MEET s REAL ECONOMIST: HA-JOON CHANG

MEETING HA-JOON CHANG, author of "23 THINGS THEY DON'T TELL YOU ABOUT CAPITALISM"

By Kevin Stoda, demanding better social, political, economic and financial education in the USA

As I came across a DN web interview with Ha-Joon Chang this past weekend, I recalled the aching question that has made a joke of the NOBEL PRIZE in ECONOMICS since its inception.

http://www.democracynow.org/blog/2010/11/12/economist_ha_joon_chang_on_the_g20_summit_currency_wars_and_why_the_free_market_is_a_myth

Namely, "Why don't any Asians win the Nobel prize when their economies have been empowering the globe for the past 4 to 5 decades?"

Surely, someone in or from Asia knows how to do something right, don't you agree?

Naturally, the reason why Asian economists have been slighted is that non-Asians had raised the money and promoted the new NOBEL Prize themselves several generations ago. Moreover, they were a mostly a pro-capitalists group of men living during the Cold War and fascist era of European and America history.

Iconoclast, Ha-Joon Chang illustrates in a series of publications, which also includes the work Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism , that free-markets have never existed and never is the market politically or socially free of influence.

FINALLY, A REAL ECONOMIST: HA-JOON CHANG

John Gray has written of Chang's most recent book, 23 Things They Don't Tell You About Capitalism , " The world is awash with books that claim to explain the global financial meltdown. Not many are written by economists. Ignorant of history, including that of economics itself, most economists not only failed to forecast the crash but, mesmerised by the spurious harmonies of their mathematical models, were blind to the mounting instability of the financial system and failed to grasp that an upheaval of the kind that is currently under way was even possible. After an intellectual failure on this scale, what could economists have to say today that would be of any interest to anyone?"

Unlike many other economists and political-economists over recent decade who have washed their hands of any responsibility in the world economy due to their opinions and interpretations of the market, Chang writes: "Economists are not some innocent technicians who did a decent job within the narrow confines of their expertise until they were collectively wrong-footed by a once-in-a-century disaster that no one could have predicted." Far from being an inward-looking, hermetic discipline, economics has been a hugely powerful and profitable enterprise, shaping the policies of governments and companies throughout much of the world. The results have been little short of disastrous. As Chang puts it: "Economics, as it has been practised in the last three decades, has been positively harmful for most people.'"

This is the sort of realism that economics and capitalism has been lacking in recent decades. Chang lets us admit, for example, that every economy on the planet is still planned in one-way-or-another. "In his 2008 book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism , Chang . . . , a specialist in the political economy of development mocked one of the central orthodoxies of his profession: the belief that global free trade raises living standards everywhere."

In 23 Things They Don't Tell You About Capitalism , according to Gray, Chang "assaults economic orthodoxy on a much larger front. Dip into this witty, iconoclastic and uncommonly commonsensical guide to the follies of economics, and, among many other things, you will learn that free market policies rarely make poor countries richer; global companies without national roots belong in the realm of myth; the US does not have the highest living standards in the world; the washing machine changed the world more than the internet; more education does not of itself make countries richer; financial markets need to become less, not more efficient; and perhaps most shocking to Chang's colleagues good economic policy does not require good economists."

The reason, Gray and I like the writings of Chang is that he "recognises the failings of centrally planned economies, and rightly describes capitalism as "the worst economic system except for all the others'. At the same time he is confident that capitalism can be reformed to prevent crises like the one we have just experienced recurring. Making markets more transparent is not enough. "If we are really serious about preventing another crisis like the 2008 meltdown,' Chang writes, "we should simply ban complex financial instruments, unless they can be unambiguously shown to benefit society in the long run.' He is aware that he risks sounding extreme, but argues that the ban he proposes is no different from those that have been enforced on other dangerous products. "This is what we do all the time with other products drugs, cars, electrical products and many others.'"

In one recent interview Chang notes that a strange academic culture has been dominant for the past half century. Good economists were considered those who were good at econometrics. Theorists and activists among economists are considered the lower-standard economists. (The same situation functions in schools of political science in the USA and in Europe in this same period.)