Review: 23 Things They Don’t Tell You About Capitalism

23 Things They Don't Tell You About CapitalismHa-Joon Chang: 23 Things They Don’t Tell You About Capitalism
Penguin, 2011, 304pp
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As a Cambridge University professor, Ha Joon Chang is of course highly specialized in his field of economics.  However, this book is written for the lay reader.

The book is written in a very interesting format.  It comes as a series of chapters, called ‘Things’, each of which begin with a section entitled: “What they tell you”.  And the next section of the chapter is of course: “what they don’t tell you.”  So first of all, you learn economics as students up to A level do.  Then the reader comes into a series of perspectives, facts and details that those who go onto higher study, and those who are prepared to challenge some fundamental economic orthodoxies do.

An example is Thing 2 (Chapter 2).  Conventional thinking is that shareholders bear the full risk of a company’s business. As a consequence, when the company goes bankrupt, the shareholders lose everything.  The rest of Thing 2 (Chapter 2) goes onto explain how the system of limited liability developed, which actually limits risk and bankruptcy for shareholders, and made the development of capitalism possible.

In Thing 1 or Chapter 1, the book traces the development of the textile industry in England, and how regulation of factory conditions (major issues in Bangladesh and Indonesia today) first became a major issue in industrial Britain during the 19th century.

The book is written with humour.  The reader learns about many of economics’ most important figures, including Adam Smith, David Ricardo, Karl Marx, Milton Friedman and Joseph Schumpeter.  Thing 14 (Chapter 14) looks at the development of the most recent forms of capitalism, or “managerial capitalism”.  The issue of financial regulation is looked at, for example with the abolition of the Glass-Steagall Act in the US and the effect of Big Bang.  However, there is little perspective from this book on environmental economics (that is an emerging problem with the discipline of economics generally).

Thing 11 looks at the IMF, World Bank and the controversial aspects of their development programmes. It is worth noting that these policies have changed significantly over the past decade or so.  There are also important references to the phenomenon of microfinance and Grameen Bank.

The perspectives in the book include those from the author’s native South Korea, but also insights from the US, German and Scandinavian economies.  The book looks at the economies of East Asia, and also Soviet economic planning (Chinese economic planning is similar in many ways).  The book has generally been well reviewed, as its back cover shows.  I would certainly recommend it.

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