Thing 1: There is no such thing as free market.
Thing 4: The washing machine has changed the world more than the Internet.
Thing 5: Assume the worst about people, and you get the worst.
Thing 13: Making rich people richer doesn't make the rest of us richer.
If you've wondered how we did not see the economic collapse coming,
Ha-Joon Chang knows the answer: We didn't ask what they didn't tell us
about capitalism. This is a lighthearted book with a serious purpose: to
question the assumptions behind the dogma and sheer hype that the
dominant school of neoliberal economists-the apostles of the
freemarket-have spun since the Age of Reagan.
Chang, the author of the international bestseller Bad Samaritans,
is one of the world's most respected economists, a voice of sanity-and
wit-in the tradition of John Kenneth Galbraith and Joseph Stiglitz. 23 Things They Don't Tell You About Capitalism
equips readers with an understanding of how global capitalism works-and
doesn't. In his final chapter, "How to Rebuild the World," Chang offers
a vision of how we can shape capitalism to humane ends, instead of
becoming slaves of the market.
Published: Bloomsbury Publishing an imprint of Bloomsbury USA on Jan 2, 2011
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The ONE thing they don't tell you about capitalism is that for a few people to be filthy rich, a larger number have to be dirt poor. Yet, this is not the kind of critique Ha-Joon Chang provides. Instead he takes the reader through 23 myths that people believe or accept about capitalism, and specifically financial capitalism (vs. industrial capitalism) as we know it, debunking each or at least providing some evidence for a reasonable doubt in the efficacy of said myth. Many of these myths are no-brainers, like "There is no such thing as a free market"; others, which seem to require a bit of fancy footwork on Chang's part ("More education in itself is not going to make a country richer").In all, Chang's critique does drill a number of holes in neo-liberal economics orthodoxy, revealing the "dark side" as it were of a system that has revealed more of its true colors in the past decade than many might have imagined.This would be a reasonable supplemental text for identifying various aspects of neo-liberal thought from a less glaze-eyed perspective.more
A good read, economic ideas for the non-economist. He makes 23 short arguments against the free-market orthodoxies that have dominated Britain and much of the developed world since the 80s, saying that they are far more trouble than they are worth, particularly in the longer term. His writing is fun and accessible, and without being totally convinced (I spent a fair amount of time wondering about what he was not saying as much as what he was) my reaction was largely positive and I found a lot of food for thought here.more
Wikipedia describes Ha-Joon Chang as a 'heterodox economist', meaning that he's a critic of the currently dominant strain of neoclassical economics. That's accurate enough; in this book, Chang advances 23 loosely related propositions that contradict aspects of the neoclassical synthesis. A number are obviously true -- for example, #18, what is good for a single company isn't necessarily good for the country where it is based; or #1, that there is no such thing as a completely unregulated market. Others reflect Chang's particular academic interests, including #7, that today's rich countries got that way by being interventionist and protectionist as they were developing, the theme of Chang's 2002 book, Kicking Away the Ladder. A few are intentionally provocative, such as #4, that the washing machine (and, he says, the telegraph) has changed the world more than the internet; and #22, that financial markets need to become less rather than more efficient. With the more provocative propositions, Chang usually turns out to mean something fairly specific and not particularly outre - for example, with respect to financial markets, he means that capital that is too liquid can increase the danger of bubbles, because it flows rapidly to chase the highest short-term return, and can undermine stable growth that depends on capital that sticks around for an extended period of time. A short conclusion suggests eight principles for thinking about good economic policy; these will seem completely uncontroversial to most progressive readers and will make no impression on free-market conservatives. I'm grateful to have received an early readers copy. However, I did have to push myself through it. The writing is neither dry nor polemical -- I'd have simply given up on it if it were either of those -- but it wasn't gripping. I think the best way to approach this book is probably to start by reading the first sections of each chapter, which consist of a neoclassical dogma and Chang's trenchant critique of it. Then it makes sense to go back to the chapters whose claims seem most interesting (or unconvincing) and read his longer explanation. With so many different arguments and ideas, there's no unifying insight that runs through the book, and so there is little benefit to trying to absorb and retain it all at once. There's no math and virtually no jargon in this book, so it should be accessible to anyone interested in public or economic policy.more
I received this book as an advanced reading copy through the Library Thing Early Reviewers program. Like the title says, it goes through 23 aspects of capitalism that are myths, misrepresentations, or simply bald-faced lies. Now this book is not anti-capitalism, but the author does seek to debunk the ideology of free-market capitalism (itself misnamed) that over the past three decades has gained an almost religious reverence in political and economic circles. Some of the most interesting tidbits include: The economic and technological revolution of the internet has been vastly overstated. We do not live in a post-industrial age and the washing machine has changed the world more than the internet has. There is no such thing as a free market as there is some level of regulation in all markets. Running a company for shareholder interest is inefficient for the company and bad for the national economy. If we assume the worst about people we will get the worst out of them (this applies to the frequently