23 Things They Don't Tell You About Capitalism by Ha-Joon Chang

Sep 14, 2011 Miquixote rated it 5 of 5 stars

Shelves: non-fiction, 76a, academic, politics, a, enjoyment-value-4, intellectual-value-5

Brilliantly simple yet effective fare which a wide variety on the political compass can digest.

Admittedly not revolutionary. Pure reformist stuff. But makes very important observations on how destructive free-market economics are and have been. One doesn't have to agree with Chang's argument that capitalism itself is not necessarily a bad thing to appreciate his well-founded critisms of the free market.

It debunks the very possibility of the existence of a a free market, it elaborates why owner...more Brilliantly simple yet effective fare which a wide variety on the political compass can digest.

Admittedly not revolutionary. Pure reformist stuff. But makes very important observations on how destructive free-market economics are and have been. One doesn't have to agree with Chang's argument that capitalism itself is not necessarily a bad thing to appreciate his well-founded critisms of the free market.

It debunks the very possibility of the existence of a a free market, it elaborates why owners cannot be trusted. IT shatters the post-modernist and pretentiously revolutionary avant-garde idea that we live in a post-industrial age. Chang illustrates convincingly that without industry there is no healthy economy. And perhaps most importantly, he proves that the 3rd world is not doomed to eternal underdevelopment, that they have been deliberately underdeveloped by the 1st world.

Taking all this into account, and if you can get over the left's overly dramatized dichotomy between reform and revolution, this book should be considered as important for leftists as it is for doubting rightists.

Is it necessary to be so puritanically left as to not be able to appreciate this kind of literature? From my point of view, a little Keynesian economics would go a long way in our hyper-free market world and let's face it - that worldwide revolution is not happening anytime soon. We must have some protection from full-on free-market dog-eat-dog neo-liberalism in the meantime...It is not a bad strategy, and a far easier one to digest for a mostly pro-capitalist 1st world to at least survive with a little more dignity through state help, until what we can only hope is the inevitable revolution.

Rome never fell in a day, so I think this kind of book is a sorely needed (and very important) exposure of mainstream economists' ideological errors and a very important step from the right leftwards.

The last time we underestimated the importance of Keynesian principles in staving off hyper-capitalism we caused the advent of neo-liberalism and financial capitalism as we know it today. Something very few economists will tell you. Ha-Joon Chang is one of them.

Now if you are ready to move even more left, ready for more revolutionary fare, may I suggest we move on to A Brief History of Neo-liberalism by the marxist David Harvey?

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Apr 23, 2013 Al Bità rated it 5 of 5 stars · review of another edition

This is a superb analysis of Capitalism at a time when Capitalism needs all the help it can get.

The book consists of 23 things they DO tell us about Capitalism, and these are summarised in a paragraph at the beginning of each Chapter of the book. What is fascinating is that each of these paragraphs read very familiarly indeed: they are exactly spot on as concepts most readers will have heard, and possibly even agreed with regarding this subject. The rest of each Chapter then proceeds to discuss...more This is a superb analysis of Capitalism at a time when Capitalism needs all the help it can get.

The book consists of 23 things they DO tell us about Capitalism, and these are summarised in a paragraph at the beginning of each Chapter of the book. What is fascinating is that each of these paragraphs read very familiarly indeed: they are exactly spot on as concepts most readers will have heard, and possibly even agreed with regarding this subject. The rest of each Chapter then proceeds to discuss each of these concepts in calm, lucid writing and clear argumentation, revealing that at best these concepts are misconceptions. There is no such thing as a free market, for example; and government involvement and 'interference' is not anathema: big government makes people more open to change. Financial markets need to become less, not more, efficient, and good economic policy does not require good economists. We are not smart enough to leave things to the market; more education in itself is not going to make a country richer; making rich people richer doesn't make the rest of us richer — these are some of the positions argued in the book.

Indeed, one could argue that Cambridge professor Ha-Joon Chang is suggesting that in fact holding onto our misconceptions about Capiralism can actually be counter-productive: they will act as a contraception (pardon the 'punning') to any real achievements, and destroy the Capitalism they claim to represent. Whether this is a good thing or not is a moot point, but at the moment we are stuck with Capitalism, and it would be best if we were to ensure that it is used for our benefit, not for our downfall. All that is required is a little clear thinking, and an awareness that it is not the be-all and end-all suggested by its proponents.

Unfortunately, the people who should read this book (dyed-in-the-wool Conservatives, major organisations such as the World Bank, and the International Monetary Fund, etc) will probably not do so (they are so convinced that they are right that anyone suggesting that they are not would be considered traitorous to the cause) so it is up to the ordinary reader to at least know that at least 23 Capitalist concepts are honeycombed with bad logic. The great irony here is that the author is very much concerned for the survival of Capitalism — just not in the ways the current powerbrokers are using it!(less)

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Jul 18, 2011 Nick rated it 4 of 5 stars · review of another edition

Plain talk about capitalism - from a Cambridge economist who believes in it, but not in the free market ideology which has surrounded it for the last thirty years. Required reading for anyone who wants a grip on what's actually going on with the global economy, and anyone who likes to kid themselves they vote rationally...

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Apr 12, 2012 Johnsergeant rated it 5 of 5 stars · review of another edition

Shelves: audiblecom, audiobook, economics, current-affairs

One of the best critiques of free market capitalism I have read!

