23 Things They Don’t Tell You About Capitalism by Ha-Joon Chang, A review

Ha-Joon Chang’s book attacks much of the “conventional wisdom” of neo-liberal capitalism: less regulation, smaller governments, the belief that we are now living in the knowledge economy. Instead, Chang argues, governments should play bigger roles, and there are instances- particularly in finance- where more regulation is needed. The points are provocative and will find many takers in the Global South. But this is not a book against Capitalism, rather it advocates for a more sustainable and humane version, with a strong welfare state and social nets for the under-privileged.

Capitalism, particularly, a form of it known as neo-liberalism  is the de-facto way of organizing markets today. In this current form, capitalism and its supporters- the big businessmen and neo-liberal economists of the world’s top universities- advocates for less regulation, less government intervention, opening emerging markets to globalization and, among other things, trusting the wisdom of economists.

It is this “conventional wisdom” that Ha-Jo0n Chang, an academic specializing in Developmental Economics at Cambridge University, systematically tries to decimate. And at times he does so spectacularly well.

The first Thing Chang attacks, : “There is no such thing as free markets“. All markets are regulated, he says, and the extend of the regulation is motivated mainly by politics. Diving into history he shows many things that used to be part of the market that are not anymore- humans, drugs, child labor. What we accept as the boundaries of the market Chang argues are just our moral and political values. He reminds us that Britain went to war in the Opium wars to allow the sale of opiates.

Many of Mr Chang’s rebuttals are becoming well known- especially in the aftermath of the 2008 financial crisis. For example the neo-liberal view that humans are rational agents has been assaulted for quite some time. The same can be said of the point that humans always act for their self interest. This is not always the case, and occasionally humans cannot process the vast amount of information they possess in order to make rational decision. Using this premise Chang advocates for the banning of financial derivatives, which he says are so complex that the so called experts in the field often have no idea what’s going on.

The book is clearly aimed at developing economies which, Chang argues, have seen their growth slow down due to following the neo-liberal ideology that is popular in the West. For example Mr Chang makes a strong point that governments have an important role to play in the development of poor countries, citing his own native Korea which successfully influenced the direction of companies such as Pohang Steel- one of the world’s biggest steelmakers- despite advice from the World bank not to do so.

He also makes a case for the developing world to protect their infant industries because, he claims, most of the developed countries did so when their own industries were just starting and weak. To support this he goes back to the founding fathers of America, in particular Alexander Hamilton, famous for his “infant industries” term, and Jefferson who did not like patents. He gives other examples too, in Europe and Asia, where governments deliberately protected their infant industries until they could stand on their own feet.

Chang also has strong rebuke for the West, criticizing their increased obsession with higher education, which he says has lost much of its relevance , at least as far as growing economies is concerned. And he provocatively claims that the internet has not been as revolutionary as other preceding technologies like the telegram whose impact was much bigger. He also cautions against a prevalent belief in Western countries that we are living in a knowledge economy, where services are more important than manufacturing. He shows, with pretty convincing data, that this is not the case. What is actually happening is that manufactured goods are much cheaper, while services are not: Computers are many times cheaper than twenty years ago, but haircuts are not.

On his 23rd Thing Mr Chang shocked me by saying running economies does not really require economists. To support this point he cites countries like China, Taiwan and others that have been led by lawyers and Engineers. While this brought a smile, it seems rather anecdotal.

In conclusion Chang offers 8 ways in which capitalism can be fixed, suggesting that “government needs to become bigger and more active,” “we should build our new economic system on the recoognition that human rationality is severly limited,” and ” we need to take making things more seriously”.

It might seem, then, that 23 Things They Don’t Tell You About Capitalism is a book against Capitalism. But Mr Chang is not advocating for something radical like socialism. Instead at the core of his arguments is the belief that, while capitalism works, it needs to be regulated.

More, not less, regulation is what the world needs to grow sustainably and equitably. And he cautions emerging economies not to fall for the advice of the World Bank which advises third world countries to open up more, reduce government spending and have as little government spending in social services as possible.

It’s a thought provoking book that I mostly agree with, perhaps because of my own background as a citizen of a third world country. But I could not help but wonder if, given our history with corruption and embezzlement by public officials, a bigger government would work in Zimbabwe and other African states.

Share this:
error

Two Weeks In November by Douglas Rodgers review- A gripping but fanciful tale that offered no new insights

For a book that sets on the obviously ambitious task of telling the “astonishing untold story of the operation that toppled Mugabe,” it falls flat. The book answers none of our questions and offers no new insight. Yet it is still an easy and enjoyable – if mostly fanciful- read.

I finished Two Weeks in November in a couple of hours the Sunday before last. That’s how good a tale it is- it totally captured my attention against competing interests of the modern world like Twitter, drink, and , of course, other books.

However for a book that sets on the obviously ambitious task of telling the “astonishing untold story of the operation that toppled Mugabe,” it falls flat.

For starters there is not much of an untold story. Much of what the book claims is an untold story is already known to all who bothered watching the news and reading the papers in November 2017:

Mnangagwa fired, fled for his life with Mugabe’s henchmen in pursuit, heading for the Mozambique border on the east. There he attempted to cross into Mozambique using the official crossing point, a curious lack of foresight if you ask me, before being accosted by border officials. Managing to escape, the now President later crossed into Mozambique and got a jet to South Africa. He’d return after two weeks, victorious.

That much is known.

What is not known is how it all unfolded and this is where Rodgers takes great liberty. After all with most of those intimately involved in the operation not talking, as he readily admits, who can dispute him?

Of Mnangagwa’s border escape and his nighttime trek into Mozambique Rodgers seems to rely on the President’s own account and those of his sons. At the border ED’s small party overpowered and escaped border security, with ED himself at 75, brushing aside a guard “like  a buffalo does a fly”.

After leaving the border in such fracas some members of the party even returned later to retrieve a bag they’d left. The trek into Mozambique was no less eventful, complete with a renegade soldier and landmines, plus, as the President’s son, Emerson Junior recalled, “mosquitoes as big as birds”.

Much of the story is devoted to two characters, one Tom Ellis, a white Zimbabwean living in South Africa, and a Zimbabwean spy named “Kasper”, also in South Africa. It is these two that Rodgers makes the central players in his tale.

It is not exactly clear what Kasper and Ellis do to facilitate the coup but Rodgers tries his best to portray them as the chief architects, together with Gabriel Shumba and others such as Horse. It is an unconvincing attempt.

By the end we are left wondering about the things we’ve been wondering about for close to two years: What exactly happened, who did what, what went on in the negotiations? Was there no General loyal to Mugabe, and why did Bob, if he was indeed under duress, not say it the day he addressed the nation?

On this last point Rodgers offers a weak answer, as much speculation as the rest of the book. Mugabe does not tell the world he is under house arrest, Rodgers says, because of his ego, he cannot harm his reputation by admitting that he’s powerless.

Still, it is not a hagiography of the sitting President, and Rodgers does make some important observations about the Zimbabwean political environment and the failure by ZANU PF to create a state where citizens, regardless of their social position, are safe, noting: “It said something about the factionalism within ZANU PF, the betrayal of its revolution and the disaster they had made of the country, that one of its heroes was now running for his life not from white Rhodesians but from his friend and former brother-in-arms“.

Rodgers is a good storyteller, and the tale is fast moving and well written. There’s a good dose of humour too- I chuckled when he described the travails of Kudzai Chipanga who “was soon on TV in a purple-patterned sweater that looked as if it had been knitted by his mother, offering an abject apology to General Chiwenga for his bellicose statement of the day earlier.”

Yet for all the humour, prose and clever statements- “if not for double standards ZANU PF would have none“- his story is nothing short of fanciful.

I felt that he would have benefited from more reliable sources than people watching the action from their roofs or those who have seen mosquitoes big as birds; and from talking to those most involved. But Rodgers concedes that the military are not saying a word and so we have to make do with his shadowy sources.

So here we are with a gripping tale that answers none of our questions. It is still an enjoyable read – one, I suspect, more aimed at Western audiences than Zimbabweans- and it does add, in its small way, to the Zimbabwean story that is still unfolding.

Share this:
error