repeated belief that the economy is based on individual self-interest and denials that people are moral agents). Many successful endeavors have been initiated by the government or through public-private partnerships. Regulation works not because the government knows better but because it deliberately restricts our choices within the scope of humanity's bounded rationality. Bigger government allows people to take more risks by re-tooling their work skills knowing there is a safety net if they fail. Chang's writing style can be dry - although there are flashes of good humor - and he gets repetitive since the 23 things overlap often. I found it an interesting overview of economics and capitalism and makes a lot of good points about what's wrong with the prevailing opinion. Of course, I may be predisposed to agree with Chang's thesis, but I also feel I learned a number of things I never understood before.Favorite Passages:"The higher purchasing power of US citizens (compared to the citizens of other rich countries) is owed in large part to the poverty and insecurity of many of their fellow citizens, especially in the service industries. The Americans also work considerably longer than their counterparts in competitor nations. Per hour worked, US incomes is lower than that of several European countries, even in purchasing power terms. It is debatable that that can be described as having a higher living standard." - p. 111"Simply making the rich richer does not make the rest of us richer. If giving more to the rich is going to benefit the rest of society, the rich have to be made to deliver higher investment and thus higher growth through policy measures (e.g., tax cuts for the rich individuals and corporations, conditional on investment), and then share the fruits of such growth through a mechanism such as the welfare state." - p. 147"When the managerial classes in the US and, to a lesser extent Britain, possess such economic, political and ideological power that they can manipulate the market and pass on the negative consequences of their actions to other people, it is an illusion to think that executive pay is something whose optimal levels and structures are going to be, and should be, determined by the market." - p. 156"Unless we deliberately restrict our choices by creating restrictive rules, thereby simplifying the environment that we have to deal with, our bounded rationality cannot cope with the complexity of the world. It is not because the government necessarily knows better that we need regulation. It is in the humble recognition of our limited mental capability that we do." - p. 177more
This is a timely and provocative book. Chang has written a clear, non-polemical indictment of the free market ideology that has dominated, and misdirected, US and global economic policy for the past 30 years. In his 23 short chapters, which are easy to read and understand, he dispassionately but effectively refutes the free market myths that people often take for granted but which in fact are responsible for some of the most serious economic problems we face today: low growth, stagnant middle-class incomes, high unemployment, financial instability, growing income inequality, and runaway corporate compensation. His calm, undramatic style belies a deeply serious purpose. As he puts it at the end of his book, “There are people who believe the currently dominant free-market system to be fundamentally sound.... However, as I have tried to show, the fundamental theoretical and empirical assumptions behind free-market economics are highly questionable. Nothing short of a total re-envisioning of the way we organize our economy and society will do.” Pretty radical stuff, but his discussion of the 23 "things" that free market advocates "don't tell you" backs up his conclusions.Free market ideologues will no doubt condemn Chang as a wild-eyed bomb-thrower (metaphorically speaking, of course) for challenging the sacred truths of their belief system: markets always produce the best outcomes; government “interference” always produces the worst outcomes; fighting inflation, real or imaginary, is always more important than reducing unemployment; income inequality is an inevitable result of capitalism; taxing the rich will only hurt economic growth, etc. After all, simple truths are the most reassuring and easiest to embrace, and a simple but plausible economic ideology can be as comforting as religious belief (a recent cartoon in The New Yorker shows an eager couple proselytizing a stranger on the street: “It's a brand-new religion based on balancing the budget.”) Let me quickly add that Chang does not wander into such philosophical thickets – his analysis is grounded in reality and focuses on what practical experience and historical data tell us about the actual outcomes of policies based on free market economics. He doesn't have to spin theories – the evidence backs him up.Chang himself is a respected economist (Cambridge University) who has joined with other dissidents (my term, not theirs) such as Joseph Stiglitz and Paul Krugman in criticizing the flawed assumptions of neoclassical economics, the reigning economic dogma for the past three decades. Based on simple microeconomic models and joined with theories about the “rational expectations” embedded in individual economic behavior, neoclassical theory produces mathematically rigorous policy prescriptions that, unfortunately, don't always reflect real life, especially the frequently irrational nature of human decisions and the tremendous difficulty economic actors have in judging just how risky their decisions are. The hubris that blind confidence in these mathematical models engenders is breathtaking. After recounting a number of the spectacular failures of judgment that rocked the financial world in 2008-2009, Chang asks "When the Nobel Prize-winners in financial economics, top bankers, high-flying fund managers, prestigious colleges and the smartest celebrities have shown that they do not understand what they are doing, how can we accept economic theories that work only because they assume that people are fully rational?" Free market ideology insists that the market should be self-regulating, that the actions of rational individual economic actors will ensure optimal outcomes. But Chang, citing the stupid decisions that produced the current crisis, counters "that we are simply not smart enough to leave [the market] alone" and that "we need regulation exactly because we are not smart enough." This is part of his larger argument that “the market is an exceptionally effective mechanism for coordinating complex economic activities across numerous economic agents, but it is no more than that – a mechanism, a machine. And like all machines, it needs careful regulation and steering.” Unfortunately, despite all the evidence we've seen over the past few years that the free market approach is seriously flawed, there is little evidence yet that Americans are ready for the "total re-envisioning" of the economy that Chang calls for.more
