My friend Doug Ross sent me a book out of the blue. (I love when that happens.) He’d been talking about this breezy, fascinating volume by a Cambridge economist, but “Cambridge economist” alone had my eyes glazing over. In mild exasperation he sent it my way, and 23 THINGS THEY DON’T TELL YOU ABOUT CAPITALISM, its listicle title, consigned it to my “maybe one day” pile. For some reason that day arrived, and do I owe Doug a round of applause. This thing is substantial, economically sound, and thoroughly accessible to us civilians (unlike Thomas Piketty’s work). It’s also fun and puckish in the way it gleefully destroys received wisdom on how profit-centered economies really work. “There is no such thing as a free market,“ Ha-Joon Chang begins (that’s Thing 1), and he’s just getting started.
Most politicians who yak about the “free market” actually mean, “free from those pesky regulations.” But as Dr. Chang points out, all developing economies, including that of the United States, have used regulation and protectionism to give domestic wealth a chance to emerge and then to preserve it. Most regulations aren’t apparent to us, he writes: we notice one “when we don’t endorse the moral values behind it.” To the rich world, identical tactics in struggling economies can seem unfair, but that is not how global capitalism works. This conflict between perception (“common knowledge”) and reality powers the entire book, which mainly consists of hole-poking into the fiscal piety of what the author terms “free-market economics,” or simply letting the “invisible hand” of the economy seek its own level. That is not what happens, never has been, and if any state or consortium actually tried to leave its market alone, the result would be disastrous.
Each discussion of the author’s 23 Things begins with a paragraph called “What they tell you.” As I read them, I was struck again and again: jeez, that’s exactly what I was taught! The next paragraph is the truth, “What they don’t tell you.” Finally, Dr. Chang explicates his conclusions with data, logic and common sense, all sourced and cited in notes at the end. Never does he outpace the lay reader, not even when one or another of his Things seems counterintuitive (Thing 4, “The washing machine has changed the world more than the internet has”) and deliberately invites scorn or disbelief until the author patiently proves his point.
The book’s brief 260 pages contain a wealth of upended “wisdom” and provocation. We do not live in a post-industrial age. The U.S. does not have the world’s highest standard of living, though its managers are paid too much, as are most workers in other rich countries. Africa is not doomed to perpetual underdevelopment. Financial markets need to become less efficient, not more. The trickle-down theory is a sham. Even after Communism, we still live under planned economics. People in poor countries are more entrepreneurial than those in rich countries. We are not smart enough to leave things to the market. And much, much more.
You will almost certainly disagree with at least a few of the 23 Things before Dr. Chang gets through with you, maybe even after. His institutional bias is certainly toward the collective and the global, and that’s all a right-wing radio host would need to cut him down. But there is no question that you will be made to think more rationally, and more planet-centrically, about “the things we know that just ain’t so.” What more can you ask of a book you can either ponder bit by bit, or devour in a single sitting?