite confusing and you’re very slippery on that.
Dambisa Moyo: So I think it’s pretty obvious because what you described, the new deal, Manhattan Institute, sort of Manhattan Project, China, what do they have in common? They have the government playing an incredibly important role …
Jason Hickel: Not in …
Dambisa Moyo: The government is not seduced by short-term voters every two years or every electoral cycle. That is what they have in common.
Jason Hickel: But it seems the problem here …
Dambisa Moyo: Their capital allocation decisions are based on long-term thinking, long-term planning, issues which focus on future generations. That’s the basic thing.
Jason Hickel: The problem here is you’ve actually targeted the wrong enemy. It’s not democracy that’s the problem because, again, the New Deal happened in a democratic society. It’s not democracy that’s the problem, right. Actually what the problem is here is free market capitalism, which is itself short-termist, and so the solutions are accurate, that the New Deal …
Dambisa Moyo: I have ten very clear problems with democracy. We don’t, unfortunately don’t have the time for me to go through them. The notion that democracy is not a problem is mad. It’s crazy. We’re looking at across Europe right now, we’ve got masses of populism, my own host here, my host here …
Jason Hickel: I think the problem is here you’re very confused which economic ideology you actually support.
Dambisa Moyo: Oh my God, so first of all, no I’m sorry, I do have to answer that …
Mehdi Hasan: Jason you made the point, let her respond.
Dambisa Moyo: Can I just add to it because that is at the crux of the matter. He’s just asked the question, “I want to know what ideological model she supports.” I am not an ideologue, let me be absolutely clear.
Mehdi Hasan: Isn’t that what ideologues always say?
Dambisa Moyo: No, it’s very …
Mehdi Hasan: “You’re an ideologue, but I’m not.”
Dambisa Moyo: He rightly pointed out that I’m not ideological at all. The bottom line is that there are definitely benefits and merits from the capitalist Western system. There are also very clear benefits from China.
Mehdi Hasan: Jamie, democracy is a problem, not a problem when it comes to economic growth. Where do you stand on that debate?
Jamie Whyte: Well, I want to first agree with the basic position that democracy isn’t a required precursor for economic growth. And, in fact, if you look at the economic growth that occurred in the United States and Britain in the 19th century, which was basically founded on institutions such as private property and the rule of law and so on, those institutions got, came into place, the British legal system, prior to anything that we would today call democracy and then democracy came later. So the basic point I think holds. What’s going on in China is indeed completely different, that isn’t a rule of law, a liberal-democracy-type system, but I think that the main point is to see that democracy is not a required precursor and indeed can get in the way for the kinds of reasons that Dambisa’s pointing out; that it instead of setting up the institutions required for a stable and developing economy you get kind of politicians doing deals with the electorate in a certain sense, over the short term, in ways that are destructive. But by that way I want to say that I am an idealogue.
Ann Pettifor: I just want to say that the most popular president of all time was Roosevelt and that was because employment was high, because people had jobs, people had decent incomes and they had public services and they loved that and they participated and they voted. What we have had since 1971 and liberalisation, neo-liberalism, is that people have found themselves becoming disempowered because there are forces beyond their control, beyond the control of their governments. If parliaments are unfashionable it’s because parliaments don’t make the decisions anymore.
Mehdi Hasan: Where do you stand on China? Is that a political economic model worthy of emulation?
Ann Pettifor: It’s a very clear, it’s an authoritarian, it’s socialist, it’s communist, the people are educated, the people are housed. Unlike many governments in Africa, the people are cared for and the market has managed but then there’s a lot of social unrest which is repressed brutally by the government.
Dambisa Moyo: I think it’s, it’s not very surprising that we’re looking very fondly back in the 1930s when actually the civil rights movement was just gaining momentum in the United States. It’s all well and good to remember those good old days, but guess what, people like me were not even allowed to vote at that time, so I mean it might be, it might already. You said it, not I. So there are significant weaknesses in the democratic process. This is absolutely the case. I mean the notion that we can sit here, take foreign direct investment from China, trade with China, have China lend our government enormous amount of money and then turn around and say, well, this is a big bad wolf and we don’t want to actually deal with them, I think is farcical.
