23 Things They Don't Tell You About Capitalism

2.5
Ha-Joon Chang 's 23 Things They Do n't Tell You About Capitalism turns received economic wisdom on its head to show you how the world really works.

In this revelatory book, Ha-Joon Chang destroys the biggest myths of our times and shows us an alternative view of the world, including:
There 's no such hing as a 'free' market
lobalization is n't making the world richer
We do n't live in a digital world- the washing machine has changed lives more than the internet
Poor countries are more entrepreneurial than rich ones
Higher paid managers do n't produce better results
We do n't have to accept everythin as they are any longer. Ha-Joon Chang is here to show us there 's a better way.

'Lively, accessible and provocative ... read this book'
Sunday Times

' A witty and timely debunking of some of the biggest myths surrounding the global economy'
Observer

'The new kid on the economics block ... Chang 's iconoclastic attitude has won him fans'
Independent on Sunday

'Lucid ... audacious ... increasingly influential ... will provoke physical symptoms of revulsion if you are in any way involved in high finance'

Guardian

'Important ... persuasive ... an engaging case for a more caring era of globalization'
Financial Times

' A must-read ... incisive and entertaining'
New Statesman ooks of the ear

Ha-Joon Chang is a Reader in the Political Economy of Development at the College of ambridge. He is coautho of Kicking Away the Ladder: Development Strategy in Historical erspective, which won the 2003 Gunnar Myrdal Prize, and Bad Samaritans: Rich Nations, Poor Policies and the Danger to the Developing World. Since the eginning of the 2008 economic crisis, he has been a regular contributor to the Guardian, and a vocal critic of the ailures of our economic system.
Available Languages
Original Series
Year of the Publication
Publication Date
Published September 1st 2011 by Penguin (first published March 10th 2010
Original Title of the Book
23 Things They Don't Tell You About Capitalism
Number of Pages
286

Community Reviews

Post your Comment
You should enter site to post the commentary
gave it

The basic tenet of the novel is that the USA and UK have been practising free market capitalism ( neo-liberal policies) for the first 30 years, and whilst he supports economies based on ideolog, he feels that the free market version has done much to lower people 's quality of life, both in Western countries that practice it, and in developing countries, who have it foisted upon them by the IMF and World Bank, ( and the wealthy countries behind these institutions.) The biggest surprise in the ook for me?

No wonder Chang argues for government regulations to simplify financial dealings.

Credit default swaps ( CDSs) were created to protect you from default on the CDOs. And there are severa more financial derivatives that make up the alphabet soup that is modern finance.By now even I am getting confused ( and, as it turns out, so were the people dealing with them), but the point is that the same underlying assets ( that is, the ouses that were in the original mortgages) and economic activities ( the income-earning activities of those mortgage-holders) were being used again and again to 'derive' new assets.

( hide spoiler) ] Rather than trying to provide any sort of overall synopsis of the ook and his argumen, I will just list some of hang 's ideas that I found interesting.

Just because the rich get richer, it does n't mean that the poor get richer too.* The free market economy is responsible for all orts of society ills:- the 2008 financial crisis- stagnating wages for ordinary workers- longer working hours- horrendously inflated salaries for the managers of big companies- greater job insecurity- shorter term contracts- an ever-increasing pressure on suppliers to provide cheap products.- Inequality in societies.- the encouragement of borrowing at unprecedented rates- the huge ballooning of the financial investment sector, and it 's dangerously unregulated behaviours, which threaten the rest of the economy.* Wages in rich countries are determined more by immigration control than anything else.

" What is a starvation wage in the US is a handsome wage in China, and is a fortune in India " .Chang feels that immigration controls are necessary though, for a ariety of reasons.* Western countries stop developing countries from realising their potential by foisting free market regulations upon them, when they are at a stage of needing different, perhaps more protectionist policies.

Why should they have to try and develop differently from the pat that we did?* Shareholders have in many instance been given far too much power in the companies they invest in.

In some countries there are regulations ensuring that shareholders can only have a limited powers in the companies they invest in, and that other share-holding bodies ( the government, or banks, or founding families of companies), ensure that company managers put the long-term well-being of the company first. *It is much easier for entrepreneurs to become successful in wealthy countries, because we have things like good infrastructures, better technologies, better institutions and better organised firms.

In developing countries they have things like power cuts that mess up productions schedules, or Customs wo n't clear spare parts needed to fix machinery, or payments are delayed due to problems getting a permit to buy US dollars.

De-industrialization also has an effect on a country 's balance of payments- because services are inherently more difficult to export than manufactured goods.

He believes that inflation at 8-10%, or even up to 20% or 40%, can be compatible with a country have a good growth rate, with a fast-growing economy.

He believes that too much inflation control can result in reduced investment, and that our obsession with it has affected long term stability, economic growth and human kindnes. *Most transnational corporation are in fact largely based in their mother countries.

