Title: 23 Things They Don’t Tell You About Capitalism
Author: Ha-Joon Chang
Publisher: Bloomsbury Press
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Wikipedia article on Ha-Joon Chang
Author Ha-Joon Chang (ranked as one of the world’s Top Thinkers by Prospect Magazine), perhaps more well known for his 2002 book Kicking Away The Ladder: Development Strategy in Historical Perspective isn’t an anti-capitalist (“I still believe that capitalism is the best economic system that humanity has invented”, p. xv), but he’s certainly against the free market economy as endorsed by many at the top of the economic food chain.
“My criticism is of a particular version of capitalism that has dominated the world in the last three decades, that is, free-market capitalism… This book shows that there are ways in which capitalism should, and can, be made better.” (p. xv)
The book doesn’t define capitalism — it assumes you already know — but is otherwise written for the average reader rather than for a student of economics. Chang sets forth 23 “Things” that free-marketeers want us to believe, and systematically knocks them down in plain and clear language, citing piles of statistics as well as infamous economic situations any news-reader will be familiar with.
It probably wasn’t coincidental that the book was released in the aftermath of the 2008 financial crisis. It’s easier to sell books like this when free-market capitalism has just slapped itself in the face.
For one thing, I’m a casual reader, not a student of economics. So I can’t swear that the 23 “things” are actually exactly what free-marketeers would have us believe — though most of them sound scarily familiar since I grew up in a fiscally conservative Republican household.
For example: Government should never interfere in the market. Poor counties need to adopt “free market” policies (especially “free trade”) to achieve sustained growth. Making rich people richer makes the rest richer too since it is rich people who seek out marketing opportunities and then invest to create jobs. Governments lack the ability to make intelligent business choices and thereby “pick winners” through state-led industrial policy. The big government welfare state damages economies by depriving the rich of the incentive to create wealth and making the poor lazy.
There are more but I won’t list them all here. Suffice it to say that I had already grown convinced of much of Chang’s viewpoint before reading the book.
I like his analogy of the market as a machine (p. 253): “…like all machines, it needs careful regulation and steering. In the same way that a car can be used to kill people when driven by a drunk driver, or to save lives when it helps us deliver an emergency patient to hospital in time, the market can do wonderful things but also deplorable ones.”
Perhaps in anticipation that he’d be accused of the big “S” (socialism) or Marxism or communism, Chang takes pains to point out that those systems have been tried in various degrees, and they failed.
Chang urges reigning in the market to some degree, providing better safety nets (unemployment insurance, worker retraining), reducing the influence of short-term shareholders (who take their profit and leave a company worse off), capping CEO salaries, investing in infrastructure and promoting the manufacturing sector, striking a better balance between finance and “real” economic activities, making the government more active, and other things that the left assumes as a matter of course and that the right deplores.
Purely as a source of non-U.S.-centric statistics and economic view, I appreciated the book, though I have my doubts that any free marketeer will be convinced by Chang’s arguments.
Before dismissing him outright though, consider his claim early in the book: “There is really no such thing as a free market… A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them” (p. 1).