Mehdi Hasan: Okay, let’s go to our audience here in the Oxford Union. Do you want to raise your hands and wait for the microphone to come to you? Yes.
Audience Participant 1: Thanks very much. If I can go back to the question around the weighted voting, so the post-apartheid South African constitution accord said that “The vote of each and every citizen is a badge of dignity and of person who quite literally says that everyone counts.” Now given the voting is not just an instrumental exercise, it’s also an exercise in personal self-worth, saying that some people can vote, others can vote and worth more, isn’t that just fundamentally offensive?
Dambisa Moyo: Well, I have a sense of what you mean by offensive, I mean, I’m not really interested in emotional reactions, I’m more interested in something that’s quite sustainable. This is about engagement, it’s how it is that we expect citizens to engage in the process. I think that we need to explore everything. I was very clear that I do not think that this type of weighted voting works in a general election. I consider myself pretty well-read. I’m pretty engaged. I’m quite interested in what’s going on in the world. But I would not argue that I actually know what the best use or what the best decisions around healthcare system should be and I do believe that if I spoke to doctors, nurses or people who work in the medical field, they’d be better able to tell me.
Mehdi Hasan: Dambisa, if doctors had been asked to vote in 1948, we wouldn’t have a National Health Service.
Dambisa Moyo: I know what you’re going to say.
Mehdi Hasan: We wouldn’t have a National Health Service if we’d asked doctors to choose whether they want to have a public healthcare system.
Audience Participant 2: Thank you. From your comments, it sounded like you’re making a very broad distinction between government and private companies and the free market. Is this distinction reasonable and that for example, if we were to limit protections, the protections that governments enforce, wouldn’t private companies like Goldman Sachs operate like governments?
Dambisa Moyo: So it is absolutely the case that we now live in a world where corporations, but not just corporations, wealthy individuals are taking a bigger responsibility and a bigger role in participation in public, things that used to be the purview of only public affairs, public governments. Think about the Gates Foundation, think about many other foundations around the world that are delivering healthcare outcomes, outside of the electoral process, education, etcetera. So these lines are certainly becoming more and more blurred. I personally think that we are moving more into the world that was requiring that, not only because shareholders are demanding it, but other stakeholders and communities, they’re saying, “If you’re going to set up a company in our backyard, we want you to help with infrastructure, we want you to build schools, we want you to invest in healthcare.”
Audience Participant 3: You’ve mentioned this quite a few times, that debates and dialogues on Africa at the moment, when they talk about political aid, business, politics or glamour aid, as you so succinctly put it, different people are taking part, rich, the powerful, white upper class men, are part of the conversation. So what do you suggest needs to happen for Africans to take back control of the dialogue, the conversation, and decide what happens in our countries?
Dambisa Moyo: Well, one of the most interesting questions that I received when I was marketing Dead Aid was if I were given a billion dollars, what would I do with it? And my answer was I would invest it all in a PR organisation because as far as I’m concerned the aid movement has been tremendously successful for 60 years in convincing Africans that they’re not worth being, having a seat around the table, they’re not that smart, they’re not that good and they’re always going to be a drag on the global economy. The narrative of Africa has been, in my lifetime, one of corruption, disease, war and poverty. Over the past ten years, there’s been a significant shift with the arrival of China and many other countries, and those countries do have their issues, but the notion that anyone would think that there’s been a positive narrative around what the stories around Africa, it’s just foolhardy.
Mehdi Hasan: Ok. Let’s go back, the gentleman here in the front.
Audience Participant 4: Hi there. I work on aid policy for Oxfam. We do believe that aid can contribute to addressing challenges like inequality and redistribution. In almost ten years since your book, in regions like Africa, we’ve seen aid double, but tax revenues have quadrupled, deaths from diseases like malaria, HIV have halved, and we’ve also seen poverty rates come down and aid has made a contribution and we have seen democracy move forward in fits and starts, so the idea that you continue to hold those views and you would actually firm them up even stronger is hard to understand. Can you explain?
