23 Things They Don’t Tell You About Capitalisim – Book Review

Posted on December 20, 2011


This really is a fantastic book, I highly recommend it.  Ha-Joon Chang teaches in the Faculty of Economics at the University of Cambridge so the guy knows what he is talking about and is from South East Asia – the part of the world that is without doubt the current and future PowerHouse of world economic growth. Love this guys work, I have paratweeted the 23 points below, Read the book – you can even get the first few chapters free on the net:

Thing 1 – Economics is not scientific but political, there is no such thing as the free market

Thing 2 – Trying to maximize shareholder value is dumb for a company and dumb for the economy in general

Thing 3 – People in rich countries are overpaid because of immigration policy not because they are more productive

Thing 4 – The internet “revolution” is not as important as we like to think it is

Thing 5 – Even a capitalist economy relies on goodwill not pure self interest and competition

Thing 6 – Inflation is a “bogeyman” that has been used to justify policies that benefit holders of financial assets

Thing 7 – No countries have become rich through free market / free trade policies and none ever will

Thing 8 – Transnational corporations benefit only the nation where they are headquartered. Only low end tasks are outsourced

Thing 9 –  Successful economies manufacture tangible products. A “service only” based economy will not prosper

Thing 10 –  American does not have one of the best living standards in the world after the amount of hours worked is taken into account

Thing 11 – African nations are not destined to always be poor, any country can overcome structural (cultural and geographical) difficulties

Thing 12 – Government can pick economic winners just as well as business, “economics only” decisions may not be in the national interest

Thing 13 – The view that giving the rich a bigger slice of the pie will make the pie bigger is, frankly, Bullshit

Thing 14 – CEO’s are overpriced and incorrectly incentivized

Thing 15a – Poor countries suffer due to the non existence of collective administrative systems, not a lack of entrepreneurship

Thing 15b – Microfinance is of limited value as the initial market for any particular cottage industry is quickly swamped

Thing 16 – No one is smart enough to fully understand the complexities of the market, simplification via regulation is required

Thing 17a – It is a myth to believe that education alone can make a country and it’s peoples richer

Thing 17b – Capitalists deliberately deskill their workers by using automation to make them more easily replaceable and easier to control

Thing 18 – While the corporate sector is important, allowing firms the maximum degree of freedom is not good for the firms themselves

Thing 19 – Capitalist societies are already planned economies to a massively large extent only the degree of regulation is up for debate

Thing 20 – Equality of opportunity is the starting point in a fair society, but it is not enough

Thing 21 – A well designed welfare state makes people more willing to change industries and more flexible, it is good for the economy

Thing 22 – Financial markets are too efficient and too keen to make easy money, the “Tobin” financial transaction tax should be introduced

Thing 23 – Good Economists are not required to run successful economies, the best economies have been run by Lawyers, Engineers, etc