Narrated by Joe Barrett

8 hrs and 58 mins

Publisher's Summary

Thing 1: There is no such thing as the 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...more

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Feb 02, 2013 Miguel Gouveia rated it 1 of 5 stars

Leitura interessante, mas apenas na perspectiva analítica da sociedade de "desinformação" em que vivemos.
Nesta obra, o autor comete os mesmos erros que tanto critica, vertendo uma subjectividade maliciosa em temáticas ardilosamente seleccionadas.
Como exemplo apenas refiro a introdução em que o economista invectiva os defensores do mercado livre delegando-lhes a responsabilidade absoluta da crise enquanto enaltece as virtudes da intervenção estatal para algumas páginas depois, no segundo capítulo...more

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Jan 14, 2013 Chungsoo Lee rated it 4 of 5 stars

This provocative book written by a Cambridge economist, Ha-Joon Chang, successfully debunks many of common assumptions about capitalism mostly held by Republicans nowadays in the US. He argues with overwhelming evidence such facts which go against the common assumptions: 1) Free market system is the cause of meager growth of US economy since 80's and in the developing countries since 60's, including Africa. 2) The countries that entered the free trade agreement with US ended up being worse off t...more This provocative book written by a Cambridge economist, Ha-Joon Chang, successfully debunks many of common assumptions about capitalism mostly held by Republicans nowadays in the US. He argues with overwhelming evidence such facts which go against the common assumptions: 1) Free market system is the cause of meager growth of US economy since 80's and in the developing countries since 60's, including Africa. 2) The countries that entered the free trade agreement with US ended up being worse off than otherwise; in fact, US economy grew faster under trade protectionism exercised by the founding fathers and Lincoln. 3) There is more economic mobility in the Scandinavian countries with wide network of social welfare than in the US (because they have more job security, so they can venture out more in terms of choosing career). 4) Equal opportunity is meaningless unless there are some equal outcome in terms of income and resources. 5) Less government does not produce economic boom; in fact, data show more government involvement produced more economic boom in the US and in other developing countries such as his native S. Korea, China, Japan, Singapore, etc. 6) African nations were booming economically--more than in the US and other advanced European countries in terms of rate of growth--until in the 70's when they were subject to free trade and open market systems imposed by the western developed countries and IMF. 7) Economy based on financial services is bound to fail, as it collapsed in 2008; in fact, the whole derivative system it was built on was rightly criticized by Warren Buffet as "the Weapons of Massive Financial Destruction" before the collapse. 8) Making the super rich richer never produced jobs or economic growth. 9) More pay in salary does not mean more skilled, talented, or harder working. (His example is the comparison between the bus drive in Sweden and in India. The former gets three or fours times more than the latter. That does not mean that he drives that much better.) The list goes on and one. This book is full of such gems. (The list above does not coincide with the list he proposed as the 23 Things not told about capitalism.)

These gems are well supported by wide collection and variety of data stemming from both the US and world wide. But these unorthodox views (or some would even accused him unfairly of being a Marxist) about capitalism are also corroborated by well known figures such as the former Labor Secretary, Robert Reich, and social philosopher and critique, Norm Chomsky. What he says in this sense is nothing new but is well guarded from the public. The question is why and how? (The question is not posed by the author.) The likely answer is: the business establishment which aims at corporate profit at the expense of the public welfare and public good. Capitalism favoring the corporate bottom-lines is what we have in the US nowadays. Capitalism favoring the public or the whole society is what we have in Scandinavian countries and other European countries, whose social welfare systems are unfortunately severely under attack nowadays by the American style European Bank and market economy. Capitalism the American style is spreading rapidly in Europe to the detriment of the economy and life style there. Preserve European style; or forget about it and go "Gangnam style."(less)

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Jan 13, 2013 Ugh rated it 4 of 5 stars

I highly recommend this to anyone not well versed in economics. I had heard every one of the 23 myths propagated, and each struck me as sufficiently sizeable to warrant inclusion. Furthermore, the book is so readable that merely glancing at the next 'thing' to be read on return would leave me itching to pick it back up again. It is for the most part highly accessible, entertaining, and convincing.

I am however fairly sure that I have heard some of these same myths propagated recently, which is a...more I highly recommend this to anyone not well versed in economics. I had heard every one of the 23 myths propagated, and each struck me as sufficiently sizeable to warrant inclusion. Furthermore, the book is so readable that merely glancing at the next 'thing' to be read on return would leave me itching to pick it back up again. It is for the most part highly accessible, entertaining, and convincing.

I am however fairly sure that I have heard some of these same myths propagated recently, which is a bit disappointing given that 23 Things was an international bestseller. However, I suppose it would be terribly naive of me to expect economists who have rigidly held to mistaken beliefs for decades to drop them on reading a book, and for the fatcats who benefit from mistaken policies to give them up so easily.

The book itself may be a little culpable in this regard. I thought that Chang made ever so slightly too much use of individual cases as examples of the fallacy of a broad and general claim, rather than looking at the overall or average picture. Of course individual examples are instructive and illuminating, and I'm not saying they should have been avoided altogether, but just that maybe they were used a little too often. I also thought the book could have been more completely referenced - not because I had any intention at all of reading further or checking any points, but just to nip that potential source of contention in the bud before it could flower. I did trust what Chang was telling me, but I shouldn't have to.

Another minor quibble were that for me the book didn't always succeed in its stated plan of introducing/explaining technical details when they because relevant, as there were some terms that this particular interested novice didn't know, and some statements of logical progression that had to be taken at face value rather than being self-evident.

Finally, the book's format of 'here's what they tell you', 'here's what they don't', 'here's more thorough exploration of the former', 'here's more thorough exploration of the latter', 'here's some of that again in conclusion' for each of the 23 things was often a mite repetitive, although never offputtingly so.

Overall however this was a very interesting and compelling book, in my opinion highly deserving of its bestseller status. (less)

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Oct 29, 2012 Matthieutc rated it 4 of 5 stars

Ha Joon Chang is an economist and he likes to poke at the mainstream ideas in the field. He wrote the book 23 Things They Don’t Tell You About Capitalism and went to LSE recently to give a talk discussing some of the chapters in the book.

You can also find various interview segments discussing his ideas at The Real News.

The book is highly recommended: It provides a strong alternative outlook on economics. Below are my reading notes. As posted on http://clockhands.org/2012/10/29/23-t...

