From the renowned heterodox economist Ha-Joon Chang comes 23 Things They Don’t Tell You About Capitalism. It is a book explaining 23 things that ‘they’, meaning the free market economists, do not tell you about Capitalism. This book is charmingly structured; each ‘Thing’ is broken up into two sections, the first of which is ‘What they tell you’ – a borderline sarcastic summary of the conventional wisdom on Capitalism – , followed by ‘What they don’t tell you’. The bulk of the book is, unsurprisingly, made up of ‘What they don’t tell you’, which essentially is an iconoclastic refutation of conventional free-market economic wisdom. It is also fair to understand this book as an amalgamation of the different writings of Ha-Joon Chang.
About Ha-Joon Chang
Ha-Joon Chang is a Reader at Cambridge University, specialising in Development Economics. His influences are broad, and are from across the political spectrum; his PhD supervisor was the prominent Marxist economist Robert Rowthorn, whilst Ha Joon Chang also claims to be influenced by Friedrech von Hayek of the Chicago school of thought. These (almost contradictory) influences makes Ha-Joon Chang a vibrant and unique author; he never seems to be drunk on ideology, and he always gives due regard to opposing arguments.
A Landmark in Heterodox Economics
Ha-Joon Chang’s wide-ranging perspective and background makes his appreciation and due regard of counter-arguments a principle strength of this book. Ha-Joon Chang never succumbs to the power of a monologue, he very often presents the argument that free market economists would do (often in a satirical manner), and readily acknowledges any truth that he sees in them. It is often the case that refuting these counter-arguments involves technical economic concepts, such as Purchasing Power Parity, which he uses in Thing 10. Ha-Joon Chang is wondrous in simplifying these concepts with examples and plain English. This, accompanied by the quirky, charming and sometimes colloquial language used, makes 23 Things a very well written, and easy to read book, accessible to readers irrespective of their background in Economics. The significance of the subject matter adds to the excellence of this book; the current narrative in Economics is one which propagates exactly what this book critiques, making this book a landmark in Heterodox Economics. The topics that are addressed in this book have been previously spoken of by the likes Joseph Stiglitz or Thomas Pikkety, but 23 Things is one of the first books to amalgamate the Heterodox narrative.
America is not Capitalism
In light of the above, it is not on terms of articulation, fairness or significance that one may criticise this book, (indeed the criticisms are few and somewhat meticulous) but rather critiques to this book would come from those seeking a book on economic theory. Be aware, you will find no mention of Solow’s Growth Theory, the Phillips Curve and the like. Ha-Joon Chang’s observations and explanations are almost always real world examples and cases. They are not rooted in economic theory. Whether or not this is a bad thing (which it is not in my opinion), it is fair to mention that to those who favour economic models, this book may not be an ‘economics’ book. Irrespective of ones regard to economic theory, 23 Things comes dangerously close to having an anti-American sentiment. While it is natural to address the so-called King of Capitalism in a critique of Capitalism, it can be argued that Ha-Joon Chang is too frequent and at times goes beyond Economics. Furthermore, there is no formalised definition of what Ha-Joon Chang seeks to critique; Capitalism as a system, the narrative, or its modern day iteration? Whilst it can be deduced that it is the latter, a lack of a definition in the introduction remains a problem.
23 things you should know about Capitalism: A Verdict
Do not let the length of the America is not Capitalism section deter you with finicky criticisms, from what is an excellent book. This book is essential reading for those interested in any Social Science. The strengths far outweigh the weaknesses, and the clarity of expression makes for a wonderful and comfortable read. There is also far more to this book than is immediately apparent.
23 things they don’t tell you about Islamic Economics?
Let us digress from the conventions of a book review, and address the real reason of why this particular book was reviewed; it is the remarkable convergence with the principles of Islamic Economics. Tarek el Diwany remarks on Islamic-Finance.com that it ‘has several themes that will be immediately recognisable to students of Islamic economic thought’ 1. One of which is certainly not the anti-American sentiment.
One such theme is Ha-Joon Chang’s attack on usurious microfinance schemes in Thing 15. He clearly dislikes usury, but disappointingly does not condemn interest rates at large. This is unsurprising, as today interest rates are unconsciously accepted as good, and any other who critiques them is considered a radical. This is not to imply that Ha-Joon Chang is against interest; whether Ha-Joon Chang does or does not condone interest rates is unknown from the contents of this book.
In Thing 16, Ha-Joon Chang argues in favour of the outright banning on financial derivatives that we are not fully able to comprehend the impact of. He argues this on this basis on uncertainty, which in Islamic Finance is known as Gharar. Gharar is also prohibited in Islamic Finance2.
Further convergence in themes includes a critique of GDP as a method of measuring well-being. Those who are well versed in Development Economics would be familiar with the arguments concerning the lack of impact of environmental factors, life expectancy among many other factors. It is no secret that Islam also does not regard money as an indicator for wellbeing. The topic of well-being indicators in Islam warrants a discussion on its own, but for this purposes of this review it will suffice to say well-being in Islam is intrinsic, immaterial and in-tune with man’s natural disposition, and would certainly resonate with what Ha-Joon Chang discusses.
Indeed the themes go well beyond the above, but regardless, this is a huge optimistic step for Islamic Economics; it shows that the ideas of Islamic Economics are gaining academic ground. Although it remains a shadow to the current narrative, Islamic Economics is growing fast, and with growing uncertainty about the current economic system, there exists a stellar opportunity to expand what may be the last alternative to the status quo.
2 Diwany, T. (2010). What is Gharar?. Available: http://www.islamic-finance.com/item160_f.htm. Last accessed 20th July 2014.