Ha Joon
Chang, the Cambridge economist enjoys myth busting. His engaging work ’23
Things they don’t tell you about Capitalism’ explains how the economic system
works in an increasingly capital intrusive world while deconstructing myths and
beliefs about it. This book is both important and persuasive for this reason,
and leads the way to open up other ways of understanding the global economy and
how nations perceive it , act and interact in it. The financial crisis of 2008
was the second largest economic crisis in human history and paved the way for a
systemic change in responding to perceived economic laws. There was a huge
drive world over and significant pressure on the developing countries to reduce
budgetary deficits through the curtailment of welfare entitlements and public
investments. This push has been the result of a particular brand of capitalism
called the ‘free market ideology’. This school of thought puts faith in the
unlimited rationality of individuals and the capacity of the unfettered market
to bring out just and efficient outcomes. The belief in the capability of the
unrestrained individual and the market comes from the idea that wealth creation
benefits everybody. It is this credo that espoused credit fuelled consumer boom
and it is this line of thought that Ha Joon Chang’s work attacks.
Toward
Active Economic Citizenship
23
things proceeds like a user manual to understand and critique free market
ideology by dissecting 23 points that counterpoises general received wisdom
about the economic system. The objective of the book, the author claims, is to
equip the average citizen with enough robustness of judgement to question
‘expertise’ so that eventually capitalism works for all of us in a better way.
The author begins with the important disclaimer that attacking the free market
ideology is not the same as attacking capitalism itself. Capitalism is the best
form of economic system that humans have invented so far. But the main
challenge is to make it work for everyone, the developed and the developing, the
expert and the novice, equally well. This calls for an active economic
citizenship that enables each individual to defend her interests well.
In
order that the way to enlightened economic participation begins, 23 different
myths about our beliefs are engaged with in a lively and pertinent manner.
These 23 things include the mundane, the abstract and everything in between.
For instance, ideas about capital, capitalism, decisions of governments and the
working of technology are discussed with trenchant examples and contrasts from
different parts of the world. Propositions like whether the washing machine has
revolutionised the world more than the internet has been taken afresh and
debated with the logic of the economist and the author’s inimical humour. Nothing
escapes the rigour of economic thinking. The instances are from everyday lives
of peoples and nations, even though the explanations are lucid and the examples
extra ordinary. Every myth begins with a statement of the obvious thinking and
an analysis of that in the following passages with examples that prove the
contrary. Active agency is implied throughout the work beginning with ‘what
they tell you’ to the responsive counter arguments.
Chang
does not just stop with critiquing the present model but goes a step further
and proposes an alternate model for rebuilding the economy. He does not believe
in the tinkering of the existing system through regulation, codes of
transparency or restraints. What he challenges is the fundamental premise of
such an economic thinking and hence looks for systemic overhaul. He believes
that in order to organise capitalism in a more efficient and rigorous manner,
recognition of the limits of human rationality, presence of human agency and
the significance of moral core of humans is important. We have to separate the
financial from the real economic activities. The emergence of a strong
government and active economic citizenry is important in this respect. This
deceptively powerful work is both a commentary on the present economic system
largely followed in the world as well as a vision document for an alternate
future.
(This review was published in The CSR Analyst, November 2014)
(This review was published in The CSR Analyst, November 2014)
