“Economics Upside Down” or Why “Free Markets” Don’t Exist

This is an instructive interview with Ha-Joon Chang, author of the new book “23 Things They Don’t Tell You About Capitalism.” He debunks some widely accepted beliefs, such at the existence of “free markets” or the necessity of “free trade” for the development of capitalism.


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  1. Septeus7

    Ha-Joon Chang is one of the best real world economists out there and I find it sad that Asians now have to teach Americans about traditional American system development and industrial policies but we should take any help we can get at this point.

    When will we stop with these idiotic so-called “free market” economics and start understanding that if we run away from our responsibility to look out for our own economic interest politically then we will have our lunch taken by those “free market” types pouring billions into political influence because they obviously don’t believe a word of their own faux-economic ideology?

  2. Another Gordon

    An excellent book, nicely structured and easy to read.

    However, he does leave out a couple of things, for example that competition does not always lead to lower prices and/or better outcomes as the neoliberal fantasy has it.

    Competition only works when it costs less than its benefits. Yet it is often horribly expensive and the benefits often modest at best.

  3. Anonymous Jones

    What is truly amazing is that something this obvious (that all markets are regulated by some means, and that whether you prefer those means versus others is almost entirely based on outcomes rather than procedures) is such a fringe idea.

    I was watching the Bobby Fischer documentary on HBO, and it struck me how easy it must be slip into madness living in this completely insane world. There are so many obvious fallacies you must accept to “fit into” normal society (the existence not just of a god, but the particular consensus “God” of your community; the belief that your community (oh, let’s say America) always has good intentions and could never (gasp) be using its might to enrich the people running the place; the weird idea that “honor” for samurai or other military types is selflessly serving the elite who are exploiting the rest of society). To be thought sane, one’s insanity must match others’ insanity.

    To investigate the world, to examine the BS that you have been told over and over, has the potential to completely untether the psyche. Look at all the rampant conspiracy theorists on this site. Are they really different (in kind, not in specifics) from the “Protocols” crazies or the bilderberg lunatics or the “end of the world” preachers? Another thing that is so amazing is that you read history and watch documentaries and you realize these crazies are doing almost *exactly* the same thing as someone else in another generation 50 years ago, 100 years ago, 150 years ago, 1000 years ago. Fischer himself was once in the thrall of an “end of the world” preacher who was doing almost exactly what Harold Camping just did and then Fischer moved onto this insane “Protocols” fixation.

    I guess people are just incapable of reflecting on themselves enough to see this. Or I guess it would make them as crazy as Fischer if they ever did.

    1. Just Tired

      Read Eric Fromm’s, The Sane Society. In the 1950’s, Fromm recognized that a whole society could be mentally ill and those who were thought to be out of the mainstream were really the sane ones. He also raised the question to the mental health profession as to who were the proper ones to treat given that reality. It is almost as if the mental health takes a kind of democratic approach to the definition of mental illness, i.e. the majority of the population was defined as sane by definition. Fromm argued that the approach should be more objective.

      1. Foppe

        subjectivity and objectivity are meaningless notions once you start ‘diagnosing’ entire societies as mentally ill or diseased. What is perceived as either is done so through consensus formation; this cannot meaningfully happen if you exclude the majority of the population from weighing in on the basis of an argument that they are mentally ill. (I do not find Fromm’s vocabulary very helpful in this case)

    2. LifelongLib

      Conspiracy theories are often twisted versions of things that are really happening. Mark of the Beast, without which you can’t buy or sell? Try getting a plane ticket or renting a hotel room without a major credit card. World ruled by alien reptiles? Some kid joins the army to get money for college, and ends up getting blown apart 10,000 miles from home. Sure sounds like something alien reptiles would set up. Actual human beings wouldn’t do those things to each other, right?

    3. Fed Up :-)

      How have individuals been affected by the tech­nological advances of recent years?

      Here is the answer to this question given by a philosopher-psychiatrist, Dr. Erich Fromm:

      Our contemporary Western society, in spite of its material, intellectual and political progress, is in­creasingly less conducive to mental health, and tends to undermine the inner security, happiness, reason and the capacity for love in the individual; it tends to turn him into an automaton who pays for his human failure with increasing mental sickness, and with despair hidden under a frantic drive for work and so-called pleasure.

      Our “increasing mental sickness” may find expres­sion in neurotic symptoms. These symptoms are con­spicuous and extremely distressing. But “let us beware,” says Dr. Fromm, “of defining mental hygiene as the prevention of symptoms. Symptoms as such are not our enemy, but our friend; where there are symp­toms there is conflict, and conflict always indicates that the forces of life which strive for integration and happiness are still fighting.” The really hopeless victims of mental illness are to be found among those who appear to be most normal. “Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been si­lenced so early in their lives, that they do not even struggle or suffer or develop symptoms as the neurotic does.” They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their per­fect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted, still cherish “the illusion of indi­viduality,” but in fact they have been to a great extent deindividualized. Their conformity is developing into something like uniformity. But “uniformity and free­dom are incompatible. Uniformity and mental health are incompatible too. . . . Man is not made to be an automaton, and if he becomes one, the basis for mental health is destroyed.”


  4. Andrew P

    My main problem with Chang’s book is that even though he destroys all these market conceits, he doesn’t properly incorporate Marxian, and other structural critiques of capitalism. He just accepts that capitalism and market systems are the best distributive means available, which is absurd. He ignores the fundamentally irrational nature of capitalism, how it’s at conflict with itself and that as marx noted, “it sows the seeds of its own destruction.”

    For a great structural critique of modern capital everyone here at NC should read up on John Bellamy Foster’s Monopoly and finance capital. He builds on Sweezy and Baran’s earlier work on Monopoly capital, showing how production in the “real” economy is less and less profitable, necessitating the explosion in financial speculation and debt in order to keep resuscitating the moribund monopoly production sector. It has aspects of Keen’s Credit Accelerator argument but goes a bit further.

    This article is the first in a series. You can find the rest at the site.


  5. MichaelPgh

    Great post! See also Freud, “Civilization and its Discontents”. The stories we tell ourselves about how the world works versus our discoveries of how the world actually works are a continuous source of “cognitive dissonance” (in modern psychology), “alienation” (in Marxism), or “madness” (in Foucault). Trying to reconcile the story with our own experience is perilous business indeed.

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