Review of 23 Things they don't tell you

Last year, the Korean star economist and acclaimed "intellectual voice of the antiglobalisation movement" Chang Ha-Joon followed up on his best selling "Bad Samaritans" and "Kicking away the Ladder" with a smartly constructed volume named "23 Things they don't tell you about Capitalism". Meanwhile, a German translation has been published with the word "Lies" in the title, and all newspapers that do economy have published a short review many months ago. So why another article now?

Because the book is the cleanest account of a self-aware infinite growth economy. Its pages breath remarkable clarity and precise examples to dismantle all of the twenty-three Things Chang takes on. It is a very good read if you are still not convinced that the system of "free market capitalism" is founded on myths, non-free markets, political influence and powerful cynicism, and is of course not free at all.

Among the Things are the insanely high managerial pays that are, contrary to mainstream thought, not only not justified but even counter-productive. There is the non-sustainability of an 800% financial sector (the Iceland bubble), the fact that protecting "infant industries" is what made rich countries wealthy, the fact that state intervention ("picking the winners") can be successful as in the case of POSCO steal and other major Korean companies. There is the fact that countries with more social security (Scandinavia) also have a higher per capita GDP and living standard than the US. There is the Thing that the so-called service economy is always supported by a strong material foundation. Or the fact that shareholder value maximization of big firms is NOT always the best thing that can happen to a country. Or that our post-communist economies are still planned. Or equality of opportunity is not always fair. These and all the other Things make reading this book a cathartic experience, if you will.

One thing...

Chang's book is also a very good read if you are questioning the infinite growth paradigm. Throughout the book I kept wondering when Chang would finally address this issue. Although he points out the discrepancies related to the insane growth rate of the financial sector, with its packaging and other nifty abstractions - the fundamental fallacy of infinite growth on a finite planet is structurally ignored in this book.

Instead, Chang reminds us of the importance of material production (and hence consumerism), calling the "post-material" economy a myth and pointing out that presumably post-industrial countries like Singapore and Switzerland both have a GDP-share of industrial production among the highest in the world.

The growth must go on, and in order to make the international game fairer we have to re-invent the rules so that they are consistent with economic history and human wellbeing. That seems to be the message of this book. For the least, we need to add the planetary restrictions (See Tim Jackson's best selling "Prosperity without Growth").

But precisely because he sees so sharply that material production growth would be essential for economies like Ghana to mimic to some extend the Asian Tiger's success story and increase global fairness, Chang finds himself confronted with a new conumdrum: The impossibility of infinite production (or productivity) growth. Let's hope he will use his brilliant analytic mind to address this problem head-on in his next book. I suggest that he calls it "23 theoretical Ladders we have to kick away if we want to Survive as a Species".

P.S. If you want me to write a review about "Prosperity without Growth" for you, please mention it in your comment. I have read it and can give you a condensed to-the-point summary.

P.P.S. If you want to read "23 Things" I'd gladly share my copy with you.

A response to Zeitgeist 2011

The makers of this year's Zeitgeist documentary didn't do a bad job. They delivered a well-organised and consistent narrative about the capitalist system, as usual paying special attention to its psycho-political roots and consequences.

The opening part shows some knowledgeable social scientists explaining the psychopathological base of consumerism and aggression, and is nice to watch. The movie continues explaining the common sense logic of the impossibility to run an economy addicted to infinite growth on a finite planet.
They present the important (and much too unknown to the general public) concepts of intrinsic and planned obsolescence, the necessary inefficiency constituting our lifecycle productivism-consumerism society.
They have Michael Ruppert, whose brilliant role as a narrator in the documentary "Collapse" made me a big fan, explaining the ultimate failure of growth-capitalism as a result of the scarcity of that all-important natural resource: oil.

Zeitgeist then starts with a clean slate and does some problem solving. The result is a network of sterile, round-shaped cities with life-supporting functions aligned in rings around a central educational dome. The movie carefully explains how a resource control system blends with a production system and a distribution system - on a global scale. It would be our only chance as a species in the long run. But wait a minute, doesn't that sound familiar?
This was intended: The movie shows a booing audience comparing the universal technocratic proposal to Stalin-style communism and discarding it without further consideration. It makes for a strong effect and certainly some consumers of this movie would per persuaded by this rhetorical stunt.

These kind of perfect cities scare the shit out of me, not because they have anything to do with communism (they don't), not because they seem so idealistic and unattainable, but because they dangerously oversimplify human need. Humans are the plasma that moves around these perfected cyber-cities, plugged into a system that feeds them with calories, education and leisure time. A handful of volunteers takes care of the maintenance, but apart from that nothing has to be done.
Now it might be possible that this all-equal world without work, money, necessities of life will become an option for humans, but that should be very seriously researched. You can't assume that humans will automatically satisfy all their mental needs if you put them in a system of almost completely mechanized universal ilfe support. What about their sense of purpose, of achievement? In spite of the movie's healthy scientific start, mental needs seem to be reduced to "love, companionship, positive attention" and the like. But you can't discard achievement, competition, and pride overnight.

I am not saying that such a city is per se impossible. As we are moving into an era where the essence of our species becomes fluid, we should be prepared for even bolder propositions. But it can never be presupposed. The alternative to capitalism shouldn't turn a blind eye to human's need for a sense of achievement or even competition, the way capitalism turns a blind eye to human's need for not-for-profit collaboration and sharing. An honest, scientific account of our mental needs could have improved this Zeitgeist.

That said, I recommend this film, along with "Collapse" mentioned earlier. But an alternative to the centrally planned world of perfectibilitas (an insurmountable perfect state could show as dangerous as the delusive infinite growth paradigm) shown here deserves some attention too. What about a world with show, deliberate population decline? A world in which production of new consumer (and hence producer) goods becomes virtually superfluous because the spell of obsolescence has been broken and upcycling becomes a way of life? A world in which people have a true, respected choice to be something else than mainstream - regardless of that being our current sick consumerist rat-race or a futurist technocratic amusement park world.