I share this, simply because it is very good and not just because it is by a man I respect and like:
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bloody brilliant !!!
It is good but he omits a crucial 10th theory: Ecological Economics. I updated his comparison table a couple of years ago to include it, here: https://steadystatemanchester.files.wordpress.com/2012/07/assumptions-of-ecological-economics-mb.pdf
As he says, you need more than one theory, but it is hard to see how we can get by in these days of ecological crisis and collapse without this one. Key thinkers include Kenneth Boulding, Herman Daly, Nicholas Georgescu-Roegen and Joan MartÃnez Alier.
Yes.
I increasingly get the impression that MMT and Ecological Economics are emerging as the new (or future)standard. Not merely because they are fashionable – but viable.
Very good, I’ve passed that onto my eldest son as I doubt he will get a better overview of economics while at University.
His parting comment is most relevant to me.
“It always seems impossible until it’s done.” ― Nelson Mandela
Economists are a blot on the whole human race,
You never see one with a smile on his face.
Here’s my definition,
Believe me dear brother,
Supply on the one hand,
Demand on the other.
Old Folk Song.
Oh dear, Say’s Law in rhyme
I learned it in the 50’s, when it was sung by Welfare Economists in the bar at LSE taking a dig at the Keynesians. An earlier different version was sung by RAF fighter pilots about having a prang.
Very good and thanks for sharing -now why hasn’t he been talking to McDonell (or McDonell talking to hi if he is party neutral)?
getting an economics education roadshow going is a major priority -people need to know what the real options are, if they knew, Osborne would not have lasted as long in a job he should have never had.
That roadshow has been going
Far be it for me to take issue with such an eminent and respected professor as Ha-Joon Chang, but I’m going to anyhow! While it’s a well-crafted and useful presentation (as are all the RSA Animates) he does over-simplify macro-economic theory – understandably, perhaps, because he doesn’t want to scare off the ‘everyone’ in the title of his presentation. There is a touch of Govism about his comments relating to ‘experts’. But, as it is often said, if you’re having surgery you really do want an ‘expert’ to be cutting you open. Popularism is a potentially dangerous path to follow for the unwary.
As Mark has stated above, he has completely omitted eco-economics. And, more importantly for me, he has failed to explain the key role played in general economic theory by money, especially today’s post gold-standard fiat currency. To understand this you really do need education because, as Steve Keen always points out, it is counter-intuitive, i.e. the opposite of the common-sense mentioned by Prof. Chang. Steve Keen uses the analogy of learning to drive out of a skid by turning the wheel in the opposite direction to that which seems natural.
Household economics is relatively simple for anyone who can add & subtract. In contrast, sovereign state macro-economics is not simple and it is dangerous, as witnessed over the past 44 years, to apply what might appear to be common sense. Of course you wouldn’t want to frighten people away from taking an interest in economics but, at the same time, it shouldn’t be ‘sold’ as something anyone can understand without studying in depth. Hence I find his correlation with direct democracy misleading.
In my own unprofessional attempt to deconstruct and then understand the optimum economic principles / criteria to tackle both actual and perceived 21st century social issues I have turnedmost to Marx and MMT. Marx for his social analysis and MMT for its clinical, unencumbered economic proposals. In the middle, as Prof. Chang says, there is a range of economic thought on which to draw – but most have direct links to gold-backed currency which is no longer relevant. And I haven’t even mentioned blockchain, with all the socio-political implications that has.
Sorry Prof.Chang, national and international economics are complex and to undertsand how they affect everyone’s daily life requires a significant investment in learning. Without that it’s not possible to sort the wheat from the chaff – i.e. see through a government’s purely political rhetoric. In this respect economics and religion have a lot in common!
Albeit not with precisely the same educational objective as Prof. Chang’s presentation, this is my preferred RSA Animate on topical economics (from 2006) – https://www.youtube.com/watch?v=qOP2V_np2c0.
I agree re his comment on experts – they have a role, most definitely
And sometimes it takes an expert to point out the bleeding obvious – which commonsense does not
But that said it is still a worthwhile video
I agree that it can take a lot of reading to go into monetary operations but I think he IS trying to encourage people to investigate which is good. Bill Mitchell does his ‘economics in the pub’ sessions and he gets over the main concepts in short talks.
Not many people have the time and energy to read a lot on the subject but it is possible to educate people about the options available about defects and surpluses using simple money flow models as in MMT.
John D that David Harvey animation is first class-thanks for posting it!
Very similar to Richard Wolff. Like Wolff he gets the concepts accross in a very straightforward way -to get to where he is you would have to wade through thousands of pages of Marx (actually, I don’t mind doing that because Marx’s excoriating wit and literary style are great fun as well).
