<p>Who is the author of Edge of Chaos?</p>

<p>Edge of Chaos is written by Dambisa Moyo.</p>

Economics

Edge of Chaos Book Summary - Edge of Chaos Book explained in key points

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Edge of Chaos summary

Name: Edge of Chaos
Rating: 3.9 (63 reviews)
Author: Dambisa Moyo

Dambisa Moyo

Why Democracy is Failing to Deliver Economic Growth – and How to Fix It

3.9 (63 ratings)

21 mins

Brief summary

Edge of Chaos by Dambisa Moyo explores how embracing uncertainty and disruptions can lead to innovation and growth, urging leaders to abandon rigid systems and embrace complexity in a changing world.

Topics

US Economics US Politics International Economics Economic Theory

Table of Contents

Edge of Chaos
Summary of 7 key ideas

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Key idea 1 of 7

What’s in it for me? Learn what you can do to make politics and the economy better in your country.

When the world is in flux and uncertainty rules, it makes sense to know just what is going wrong and what the remedy could be. When you’re faced with the possible collapse of the current world order and its globalized economic system, there’s no better guide than internationally renowned economist Dambisa Moyo.

Economics and the political order can be tough subjects to get your head around, whether you’re trained in the field or not. But these blinks give you the prognosis. They explain how the world economic system should be functioning to ensure that it’s working in everybody’s favor. What’s more, they go into what’s currently going wrong, and how the forces of protectionism, anti-globalization and populism will only worsen these problems.

But these blinks are no lamentation to a lost world; they also offer a practical guide, telling you what you can do to ensure the preservation of liberal democracy and a healthy economic system that can ultimately serve to protect and nourish us all.

In these blinks, you’ll learn

why Chinese economic growth might not be all it’s cracked up to be;
just how good Americans are at math compared to the rest of the world; and
how much was raised in contributions for the 2016 US presidential election.

Economic growth improves living standards, while political instability and short-term policies harm the economy.

Economics is a rich and complex field of study. But when you read or see a news report about how a particular company or country is doing, it all gets boiled down to a few bare figures. And most of the time, what’s being talked about is growth. We’re obsessed with it and we expect it: if a country’s economic growth is stagnating, then you can be sure that some politician is going to come in for criticism.

But let’s backtrack a bit. Just why is growth so desirable?

Simply put, growth brings economic opportunity, upward mobility and increased living standards.

China is the example par excellence here. Its growth over the last 40 years has been stupendous and it now stands as the world’s second-largest economy. By 2014, China’s purchasing power parity – how much a country's money can buy in other countries – was $17.6 trillion, surpassing the United States’ $17.4 trillion.

China's economic growth also brought economic opportunity. Its economy created new jobs, especially for the rural poor; in just one generation, over 300 million Chinese were lifted out of poverty.

In 2013, the Chinese State Council’s income distribution plan made clear how the economy would be directed. China would work toward minimizing income inequality by raising low wages, increasing education spending and providing more affordable housing.

This begs the question: what factors result in a country failing to grow? As we know from Argentina, when economic growth fails to materialize, it’s often down to political instability and short-term thinking.

Back in 1913, Argentina was, per capita, the world’s tenth-richest country. But between 1930 and the mid-1970s, the country experienced six military coups. Alongside this political instability, three separate bouts of hyperinflation exceeded 500 percent per year, while economic “growth” rates sank below zero for several years.

Furthermore, Argentine governments weren’t exactly thinking long-term about what could be done to benefit the country. They failed to invest in education and instead preferred to build up a cheap, poorly educated agricultural labor force – hardly a strategy for economic success. In fact, during the 1940s, Argentina had the lowest rate of secondary-school attendance in the world, and the result of poor education was ultimately a lack of innovation and a competitiveness shortfall.

The full effects were felt in Argentina’s 1998-2002 economic and political crisis. Unemployment peaked at 25 percent, the currency lost 75 percent of its value and poverty went from 35 percent in 2001 to 54.3 percent in 2002.

Getting the economy right is tricky, but one thing is clear: growth matters.

Some types of government debt, limited resources and population growth threaten economic growth.

