Last year, the Korean star economist and acclaimed “intellectual voice of the antiglobalisation movement” Chang Ha-Joon followed up on his best selling “Bad Samaritans” and “Kicking away the Ladder” with a smartly constructed volume named “23 Things they don’t tell you about Capitalism”. Meanwhile, a German translation has been published with the word “Lies” in the title, and all newspapers that do economy have published a short review many months ago. So why another article now?
Because the book is the cleanest account of a self-aware infinite growth economy. Its pages breath remarkable clarity and precise examples to dismantle all of the twenty-three Things Chang takes on. It is a very good read if you are still not convinced that the system of “free market capitalism” is founded on myths, non-free markets, political influence and powerful cynicism, and is of course not free at all.
Among the Things are the insanely high managerial pays that are, contrary to mainstream thought, not only not justified but even counter-productive. There is the non-sustainability of an 800% financial sector (the Iceland bubble), the fact that protecting “infant industries” is what made rich countries wealthy, the fact that state intervention (“picking the winners”) can be successful as in the case of POSCO steal and other major Korean companies. There is the fact that countries with more social security (Scandinavia) also have a higher per capita GDP and living standard than the US. There is the Thing that the so-called service economy is always supported by a strong material foundation. Or the fact that shareholder value maximization of big firms is NOT always the best thing that can happen to a country. Or that our post-communist economies are still planned. Or equality of opportunity is not always fair. These and all the other Things make reading this book a cathartic experience, if you will.
Chang’s book is also a very good read if you are questioning the infinite growth paradigm. Throughout the book I kept wondering when Chang would finally address this issue. Although he points out the discrepancies related to the insane growth rate of the financial sector, with its packaging and other nifty abstractions – the fundamental fallacy of infinite growth on a finite planet is structurally ignored in this book.
Instead, Chang reminds us of the importance of material production (and hence consumerism), calling the “post-material” economy a myth and pointing out that presumably post-industrial countries like Singapore and Switzerland both have a GDP-share of industrial production among the highest in the world.
The growth must go on, and in order to make the international game fairer we have to re-invent the rules so that they are consistent with economic history and human wellbeing. That seems to be the message of this book. For the least, we need to add the planetary restrictions (See Tim Jackson’s best selling “Prosperity without Growth”).
But precisely because he sees so sharply that material production growth would be essential for economies like Ghana to mimic to some extend the Asian Tiger’s success story and increase global fairness, Chang finds himself confronted with a new conumdrum: The impossibility of infinite production (or productivity) growth. Let’s hope he will use his brilliant analytic mind to address this problem head-on in his next book. I suggest that he calls it “23 theoretical Ladders we have to kick away if we want to Survive as a Species”.
P.S. If you want me to write a review about “Prosperity without Growth” for you, please mention it in your comment. I have read it and can give you a condensed to-the-point summary.
P.P.S. If you want to read “23 Things” I’d gladly share my copy with you.