John D,
Lighten up, your comment is fair enough but, unlike that video, it would never hold the attention of a general audience and I’m not quite sure how it is that some flippant reference to ‘gold-backed currency’ can magically dismiss the history of economic thought.
Either way, I don’t think that HJ Chang was saying that Economics didn’t require learning, merely that it need not be exclusive – and his comment about protecting elite pretenses with smokescreens of jargon and mathematics – that was spot on.
First off, I’m not a professional economist nor a reader in the Political Economy of Development at Cambridge, and I have no remit to educate or otherwise inform the wider public in return for which I would imagine to be a well above average wage. I was simply making a comment as a viewer of his presentation, as it came across to me.
Re gold-backed currency, I clearly failed to communicate my observation adequately. I’ll try again. What I meant was that since 1971 when Nixon ended the convertability of the dollar to gold and sovereign currencies effectively became fiat money, the ‘rules’ that are a feature of economic theories developed before then, no longer apply. While a student of economic history may have to study the entire spectrum of economic thought, any lay person today wanting to understand how the global monetary system currently works should focus on a sovereign government’s ability to create money ‘out of thin air’ and the direction in which crypto-currencies are taking us all.
I thoroughly enjoyed Prof. Chang’s ’23 Things They Don’t Tell You About Capitalism’. He has a relatively jargon-free, easy-to-follow style and so I’m sure he could have included these points, along with eco-economics, in this presentation, which I think would have improved it.
That’s all.
Thanks, that’s a reasonable reply although I still respectfully maintain one point of difference – this one:
“since 1971 when Nixon ended the convertability of the dollar to gold and sovereign currencies effectively became fiat money, the ‘rules’ that are a feature of economic theories developed before then, no longer apply.”
I don’t know what you mean by rules exactly, but the principles raised by Hume in 1752, for example, on currencies, by Ricardo on rents, Mill on the ‘the stationary state’, Thornton on monetary policy, Marx and Keynes (on just about everything) still apply to some extent or, at the very least provide insights that stand the test of time.
Even so in the case monetary issues. If we take Thornton for example and the debates of his time. The idea that tight monetary policy can be needlessly recessionary (or loose policy, inflationary) That is a discussion that continues regardless of the presence of fiat money or gold-backed currencies.
Sound principles are quite often timeless.
Ah the old Neo-Liberal paradigm that government should be run as a household still running strong in the minds of Westerners. Here’s the Corbynistas still on board. Despite Peoples’QE they still can’t get their heads round the idea that capital and current spending must be regarded as one to deal with deflation as well as hyper-inflation:-
“Labour has drawn up a fiscal credibility rule in conjunction with economists from its economic advisory council. It aims to close the deficit on day-to-day spending over a five-year period as well as ensuring the government can invest.”
http://www.theguardian.com/politics/2016/may/21/jeremy-corbyn-labour-economy-re-industrialisation-digital-age
Meanwhile in China:-
http://ritholtz.com/2016/07/china-spends-economic-infrastructure-annually-north-american-western-europe-combined/
I am working on a blog on this
Except it’s too darned hot
And it’s only going to get hotter if we don’t move on from 16th/17th/18th/19th and 20th century economics and politics pretty quickly!
Although sadly history shows us fairly conclusively that humans do not change their behaviour or the dominant paradigms and ideologies without being taken to the brink of disaater and beyond, so I don’t expect much more than a token gesture until it is too late.
Sadly our collective tolerance for existential risk seems greater than our collective intellectual capability to mitigate such risk. The same can be said of the nuclear disarmament debate which has been going on since before I was born, and we now live in a world with more nuclear weapons and rogue nuclear states than ever before.
So do we continue with the approach of multilateral decarbonisation and disarmament, or will some enlightened nations need to take a leadership position on these matters of utmost human importance?
No matter what the hegemonic political/economic perceived wisdom!
Hmmm, I love these animations and think they should be used in schools as a teaching aid. I too am wary of the experts jibe though it is warranted in economics more than any other discipline. Any remark like that can and will be misconstrued to attack actual science, witness the climate change ‘debate’.
However on the eco front I would point out that if the focus of economics is moved to people and away from markets/profits, then that should address it. Any socio economic system that doesn’t account for the ecological niche we occupy can’t be described as people led.
I’d love a crystal ball, I don’t want to see the immediate future but the distant one. I’d love to know if we make it or if we are the first of a series of human, or other, variations. I know it’s an irrelevant daydream but I sometimes find it soothing in the face of destructive short termism.
Chang is a genius but best of all the best cleaner-upper of economic bullshit EVER!