There is n...more

Ha Joon Chang is an economist and he likes to poke at the mainstream ideas in the field. He wrote the book 23 Things They Don’t Tell You About Capitalism and went to LSE recently to give a talk discussing some of the chapters in the book.

You can also find various interview segments discussing his ideas at The Real News.

The book is highly recommended: It provides a strong alternative outlook on economics. Below are my reading notes. As posted on http://clockhands.org/2012/10/29/23-t...

There is no such thing as a free market

Every market has restrictions or regulations. People advocating free markets or advocating against restrictions on it are as politically motivated as anyone.

Companies should not be run in the interest of their owners

A company has many stakeholders and of those, the shareholders are probably the most mobile. Hence, it does not make sense to manage a company to maximize shareholder value. This might be the “dumbest idea in the world”.

Most people in rich countries are paid more than they should be

A lot of the wage gap between rich and poor countries is explained by immigration control, not differences in productivity.

The washing machine has changed the world more than the internet has

We tend to emphasize recent changes as being revolutionary. In fact, the washing machine or the telegraph probably increased our productivity a lot more than the internet. This bias is destructive when rich countries start prioritizing the digital divide or ICT.

Assume the worst about people and you get the worst

Free markets assume that people are only motivated by their self-interest. While people are in part motivated by self-interest, it is far from being the only motivation.

Greater macroeconomic stability has not made the world more stable

Some inflation is not proven to be harmful. Policies to keep inflation a very low level might very well be.

Free-market policies rarely make poor countries rich

The growth of developing countries under protectionism is usually higher than we account for. State intervention has led to more equal development that is less prone to crises.

Most developed countries that prone free trade today have used protectionist policies to their advantage in the past—and that is clearly true of the US.

Recommending free trade policies to developing countries is anachronistic. Developing countries need some measure of protection to build up infant industries.

Capital has a nationality

Capital has a home. The home country of a corporation matters. Most R&D and top jobs will be biased toward the home country.

We do not live in post-industrial age

The absolute output of manufacturing has not declined, rather the prices associated with manufactured products have declined and thus manufactures takes up a smaller fraction of GDP.

With the migration of manufactures to China comes a negative trade balance which makes it harder to import goods. This hurts growth.

Service-oriented economies do not produce things that are easy to export.

The US does not have the highest living standard in the world

Duh.

Africa is not destined for underdevelopment

Africa has not always been stagnant economically. The main culprit for its current flatlining is probably the free-market policies that have been forced upon it.

Government can pick winners

There are numerous examples of government picking winners (POSCO, LG, Hyundai).

Sometimes what is good for business is not so good for the economy.

Making rich people richer doesn’t make the rest of us richer

Trickle-down economics has not been working for the last 30 years.

US managers are over-priced

Managers in the US are overpaid compared to their predecessors and compared to managers in other countries. They pay is not left to market forces as managers have developed a lot of political clout and can influence their own salaries.

People in poor countries are more entrepreneurial than people in rich countries

Poor people need to be entrepreneurial just to survive. Productivity is based on infrastructure and social organizations. This is what is missing in poor countries. What is missing is not a lack of entrepreneurial drive. There is no such thing as the entrepreneurial gene.

Microcredit is a hype and is falling under a lot of criticism:

when microcredit is not subsidized, financing institutions have to charge (very) high interest rates
most debtors take a loan to smooth out consumption (e.g. pay for someone’s wedding or cover the losses as a family member is sick)

What it does not do is pull people out of poverty. There is only a limited number of things that poor people can take up that will improve their lives. The reason for poverty is the lack of infrastructure and social organizations. Microcredit, being very local, cannot change that.

We are not smart enough to leave things to the market

Rational actors don’t necessarily make the best decisions and the emergent behavior of the market is often far from ideal. Agents have bounded rationality.

Before the financial crisis in 2007, smart educated rational actors made terrible mistakes that brought the system down and required a huge bailout.

The government does not need to know better than the actors, the government just need to enact regulation that will reduce the complexity of the market, rendering the actors more rational and reducing the overall risk.

More education in itself is not going to make a country richer

There is no link between the achieved level of education and the productivity of a nation. Education does not make us more productive, though it allows us to live a more fulfilled life.

The “knowledge economy” is nothing new: Knowledge has always been the main source of wealth. In fact, as industries are being mechanized, the required level of knowledge for a particular job might have fallen.

Our overenthusiasm with education should be tamed.

What is good for General Motors is not necessarily good for the United States

Regulation is not always a drag on business, it is often good for businesses as it prevents the tragedy of the commons. Or it allows businesses to make long-term bets without being undercut but other businesses who are willing to sacrifice the long term (e.g. regulations can help increase employee training).

Despite the fall of Communism, we are still living in planned economies

Most governments sill plan a major share of the economy through R&D, subsidies, state-owned enterprises, and public works.

So the debate should not be about planning or no planning, it should be about planning things at the right levels.

Equality of opportunity may not be fair

It is definitely true that excessive attempts to equalize outcomes will have an adverse effect on incentives and effort. But some level of equalization is necessary if we are trying to build a truly fair society. It does not matter if universities offer the same opportunity to rich and poor people if the high schools or primary schools for poor people are underfunded. Or if the poorer kids do not eat as much and as well as the richer ones. Or if the good schools are in neighborhoods where real estate is prohibitively expensive.

Individuals are not born into a vacuum. Some have it harder than other and some form of equalization helps in making the social opportunities truly fair.

Big government makes people more open to change

The welfare state allows workers to switch jobs, retrain, or to generally take more risks because they know that the state can help them. This makes for a more open, more flexible society.

The welfare state is bankruptcy law for workers.

