Chang’s “Edible Economics”

from Junaid Jahangir and current issue of RWER

[Ha-Joon] Chang’s latest book Edible Economics (2022) crystallizes the narrative that he has developed through his popular books over the years. . . . I have reviewed the salient ideas as follows in a bid to draw out lessons I could share with my ECON 101 students.

. . . the main ideas of Ha-Joon Chang can be distilled in point form as follows.

1. Neoclassical economics gives precedence to mathematics over real-world issues of inequality and power. It emphasizes markets over democracy.
2. Culture has elements both conducive and detrimental to development. Policy directs economic development, which then shapes culture.
3. Free market advocates focus on the economic freedom of consumers and corporations and not the freedom of workers to push for better jobs.
4. Poor people in poor countries are not poor because of low productivity but because the elites in their countries are unproductive, as they have failed to provide better technology and infrastructure.
5. Comparative advantage is not static and can be developed with temporary protectionism. Britain, the U.S., and East Asian economies of Japan, South Korea, and Taiwan, all used infant industry protection.
6. Entrepreneurship rests on collective efforts; interlocking patents impede technological progress.
7. Free trade is imposed on developing countries by advanced economies that used infant industry protection themselves.
8. The benefits of foreign investment materialize only when public policy ensures technology transfer and management techniques.
9. Neoliberal policies of trade liberalization, deregulation, and privatization have brought slower growth, higher inequality, and financial crises; the secret of economic development is to access advanced technologies and develop high value-added industries.
10. Welfare benefits including pension, healthcare, employment insurance, and housing subsidies are not freebies; they make capitalist economies more dynamic by reducing people’s resistance to technological change.
11. People pay value added taxes and sales taxes that burden the poor, but corporations evade taxes.
12. Equality of opportunity is not sufficient, and some equality of outcome is required, which necessitates equal access to education and healthcare, instituting a minimum wage, and redistributing income.
13. The market does not value based on contribution or need; marketization of care services should be restricted and regulated.
14. Both individual change and government action are required to address climate change, as the private sector is fixated on short term gains.
15. Shareholders and managers focus on short term gains in deregulated markets; multi-stakeholder capitalism recognizes that workers have a long-term stake in the firm.
16. Policy can help address automation with subsidies for retraining and by creating good jobs based on higher number of workers per people in education, healthcare, and senior care.
17. The post-industrial economy is a myth; manufacturing is the main source of technological innovation and the most important determinant of a country’s living standard.

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