Dambisa Moyo: Yeah, for sure. So two things, first of all, I don’t know, entirely know what the Oxfam aid budget comes from but many aid agencies that are proliferated across Africa are heavily reliant on their government, on Western governments. The corrosive nature of, uh, of aid, is around this question of, of democracy on the African continent. We do want to be able to hold our governments accountable but we can’t do that if actually Oxfam is going to solve the healthcare problem, somebody else is going to solve education. How are we able to hold our governments accountable from a public policy stance if they are not the ones who are delivering these outcomes? We do need to move away. I was very clear that, I didn’t say we need to go to zero. I think there are some initiatives and there are some good things that I myself am involved in some aid initiatives that I think are very good, they’re very targeted. But even the aid programmes to Europe, after World War Two, in the form of Marshall Plan, were short, sharp and targeted, they were not open-ended concessions that have been very corrosive to Africa, not just because of corruption but because of inflation, the debt burden that they’ve left on the continent and I will just say one last thing. You’ve given a whole list of positive things that have happened in the continent over the last decade, you’re absolutely right, there have been significant wins but the notion that those are because of aid, I think is wrong. I mean, as I said, we’ve had China come in, there’s been significant investment from China, we’re able to trade with the Chinese, for better or for worse, and I think that that is just one example. Many other governments are now going to the capital markets to raise capital, so I think aid is producing some help but it’s absolutely not the case that it is all because of the aid regime, which has been around for 60 years.
Mehdi Hasan: We will go to the gentleman at the back and then the lady here.
Audience Participant 5: You talk about the very long-term view economic policy needs to take root in a country and the short-termism that democracy brings, but when we look at the example of Rwanda, what Paul Kagame is doing, he is basically, limiting civil rights for the benefit of growth. Now, in an African context, do you feel that critical mass can be amassed within the middle class to allow for a distributive power within the economy so that rights and progress and democracy can take root without having it hijacked by dictatorships and things like that?
Mehdi Hasan: I want to get where you’re coming from. Are you someone who thinks it’s a good thing what Kagame is doing on the growth front regardless of the political front or vice versa?
Audience Participant 6: I believe that what Paul Kagame is doing is interesting.
Mehdi Hasan: You should be up here. You should be sitting in this chair. “I don’t do yes or no questions.” What do you think about Rwanda under Kagame and what’s happened?
Dambisa Moyo: I’m not Rwandan, I don’t live in Rwanda, so it would be kind of arrogant of me to sit here and start pointing fingers at that economy. What I will say is that that country came from a genocide that the world turned their backs; we flew people out within 90 days, ten percent of the population was massacred and we didn’t really, we did nothing. The international community did nothing, and so I am sympathetic to the fact that they had a very difficult challenge. Everything was razed to the ground. I think that they are showing improvements in many of the metrics that economists care about. Things like doing business, the participation rate, 61 percent of women in parliament, more than anywhere else in the world. There are things that I can pick out and say that that is something for us to look at and emulate.
Audience Participant 7: One of the things you do suggest quite often is actually to make voting mandatory and in Brazil, uh, it is mandatory and in fact more than 20 percent of the population does not go and vote and resents the fact that there is this policy and you could not argue that Brazil certainly in the last few years has been a disengaged society in any shape or form. Don’t you think that not voting is not only a reflection of how the society feels about their elites and their representatives, but also ultimately part and parcel of the right to vote is the right not to vote?
Dambisa Moyo: Well, I actually believe in the civic right, people died for the right to vote and so I really, I would, I talk about mandatory voting because I think it’s something we should explore and I think it really is interesting. And as you know, there are 27 countries around the world that have mandatory voting, from Australia, Belgium, Greece, many countries in South America. Do I think that that people, the only reason people don’t vote is because they’re trying to send a message to the political class and the elite? No. I think there are a lot of economic arguments, there are a lot of people in the United States, as you know, the presidential election, every four years, is on a Tuesday. There are a lot of people who are on minimum wage who would like to vote who are not able to go to vote because it takes too long and there’s a process.
