23 Things They Don’t Tell You about Capitalism

One day, Jin-Gyu, my nine-year-old son (yes, that’s the one who appeared as ‘my six-year-old son’ in my earlier book Bad Samaritans – really quite a versatile actor, he is)

For the same reason why we send our children to school rather than making them compete with adults in the labour market, developing countries need to protect and nurture their producers before they acquire the capabilities to compete in the world market unassisted.

There were some spectacular failures of state intervention, but most of these countries grew much faster,

Virtually all of today’s rich countries used protectionism and subsidies to promote their infant industries.

greater job insecurity (euphemistically called greater labour market flexibility),

So, free-market economists have deliberately taken advantage of people’s justified fears of hyperinflation in order to push for excessive anti-inflationary policies, which do more harm than good. This is bad enough, but it is worse than that. Anti-inflationary policies have not only harmed investment and growth but they have failed to achieve their supposed aim – that is, enhancing economic stability.

Communism failed because it denied this human instinct and ran the economy assuming everyone to be selfless, or at least largely altruistic. We have to assume the worst about people (that is, they only think about themselves), if we are to construct a durable economic system.

The fascination with the ICT (Information and Communication Technology) revolution, represented by the internet, has made some rich countries – especially the US and Britain – wrongly conclude that making things is so ‘yesterday’ that they should try to live on ideas. And as I explain in Thing 9, this belief in ‘post-industrial society’ has led those countries to unduly neglect their manufacturing sector, with adverse consequences for their economies

Piped water has meant that women do not have to spend hours fetching water (for which, according to the United Nations Development Program, up to two hours per day are spent in some developing countries).

In other words, poor people from poor countries are usually able to hold their own against their counterparts in rich countries. It is the rich from the poor countries who cannot do that. It is their low relative productivity that makes their countries poor, so their usual diatribe that their countries are poor because of all those poor people is totally misplaced. Instead of blaming their own poor people for dragging the country down, the rich of the poor countries should ask themselves why they cannot pull the rest of their countries up as much as the rich of the rich countries do.