Financial markets need to become less, not more, efficient

The pace of financial transactions is making the system unstable and is making it harder for the real economy to find “patient capital”, more permanent capital, to finance long-term developments:

All this is not to say that the speed gap between

finance and the real economy should be reduced to

zero. A financial system perfectly synchronized with

the real economy would be useless. The whole point

of ﬁnance is that it can move faster than the real

economy. However, if the ﬁnancial sector moves too

fast, it can derail the real economy. In the present

circumstances, we need to rewire our financial

system so that it allows firms to make those long-

term investments in physical capital, human skills

and organizations that are ultimately the source of

economic development, while supplying them with

the necessary liquidity. (loc.3743)

Good economic policy does not require good economists

Taiwan, China, or Japan all grew at a nice pace while their economic policies were decided by lawyers or engineers. Whereas decades of free-market policies directed by economists made the situation worse throughout the world.

Perhaps what developing countries need more than economists, is smart generalist bureaucrats. As John Kenneth Galbraith said: “economics is extremely useful as a form of employment for economists.”

Conclusion—How to rebuild the world economy

Our economies need to be rebuilt. A little tinkering at the margins will not be enough. Here are eight principles to guide the reconstruction:

Capitalism is the worst system except for all others. Free-markets policies need to be restrained.
We should build our new economic system on the recognition that human rationality is severely limited.
While acknowledging that we are not selfless angels, we should build a system that brings out the best, rather than the worst, in people.
We should stop believing that people are always paid what they deserve.
We need to take “making things” more seriously. The post-industrial knowledge economy is a myth.
We need to strike a better balance between finance and “real” activities.
Governments need to become bigger and more active.
The world economic system needs to “unfairly” favour developing countries.

The eight principles all directly go against the

received economic wisdom of the last three decades.

This will have made some readers uncomfortable.

But unless we now abandon the principles that have

failed us and that are continuing to hold us back, we

will meet similar disasters down the road. And we

will have done nothing to alleviate the conditions of

billions suffering poverty and insecurity, especially,

but not exclusively, in the developing world. It is

time to get uncomfortable. (loc.4073)

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Jun 11, 2012 Jonas rated it 1 of 5 stars

Shelves: nonfiction

"23 Things" (for short) purports to be a rebuttal of commonly held views about the free market, capitalism and the science and profession of economics. Chang's position is pro government action and intervention (left wing, if you will), and he seeks to back it up with evidence and arguments.

I find it rather disappointing. 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 argume...more

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Jan 05, 2012 Marc rated it 5 of 5 stars · review of another edition

Shelves: highly-recommended, non-fiction

This book is an amazing and enlightening work that every world citizen ought to read. It succinctly breaks down what is wrong with our global economic market in terms that any non-economist can understand. It throws new (to most of us) and important light on the flaws of conventional “wisdom” about free-market capitalism and how those policies over the past 30 years have created the systems and incentives for ongoing economic crises during that time (including our current one). But Chang is not...more This book is an amazing and enlightening work that every world citizen ought to read. It succinctly breaks down what is wrong with our global economic market in terms that any non-economist can understand. It throws new (to most of us) and important light on the flaws of conventional “wisdom” about free-market capitalism and how those policies over the past 30 years have created the systems and incentives for ongoing economic crises during that time (including our current one). But Chang is not content with simply nay-saying the system: he also provides some general principles about how to rebuild the world economy to function better and more humanely.

His methodology is pretty sound (as far as I can tell), and his evidence is convincing. Indeed, I only found one place where I questioned one of his solutions (though I wasn’t able to give it the most critical analysis on my first read). Chang begins each chapter by: 1. telling us about the “thing” (remember, there are 23 “things”); 2. telling us the oft-touted myth about that thing; 3. telling us the untold story (and reality) about the thing; and 4. presenting his evidence and solutions for that thing. (He even presents several ways to read his book and directs you to the “things” that might matter for a particular reading. And yes, he simply calls them “Thing 1” throughout the book for ease of reference).

I won’t go into detail over all 23 things here (of course), but I will point out some of the tid-bits that I found particularly poignant.

There is no such thing as a free-market. As Chang points out, all markets have some sort of rules and regulations, some of which we take for granted (e.g. child-labor laws). In fact, as the economy has come to be dominated by corporations, those economies are also more fully-planned since successful corporations tend to be carefully-planned themselves (otherwise they’d fail). So the idea that we should not regulate the market is not only fallacious, deregulation over the past 30 years has actually caused more problems and slowed growth, despite the rhetoric. Related to this, trickle-down economics has not worked out as planned, either. The wealth has only trickled upwards (as evidenced by the US having the largest wealth disparity of any developed country).

Companies should not be run in the interest of their shareholders. Since most of those shareholders tend to have little interest in the long-term fortunes of a company (they’re focused on short-term profits), and managers run those companies to maximize such profits (and satisfy shareholders), the companies are inevitably harmed in the managing policies. Labor forces (i.e. workers) are collateral damage as cost-cutting (i.e. layoffs) occur. The government has lowered corporate tax rates which have helped wealth inequality skyrocket, and the average citizen’s borrowing has likewise gone up to get in on the “apparent” wealth. This has led to slower per capita growth as long-term investment has been slashed. Harming the companies’ long-term viability, focusing on quick, short-term profits, and increased wealth concentration has resulted in a failing economic system.

US managers are overpaid. In recent months, the ridiculous paychecks that CEOs and managers receive (including their bonuses and severance packages), have come under some scrutiny. Chang points out that not only do our CEOs make 2 to 20 times what other countries’ managers do, but their earnings have also increased 10 times since the 1960s (while the average workers’ wages have remained virtually stagnant, accounting for inflation). Of course, American companies are not 10 to 20 times more efficient, productive, or successful either temporally or geographically, so this needs to be rectified as well. Worse, the CEOs are not held accountable for failing (and are often rewarded with severance packages when they do fail!). Remember the crisis way back in 2008? Know any financier or CEO that went to jail or was held to task? Yeah, neither do I.

