23 Things They Don't Tell You About Capitalism

Abstract

[...]the current A Level Economics specifications are so filled with Keynesian bias that it is wonderful to have a fresh outlook on economics, acting as a counterweight to Keynesianism, from such a credible author. In this sense, the book would benefit from greater clarity on the precise original principles of a freemarket system and the foundations of their formation in economic thinking, alongside the problems free market economics causes, considering the emphasis the author places throughout the text on economic problems stemming from free-market policies.

23 Things They Don't Tell You About Capitalism, Ha-Joon Chang, Penguin, 2010, 304 pages, RRP £9.99, ISBN 978-0-141-04797-3

This book appears to be the 'new black'. In 2008 every student applying for an Economics-related undergraduate degree typed 'I have read the Undercover Economist' somewhere in their UCAS personal statement. I have found that now in 2013, the new 'must have' quotation is 'I have read 23 Things They Don't Tell You About Capitalism'. Many of my Oxbridge students this year, including prospective Economists, Land Economists and Economics and Management applicants, as well as the Geographers, are reading this text. I can see why it's the new economics buzz book. It provides some truly fascinating insights into the mistakes of free-market economies. Chang uses student-friendly language throughout, explaining how many of our current economic problems are, in one way or another, directly related to capitalist policies.

Ha-Joon Chang sets out 23 chapters, each one with an original title as a 'thing' worth considering. This is a clever style of writing, where the audience can pick and choose what and where they read according to their topic or subject-specific interests. This is of particular use to economics teachers who are trying to stretch brighter, more able, economists by suggesting some extension reading outside the core exam board-specific textbook. For example, the chapter entitled 'Thing Two' (Companies should not be run in the interest of their owners) is a useful chapter to read for any A2 economist wanting to have a deeper, more advanced understanding of the theory of the firm. It covers the objectives of firms and the principle-agent problem, as well as concepts such as profit maximising or satisficing. Indeed, my students taking the OCR F584 Transport module have found this of particular relevance.

Likewise 'Thing Three' (Most people in rich countries get paid more than they should) is of great use to those students taking an examination on labour markets (OCR F583). This could also be used to demonstrate the concept of sticky wages when teaching differences between Keynesian and Classical schools of thought. Similarly 'Thing Four' (The washing machine has changed the world more than the internet) and also 'Thing Seventeen' (More education in itself is not going to make a country richer) is of great use to those students taking an examination on development economics (IB HL). Indeed, we can see in the chapter entitled 'Thing Ten' (The US does not have the highest living standard in the world) a clear connection to indicators of welfare - including HDI, Lorenz Curves and the Gini Coefficient. These are all relevant extensions to basic knowledge, for any student taking an international economy examination (F585 Global or indeed AQA or Edexcel Unit 4).

It is very refreshing as an Economics teacher to have such a clear focus on the importance, relevance and impact of free market economics. Indeed, the current A Level Economics specifications are so filled with Keynesian bias that it is wonderful to have a fresh outlook on economics, acting as a counterweight to Keynesianism, from such a credible author. That said, I would be failing as both an examiner and a teacher of this subject if I ignored the glaring lack of precise economic terms throughout this book. Although Chang acknowledges this omission, claiming it makes the text more accessible to all readers, I cannot help thinking that it would be so much more credible had it included key definitions, accurate economic terms and much more mechanical, clinical language.

I would suggest that this book should be read chapter by chapter by A2 economists who have had a solid grounding in basic theory of economics. They should be guided by their teachers - this will not only stretch their ability to critique free mark theory, but also enable them to offer balance and articulate alternatives. In this sense, the book would benefit from greater clarity on the precise original principles of a freemarket system and the foundations of their formation in economic thinking, alongside the problems free market economics causes, considering the emphasis the author places throughout the text on economic problems stemming from free-market policies.

I can easily see why Chang's book is an international bestseller. It makes accessible the real issues that students read in the news, such as inequality, poverty and the global financial crisis. He has such a wonderful way with words that he can relate these issues directly to the policies of free-market economics, making it easily digestible. What is really appealing is the author's lack of assumptions regarding the reader's depth of knowledge on this system of capitalism. So those students, perhaps those who do not usually look outside the core text, will have their hand held by Chan as he walks the reader through many puzzling concepts.