23 things they don't tell you about capitalism

Born in Seoul, South Korea, Dr Chang left his homeland for the first time when he moved to Cambridge as a graduate student in the 1980s. His time in Korea had coincided with an economic miracle, when the country transformed itself from being one of the poorest countries to one of the richest by the late 1980s. It was an economic transition that he now looks back on with academic interest: ‘Of course when you are living through it you don’t realise the enormity of the change,’ he says. ‘But, as an economist today, I feel extremely fortunate to have witnessed this leap, rather like a historian of mediaeval England witnessing the Battle of Hastings.’Dr Chang’s research in the Faculty of Economics encompasses trade and industrial policy issues, foreign investment and intellectual policy rights, corporate governance and the stock market. Partly shaping his research agenda is his work with the many organisations he advises, from the World Bank to Oxfam, and the Ecuadorian Presidency to Shell.‘I don’t wish to work on a permanent basis anywhere other than in academia but I have a lot of interactions with non-academic people – in government, business, international organisations, and NGOs – because much of my research is directly relevant to policies,’ he says. ‘These interactions help me to take a fresh look at economic theory and how it relates to the real world.’He is also keen to bring economics to a new audience by communicating complicated ideas in plain language. His latest book 23 Things… explains how capitalism really works by challenging such dogmas as the ‘free’ market, globalisation making the world richer, and rich countries being more entrepreneurial than poor ones, before concluding with his eight principles for rebuilding the world economy.

What might others be surprised to learn about you?

A few years ago, South Korea’s Ministry of National Defense banned my book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in the country’s military barracks as ‘seditious’ literature. Funnily enough, the incident propelled me into something of a celebratory sphere in Korea – whenever the issue was discussed, somehow my book became representative of the list of 23 banned books. I suppose you could say it was the best kind of ban. Bad Samaritans had a certain aura and yet was available everywhere except in army bookshops, with the result that sales more than doubled!

Who or what inspires you?

I’m inspired by people who have fought for a better world – the individuals we know about and also the countless, nameless people who have made sacrifices to change the world. I often get asked by my students whether, with so many things wrong with the world and so much resistance to change, it is realistic to expect any social and economic reform. But only 200 years ago people thought that abolishing slavery was totally unrealistic, and 100 years ago women were imprisoned for wanting the vote. These things were changed because people fought for them. So I tell them yes, although in the short run it’s almost impossible to change anything, in the long run it is possible.

If you could wake up tomorrow with a new skill, what would it be?

I would love to wake up having learned another language overnight because knowing another language is like knowing another world. Spanish would be the best because some of my favourite writers are from Latin America, but even if it’s a language with only three books I would gladly take it if it were given to me.

What is your favourite research tool?

It’s more a research methodology than a tool, but I’ve learned much from looking at the economics of real societies and comparing them across time and space. The real world does not operate in a way that economic models would predict – life is often stranger than fiction. My favourite example is Singapore. It’s famous for its free trade and welcoming attitude towards foreign investors but in many ways it’s a socialist country, with all the land publicly owned, 85% of housing provided by the government-owned housing corporation, and more than 20% of national output produced by state-owned enterprise. It is a perfect example of both the limitations of economic theory and the pragmatic mixture that is needed in the real world – anyone trying to invent an economic system on the basis of a particular theory would not invent Singapore’s economy. Real-world analysis wakes you up from your hidden assumptions and helps sharpen your theory.

What will the future look like in 2050?

In contrast to what is often hyped, over the past 30 years the world economy has grown more slowly and has become more unstable and more unequal than it was during the preceding 30-year period. On top of this, we are in the middle of a financial crisis the end of which is not yet in sight. Unless we reform this system we could continue to have these problems over the next 50 years. I see the challenge as restoring the balance between the market and the government, finance and the real economy, and material prosperity and environmental sustainability. Economists will need to do their bit to help find solutions.

For more information, please contact Dr Ha-Joon Chang (hjc1001@cam.ac.uk) at the Faculty of Economics or visit www.hajoonchang.net/