Economics: The User’s Guide, by Ha-Joon Chang

economics users guide changMost people don’t find economics very engaging. Ha-Joon Chang knows this, which is why the first chapter of his new book is about why should you read it, and how. You can skip the boring bits, he says. If you don’t have much time, read the first two chapters and the end. There’s even a miniature version of the book inserted between the pages as a bookmark, summarizing it in five bullet points. Just please read something, is Chang’s point, because it’s vital that people understand a little economics. If we don’t, we’re at the mercy of those who tell us they’re experts, and the politicians who say there is no alternative.

Economics: A User’s Guide attempts to remedy the general public’s lack of interest in economics. It is clear, practical, and often entertaining. It’s full of examples, and regularly pauses to tell the reader some ‘real world numbers’. Most importantly, it is about “how to think, not what to think, about the economy.”

It starts with a history, from the medieval era through the industrial revolution to our current day, explaining the emergence of economics as a discipline. Having explained the origins of capitalism, Chang then outlines the predominant schools of economic thinking, their strengths and weaknesses, what their main insights are and where they fall down. Whatever you do, don’t pledge your allegiance to just one, he insists. If economics is a tool, it is a Swiss army knife, with different perspectives to apply to different problems.

This openness to the diversity of economic thought is what stands out most to me about the book. Chang draws insights from the Austrians on the far right and the Marxists on the far left. He points out where they go wrong or what they overlook, but his insistence that their contribution is important is unusually open and generous. Hold opinions, he says, and hold them strongly. But “given the complexity of the world and the necessarily partial nature of all economic theories, you should be humble about the validity of your favourite theory and keep an open mind about it.”

If you’ve never read any economics before, this is a great introduction to the most common aspects of it that we hear about in the news. Key terms are picked out and patiently explained. Even if you’re familiar with the basics, there is still plenty to learn from Chang, precisely because he ranges so freely across the wide plains of his discipline. It’s also a commendably international book, its Korean author avoiding the usual Western-centric take on the global economy.

Finally, Chang suggests that despite the claims to science made by many modern economists, “economics is a political argument.” The numbers may appear objective, but somebody always had to choose what to count and how. There are always theories, assumptions, and moral judgements behind the numbers – and so we shouldn’t be afraid to challenge economists, and the author includes himself in that invitation.

That’s why the book is a ‘User’s Guide’, and not an introduction or a primer. This is supposed to be practical information to help you understand the economy, knowledge you can use to make the world better. Ask more questions, the book suggests. “When faced with an economic argument, you must always ask the age-old question, ‘who benefits?’”. And don’t be daunted by economics, which the Cambridge professor self-deprecatingly claims is “95% common sense.”

Browsing the popular economics shelves at the bookshop, it’s not hard to find swaggering ‘how economics explains everything’ titles. Neither is there any shortage of ‘debunking’, bubble bursting books trying to bring economics down a peg. And then there’s Economics: A User’s Guide, which succeeds where those exasperate by remembering a little patience, humility and kindness.

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5 Comments on “Economics: The User’s Guide, by Ha-Joon Chang”

  1. henry1941 June 16, 2014 at 1:18 pm #

    I cannot get hold of the book easily. Has he separately identified land as a factor in the process of production? Is there a discussion of land and rent? How has he defined capital? If he has treated land as a sub-species of capital, then he his merely perpetuating the reigning state of confusion about economics. I hope he has not done that.

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