Most importantly, they have used their political and economic influence to spread the free-market ideology that says whatever exists must be there because it is the most reliabl. *'Purchasing power parity' and the 'international dollar'= a way of measuring a country 's living standard.

Africa does have some serious problems, but they have problems that many Western countries also had when they were developing, and hopefully African countries can work through them too. *Microfinance in developing countries does not workOften these loans are given with high interest rates, and few businesses can make the necessary profits to repay these loans.- The people who take out the loans often have limited skills.- They only have a broa range of technologies available to them.- They can only get hold of a limited amount of finance via microfinancing schemes.- If people have a decen idea- other people often quickly copy it, and the market becomes too full. *We need to bring regulations to the free market.The world is too complex for our limited intelligence.

They create informal rules that deliberately restrict people 's freedom of choice ( eg queueing means we do n't constantly have to calculate and re-calculate our positions at a crowded bus stop.) The financial crisi of 2008 was due to the free-for-all complexity of the market- even financial experts did not fully understand the financial instruments being used and offered.

If we are to avoid similar financial crises, we need to severely restrict freedom of action in the financial market. *More education is not in itself going to make a country richer.

This suggests that it is the inadequac of a basic income guarantee that is preventing poor kids from making use of the equality of opportunity provided by schooling. *A good safety-net, in terms of a robust welfare state, gives people more incentive to be mobile and flexible, because it wo n't be the beginnin of the world if they lose their jobs.

The economies of Scandinavian countries, with high welfare support, have performed just as well as the US. *Financial markets are HUGE, and they need to become less, rather than more efficient.

This makes it easie for real-sector companies to secure the 'patient capital' that they need for long-term development.

But then everything went bang in 2008 ... .and this was all due to privatization and de-regulation of Iceland banks, which set them on a roller-coaster of borrowing and investment.The financial sector has become hugely more powerful in many countries, following financial deregulation in the 1980s.In the UK and France, the profit rate of the non-financial sector was higher than the profit rate of the financial sector ... ..

but after deregulation, the profit rate of the financial sector was higher than the non-financial sector.In the US, the financial sector became so attractive to people that even many manufacturing companies have turned themselves essentially into finance companies.eg General Electricity, General Motors and Ford- once all symbols of American manufacturing prowess, now make most of their money through their financial activities.Things that could help slow down financial markets ... Taxes on transactionsRestrictions on cross-border movement of capital ( especially movements in and out of developing countries) Greater restrictions on mergers and acquisitions.

gave it

Well, I say personal recommendation but what I mean is that I listened to this podcast in which Ha-Joon Chang talks through three of the twenty-three things that he discusses in this memoir.

Ha-Joon Chang tries to prise off those neo-liberal sunglasses by looking at twenty-three things asserted by people with a neo-liberal economic viewpoint and discusses each in turn over about ten pages.

Ha-Joon Chang writes ( view spoiler) [ and this gives a good idea of his general approach ( hide spoiler) ]: " even though they were not trained as economists, the economic officials of East Asia knew some economics.

Hav of the ways that the East Asian government officials did in the miracle years- protecting infant industries, forcefully mobilizing resources away from technologically stagnant agriculture into the dynamic industrial sector ... derive from such economic views, rather than the free market view ... The philosoph of Herbert Simon& his followers has really changed the way we understand modern firms, and, more broadly the modern economy ... When we understand that the modern economy is populated by people with limited rationality& complex motives, who are organised in a complex way, combining markets, ( public and private) bureaucracies& networks, we begin to understand that our economy can not be run according to free-market economics ( pp249-250) The choice of twenty-three things ( view spoiler) [ 1- There is no such thing as a free market 2- Companies should not be run in the interest of their owners 3- Most people in rich countries are paid more than they should be 4- The washing machine has changed the world more than the internet has 5- Assume the worse about people& you get the worst 6- Greater macroeconomic stability has not made the world economy more stable 7- Free-market policies rarely makes poor countries rich 8- Capital has a nationality 9- We do not live in a post-industrial age 10- The US does not have the highest living standard in the world 11- Africa is not destined for underdevelopment 12- Governments can pick winners 13- Making rich people richer does n't make the rest of us richer 14- US managers are over priced15- People in poor countries are more entrepreneurial than people in rich countries 16- We are not smart enough to leave things to the market 17- More education in itself is not going to make a country richer 18- What is ood for general motors is not necessarily good for the United States 19- Despite the fall of communism we are still living in planned economies 20- Equality of opportunity may not be fair 21- Big government makes people more open to change 22- Financial markets need to become less not more efficient 23- Good economic policy does not require good economists ( view spoiler) [& for a touch of post modern fun Ha-Joon Chang suggests seven different ways to read the novel ( hide spoiler) ] ( hide spoiler) ] feels as a result a little arbitrary, there seemed to be no reason why he could not continue& discuss even more.