Bigger government can help growth and the economy. Some folks point to Europe and the boogeyman of socialism as an evil that capitalist America must avoid at all costs. What they don’t tell you is that several of those socialist countries have had equal or better growth that the US, even during our booming 1990s. As with nearly all of the “things” Chang addresses, it’s not a matter of pure absolutes (i.e. big government is good or bad). It’s a matter of the right kind of thing and the right kind of policies (e.g. a large welfare state that has good policies [Scandinavia] is better than a welfare state with self-defeating policies [the US]).

Developing countries need our help and it’s about time they received a leg up from us. Not only is this the right and humane thing to do, it will inevitably help the world economy become more stable (along with other changes Chang recommends to rebuild the global economic system).

There is plenty more to digest including the liquidity (and ratios) of financial assets, limited human rationality, the fallacy of us living in a post-industrial world, and so forth. I hope this brief summary hasn’t made things more complicated (not my intention), because the book is very digestible. Rarely do I come across books that are paradigm-shifting and life-changing, but I’d venture to say that Chang’s 23 Things is such a work.(less)

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Dec 21, 2011 Aaron Jordan rated it 2 of 5 stars · review of another edition

I am a free-market advocate and read this book to examine opposing arguments. I tried to be open-minded, but ultimately found most of the arguments in this book unpersuasive. He makes a few good points, but he also sets up many straw men to tear down positions that nobody holds, and he imbues many of his arguments with abstract plausibilites rather than with logic and empirical evidence. Some of his arguments border on the absurd, such as his claim that the welfare state facilitates economic gro...more

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Dec 17, 2011 Leo Walsh rated it 5 of 5 stars

Shelves: favorites

Amazing book by an insightful author. An economics professor at Cambridge, Chang emphasizes the collective nature of economics, as well as the faulty underpinnings and assumptions behind the currently popular notions of "Chicago School" economists and its popular manifestation as Supply-Side libertarian philosophy preached by our popular media.

Chang's contentions make you think. He addresses some common misconceptions that spring from the media daily, and debunks them with empirical data.

Here a...more Amazing book by an insightful author. An economics professor at Cambridge, Chang emphasizes the collective nature of economics, as well as the faulty underpinnings and assumptions behind the currently popular notions of "Chicago School" economists and its popular manifestation as Supply-Side libertarian philosophy preached by our popular media.

Chang's contentions make you think. He addresses some common misconceptions that spring from the media daily, and debunks them with empirical data.

Here are a few of the topics addressed, and some questions to make you think.
1) Is there any such thing as a free-market? If there is, why do nations impose immigration quotas?
2) Does the US really have the highest standard of living. The short, accurate answer is "no." What nations' standard of living higher? And is it only money that makes us happy?
3) Why is it either inaccurate or deceitful (depending on the presenter's motives) to use "average" when describing income? What makes "median" a better measure? And why does it feel like the American middle class is being wiped out, with the rich getting richer and everyone else poorer?
4) Do wages really reflect a person's "productivity" and "skill"? If so, why would an American cab driver be paid more that an Indian cab driver? After all, it takes much more skill to navigate the congested, ill-paved roads of India than the asphalt grids of LA, Chicago or New York.

I also want to point to some other "social science" books that show similar rigor and have changed my attitude over the past few years.
* The Drunkard's Walk: How Randomness Rules Our Lives: A physicist walks the reader through both the history and application of probability and statistics to real-life scenarios. A bit theoretical, but fascinating. From a peer-reviewed PhD.
* The Authoritarians: A look at "Authoritarians," a statistically verifiable classification of human beings. Authoritarians, contrary to expectations due to the label,are blind followers. The tend to be closed minded and dogmatic, and fail to apply logic of their convictions to situation. Think of conservative Christians huddling behind certain economic principles, like lauding economic leaders and dismantling the social safety net, which run contrary to the scriptures ("It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven" and "the poor of spirit...shall inherit the kingdom of God..."). Also a chilling discussion of manipulative "Authoritarian Leaders" who exploit these masses by using catch phrases to gain and maintain power. From a peer-reviewed PhD.
* Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets: Another interesting take on the role of chance (or "luck") in success. The author applies "Monte Carlo" logic to illustrate the it is very conceivable that chance alone will have some incompetent leaders rise to the top.
* The Halo Effect: Applications of honest, peer reviewed science to the business press. From a peer-reviewed PhD.
* Everything is Obvious: Once You Know the Answer: The most thorough discussion I have come across so far of applying disciplined mathematical/ disciplined logic to sociology and economic outcomes. From a peer-reviewed PhD.
* Outliers: The Story of Success: Gladwell is an engaging writer who really makes you think and question long-held notions about luck, skill and practice in this book. But please bear this in mind when reading this: a lot of the statistical reasoning in this book is inaccurate. Still, I really enjoy the way that Gladwell raises intriguing questions.(less)

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Aug 23, 2011 Ilya rated it 3 of 5 stars · review of another edition

Shelves: economics

In the 1960s, South Korea, then a military dictatorship, wanted to be self-sufficient in steel. It founded a steel company with the government as the major shareholder, an ocean away from the nearest deposits of iron ore and coking coal (there was then no trade between Communist China and anti-Communist South Korea), headed by a retired general who knew nothing about steel, using Japanese reparation payments as capital. This project was thought of by most investors as insane. The company is now...more

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Jun 17, 2011 Converse rated it 2 of 5 stars

Shelves: economics, non-fiction, politics

I listened to an audio version of this book purchased from Audible.com. The author's general point of view is that of someone who advocates a mixed economy with both market and non-market (mainly government) aspects, with a greater role for government than in the United States. The book is primarily a critque of various points of view allegedly put forth by advocates of a free market economy. I say allegedly because I felt that some of the points of view were to some extent straw men. I found t

...more

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Apr 05, 2011 Ob-jonny rated it 5 of 5 stars

This is a great book on economics, the free market, and trade policy. Everything is explained in a very understandable way without getting the reader lost in too many details or obscure terms that only an economics expert would understand. It dispels a lot of myths about how the free-market is good for the economy of the country where it is practiced. It describes in detail about how the free-market ideology has destroyed or stagnated the economies of countries in sub-Saharan Africa and Latin Am...more

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Apr 01, 2013 Geir rated it 2 of 5 stars

My Amazon.com-review repeated (but with only two stars here, because they suggest the same as three stars on Amazon):

This book is easy to read, is written in good and accessible language, has some good points and is probably a very convincing text on economics, for those who don't know any better (sorry, but it's true).

