THROUGH THE LOOKING GLASS

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)