Summary of Ha-Joon Chang's 23 Things They Don't Tell You about Capitalism

Everest Media

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 When the government interferes with the free market, resources cannot be directed to their most efficient use. If people are not allowed to do the things that they find most profitable, they lose the incentive to invest and innovate.
#2 The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market appears free only because we so unconditionally accept its underlying restrictions that we fail to see them.
#3 The free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.
#4 The free market is a bit like that. We accept the legitimacy of certain regulations so totally that we don’t see them. More carefully examined, markets are revealed to be propped up by rules.

Sujets

• General officer
• Economics
• Business
• General
• International

Informations

• Publié par: Everest Media LLC
• Date de parution: 10 mai 2022
• Nombre de lectures: 0
• EAN13: 9798822503380
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Insights on Ha-Joon Chang's 23 Things They Don't Tell You about Capitalism
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8 Insights from Chapter 9 Insights from Chapter 10 Insights from Chapter 11 Insights from Chapter 12 Insights from Chapter 13 Insights from Chapter 14 Insights from Chapter 15 Insights from Chapter 16 Insights from Chapter 17 Insights from Chapter 18 Insights from Chapter 19 Insights from Chapter 20 Insights from Chapter 21 Insights from Chapter 22 Insights from Chapter 23 Insights from Chapter 24
Insights from Chapter 1

#1

When the government interferes with the free market, resources cannot be directed to their most efficient use. If people are not allowed to do the things that they find most profitable, they lose the incentive to invest and innovate.

#2

The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market appears free only because we so unconditionally accept its underlying restrictions that we fail to see them.

#3

The free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.

#4

The free market is a bit like that. We accept the legitimacy of certain regulations so totally that we don’t see them. More carefully examined, markets are revealed to be propped up by rules.

#5

All prices are politically determined. If wages and interest rates are, to a large extent, determined by politics, then all the other prices are determined by politics as well.

#6

The debate about fair trade is about moral values and political decisions, not economics. It is not something economists can rule on.

#7

The history of capitalism has been a constant struggle over the boundaries of the market. There have been movements in both directions, but the trend has been towards less marketization.

#8

Free-market economists claim that a certain regulation would restrict the freedom of a certain market, but they are simply expressing a political opinion that they reject the rights that are being defended by the proposed law.
Insights from Chapter 2

#1

When you run a company for the shareholders, its profit is maximized, which also maximizes its social contribution. Thus, shareholders bear the risk that others involved in the company do not, incentivizing them to maximize company performance.

#2

Shareholders are the most mobile of the stakeholders, and they prefer corporate strategies that maximize short-term profits at the cost of long-term investments and dividends. Running the company for shareholders often reduces its long-term growth potential.

#3

The letter L in company names stands for limited, which means that investors in the company will only lose what they have invested. This form of organizing a business enterprise is taken for granted today, but it was not always like that.

#4

Limited liability allowed large sums of capital to be mobilized for the newly emerging heavy and chemical industries, which reduced the risk for individual investors. Marx understood how this would enable the mobilization of capital for socialism.

#5

The birth of managerial capitalism occurred in the 1930s, when capitalists in the traditional sense were replaced by career bureaucrats. There was an increasing worry that these hired managers were running the enterprises in their own interests rather than in the interests of their legal owners, the shareholders.

#6

The rise of the professional managers was not seen as an inevitable phenomenon. Many accepted it, but others believed that the only way to provide countervailing forces to these companies was through increased government regulation and union power.

#7

The principle of shareholder value maximization was developed in the 1980s. It states that professional managers should be rewarded according to the amount they can give to shareholders. In order to achieve this, they must first maximize profits by ruthlessly cutting costs.

#8

The easiest way for a company to increase its profit is to reduce its expenditure, as increasing revenues is more difficult. The maximum proportion of the profit thus generated needs to be given to the shareholders in the form of higher dividends.

#9

The long-run prospects of the company are damaged by cutting jobs. The heightened insecurity that comes from the threat of job cuts discourages workers from investing in acquiring company-specific skills, which erodes the company’s productive potential.

#10

The ease of exit offered by limited liability has allowed shareholders to amass huge amounts of capital, but it has also made them unreliable guardians of a company’s long-term future. This is why most rich countries outside the Anglo-American world have tried to reduce the influence of free-floating shareholders and maintain a group of long-term stakeholders.
Insights from Chapter 3

#1

The wage gaps between rich and poor countries exist not because of differences in individual productivity, but because of immigration control. If there were free migration, most workers in rich countries could be replaced by workers from poor countries.

#2

Free-market economics states that if something is more expensive than another comparable product, it must be because it is better.