The author is a political leftist, despite himself saying, that he is a capitalist in search of reforms to capitalism. His socialist tendencies are many. This should become clear...more

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Aug 26, 2012 Answer Styannes rated it 3 of 5 stars · review of another edition

"23 Things They Don't Tell you About Capitalism" is basically a 'pop' version of Ha-Joon Chang's previous work, Bad Samaritans. This book seems to be intended to be very easy to read -which is good to some extent- but unfortunately it has made the discussion a bit too oversimplified.

Ha-Joon Chang starts every chapter with a brief explanation on 'myths' he claimed put forward by the capitalists and free market advocates. I, however, found that some of the 'myths' he mentions in the book are not...more

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Aug 25, 2012 Sps rated it 3 of 5 stars

Shelves: 300s, kindle

Not super-rigorous, but persuasive, clear, and balanced enough to admit when there are counterexamples to his argument. He also talks about role of values in economics and how averages, statistics, and theories don't always give a clear picture of the day-to-day outcomes for the poor: "Price stability is only one of the indicators of economic stability. In fact, for most people, it is not even the most important indicator. The most destabilizing events in most people's lives are things like losi...more Not super-rigorous, but persuasive, clear, and balanced enough to admit when there are counterexamples to his argument. He also talks about role of values in economics and how averages, statistics, and theories don't always give a clear picture of the day-to-day outcomes for the poor: "Price stability is only one of the indicators of economic stability. In fact, for most people, it is not even the most important indicator. The most destabilizing events in most people's lives are things like losing a job (or having it radically redefined) or having their houses repossessed in a financial crisis, and not rising prices, unless they are of hyperinflationary magnitude." (59)

He also outlines what we have done wrong, and could be doing more and less of, in order to build equality and wellbeing for poor people and people in developing countries:
"The fascination with the internet by people in rich countries has moved the international community to worry about the 'digital divide' between the rich countries and the poor countries. This had led companies, charitable foundations and individuals to donate money to developing countries to buy computer equipment and internet facilities. The question, however, is whether this is what the developing countries need the most. Perhaps giving money for less fashionable things such as digging wells, extending electricity grids and making more affordable washing machines would have improved people's lives more than giving every child a laptop computer..." (39)

"Economists are not some innocent technicians who did a decent job within the narrow confines of their expertise until they were collectively wrong-footed by a once-in-century disaster that no one could have predicted. Over the last three decades, economists played an important role in creating the conditions of the 2008 crisis..." (247)

And the limitations of a market-ruled system:
"Indeed, before taxes and transfers, income distribution is actually more unequal in Belgium and Germany than in the US, while in Sweden and the Netherlands it is more or less the same as in the US. In other words, we need the electric pump of the welfare state to make the water at the top trickle down in any significant quantity." (146)

"Markets weed out inefficient practices, but only when no one has sufficient power to manipulate them." (156)

"Greater insecurity" (the flip side of so-called labor flexibility, which the liberalized market demands) "may make people work harder, but it makes them work harder in the wrong jobs." (227)

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Sep 24, 2012 Andrew added it

Shelves: economics, neoliberalism-and-postmodernity

Ha-Joon Chang wields powerful analytical weapons, my friend.

The free market doesn't work. I've got a strong sympathy for Marx, so I didn't really need convincing of this, but Chang isn't a Marxist. He's a Keynesian and a social democrat. Regardless of your political position, if you've seen the arguments made by the heroes of neoliberal capitalism (Friedman, Hayek, etc.) and have thought "something about this seems intrinsically wrong, but I can't put my finger on it" then Chang is probably able...more

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Mar 15, 2013 Karmen rated it 2 of 5 stars · review of another edition

Shelves: political

The book has one or two bright moments and few interesting insights but unfortunately they remain burried under the rather sloppy and shortsighted view of the world and it's history. The ambitious title falls under many attempts to present the big picture and at the same time "dumb" things down for the non-economists. Therefore the painted big picture remains incomplete, superificial and filled with false data.

Even though Chang doesn't completely leave out the effect of collonialism on today's e...more The book has one or two bright moments and few interesting insights but unfortunately they remain burried under the rather sloppy and shortsighted view of the world and it's history. The ambitious title falls under many attempts to present the big picture and at the same time "dumb" things down for the non-economists. Therefore the painted big picture remains incomplete, superificial and filled with false data.

Even though Chang doesn't completely leave out the effect of collonialism on today's economy of developing countries, he seems to suggest the main problem today is too much migration control in the rich countries, and less migration control is in his opinion also the way forward for over-educated people in poor countries (amongst which I learned is also Slovenia).

Despite Chang's attempts to include a view of equal opportunities (e.g. by using female form), he destroys it all by claiming that washing machine revolutionized the world much more than internet, as it allowed women to enter the labour market (and the pill in his opinion powerfully affectef female education). As if such women's and feminist movements, that were fighting for right of women to get education, work and voting rights, didn't exist at all:
"Having said this, however, it is still true that, without the washing machine (and other labour-saving housefold technologies), the cale of change in the role of women in society and in family dynamics would not have been nearly as dramatic." (p 36)

When trying to illustrate the worth of educational system for the productivity he throws in such arguments as: "This days most of shop assistants in rich countries do not even need to know how to add..:" which only shows how little he knows about the reality of shop assistant's work. He boldly concludes that education doesn't neccessarily affect the productivity so developing countries should rather invest in entrepreneurship.

