Meeting Gary's favourite economist: Ha-Joon Chang

Quick Overview

Ha-Joon Chang, Gary's favorite economist, advocates for a pluralistic approach to economics that addresses real-world issues like inequality and poverty, contrasting sharply with the dominant, highly mathematized neoclassical models taught in universities. He argues that economics has become a tool for justifying the status quo, akin to medieval theology, and emphasizes the historical precedent for higher taxation on the wealthy to foster economic growth and reduce inequality, despite current political reluctance.

Key Points: Ha-Joon Chang, Gary's favorite economist, is praised for writing about economics in an "accessible and relatable" way for ordinary people, contrasting with abstract mathematical models. Chang's motivation to study economics stemmed from witnessing South Korea's rapid economic growth (10-15% annually) in the 1960s and 70s, alongside harsh working conditions and political repression, prompting him to "understand what's going on around me." Both Chang and Gary criticize mainstream economics for being "very heavily mathematized" and using "representative agent models" that ignore real-world issues like inequality and wealth distribution, leading to explanations like the 2008 recovery being an "exogenous shock to consumption savings preferences." Chang states that economics has become "a bit like Catholic theology in medieval Europe," serving as "the language of the rulers" to justify the status quo and exclude those who cannot speak its technical terms. Gary argues that "distribution of wealth is distribution of power," leading to a "downward spiral" where economic inequality grants the rich more power to further increase their wealth and control over media and politics. Chang highlights historical facts, noting that 1960s and 70s Britain (80% top income tax) and the US (90% top income tax) experienced faster growth than today, challenging the narrative that high taxation on the rich is detrimental to the economy. Chang concludes with the philosophy of "pessimism of the intellect but optimism of the will," asserting that societal changes, like the abolition of slavery, prove that change is possible if people "fight for it."