Ha-Joon Chang’s 2010 book, [amazon_link id=”0141047976″ target=”_blank” ]23 Things They Don’t Tell You About Capitalism[/amazon_link], came out in paperback this year, eliminating my already paltry excuses for not having read it. Now I have.

1. It’s very well written, a lively read, and I’m not surprised it’s done so well. Hooray for a distinguished academic economist joining the roster of those who want to communicate the subject widely.

2. But I don’t like the format of a list of things headed Thing 1 to Thing 23. Not only does it remind me of Dr Seuss’s [amazon_link id=”0007158440″ target=”_blank” ]The Cat in the Hat[/amazon_link], it also militates against sustained reasoning. Still, maybe this is related to the popular success mentioned in my Thing 1, so I’ll stop complaining.

3. There are tremendous pockets of interesting facts. I enjoyed, for example, the pocket summary of the history and effects of limited liability, discussed in Thing 2. The eminent Bank of England executive Andy Haldane made similar points about the effect of limited liability on management incentives in his outstanding Wincott Lecture (pdf).

4. Ha-Joon Chang is not afraid to discuss ethics, something warmly to be welcomed in an economics prof. He takes on, for example, equality of opportunity versus equality of outcome (Thing 20). As he points out, just talking about Pareto optimality, our usual welfare assessment, will not do.

5. Like Hans Rosling, Ha-Joon Chang thinks the washing machine (and other domestic labour-saving machines) have had a bigger social and economic impact than the internet (Thing 4). This is neatly contrarian, but makes the mistake of portraying the current wave of technologies is all about blogs and Twitter. The current industrial revolution is the immense, unprecedented fall in price in computer processing and the conveying of information, a General Purpose Technology used throughout the economy from hunting for new medicines to logistics in global supply chains, from nanotechnology and molecule design to mobile telephony in Sub-Saharan Africa. I don’t know how you weigh the liberation of women’s time from domestic work against the introduction of communications in a whole continent. Probably best not to try.

6. The author has a fine turn of resounding phrase – but they don’t always bear the weight of scrutiny. On Economics, he says: “Economics is not a science like physics or chemistry, but a political exercise. Free-market economists may want you to believe that the correct boundaries of the market can be scientifically determined but this is incorrect. If the boundaries of what you are studying can not be scientifically determined, what you are doing is not a science.” (Thing 1). Hmmm. Economics applies the scientific method to issues with a political dimension. I can live with that. I think even free market economists would recognize that the public sector is different in scope in Singapore compared to Denmark. And that last sentence just isn’t correct. Physics and chemistry have fuzzy boundaries too.

7. The tendency to over-stating his case is also revealed in Thing 3, which says people would be paid the same in rich and poor countries if there were unlimited scope for immigration. While removing barriers to movement would create a global labour market (a) offshoring means we have gone part-way there without removing barriers to movement; (b) people from different places would still have different productivity levels due to differences in human capital, physical capital and institutional frameworks.

8. I would like to know if Ha-Joon Chang predicted the crisis, back in 2007 or 2008. His earlier work seems to be about trade. He criticises other economists for failing to warn of the impending disaster, (Thing 23), but there is a real issue about how to ensure decision-makers pay attention to the things they need to, as discussed in this recent conference (pdf) at the Toulouse School of Economics – and as we see in the current Euro crisis.

9. By the way, he isn’t opposed to capitalism, just to the Anglo-Saxon variety. South Korea, Japan, the Scandinavians – their versions get the thumbs up.

10. It’s terrific to be having this debate about reforming capitalism. Can we all agree on the basics now, like outlawing ludicrous executive and financial pay packages, and acknowledging that economies work best when both markets and governments are pulling together, and that history and political economy are important?

[amazon_image id=”0141047976″ link=”true” target=”_blank” size=”medium” ]23 Things They Don’t Tell You About Capitalism[/amazon_image]

* It would carve too long out of my working day to do 23 Things, sorry.