In the end most of those 23 things they supposedly don't tell us about capitalism are old and rather obvious. In fact the book with such promissing title tells us much less about capitalism than e.g. Amartya Sen's: Development as Freedom. Disappointed.(less)

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Sep 25, 2011 Adam Higgitt rated it 4 of 5 stars

This is a book that could only have been published in 2010. A confluence between the style of Freakonomics and an appetite for tracts like The Spirit Level it may be, but the timing of Ha-Joo Chang’s book is important for another reason. It isa reappraisal of economicorthodoxyonly possible once appropriate distance has been gained from the manifest failure of that orthodoxy.

23 Things The Don’t Tell You About Capitalism takes the sacred cows of free market economics one-by-one and calmly slaughte...more

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Mar 22, 2013 Konstantinos Chatzigeorgiou rated it 5 of 5 stars

Ahhh, the free market. Living in Greece and having witnessed our financial crisis first hand, are experiences which seem to make this book's content rather obsolete *. However, Ha-Joon Chang is such a charismatic economist that turned the tables for me. He can quote Marx and Hayek next to one another. He can present some mind-blowing and lucid arguments to support his views. The best thing about him though, is that he studies history and institutions to understand why and how economic systems de...more Ahhh, the free market. Living in Greece and having witnessed our financial crisis first hand, are experiences which seem to make this book's content rather obsolete *. However, Ha-Joon Chang is such a charismatic economist that turned the tables for me. He can quote Marx and Hayek next to one another. He can present some mind-blowing and lucid arguments to support his views. The best thing about him though, is that he studies history and institutions to understand why and how economic systems develop (one might claim that his base is Marx's superstructure which is as ridiculous as it is fascinating).

Do free markets exist? Well no, not really. Let yourself free from the illusions of an objectively defined free market and you got yourself some evolving institutions which you take for granted. So for example, we all understand that child labor is unacceptable, right? Not under the pretences of a free market though. What IS an actual limitation, is never mentioned but instead we hear constantly that liberating the market means dismantling the welfare state, abolishing taxes etc.
There are examples like this all over this book. What about free immigration? If a free-marketeer wants to stay true to his or her principles he or she must also support free immigration. How often do similar ideologues offer such proposals? Lowest income is not defined by a law really, it's actually defined by the immigration policy of each nation. Open Sweden's borders for example and Indians are ready to take jobs for a lot less and might be more productive as well.

Have planned economies really failed? Are bureaucrats and engineers better than economists when it comes to successful economic policies? Does the welfare state strengthen productivity? These questions do come up and are answered competently by a rational economist who prefers a pragmatic rather than an ideological approach to economics.

Economics is not a hard science whether some people try to convince you that it in fact is. Having studied Mechanical Engineering I can clearly see that there aren't schools of thought that radically alter the fundamental approach to mine or similar disciplines. For example, you can't really say ''Gee, we don't think Newton's laws are of any use to mechanics nowadays. Instead we believe in this new set of laws''. You can definitely try to explain things differently, but in the end since all natural sciences are to an extent falsifiable, you'll most certainly get a devastatingly falsifiable and inconsistent result if you try to do so.

All economic schools of thought are characterized by a different perception of human nature. That's why different tools which lead to different conclusions are used. But nobody really knows much about human nature. It is incredibly diverse and many unanswered questions still cause irritation to social scientists of all kinds (including economists). That's why this book is of great value, because it reminds us of this elementary truth. It understands the complexity of our economic system as well as our limitations as human beings to fully grasp it. Limiting market options is not arrogant, it's actually the most humble thing because it clearly shows that we aren't smart enough to leave things to something we can't fully process.

* Reducing the welfare state in Greece has caused great unrest with 26 % unemployment and more than 50 % youth unemployment as of the 22th of March, 2013. Taxes are constantly raised (which is not a free-market doctrine though) but we are promised that they will be lowered if most of the country's wealth is given to corporations or incredibly rich investors. That's not the actual suggestion, but no middle or low income people can buy electrical plants, islands, goldmines etc. It's funny when libertarians are always skeptical of hierarchical and bureaucratic structures such as the state but have no problem with corporations which usually form conglomerates. I suppose hugely concentrated economic power does not affect our lives. Maybe corporations will dissolve if we have some sort of laissez-faire capitalism. Wishful thinking ain't enough for me though.

More information over what's being sold in Greece can be found on the following link :

http://www.hradf.com/en (less)

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Jun 23, 2012 Biogeek rated it 4 of 5 stars · review of another edition

Shelves: great-ideas

A thought-provoking book that challenges ideas that many have started to accept as conventional wisdom and prior knowledge. Chang questions some of the foundations of the so-called "free" market, and does some from a position of knowledge. While some of the reviewers here have dismissed him as being "far left", it is clear from most chapters that this is no liberal manifesto. In many topics (immigration, aid), he is as critical of the left wing as he is of the free marketeers. This is a balanced...more

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Feb 10, 2011 Christopher Rex rated it 3 of 5 stars · review of another edition

This book would make an excellent companion to any economics class. It is better as a "discussion starter" and/or "debate" type of hypothesis than a standard economical study. That within itself is the book's greatest strength and weakness. Many of the arguments put forth here are not backed up w/ methodical statistical studies and data - that's obviously a good thing for the "casual" reader, like myself. The problem is, that without widespread and detailed case-studies it opens itself up to cri...more

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Oct 24, 2010 Tank Green rated it 5 of 5 stars · review of another edition Recommends it for: everyone!

