Winner Take All: A Review

In 1798, Thomas Malthus published his ‘Essay on the Principle of Population’, which is widely considered as the ground-breaking text that shaped the theory of population growth as being ultimately devastating for utility (and ultimately surviving). Then, there was the baby-boom, India tripling its population in fifty years, China doubling its. The post-WWII world didn’t live in the calculation of resources usage, and population control policies. Last year, the world population hit 7 billion people. The 7th billion child was born in Asia (in the Philippines), and there was a 60% chance that the landmark event would take place in this part of the world. In her new book, Winner Take All: China’s Race for Resources and What it Means for Us, the now-famous economist Dambisa Moyo reminds us about Malthus: we are at that point in time where our population growth graph starts to look truly exponential, and worse, we are in dire need of resources to sustain this also exponential  growth.

After Dead Aid and the widely reported quarrels between the main players in Development Economics (Jeffrey Sachs, Esther Duflo to cite only two), Moyo explores a more federating issue. China is grabbing what it can, and it has the means to obtain monopolies over certain every-day commodities. The result could threaten the Western way of living: commodity prices could rise, and so would goods. Things that seem acquired such as metals, fossil fuels, but also water and arable land are in other words threatened by the massive funds of Chinese both public and private conglomerates. China uses its 3 trillion dollars in foreign reserves to invest in underdeveloped countries, while striking deals with foreign governments for the total acquisition of mines and oil reserves. In order to sustain both its export-oriented industry, and its nascent consumer class, China’s needs appear enormous, and frankly unsustainable. Moyo argues that the World Bank, and other international organisations should step in, and assist with loans developing economies rich in resources instead of selling it for ‘cheap’ to Chinese banks. China’s growth has in fact made the OECD so insecure, that it seems unfair to discriminate the ‘quiet strength’.

So I ask: when would we reach the time of discussing what a balanced but responsible China policy looks like? Reading China’s attitude towards the West and the Moyo’s interpretation of China as the imperious superpower of tomorrow gives her the impetus of predicting technology, financial fluxes, even weather. For instance, most of the explored petrol in Venezuela has recently made the country one of the most sought after destinations for investment by energy companies, companies which have profited from large R&D budgets. After all, data from the 1978 U.S. Energy Information Administration predicted that oil resources would only last until 2010. In 2012, it predicts we still have enough oil to sustain our growth until 2050! Technology is also exponential, and seems out of the equation, although we can measure it. The progress the economy made towards green energy and better use of the resources under scarcity are only at their inception.

Malthus was controversial in his time. He was a man born in the wrong era: one full of new ideals and of unequivocal hope in mankind. Adapting Malthus’ theory to commodity economics and China’s rise can easily confuse us on what is known, and what is predicted about our exponentially growing needs.