His recommendations for rebuilding the world economy are: ( 1) capitalism is the worst economic system except for all the others ( 2) we should build our new economic system on the acceptanc that human rationality is severely limited ( 3) we should build a system that brings out the best, rather than the worst, in people ( 4) we should stop believing that people are always paid what they 'deserve' ( 5) we need to take 'making things' more seriously ( 6) we need to strike a better balance between finance and 'real' activities ( 7) government needs to become igger and more active ( 8) the world economic system needs to 'unfairly' favour developing countries ( pp253-262) Whether or not we will see a trend towards reality impinging upon the study of economics and upon economics in public discourse is something that will emerge in time " but unless we now abandon the the principles that have failed us& that are continuing to hold us back, we will meet similar disasters down the road " ( p263).

gave it

This is a ook that really does deserve to be read.

gave it

It may not sound like the most enjoyabl book to read but Chang actually writes this for the " common person " to use somewhat problematic phrase.

gave it

It often addresses straw men and commonly held misconceptions about how economists think ( rather than how economists actually think), and often fails to present opposing arguments fairly.For instance, in Thing 1, " There is no such hing as a free market ", Chang writes " Every market has some rules and boundaries that restrict freedom of choice ".

I do n't know which of those explanations tars him the worst.Later in Thing 1, Chang talks about child labour laws: " If you believe that the right of children not to have to work is more significan than the right of factory owners to be unable to hire whoever they find most profitable, you will not see a ban on child labour as an infringement on the freedom of the labour market " .Oh boy, where to start?

If child labour laws help children, why not prohibit all labour?

Also, given that the internet piggybacks on computers one-to-one communication enables many-to-many communication ( e.g. by each of us communicating one-to-one with Goodreads) in ways that are mindbogglingly cheaper than with faxes ( what the internet replaces, according to Chang) .Last point from me: in Thing 20, " Equal opportunity may not be fair ", Chang makes the point that when children of poor parents ca n't concentrate in school because they 're hungry, that 's not equal opportunities.

My thought got boggled.Chang goes on to write: " Fair competition can only be achieved when the child is given enough food -- -at home through family income support and at school through a free school meals programme. " If I grant Chang the first part, that fair competition can only be achieved when children have enough food*, it does n't necessarily follow that his way of doing it is the right pat.

gave it

Since I forget things, I force myself to keep reading books like this so that, hopefully, when I need them, I 'll be ble to pull a few concepts and examples out of my back pocket.

I could have just re-read Economix: How and Why Our Economy Works ( and Does n't Work), in Wor and Pictures, but updates are always needed, and besides I like to think throwing fresh ideas at my brain might help something stick.I have to thank Ha-Joon Chang for writing such a painless book.

This is not an anti-capitalist book at all, it 's merely reformist, and all the people hailing it as 'shocking' 'revelatory' etc should be ashamed of themselves, because what 's hocking is the insane dogmatic neo-liberal/free market orthodoxy that Ha-Joon Chang so forcefully critiques.

Repeatedly Ha-Joon Chang demonstrates and explains why free market policies are not just bad for workers and people who can not work; they are ad for everyone but the super-rich elite.There are lots of useful insights I had n't thought of, for xample, corporations do planning, vigorously, and often in an authoritarian style, so the neo-liberal horror of 'state planning' is ideological.

Books with the same Year of the Publication

Chew, Vol. 2: International Flavor
Immortal Beloved
Burned
American Rose: A Nation Laid Bare: The Life and Times of Gypsy Rose Lee
The Passage
Never Going Back There
Squirrel Seeks Chipmunk: A Modest Bestiary
The Iron Daughter
Safe from the Neighbors
De begraafplaats van Praag

Books with the same Authors

Economics: The User's Guide
23 Things They Don't Tell You about Capitalism

Books with the same Categories

The Making of Home: The 500-Year Story of How Our Houses Became Our Homes
Success Mindset: How Successful People Think (How to Get Rich and Make Money by Using the Millionaire Mindset)
Give Your Child the World: Raising Globally Minded Kids One Book at a Time
Understanding Power: The Indispensable Chomsky
Integrating Differentiated Instruction and Understanding by Design: Connecting Content and Kids
Kwiaty w pudełku. Japonia oczami kobiet
Shaking Things Up: 14 Young Women Who Changed the World
Books I Have Loved
Grimorio de la Serpiente Septuple
Confessions of the Guerrilla Girls: By the Guerrilla Girls (Whoever They Really Are)

Same Available Languages

Turbulence
The Notorious Widow
Gypsy
Jane Eyre
The God of Animals
Vale of the Vole
Kitchens of the Great Midwest
Henry
Freeks
Grave Witch

About Authors

© Montage Publishing