Shelves: economics, development, globalisation

i was going to give this 4 stars at first b/c i think he's often overly and unnecessarily simplistic to the point that i sometimes got confused over his target audience. also, some of his examples are weak which is frustrating b/c his arguments are not; he could have chosen better examples is all.

however, things 16 and 23 are absolutely brilliant and he goes straight for the jugular: they made me happy! things 9 and 17 are also pretty damn good.

i don't think anything he says is particularly reve...more

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Oct 22, 2012 David rated it 4 of 5 stars · review of another edition

In this wonderfully accessible read, Ha-Joon Chang breezily takes the reader through a wide-range of economic topics and concepts. The context for this book, of course, is the global financial crisis of 2008 and inevitably this casts its shadow over every page (just as indeed, it continues to cast its shadow over us now). Of course, there are hundreds of books around that seek to talk about the credit crunch, its aftermath and how it can be avoided but I really like Chang's approach. The "23 thi...more In this wonderfully accessible read, Ha-Joon Chang breezily takes the reader through a wide-range of economic topics and concepts. The context for this book, of course, is the global financial crisis of 2008 and inevitably this casts its shadow over every page (just as indeed, it continues to cast its shadow over us now). Of course, there are hundreds of books around that seek to talk about the credit crunch, its aftermath and how it can be avoided but I really like Chang's approach. The "23 things" structure, far from dumbing the subject down, actually proves a neat way of focussing on key topics. Despite the fact that this might seem a "bitty" approach at first glance(there's a list of suggestions at the front for alternative orders of reading the book), the book also builds its picture of the workings and systemic problems of the approaches to international economics that have been in the ascendent over the last few decades, cross-referencing between chapters and concluding with a summary overview of what Chang sees as the problems of "free-market" capitalism.

I notice that some reviewers on here have accused Chang of setting up straw men in this book, but I don't think that really does justice to what the author is trying to do. While some of his targets might indeed be straw men in contemporary academic economics, they remain nonetheless very powerful animating myths amongst the business and political elites that have a far greater influence on the way our economies are run than the economists do. In fact, I'd suggest - despite Chang's own dismissal of the impact of economists - that the ascendancy of free market economics since the 1980s has had more to do with these elites' enthusiastic adoption of a thoroughly self-serving mythology than with debates among acaademic economists. The tragedy for all of us is that it's this that has kept economists like Chang out in the cold. If that changes as a result of recent crises then I think we're all likely to be better off, capitalists included. Unfortunately, that's a rather big 'if'. (less)

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Mar 04, 2011 Connie Kuntz rated it 5 of 5 stars · review of another edition

This book is a very convincing argument about how utterly bogus the notions of free market and free trade actually are. You can find a quote in every chapter regarding this point. My favorite is found on page 73:

"The free trade, free-market policies that have rarely, if ever, worked. Most of the rich countries did not uses such policies when they were developing countries themselves, while these policies have slowed down growth and increased income inequality in the developing countries in the...more

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Jun 22, 2012 Neil Hanson rated it 4 of 5 stars

National and world economics is such a confusing thing to normal folks, and this book does a super job of simplifying things in a way that helps the reader see the big picture and the context. The author seems to have the objective of debunking the neo-liberal economic myths that have driven our national economy for the last 3 decades, and much of the world economy for that matter. I think he does an excellent job of presenting the neo-liberal arguments, and then laying out evidence that a ratio...more

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Dec 22, 2012 Jamie Johnson rated it 4 of 5 stars

Classic work from a heterodox economist. The buzz term for the 21st century is that we now live in knowledge economy. This somehow implies that western economies have moved beyond material needs to some post-industrial nirvana. Ha-Joon Chang argues convincingly that this is erroneous, and that the (impressive) productivity gains of industrialisation have been captured by vested interests (assisted by dumb-assed economists) in an increasingly unequal world. The post-industrial global economy is p...more

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Feb 10, 2012 Mark rated it 4 of 5 stars

Shelves: politics, philosophy

Ha Joon Chang is fast becoming a poster boy for the moderate left. His down to earth approach towards solving the worlds problems, within the systems we have in place is quite refreshing and in many ways much more realistic than the radical philosophers that espouse worthy but ultimately futile ideas of violence revolution.. His last book, Bad Samaritans told of the global domination of the west at the expense of developing nations and 23 Things largely follows on from this critique. The book is...more Ha Joon Chang is fast becoming a poster boy for the moderate left. His down to earth approach towards solving the worlds problems, within the systems we have in place is quite refreshing and in many ways much more realistic than the radical philosophers that espouse worthy but ultimately futile ideas of violence revolution.. His last book, Bad Samaritans told of the global domination of the west at the expense of developing nations and 23 Things largely follows on from this critique. The book is broken down in to easily digestible chunks, ideal for the reader who wants to break in to the world of economics and globalisation. Chang cuts through the jargon of the system well using simple metaphors and examples to aid the reader. An economist himself, the author is bitter about economists and their influence on global politics over the last thirty years, claiming "Economics, as it has been practised in the last three decades, has been positively harmful for most people." Anyone who still believes that global free trade is beneficial to everyone should read Chang (this book or the previous one) and take a long hard look at themselves in the mirror. Present developed nations only became the way they did due to intense protectionism, colonialism and state funded monopolising of industry. Only when economies had grown to a particular level did nations feel confident enough to open up their markets, and not fully even then. Through the IMF and World Bank third world nations have been ordered to free up their economies and open the doors to international competition and cannibalism. In no country has this method worked, including the so called “Asian Tigers” including South Korea where Chang calls home. He expertly shows us that in almost all cases economic growth was higher during pre-neoliberal times (ie pre-Regan/Thatcher) across the world. These 23 Things develop around this central point. Chang explains all this through the prism of capitalism; he himself is no socialist and believes in globalisation, but a form of globalisation that can and should operate for the benefit of all. There’s nothing wrong with being rich as long as no one is abjectly poor. The chapters take us on journeys from entrepreneurialism to free markets, wage labour and “consumer choice” to immigration and many other areas linked to globalisation and each chapter is myth-breaking of the highest order. Although fairly introductory at source there were some points that made me raise my eyebrows as in the section on entrepreneurialism being an increasingly collective process from schools right through to in-house company training, and some new ways of explaining old arguments and paradoxes such as the inherent fallacy of consumption. A book I would recommend to anyone who wishes to understand the world we live in, not as it is professionally understood but how it really operates, and how it can be changed.(less)

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