The Power of Productivity: Wealth Poverty and the Threat to Global Stability

About this book

The disparity between rich and poor countries is the most serious intractable problem facing the world today. The chronic poverty of many nations affects more than the citizens and economies of those nations; it threatens global stability as the pressures of immigration become unsustainable and rogue nations seek power and influence through extreme political and terrorist acts. To address this tenacious poverty a vast array of international institutions has pumped billions of dollars into these nations in recent decades yet despite this infusion of capital and attention roughly five billion of the worlds six billion people continue to live in poor countries. What isnt working? And how can we fix it? The Power of Productivity provides powerful and controversial answers to these questions. William W. Lewis the director emeritus of the McKinsey Global Institute here draws on extensive microeconomic studies of thirteen nations over twelve yearsconducted by the Institute itselfto counter virtually all prevailing wisdom about how best to ameliorate economic disparity. Lewiss research which included studying everything from state-of-the-art auto makers to black-market street vendors and mom-and-pop stores conclusively demonstrates that contrary to popular belief providing more capital to poor nations is not the best way to help them. Nor is improving levels of education exchange-rate flexibility or government solvency enough. Rather the key to improving economic conditions in poor countries argues Lewis is increasing productivity through intense fair competition and protecting consumer rights. As The Power of Productivity explains this sweeping solution affects the economies of poor nations at all levelsfrom the viability of major industries to how the average consumer thinks about his or her purchases. Policies must be enacted in developing nations that reflect a consumer rather than a producer mindset and an attendant sense of consumer rights. Only one force Lewis claims can stand up to producer special privilegesconsumer interests. The Institutes unprecedented research method and Lewiss years of experience with economic policy combine to make The Power of Productivity the most authoritative and compelling view of the global economy today one that will inform political and economic debate throughout the world for years to come.