Back in my university days, when I was taking economics classes, there was something that was always bothered me about how economics was taught and the assumptions that were used. At the time, I had trouble articulating what it was. Well, I wish I had this book back then. Ha-Joon Chang's book captures those niggling questions in the back of my mind and then some.23 Things strikes the right balance between being approachable but not dumbing down the subject matter. Chang does an excellent job explaining his points and his tone is balanced and straight forward. The overarching point of the book is that economics does not operate in a vaccuum and cannot be separated from politics. Given the times we live in, the author does a great service trying to educate people on this point.Highly recommended for anyone curious about economics.more
I was not familiar with Ha-Joon Chang and, to be perfectly honest, I'm leery of economics books that try to dumb down their content for their masses, which is what I thought this book would be. We already have a bunch of pseudo-economic fast-food like books that try to wrap ideas up in easy-to-read chapters without much support provided for their arguments. I was afraid that this would be the same.Thankfully, this book was nowhere near that low standard (which, had I know more about the author, I should've known). Instead of dumbing down the material, it was divided up into short, encapsulated chapters that cover a surprisingly good range of arguments about each of the 23 "things". In no way could this book be compared to fast food -- more like a good steak, cut up into the small bite-sized pieces for me to chew through a little more easily. The arguments are thorough and thought-provoking yet each chapter is limited to about 10 to 12 pages. This is a great book to lug around when you expect to wait in line or ride on a bus or keep by your bedside for one-chapter-per-night reading. You can finish one chapter fairly quickly and yet get a lot out of just 10 pages.It does, however, feel like a slideshow turned into a book (maybe that's par for the course with economist-authors, as I got the same feeling while reading Jeff Rubin's Why Your World Is About to Get a Whole Lot Smaller -- although this book is better written than Rubin's). You can picture the 25 slides (intro slide, 23 "thing" slides, conclusion slide) that might have led to this book. Also, if you're looking for cohesion or even a steady progression while reading through the 23 "things" in sequence, you'll likely be disappointed. I didn't find this to be a problem but others might (as I see from other reviews below).That said, I enjoyed it a lot -- much more than I expected. It was a pleasant surprise and I will definitely keep an eye out for other books by Ha-Joon Chang.more
Award-winning economist Ha-Joon Chang uncovers 23 false premises upon which free-market capitalism is built. Chang supports capitalism. His book is a critique of free-market capitalism. He contends that the free-market policies that have dominated in most countries over the last three decades have resulted in slower growth, rising inequality, and heightened instability culminating in the recent economic meltdown. Chang hopes his book will inform the layperson so we all may become active economic citizens. Otherwise, we will always be victims of those in power.Chang addresses each premise separately. He briefly outlines what free-market capitalists tell us and then reveals what we are not told. He writes in a style that is easily understood by those unfamiliar with economic theory. He concludes his book with eight principles for redesigning the economic system.This is a book those in power would rather you not read. It is imperative, though, that we all understand the assumptions underlying our economy if we are to be responsible citizens. Reading this book may make you uncomfortable, but that is a small price to pay to avoid a repeat of our recent economic disaster. We need to get uncomfortable.more
Free LibraryThing Early Reviewer book. Accessible and persuasive book about how government is necessary to make capitalism work, and how the antiregulatory/everyone-for-themselves ideology that dominated the past couple of decades destroyed a lot of lives (and economic value). Chang takes the position that capitalism is better than other regimes, but points out that there are lots of ways of having capitalism, and that the state is necessarily involved in the structure of the market—at a bare minimum, by controlling immigration, and also in many other ways. He argues that, like the availability of bankruptcy, social supports (education, job retraining, unemployment insurance) are ways of making people willing to take socially beneficial risks, and suggests that the minimal safeguards for American workers help explain why Americans are so much more protectionist than citizens of other advanced countries; if they lose their jobs because an industry is contracting, they have much more difficulty transitioning to something else than workers in many other nations. Other notable points: education isn’t the be-all and end-all; we aren’t living in an information economy, and making stuff is still the most important function of an economy; and capital needs to be slowed down so that long-term investments make sense. Quite readable, if much more of an overview than a detailed treatment of the various topics.more
