Ha-Joon Chang: Economics: The User’s Guide

July 3, 2014

9780718197032If you were wanting anything revolutionary, then you probably wouldn’t start here. Nevertheless, I was sufficiently impressed by the writer’s previous 23 Things They Don’t Tell You About Capitalism, to want to read this.

It’s probably the house-style of the new Pelican Books series to have the writer try and be jokey at the start, and smite everything down into bite-sized gobbets for ease of comprehension; when he stops being patronising and gets down to serious explanations and definitions, then he is extremely clear and concise; he draws distinctions between terms and theories very clearly, and this is a must in such a complex subject.

He offers a very useful history of the development of capitalism, debunking the myths of the free market and neoliberalism along the way, as well as pointing out that insufficient attention is paid to production. A major issue is clearly the concept of limited liability, which leads to risk-taking, and we know where that had led us…

He recognises Marx’ prescience in some areas as he illustrates and exemplifies the whole gamut of economic theories, offering judgements and evaluations; he is very clear that economics cannot pretend to be a science, and you are very clear about that when you get to the end of the book!

I learnt a lot and understood a lot after I’d read this book: for instance, I wasn’t aware of just how large a proportion of trade, especially international trade, is not part of the ‘free market’ because it’s trade within firms…

So, where does he stand on current issues? He’s clear about the necessity of some state intervention in the economy; he’s clear about the importance of manufacturing; he stresses the importance of all the environmental issues that are currently emerging; he’s clear about the need for more regulation. Basically, what has been going on recently is legalised gambling with other people’s money, at no risk to the gamblers themselves, and the system is currently too complex to monitor and control, meaning that the gamblers always win, even when they lose, as governments bail them out.

It’s not an easy read, but it’s a good, clear introduction to the ramifications of the subject and ought to be essential reading for anyone who cares about the future. There were places where my eyes glazed over at the complexity of it all, but I’m on the side of anyone who ends up saying that there are no easy answers, and beware of anyone who tries to tell you that there are…

I still think we badly need a 21st century updating of Marx, an analysis that posits a way of organising a world differently, that can jolt us out of our current enslavement to the hegemony of materialism.

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