23 Things They Don’t Tell You about Capitalism by Ha-Joon Chang

Thing 1

There is no such thing as a
free market
What they tell you
Markets need to be free. When the government interferes to
dictate what market participants can or cannot do,
resources cannot flow to their most efficient use. If people
cannot do the things that they find most profitable, they lose
the incentive to invest and innovate. Thus, if the government
puts a cap on house rents, landlords lose the incentive to
maintain their properties or build new ones. Or, if the
government restricts the kinds of financial products that can
be sold, two contracting parties that may both have
benefited from innovative transactions that fulfil their
idiosyncratic needs cannot reap the potential gains of free
contract. People must be left ‘free to choose’, as the title of
free-market visionary Milton Friedman’s famous book goes.
What they don’t tell you
The free market doesn’t exist. Every market has some rules
and boundaries that restrict freedom of choice. A market
looks free only because we so unconditionally accept its
underlying restrictions that we fail to see them. How ‘free’ a
market is cannot be objectively defined. It is a political

23 Things They Don’t Tell You about Capitalism by Ha-Joon Chang