JORE, Ma. Jovi PDecember 2, 2013 4POL1

Countries in the West had been successful politically and economically in the past decades and became the worlds most advanced nations as mentioned in the first two articles of the book entitled, How the West was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead by Dambisa Moyo. The author focused with the United States which had suffered from the consequences of the great depression in year 1929 where value of stocks decreases, unemployment rates rose. United States President, Franklin Roosevelt reconstructed American Capitalism in which free enterprise is maintained but the government would have a key role in orchestrating, supervising and directing the economy of the country. By the end of Second World War however, the United States had all the economic, political and military might to become the global power. Accounted together, the United States and Europe has 60 per cent of the worlds domestic product during those times. The Lend-lease act which was signed by President Roosevelt into law allowed the United States to sell, exchange, lease or to lend military equipment to their allies where repayments became the burden to their allies especially after the war. United States also became a manufacturer of goods which it did not only helped their allies but it also help in boosting its economy (Moyo, 2013). By the end of the war, economic powers such as Japan, Europe and United Kingdom were all broke and were deemed to bankruptcy leaving United States enormously rich. Thus, the Second World War seemed to be an economic opportunity for United States with its unique position to direct the industrial, manufacturing and military sectors. United States then, is a rich country and has a vibrant democracy. It has strength, confidence and energy that it permeated and infiltrated western influenced human activities as there is the development of science and technology and the increased exports not only of goods but also of values marked by its military might, industrial capability helped by free capitalism and its cultural monopoly (Moyo, 2013). The United States was the epitome of wealth, power and cultural dominance that reached every part and corners of the globe. A Filipino saying must be true that, life is like a wheel, sometimes youre at the top and sometimes youre at the bottom. Western Countries, such as the United States were once at the highest peak when it comes to economic development. Today, however, everything has changed. Western countries are now facing financial calamity with their ageing population. Western countries today are financially weak and economically vulnerable. The industrialized west, specifically the United States have been declining economically while the rest are rising which is led by China. There are three essential ingredients or components to economic growth are Capital, Labour and Technology (Moyo, 2013). First, the United States had the capital, where it was able to have the Apollo Project and fought Vietnam War where billions of dollars were allocated as budget in both programs. Second, the United States had the labour, where it had a huge number of armies and had a huge labour force it needed for the invention of the technology for the space race. Lastly, the United States advances in many areas of technologies such as rocketry, spaceflight and telecommunications. No country had the capability to plan, develop and execute programs such as the lunar landing.The declining economic supremacy of the West, particularly the United States was primarily because of the misallocation of capital, labour and technology- which are the three components or ingredients for economic growth. Each misallocation is from flawed public policies of the government which led to its continual economic decline. Although the policies are propelled by good intentions which produced short term benefits, it has long term detrimental costs and unintended consequences (Moyo, 2013). The rise and fall of the West is seen on how it viewed, stored and wasted its capital and its prosperity had been imperilled because of high consumption, low savings and lack of investments.In East Asia, their superior economic performance was primarily because of the high levels of investment and their exposure to the international competitions in foreign markets. Specific sets of policies enabled the government to guide and govern the process of resource allocation in order to produce different production and investment profile than of the free market system (ni, 1991). Compared to the West, in United States for example, the government encouraged investments particularly to housing. Citizens tended to over-invest and over-allocate their savings into housing stock which is not income generating than other investments such as stock or bonds. China and the rest are rising; the developed economies are declining in part because of debt and demographics (Moyo, 2013) Chinas profound transformation from being internal and introspective and became the most potent economic force and the largest exporter in the world (Moyo, 2013). Countries such as Brazil, India and the Russia are also emerging. These countries had been growing in confidence and gaining in competence in the economic race. Moreover, when combined, Brazil, India and Russia has a larger share of todays world GDP than the United States (Moyo, 2013). West once had plenty of money but misallocated it and all it garnered in the past decades had frittered away.

References:Moyo, D. (2013).How the West was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead. Civitas Books Publication. ni Z. (1991). The Logic of the Developmental State.Comparative Politics. 24. no. 1. pp.109126.