Free market has turned us into 'Matrix' drones

Ha-Joon Chang, the new kid on the economics block, is out to bust open a few myths

A leading economist has likened the nation's acceptance of free-market capitalism to that of the brainwashed characters in the film The Matrix, unwitting pawns in a fake reality. In a controversial new book, the Cambridge economist Ha-Joon Chang debunks received wisdom on everything from the importance of the internet to the idea that people in the United States enjoy the highest standard of living in the world; an iconoclastic attitude that has won him fans such as Bob Geldof and Noam Chomsky.

Dr Chang's 23 Things They Don't Tell You About Capitalism is one of a spate of tomes published in recent weeks that question the future of the current system, including Capitalism 4.0 by Anatole Kaletsky, and Ian Bremmer's The End of the Free Market. Economists are keen to tap into the market for popular books on seemingly impenetrable subjects – highlighted by the runaway success of Freakonomics, which has sold more than four million copies since it was published in 2005 and is about to be made into a film.

South-Korean born Dr Chang aims to disprove what he sees as economic myths, including the idea that people are paid what they are worth, that the "trickle down" effect of increasing wealth among the rich helps the poor, and that education makes countries more prosperous.

One of the modern idols Dr Chang seeks to bring down is the internet. He claims that we overestimate the importance of new technologies compared to older inventions – such as the washing machine – and criticises the way in which internet access has been seen as key to countries' development.

"If you had everything, then I'm in favour of it. But when children don't have safe drinking water and free school meals, is it really important?" he said. "We have a fascination with the new, and we have to be careful not to project our own vision on to other people's lives."

A leading development economist, Dr Chang was much lauded for his 2007 book Bad Samaritans, which looked at the negative effects of globalisation on developing countries. He is now bringing his focus closer to home, considering problems in the UK. "It is like The Matrix. There is a reality where things could and should be better," he said. "In order to wake people up to that alternative reality, you need to show them that it isn't impossible. I'm not necessarily saying that I have a solution, but we have to recognise that some of the things we accept as inevitable aren't."

But while Dr Chang may not have the answer, he is sure of the problem – arguing that free-market capitalism has left the global economy more unstable, and people with less job security and greater feelings of insecurity, than ever before. His conviction that, post-recession, we should be rebuilding our country in a "moral" way – by acknowledging the social consequences of economic choices such as benefit cuts and job losses – will strike a chord with many.

"Another myth that needs to be busted is the idea that we can discuss economics without any moral implications," he said. "What kind of economy we build changes us, so what we do in terms of monetary policy determines who we are."

Dr Chang also highlights the way in which economics impacts not just on our wages and living standards, but also on our characters. He said: "In conventional economic theory, it is thought that we are born as perfectly formed, rational, self-serving agents. But where you work and what kind of work you do are important in determining your character."

While Dr Chang may have many fans, his belief that the welfare state should be expanded has prompted criticism from some economists.

"It is a very unfashionable thing to say at the moment, but people have to realise that cuts have long-term implications on the fairness of the culture," he said.

Dr Chang, who moved to the UK in 1986 as a 23-year-old graduate student, argues that an emphasis on equality of opportunity is futile – likening life to a race which everyone starts at the same time, but where some have weights strapped to their legs – and that we should instead work towards greater equality of outcome.

"People have been drilled into thinking that there is equality of opportunity and whatever comes out at the end should be accepted. But the effects of not having equality of outcome are felt by the next generation. It is not simply that you don't have enough money; if your parents are from a certain background, you don't even aspire to another background. You can ameliorate some of these things through the school system, but not all of them."

What his peers say...

'I think the internet has probably changed the world more than the washing machine'

Dr Ruth Lea, Economic advisor to Arbuthnot Banking Group

'Different organisations do behave differently, and structures have an effect on our actions'

Professor Robert Wade, London School of Economics

'Of course the crisis revealed the futility of the dominant system of economics'

Professor James Galbraith, Lyndon B Johnson School of Public Affairs

'Just about every economic decision that you make has a moral aspect'

Dr Timothy Leunig, Reader, London School of Economics

'The dominant paradigm about capitalism being best for all is an illusion'

Professor Bob Rowthorn, Professor emeritus, Cambridge University

News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
PROMOTED VIDEO
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
sportColombian World Cup star completes £63m move to Spain
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Business Analyst (Agile, SDLC, software)

£45000 - £50000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Finance Manager - Bank - Leeds - £300/day

£250 - £300 per day + competitive: Orgtel: Finance Manager - Accountant - Bank...

Compliance Officer - CF10, CF11, Compliance Oversight, AML, FX

£100000 - £120000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fi...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn