So what’s your problem? Nothing too troubling I hope. As for me I’m delighted to report that after many years groping around in the dark I’ve finally had mine explained to me. My problem, (or at least the one I’m prepared to discuss here) is this: I don’t understand The Market.
I realised this by chance one day last week when I happened to be within range of a radio as on three separate occasions my problem, my lack of understanding, was defined by a variety of erudite experts who were obviously “in the know”. Surely this was no coincidence I thought as the mists cleared; there must be some underlying synchronicity at work here. Either that or a well-meaning higher power was prodding me into finally arriving at an understanding of my handicap.
Having thought about it for a few days I now realise that The Market that I don’t understand is actually any number of markets, maybe even all markets. Or maybe all markets are in reality one huge market, much too vast and complex for simple folk to understand. There you go you see, I’m feeling confused and inadequate already just thinking about the great big hugeness of The Market and the depths of my ignorance. However, just for now, and for the sake of simplicity the three markets that I’d like to isolate are these:
1) The Energy Market. I don’t understand how it can be that energy companies, gas suppliers for example, can continue to make such enormous profits for themselves and their shareholders while at the same time obliging the consumer to pay higher and higher prices. Surely if we are “all in this together”, as we’re so often led to believe this spirit would be better served if the energy companies passed a share of their profits on to the consumer in the form of lower prices? As things stand their position could easily be mistaken for simple, uncomplicated greed by an ignorant person like myself. But my confusion, as I’ve now come to see is simply down to my lack of understanding of The Market.
2) The Food Industry. Specifically the market in meat. I don’t understand how it can be economically viable or beneficial to all those in the chain of supply and demand, from farmer to processor to retailer to consumer, for meat to be flown in to Europe from all corners of the globe, and then sold to me in a supermarket at half the price I would pay for locally sourced meat at the local butcher. Not being a butcher or a farmer, a meat trader, or even a supermarket employee I simply fail, from whatever angle I look at it, to see how this is fair, sustainable, or can be described in terms other than globalized profiteering. However, as I now realise, once again this is simply a case of me not understanding The Market.
3) The Banking Industry. Try as I might, and despite the bombardment of excuses and explanations we’re daily subjected to I can’t understand how it can be possible for such failed and failing institutions, bailed out worldwide by taxpayers to still be in a position to reward their decision makers with armfuls of extra cash on top of their already enormous salaries. I realise of course that I lack understanding of The Market, but it just doesn’t feel right, like when you notice that there’s an awful stink coming from somewhere and somehow you just know that there’s a dead rat under the floorboards.
At this point I suppose I should declare a bias. A few years ago, before the current financial crisis became publicly visible I actually met an investment banker at a small social gathering. I’m sorry to say that I didn’t enjoy the experience. The urbane gentleman turned out to be one of the most seriously unpleasant people I’d ever come across, and I can assure you that I’ve led anything but a sheltered life. It’s safe to say that that particular banker left me with a poor opinion of his profession and the culture it spawns. But putting negative personal experiences to one side for now there’s obviously little doubt that it’s The Market that’s got me flummoxed here.
A Dangerous Thing
Clearly there are two sorts of people in the world: those who understand The Market, and those who don’t. So what’s to be done about my unfortunate ignorance? What can I do to get my head around the apparent absurdities and anomalies we constantly see? “Nothing”, is I suppose the answer that some would prefer to hear. Many people believe that there’s little to be gained by poking around under the surface of things, especially when it concerns our economic well-being, or interferes with the status quo, whilst others, the “insiders” seem less than thrilled at the prospect of The Market being obliged to expose itself for all to see. “A little knowledge is a dangerous thing”, as my banking acquaintance might well have said, but you’ve got to start somewhere, and speaking for myself, now that my problem has finally been identified and I can breathe more easily the obvious response is to learn, learn, learn.
23 Things They Don’t Tell You about Capitalism, a book by Cambridge professor of economics Ha-Joon Chang seems like a good place to start. By page one of chapter one: “There is no such thing as a free market”, I already feel that I’ve probably chosen the right guidebook, especially when Professor Chang states that 95 percent of economics is actually common sense deliberately made complicated. Made complicated by whom? By free market ideologists who have convinced us that all we need to do is to put our trust in The Market and get out of the way, according to the author, who goes on to insist that it is not necessary for us to have a grasp of all the technical details in order to understand what is going on in the world.
Active Economic Citizenship
There’s more than one way to run capitalism Chang argues, and what we’ve seen over the last few years are the consequences of allowing free market capitalists, otherwise known as ‘neo-liberal economists’ free rein to develop their concepts about how the World – the World, not just The Market – should work. Understanding the key principles and basic facts puts us in a position to exercise, as he puts it, ‘active economic citizenship’, in order to demand the right courses of action from those we’ve voted in to make decisions on our behalf.
A Failed Ideology
Crucially he also confirms our suspicions that what happened to the world economy over the last few years was no accident but the result of a failed ideology that now wants nothing better than for us go back to sleep and allow it to carry on where it left off – organising and facilitating the upward redistribution of wealth – while we’re left wondering where all the money went.
Of course, this is as about as radical a tome as you’re going to get from someone with the author’s background – there’ll be no overthrow of the established order advocated here. But coming from a self-confessed capitalist this book seems to me like a blast of fresh air finally emerging from the pit. Given that his stated intention is to “equip the reader with an understanding of how capitalism really works and how it can be made to work better”, this is a genuinely courageous and illuminating book from someone who obviously cares about what happens next and wants to let us all in on the act.
To be continued…
- Europe is haunted by the myth of the lazy mob | Ha-Joon Chang (guardian.co.uk)