Seung-Yoon Lee: One of many things that sets your new book apart from others is that you devote a whole chapter to different schools of thought in economics. Why is that so important?
Ha-Joon Chang: I’m sure it’s similar in many other fields, but especially in economics there is no single economic theory that can explain everything. To make that point, I talk about Singapore in the book. If you read the standard account of Singapore’s economic success in The Economist, The Wall Street Journal, or some textbook, you only learn about Singapore’s free trade and welcoming attitude towards foreign investment. But you will never be told that all the land in Singapore is owned by the government, and 85 percent of housing is supplied by the government’s own housing corporation. 22 percent of GDP is produced by state-owned enterprises (including Singapore Airlines), when the world average in that respect is only about 9 percent.
So I challenge my students to tell me one economic theory, Neo-Classical or Marxist or whatever, that can explain Singapore’s success. There is no such theory because Singaporean reality combines extreme elements of capitalism and socialism. The point that I’m trying to make as an example is that all theories are partial.The WorldPost
Ha-Joon Chang: Economics Is A Political Argument
Seung-yoon Lee interviews Ha-Joon Chang, Professor of Economics, University of Cambridge
7 comments:
Ha-Joon Chang is always a breath of fresh air. If you ever get a chance to listen to a lecture by him, you'll find he also has a good sense of humor.
Nice read! Very informative. Did you know that Chinese lead in online shopping? Full story here: http://on.fb.me/1gRKzis
Singapore is practicing Eclectic Economics?
"Economics" means 'house-law' so yes you'd have to think that economic policy is a product of the political process... rather than a 'natural' process.
He asserts that 'capitalism' and 'socialism' are 'theories' that purport to 'explain everything'... is this correct?
I see them as 'economic policies' rather than explanatory theories...
So if Singapore decides to run a state owned airline, is he saying that can be 'explained by socialism'? I'd rather look at it as 'Singapore has decided to socialize its airline' more as an observation rather than an explanatory theory...
And another thing, he talks of 'Singapores success' and cites 22% of GDP is produced by state owned enterprises... I can tell you there are many libertarians out there that would not consider that a 'success' under any circumstances.... so 'success' is in the eye of the beholder (who is not trying to get an 'A+' in the good professors class...)
rsp
Matt, I think his point is that publications like the WSJ and the Economist do regard Singapore's economic performance as a success, but attribute it to classical liberal policies like free trade and ignore the socialistic policies.
good point Dan... I see that too...
but again I dont know about his use of "explain" here... I guess there are capitalists who would say like Larry Kudlows tagline "free market capitalism is the blah, blah.." and I suppose Kudlow is trying to 'explain' how success is achieved there...ie 'success is a product of free market capitalism..." or "success is explained by capitalism..." but I dont think that is correct thinking... I look at these different approaches as political choices... as the title here also suggests but not like 'explanatory' in some way...
I also have observed that we dont really have Marx's 'capitalism' at least since we went out from under gold.... we have a different system now... I dont know what to term it, but it is not 'capitalism'...
rsp,
WSJ and the Economist do regard Singapore's economic performance as a success, but attribute it to classical liberal policies like free trade and ignore the socialistic policies.
Much as Japan's success in their high growth decades was attributed to their "copying us." It was never observed that the Japanese were more influenced by Listian ideas than classical free trade dogma. Also in the post-war, MacArthur was something of a Georgist who promoted land reform. He would have gone further but met resistence from the Dulles boys.
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