by frog
Ha-Joon Chang writes in his latest book:
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.
Economics, as it has been practised in the last three decades, has been positively harmful for most people.
The author briefly introduces some of his reasoning in this talk:
I look forward to getting my hands on this book 
Published in Economy, Work, & Welfare by frog on Wed, October 6th, 2010
Tags: capitalism, economics
on the trolls and those who are unable to keep on topic
sorry dont have time to watch this video… BUT
ONE Thing I do know about capitalism.. its controlled by Ruthless, Greedy people, whose main concern is how fat their wallet is.. regardless of any effect on others or the planet.. Kia-ora
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I think frog you will be less interested in the book when you see that Mr Chang describes capitalism as “the worst economic system except for all the others”. This may not suit the world view that you adhere to.
Note the premise of the book is that governments can pick winners (Sth Korean development of a steel industry as one kind of example). essentially it reignites an old economics debate of government industrial support through direct and indirect tariff barriers (which you should note have had negative consequences for the development of Africa and subsidies. Whilst some countries have had success with this approach (Sth Korea) others have been very unsuccessful. The risk of the analysis in this book is that successful high growth outliers are the recommended economic approach whilst ignoring the average result of all countries and identifying what economic policies on average have supported economic and social growth (they go hand in hand).
I expect this argument to be debated back and forth in the next couple of years as political bodies try to establish a new policy framework whilst completely unable to actually do anything about the economy in the short term (i.e., aftermath of the GFC is still going to influence world economy for at least another year or two) with global stimulus or austerity measures have little or no impact – mostly because the economic conditions for different economies will be context specific -some will need to devalue/float their currency, others provide income support and some need to write off a lot of debt. It willdepend on the context.
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WH: Yes, I saw that quote too.
I am not anti-capitalist either.
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The problem with the un-regulated capitalism we have seen is that cheats prosper to the detriment of every one else.
They did not read the bit of Adam Smith that talks about the rule of law and looking after your staff.
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Frog – ticks for you and Kerry then.
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capitalism is ok as long as its regulated? so its ok to be a little bit rich?
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Doctors, Teachers, airline pilots and others who do things that require more effort in the job, more responsibility or education should not be rewarded?
How are you going to get people to even sacrifice 3 years of initial earnings and put in the extra effort to learn a trade if they are not going to be a “little bit richer” at the end of it?
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More and more capitalism is spiraling out of control. I do not like more regulation as a general rule, but it seems to be unavoidable in this day and age.
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The need for “regulation” would be a lot less pronounced if the monetary system were just a little more sane. This is something that has been posted a number of times and it remains extremely relevant. Fractional-Reserve, Fiat currency gives the power to create money over to the banking sector and takes it away from government. This means, particularly for a small country, that your money is at the mercy of the larger countries and banks. It also means that stability is only possible if the money supply continues to grow in some way… either through inflation or actual production. Growth is mandatory. Continuous growth forever…. and this is a very very UN-green thing indeed. Which makes the notion of changing if a very Green idea.
Eliminate the Fractional-Reserve Fiat currency by creating something redeemable and controlled directly by the treasury, something that behaves like the physical work it is substituting for, and a lot of the potential for abuse and manipulation simply disappears.
There Ain’t No Such Thing As A Free Lunch
respectfully
BJ
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We live in a finite universe and economics is no exception it has now been realised even by some right idealagogues that this ‘free’ market brand of capitalism is a huge con. (see last week standard NZ)
Iam sure that most people with common sense shoule see that government needs to control the banks and not the other way around. Physical work + raw materials = wealth
Green rules
Physical work + sustainable and recycled raw materials = sustainable wealth.
Should speculation enter the above equasions?
And there is no such thing as continuous growth forever
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Kerry,
You write: “How are you going to get people to even sacrifice 3 years of initial earnings and put in the extra effort to learn a trade if they are not going to be a “little bit richer” at the end of it?”
Well, which would you rather do: work on a production line or work as a plumber, electrician, teacher or whatever? There’s more than just monetary rewards from jobs which require more education and training.
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samiuela,
Too true, however if in the workers paradise of Noo Zooland the certified plumber is paid the same as un uncertified factory worker, will the plumber stay here to support the economy or will he/she move to Ozzland for higher wages?
Job satisfaction will be the same.
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Point taken Gerrit, although if people were paid while they were training and then were bonded for a period it might change the equation a bit.
In any case, I moved to Australia to do essentially the same job at about $10 000 per year less than in New Zealand (even taking into account exchange rates and cost of living) …and the job was paying almost exactly the average Australian wage, so it wasn’t as though I was rolling in money and could easily afford the pay cut. The difference … a much greater variety of work (simply because Australia is a bigger place) which was consequently more challenging and enjoyable.
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The attempt in Russia to have equal pay (Though not for nomenclatura) was a failure.
In my ideal world people would get paid according to their usefulness to society. A plumber would get more than a lawyer and a Teacher more than an accountant at a finance company. Administraters would not get paid 100 times the wages of their staff as a reward for cutting staff wages. Utopia here we come.
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It would help if most peoples NZ wages had not dropped in real terms so much since the 80′s.
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Unregulated Capitalism is indistinguishable from theft.
http://www.businessweek.com/news/2010-10-07/man-who-had-no-mortgage-faced-foreclosure-anyway-ann-woolner.html
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The disaster caused by economystics (my term) stems from the debate in academic circles 1890-1930 between economists of a philosophical pesausion and econometric types with the latter winning. Since winning, almost no university has chairs devoted to economic philosophy whereas almost all trained economists have to be specialists in mathmatical modelling.
Rather than debating principles about human behaviour the way we acted was modelled, with the firm maximising profit, the ntion-state advanatages through trade and the iundividual/household utility where that was shortened into wealth which was measured in dollar terms.
The definition of success (maximum profit by the firm, GDP/current account of the nation state or indvidual wealth measures) are the measures imposed by capitalism – thus we have the philosophy by default. The USSR form of economic management was but state capitalism, and this is reflected by the Chineses form both prior to its recent economic advances and since.
Green economics could have significantly different philospohical base but many blue-greems are tied to the model described above with some recognising externalities better.
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