Interview: Ha-Joon Chang
Louis Degenhardt speaks to leading heterodox economist and Cambridge academic Ha-Joon Chang
With his publications now standing at over a million sales, a regular Guardian column, and a CV that boasts the names of pretty much every important international organisation and many national governments, you’d be forgiven for assuming that Ha-Joon Chang would have more to concern himself with than the frivolities of student media. Chang, ranked by Prospect Magazine as the 18th most important thinker of 2013 – above such household names as Michael Sandel, Francis Fukuyama, and Niall Ferguson – is arguably the most famous economist of his generation. He is in that enviable (and for most academics, unattainable) position of having transcended the purely academic debate. When he talks, policy-makers listen.
So I’m almost taken aback when I meet him: his prepared notes look meticulously compiled, and he is happy to talk to me for the best part of an hour. It quickly becomes clear though that for Chang – echoing the sentiments he expressed in his Union talk earlier this term – communication is paramount; conveying his ideas to as broad an audience as possible is a duty, rather than a chore.
“We’ve got this profession wrong; a lot of professional economists think what they do is too difficult for ordinary people. You’d be surprised how often these people are stupid enough to say things, at least in private, like ‘you wouldn’t understand what I do even if I explained it to you’. If you cannot explain it to other people, you have the problem.”
He bemoans that, although he argues 95 per cent of economics is “common sense”, the gulf between academic specialists and the general public has become dangerously vast. This gulf is what he is attempting to address in his upcoming book, Economics: The User's Guide, which he hopes will make people think again about the subject he is so passionate about. His blunt appraisal of the state of contemporary economics urges the need for a re-evaluation of conventional wisdom:
“We have reached a stage where economists somehow think they are workers of some higher truth, and whatever ordinary people or politicians think, they will have to cater to their demands. We’ve already seen it – in Italy, in Greece– during the height of the Eurozone crisis; the EU tried to superimpose these technocrats onto these countries. This is fundamentally antidemocratic”
“Unless you are willing and able to challenge the professionals, challenge the experts, what’s the point of having a democracy?”
For Chang, economics is inherently political, and he sees it as imperative that this is acknowledged and embraced, instead of the “rather outdated”, “nineteenth century” idea that economics is a science:
“That’s the huge achievement on the part of the professional economists, because you have basically persuaded the people that this is so difficult that you cannot even have an opinion about it”
He worries that we have carved out an essential part of our life that is “totally insulated from common sense, totally insulated from democratic pressure, totally insulated from the deliberative process.”
In person, Chang is an eclectic amalgamation of contrasts, difficult to characterise: funny yet deadly serious, humble while evidently self-assured, proudly Korean though equally influenced by his time in Britain. He points out that, even though judging from market sales he is one of the most popular contemporary economists, many of his peers dispute his position as an economist, labelling him disparagingly as a sociologist.
His outlook is similarly mixed. He is at pains to point out that there are many like him who are unafraid of challenging conventional dogma, looking beyond traditional economic concepts of critical rationality and selfishness when their use is clearly limited. He notes that even at the apex of the capitalist system, figures like Bill Gates and Warren Buffet earn money for reasons other than the pure accumulation of wealth, and pursue some policies that are clearly against their self-interest.
In a similar vein, he is in some regards surprisingly positive about institutions like the World Bank and WTO, given that much of his focus is on development, and on criticism of the neoliberal, free-market policies they are often caricatured as upholding: “these organisations are not the monoliths that people sometimes assume they are…they have a very complex organisational structure and it’s impossible to define them in a simplistic way”.
So too, at times, is his diagnosis positive about the changes already underway in his profession; he talks about “cracks” opening up, challenging the prevalent consensus. “There might come a point where most people say that this very strong rationality assumption doesn’t hold and it will have to result in some kind of reformulation of economics; once you begin to reject that the whole thing might unravel”.
A self-confessed subscriber to Gramsci’s dictum that we must be pessimistic intellectually while having an optimism of the will, Chang is clear that there is no excuse for complacency. “If you organise and demand reforms then a lot of amazing things happen”, but it won’t come easy – “we have to fight for it”.
And from his perspective, there is a lot to fight for. He fears the policies for growth being preached by developed countries could create huge resentment, fears this is already happening: “I’m told that in the WTO negotiations the phrase ‘kicking away the ladder’ has become a standard term. Developing countries found this phrase that crystallised their discontent”. After a moment of reminiscence about the education he received here in Cambridge in the 1980s, his verdict on economics teaching today is damning: “[N]ow our faculties are dominated by economists who think there is only one truth, and all students need to do is read textbooks”, though he is keen to clarify that he is not particularly including Cambridge in this description.
Even more worryingly, his concerns about the lack of banking reform appear to be falling on deaf ears.
“If any other profession caused this kind of mayhem, the profession – whether homeopath, neurosurgeon – would have been banned and its members hunted down and imprisoned, hanged drawn and quartered if it was the Middle Ages! But who has taken any of this?”
“Everything is carrying on more or less as before - the world has become so incredibly tolerant of the financial sector, it is quite scandalous given the scale of problem that the industry has created.”
When I ask if we’re destined to repeat the crisis we’ve just experienced, I’m struck by how frank his prognosis is:
“In the US and here, stock markets are higher than ever. For what? There’s something seriously wrong. I cannot predict exactly where it is going to come from, and exactly when it is going to happen, but it is quite possible that some kind of financial crisis hits some part of the world economy and we all get sucked into trouble again.”
As I’m processing that bombshell though, demonstrating an optimism of the will that Gramsci himself would have been proud of, he offers a glimmer of hope:
“It’s been quite disappointing that people haven’t reacted as much as they should have to this financial crisis but you know these social changes are very difficult to predict. Who’d have thought the Tunisian police beating up some local market guy would lead to the deposition of all these dictators who’ve ruled their countries for decades? It’s quite difficult to predict, but if things continue in this way, at one point the people might say ‘enough is enough’. And let’s hope that something happens, because this hold of free market ideology, in this country at least, that the financial sector is paramount and everything has to be sacrificed has such a hold on the British mind-set that it’s not going to be easy. But let’s hope that, especially with younger generations beginning to question these things, let’s hope that something happens.”
Given the gravity of the potential problems he envisages down the line, it’s reassuring to know that Chang will keep taking the fight to the ideologues – one bestseller at a time.
Economics: The User's Guide by Ha-Joon Chang will be published by Pelican on 1 May, and is available for pre-order now
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