“The Undercover Economist”
Apr 12th, 2008 by Chris
I’ve just finished reading the book “The Undercover Economist”, by Tim Harford. Definitely an informative book and well worth reading carefully and critically. It rightly makes the point that those of us who are “capitalists” do not defend “big business” (which want limits on competition) but instead defend open and free markets (which ensure competition). It also serves as a reminder that many of the problems countries in sub-Saharan Africa and other lesser economically developed regions face is not “free trade” but instead protectionism inside developed countries (such as the EU’s Common Agricultural Policy) and corruption which stifles entrepreneurial spirit.
The book also contains an interesting section towards the end about how sweat shops (factories run by large multinational corporations in Southeast Asia, with worse working conditions and wages than in Western countries) are actually an improvement in working conditions for people who are employed there, and that Western calls to boycott companies making products in sweat shops are severely misplaced and cause actual harm to workers. I’m not entirely convinced by this argument so some recommended reading on sweat shops would be appreciated!
It’s not a stereotypical “dry” economics textbook, it contains real-world examples of applications of economic theory, and isn’t at all hard to understand for someone without any formal instruction in the field. Harford also has a new book, “The Logic of Life”, which is available now.
This post is shocking, even for a labourite/liberal. The feeling of moral disgust and intellectual reulsion went through me like a wave. Sweet Jesus, to think that its come to this. Normally i dont bother, but this is just too sick not to contest.
“It rightly makes the point that those of us who are “capitalists” do not defend “big business” (which want limits on competition) but instead defend open and free markets (which ensure competition).”
Wrong. Wrong. Wrong. ‘but why michael?’, well, its simple you see its a matter of the real world and the concrete functioning of capitalism versus your imagination and rationalisation. You are not a capitalist, a capitalist is a really exising catergory in production and social affairs based upon the creation of surplus value from the none-capitalist class, it is not an ‘ideology’ per se, it is a concrete and historically particular arrangement of social labour and the appropriation of the products of. That you are not ‘for’ big business is meaningless, the power of the capitalsit class arises from capitalist production and class society, thus the power of big business arises naturally from the sytem you support, that you can rail against the effects of this system at the same time only makes you a reactionary as you sink into meaningles abstraction. Competition leads to monopoly, why? Because one set of capitalists wins, thus monopoly.
“which stifles entrepreneurial spirit”
Guff and nonesense im afraid. The best way to make money is to already have money, no amount of spirit makes up for the lack of your own means of production, even then this is a small sidepoint and a relatively trivial criticism of capitalism.
As for protectionism, well duh, the state is a class instituition not charity, designed to serve the national, and to a lesser extent the international, capitalist class and the profit motive.
As for the progressive character of slave labour and sweatshops, thats just sick.
I’m glad you managed to finish cleaning up your keyboard to reply. I disagree reasonably strongly with several of the comments you make, which I think you need to expand upon.
Firstly, “Competition leads to monopoly, why? Because one set of capitalists wins, thus monopoly.” This is far from true. Plumbers operate in a reasonably free market, compete with others for trade and business, but there is no evidence I am aware of which suggests that there is a monopoly in this trade.
Secondly, “no amount of spirit makes up for the lack of your own means of production”, this might be true if there were no temporary resources available to people wishing to carry out an idea, but there are - banks are often happy to loan money to startup businesses.
I’m confused by your statement regarding protectionism. As I’ve explained, protectionism and free markets (i.e. capitalism) are opposites.
I don’t think I used the term “progressive” in describing slave labour nor sweatshops, so this is a straw man.