"23 Things They Don't Tell You About Capitalism" is an entertaining, provocative look at some of the sacred cows of economics, using historical examples and economic theory. I was impressed by the evenhanded way in which the author exposes the political underpinnings that motivate the perpetuation of these myths. While it seems clear he approaches things from what might be considered a liberal perspective, he is not advancing a partisan agenda. (For one thing, he's not American... Born in Korea and currently teaching at Cambridge, his only investment in our particular economic and political situation is that of any other world citizen affected by the United States' role in the global economic crisis and ongoing market imbalance.) Whatever your political persuasion, this is a useful book for cultivating a broader perspective on economics. I highly recommend it.more
Ha-Joon Chang has served as a consultant to the World Bank, the Asian Development Bank, the European Investment Bank, and various United Nations agencies. He is a fellow at the Center for Economic and Policy Research in Washington, D.C. and teaches economics at Cambridge. I looked that up because his book, 23 Things They Don’t Tell You About Capitalism, says, in plain English and using common sense way many things that are contrary to what “experts” have been preaching for decades. It has reached the point in the United States that Milton Friedman’s version of free market Capitalism is almost a religion. It has reached the point where many in the media capitalize it as they would “Christianity”. Chang debunks the dogma our financial media evangelizes.Chang begins each chapter by telling us what “they” say. For instance with Thing 1, There is no such thing as a free market, he quickly explains what passes for common wisdom, that markets need to be free, that government regulations simply act as a restraint on trade that limits private enterprise’s potential profits. He explains all of the market restraints that we accept today as common sense such as child labor laws and health codes. There is a long list of things that have been removed from the market place, elections, government jobs, and human beings. There is no “Free Market”. There is simply a market with restrictions that have been agreed to be both moral and necessary. Proposed regulations need to be weighed against the same standards but are not automatically bad as we have been mislead to believe.Do private interests make better decisions than governments? Is what is good for corporations good for the nation? Does making the rich richer make the rest of us better off? The 22 other things Chang examines are just as interesting as the first and his arguments are all jargon free. This book’s one weak point could be its clear language and common sense. People may wonder how can an economist be correct and still be understandable? This is why I looked up his credentials; I had the feeling that he was making too much sense for someone that knew what he was talking about.If you pay taxes, or if you know someone who does, you should read this book. I am sending my copy to my Congressman in the hope that he will read it.more
Economics is a field that has always seemed unreal to me. It is akin to witch doctors. They say things that make no sense. Things don't seem to work out how they say they will. But they continue to be treated like experts and I just don't get it. Once in a while I read an economist that seems to be talking about the real world but most of them just sound like they are preaching an insane religion from another planet.This book was a breath of fresh air because it explained that those nonsensical things economists are always spouting are not exactly true and do not exactly work the way economists faithfully promise that they will. It actually made sense. And it sounded more like a practical "let's do something that works" sort of economics rather than this strange faith-based "you stupid regular people don't get the magic that is market economics so let us make decisions and shut up" kind that is usually infuriating me. Why aren't all economists like this? Why are they such ideologues?My favorite chapter was the final one which pointed out that countries that let economists take charge of their economies do worse than countries that leave it to non-economists be they lawyers, engineers, even politicians, seems like they can't louse things up like economists can. I don't really have any complaints about this book. It was a fun and easy read and it actually made sense. I plan to read his other book, Bad Samaritans. I recommend this book highly. If people all read it, they would not be so mystified by "experts" who are just so many snake oil salesmen.more
A straightforward, plainly written guide to economics and how the market actually works. The author makes clear something that is patently obvious to anyone who has spent any time studying the subject, there is no such thing as an absolutely free market, operating without regulation. Capitalism, unregulated, will not lead to benefits for all. This is the book that a large number of people, committed to the nonsense peddled by Randroids and tea-partiers need to read. It lays out the basics of political economy simply and clearly, in plain English. He deals clearly with important subjects such as post-industrialism, the role of China, migration, and globalisation. If there is one book about the world economy that you read, read this one, and not Tom Friedman's puff-pieces about globalisation (there's a reason why, when I'm taking notes I shorten that word to 'glob').This is, most definitely, a book worth reading, both by the lay reader, and by the person who wants to know more about political economy. It's the kind of book I'd give my students as an introduction to the subject.more
I listened to this book on tape. Everything in life appears on a continuum. On the far left you have say North Korea - Communisim. On the far right the United States? Chang does not answer that. However, he does explore 23 positions regarding assumptions many of us hold regarding capitalism and offers alternative view points. If anything, this book should help you understand and avoid extreme positions on either end of economic/political debates. This books is easy to read yet presents complex subjects that are relevant to each of us.more
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