I need only spend a few short minutes on the interwebs before I find another interesting book to add to my To Read list. Some how, some time ago, I stumbled upon some article on some website expressing something about how some people have become skeptical of free market capitalism in the wake of the recent financial crisis for some reason. This article mentioned the book 23 Things They Don't Tell You About Capitalism by Ha-Joon Chang. Predictably, I immediately opened up a new tab and went to Amazon to add the title to my wishlist.
Continuing on the theme of economics, free market capitalism, and globalization, the time was right to pick up this book. So far, it has exceeded my expectations. Each myth-busting chapter is setup in such away that the assumptions and assertions of free market capitalists are succinctly (though not necessarily unfairly, in my opinion) presented, and then rather persuasively debunked using clear and engaging language and some real world examples.
The book deals with such neo-liberal ideological claims as:
- Running a company in the interest of increasing shareholder value incentivizes the company to perform well. (It doesn't, and it often results in short-term profit seeking measures that hurt a company's long term growth and lifespan.)
- Markets need to be free and they cannot be efficient and profitable where there is government interference. (There's no such thing as a 'free market', which is a primarily a political definition to begin with, and even the most liberal markets only appear that way because we take much of the 'ambient noise' of established rules for granted. This includes regulation surrounding environmental protection and child labour laws.)
- We live in a post-industrial age where manufacturing is relegated to less advanced economies such as China because there is simply less demand for manufactured goods in the West. (While jobs in manufacturing have certainly declined in places like the United States and Britain, this is mainly an artifact of greater productivity and the lower costs of manufacturing relative to the service industry, as well as outsourcing and other processes of de-industrialization.)
Perhaps my favourite example so far deals with the assumption that people are primarily motivated by self-interest and that social harmony and prosperity emerges from selfish individuals thinking only of themselves. These ideas are, at best, naive and misleading, and at worst they seek to bring out the worst in people. What motivates individuals is far more complex than objectivist Ayn Rand fanboys would care to admit, or even acknowledge. People do things for all sorts of other reasons than just money. We have a sense of duty to family, community, and country. We like to feel as though we contribute. We like to help and volunteer our time and resources. Of course, the most cynical of ideologues would say these 'reasons' ultimately boil down to self-seeking behaviour masquerading as some degree of altruism or selflessness.
Ha-Joon Chang goes on to explain how if people really were entirely self-seeking in their behaviour, the project that is human Civilization would simply grind to a halt. There would be so many cheaters out there that we'd spend all of our time trying to catch them and prevent ourselves from being cheated. Taking that old bumper sticker slogan from Adam Smith that "it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest" to its next logical step would result in a world that is not only unworkable, but also downright disturbing.
23 Things... is the perfect little book to serve as a potent antidote for those who have imbibed the poison kool-aid that is neo-liberal economic ideology. The ideas that became fashionable in the 1980s have produced legions of academic and political followers that continue to shape our economic lives. Books like Ha-Joon Chang's should help to break the fever, though it is often the case that well reasoned arguments based on evidence are scarcely effective in the face of obstinate ideology. In any case, I have another book to add to my wishlist: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by one Ha-Joon Chang.
It is also quickly becoming an inescapable fact that I will have to read Thomas Piketty's Capital In The Twenty-First Century.
