23 Things They Don't Tell you About Capitalism

   The international best selling author Ha Joon Chang writes a very interesting book 23. Chang is an academic at Cambridge in England but delivers a very readable , entertaining and informative book about the shortcomings of Free Market capitalism. Chang makes clear he isn't an anti-capitalist but very much a critic of its free trade form. He borrows from what  Churchill says about democracy , that its terrible but better than anything else. Replace democracy with capitalism and you get Chang's sentiments. I more or less agree.

   His list of "things" include 1. There is no such thing as free trade. 2.Companies should not be run in the interest of their owners.3 Most people in rich countries are paid more than they should be 4.The washing machine has changed the world more than the Internet has  5.Assume the worst about people and you get the worst 6.Greater macroeconomic stability has not made the world more stable7. Free market policies rarely make poor countries rich 8. Capital has a nationality 9.We do not live in a post-industrial age.10.The U.S. does not have the highest living standard in the world.11. Africa is not destined for underdevelopment 12.Governments can pick winners 13. Making rich people richer doesn't make the rest of us richer.14.U.S.managers are overpriced.15. People in poor countries are more entrepreneurial than people in rich countries.16 We are not smart enough to leave things to the market.17 More education alone is not going to make a nation richer 18.What is good for General Motors is not necessarily good for the United States 19.Despite the fall of communism we are still living in planned economies.20. Equality of opportunity may not be fair.21 Big government makes people more open to change.22. Financial markets need to become less not more efficient .23Good economics does not require good economists. He begins each chapter by stating the Free market perspective on the issue in a paragraph or so and then  goes on to dismantle what we've been fed by the free market information machine or myth makers.

    He concludes the work by listing 8 recommendations to a better world economy. He starts with the reference to Churchill , condemning the poor performing free market variety in favor of a better regulated model. Second , we should build a system recognizing that rationality is severely limited. He argues "we need to have better safety standards for financial markets just like we do for , food, drugs automobiles and airplanes." Third , while acknowledging that we are not selfless angels , we should build a system that brings out the best rather than the worst in people. Many people work in complex organizations where its not each person for himself , otherwise the organization wouldn't survive. Fourth:we should stop believing that people are  always paid what they deserve. This is especially true of very skilled people in poor countries where there is little opportunity and executives in countries like the U.S. where through board room voting fraud ,CEO's buy huge salaries by offering board members plum positions. Fifth;we need to take "making things' more seriously. The post industrial age is a myth. The idea that you can ship your industry to poor countries only lead to  a lower standards of living.Sixth, we need to strike a better balance between fiance and the real economy.The finance sector lives on short term gains but some of the  most successful companies like Toyota and Nokia  went over a decade before they  started to generate a profit.Seventh:Government needs to become bigger and more active.The countries with the biggest welfare states also had very good growth rates.We need a better welfare state, better regulation and better industrial policy.Eight: the world economic system needs to unfairly favor developing countries.Organizations like the WTO , the IMF and World Bank are functioning at the behest of the developed countries. These poorer trading partners would be in much better shape if they could protect their adolescent industries like successful countries like the U.S.  did when it was young.

    Chang tells an interesting story about the leaders on our greenbacks  , which we sometimes call "dead presidents." As it turns out not all of them were presidents, Hamilton and Franklin never served as president. They were all protectionists  however and would be opposed to the free market ideology which has gripped the economic psyche today and is dropping us  to hell in a hand basket both domestically and internationally. 

    Chang makes some good economic as well as moral arguments ,which is a commendable combo . Plus he ells many interesting stories along the way.