If you’re managing a household budget, going into debt can be terrifying. But when it comes to national economies, the situation is quite different. Believe it or not, going into debt can actually stimulate economic growth.

Let’s look at the United States as an example. After the Second World War, the country took on a massive amount of debt to fund education, health care and infrastructure.

Automation and the decline of the global workforce threaten nations’ economies.

Economies are fragile things: one misstep and the whole edifice can come crumbling down. It may seem counterintuitive, but one of the biggest threats an economy faces is people, and specifically its workforce – that is to say, the people in an economy who actively contribute to its growth.

In the developed world, both the quantity and quality of workforces are in decline, and this poses a major problem.

Trends toward protectionism negatively affect the global economy.

Two events in 2016 seemed to indicate that the global economic consensus was turning a corner. First, the United Kingdom voted to leave the European Union in the Brexit referendum. Then, later in the year, Donald Trump was elected President of the United States. These indicate that the world is steering away from globalization and back to protectionism.

Unfortunately, protectionist trade policies damage the global and national economies alike. The global economy struggles because protectionist tariffs and quotas on imported goods and services end up limiting trade and thus squeezing the flow of cross-border capital.

China’s state-regulated economy has become a model for growth, but state intervention poses long-term economic risks.

Hundreds of millions of people in the developing world live on less than a dollar a day. When the biggest concern is whether there will be food on the table every night, it’s understandable that calls for political freedom become secondary. That’s why many people in the world prioritize economic growth over a flawless, transparent democracy.

China is an excellent example in this regard. It has developed a form of authoritarian state capitalism that has served the country well by fostering economic growth. It does this by prioritizing collectivism over individual rights and freedoms. Record economic growth there has resulted in a reduction in poverty that is historically unprecedented.

Economic stability in this climate requires long-term policy decisions, a limit on campaign donations and higher public-sector wages.

The last decade has seen the rise of populism and growing economic uncertainty; it has become increasingly clear that Western democracies have to adapt. Radical reforms are needed to ensure that good decision-making remains a key pillar in Western democracies.

What’s more, it’s us who need to force the issue.

Longer terms of office and real-world experience lead to better politicians, while compulsory voting breeds better politics.

Reforming the political system is no easy task, but it’s a necessary one. And there are three more aspects that need changing.

For starters, we should extend politicians’ terms in office, but simultaneously impose term limits. Longer terms in office allow leaders to focus on long-term solutions due to increased accountability.

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What is Edge of Chaos about?

Edge of Chaos (2018) examines the key challenges that liberal democracies around the world are facing today. Aging populations, limited resources and increasing debt are all threats to these countries’ economic well-being – but so too are the “remedies” of short-term policies and protectionism. Author Dambisa Moyo examines that misguided agenda and presents a radical blueprint for economic growth in the twenty-first century.

Edge of Chaos Review

Edge of Chaos (2018) by Dambisa Moyo explores the risks and opportunities of the global economy in the face of increasing complexity and uncertainty. Here's why this book is a worthy read:

Offering a refreshing perspective on economic systems, the book challenges conventional wisdom and provides thought-provoking insights.
Backed by extensive research and real-world examples, the author presents a compelling argument for the need to embrace chaos and adapt to change.
By examining the failures of traditional economic approaches and exploring alternative models, the book stimulates critical thinking and encourages readers to re-evaluate their understanding of the global economy.

Best quote from Edge of Chaos

For the first time in Americas history, its next generation of workers will be less educated than its last.

—Dambisa Moyo

Who should read Edge of Chaos?

Citizens concerned about Brexit and Donald Trump
Policymakers interested in rebuilding their political systems
Curious readers hoping to get a grip on global economic systems

About the Author

Dambisa Moyo is an internationally renowned economist and author whose career has included posts at the World Bank and Goldman Sachs. Her macroeconomic analyses have landed her on the New York Times best-selling books list four times. Her books include Dead Aid (2009), How the West Was Lost (2011) and Winner Take All (2012). In 2009, she was recognized as a World Economic Forum Young Global Leader, listed in TIME’s 100 most influential people in the world and named as one of “20 remarkable visionaries” by Oprah Winfrey.

Categories with Edge of Chaos

Economics Politics

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