Audience Participant 8: I was wondering about the importance of voters being informed as well as misinformed. What do you think is the balance of responsibility between voters informing themselves and educating themselves and the government preventing misinformation and campaign finance reform that will get more accurate information out to the voters? What is the balance of responsibilities or are they equal?
Dambisa Moyo: Yeah, I think that’s a great question, particularly in a world where we have fake news, we have social media, a different conduit, and so one of the things that I’ve been looking at, and I’ve written about, is whether or not we need some kind of Glass-Steagall regulation that sort of, this refers to the banking sector where we separate retail consumer banking from investment banking. Do we need that kind of regulation in the media? So in other words, some clear delineation between fact versus fiction. I think that’s something that’s on the agenda right now and I would be very supportive of that. Traditionally, BBC, Walter Cronkite of the United States, it didn’t matter what race or gender or what part of the political spectrum you were on, everybody got the, there was this one font of knowledge, basically one font of knowledge, that is very different now. We are all sort of quite siloed, we get out information from the places where we want to sort of reinforce our views and so I do think if government and public policy actually want to survive, we do need to have much more diversity of thought …
Audience Participant 9: Yeah I read Dead Aid and find it challenging. On one hand, it talks about kind of aid and that being about culture and that being, making it difficult to kind of create change and then, on the other hand, talking about trade and then you have kind the market, you know supporting people and helping to kind of develop economies. I just wonder are we swapping one kind of challenging institution for another?
Dambisa Moyo: So in Dead Aid I offered five proposals for alternatives for aid and, again, just to be absolutely clear, nowhere in Dead Aid did I say we want to go to zero aid, even in developed countries there are areas of society that are based on charitable outcomes, welfare systems of the government, etcetera, so we don’t have to go to zero aid, but we do need to think about things like foreign direct investment, issues around tapping the capital markets. This is just the suite of things that other countries that are very successful at it developed and developing use and so trade, you’re right, it’s under a lot of challenge and threat right now with the rise of protectionism emanating from the leading economies, but I do think that we, it’s not just about one solution, it’s about a whole host of portfolio of initiatives and I offer them in the book as well.
Mehdi Hasan: You keep saying you didn’t say aid should go to zero.
Dambisa Moyo: Yes.
Mehdi Hasan: But didn’t you famously, I mean there was a lot of controversy around when it came it, the book, that you said, “What if one by one African countries each received a phone call telling them in exactly five years the aid taps would be shut off permanently?”
Dambisa Moyo: Yes, but I didn’t say that that’s what they should do. I said, what if? What if is a question. It is not a statement.
Mehdi Hasan: And one final question, Robert Kennedy famously said in 1968 that GDP, this measuring of economic growth, quote, “Does not include the beauty of our poetry or the strength of our marriages, it measures neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short except that which makes life worthwhile.” Do you agree with him?
Dambisa Moyo: Well, yes and to some degree, because Simon Kuznets when he came up with the GDP statistics and he had a brilliant saying, he said, “The truth of the matter is that there are four categories of countries, they are underdeveloped, developed, Japan and Argentina.” Nobody knows why Japan grows and why Argentina doesn’t and I think that really is emblematic of the field of economics. We are learning, we’re evolving, we’re innovating and a lot of what has been said here is food for thought. It’s things that people are trying to re-engineer, to improve on, and I would not suggest that we should throw out all the knowledge and all the impact that was mentioned earlier, all the benefits and the significant improvements that the world has seen. I mean, today, 71 years old is the global average for life expectancy. These are significant benefits that have occurred over the last half century and I think we do need to actually recognise that there have been benefits on the system and we do need to tweak and focus on improving the ones where there have been weaknesses.
Mehdi Hasan: Dambisa Moyo, we’ll have to leave it there. Thanks to our audience here in the Oxford Union. Thanks to our panel of amazing experts, and thanks to Dambisa Moyo for joining us on Head to Head.
Dambisa Moyo: Thank you. Thank you.
Source: Al Jazeera
