He points out several things. For instance, the Asian countries that grew miraculously fast did so without economists in charge. They mainly had engineers, politicians, and even school teachers directing their economies. It wasn't that they were ignorant of economics, but that they weren't professional economists.
The economic bureaucrats that have been most successful are usually not economists. During their ‘miracle’ years, economic policies in Japan and (to a lesser extent) Korea were run by lawyers. In Taiwan and China, economic policies have been run by engineers. This demonstrates that economic success does not need people well trained in economics – especially if it is of the free-market kind. Indeed, during the last three decades, the increasing influence of free-market economics has resulted in poorer economic performances all over the world, as I have shown throughout this book – lower economic growth, greater economic instability, increased inequality and finally culminating in the disaster of the 2008 global financial crisis. Insofar as we need economics, we need different kinds of economics from free-market economics. (pg. 242)
By contrast, the countries ran by professional economists such as Chile, and many African countries that were directed by professionals at the World Bank, did extremely badly and in many cases even had negative growth! And those were all countries ran by the folks who were big believer in free market economics.
He points out that Scholes-Merton, who won the Nobel prize for economics, founded/were on the board of LTCM, which blew up. That by itself could be a fluke, but they went on to start two more capital management companies and all of them blew up. He notes that effectively the winners of the Nobel prize for Economics don't actually understand economics and therefore shouldn't be running economies.
He points out that shareholders in big public companies shouldn't be the primary stakeholders/decision makers in the company. That's because shareholders have the least commitment to the company, easily exiting their commitment by selling shares. By contrast, employees, suppliers and occasionally even customers have a much harder time looking for a new job or a replacement vendor. GM, for instance ran itself for short-term profits all the way into bankruptcy, which basically means that the so-called profit motive and shareholder capitalism doesn't work either.
Shareholders may be the owners of corporations but, as the most mobile of the ‘stakeholders’, they often care the least about the long-term future of the company (unless they are so big that they cannot really sell their shares without seriously disrupting the business). Consequently, shareholders, especially but not exclusively the smaller ones, prefer corporate strategies that maximize short-term profits, usually at the cost of long-term investments, and maximize the dividends from those profits, which even further weakens the long-term prospects of the company by reducing the amount of retained profit that can be used for re-investment. Running the company for the shareholders often reduces its long-term growth potential. (page 11)
The book is replete with examples of market failures (e.g. pollution, over-fishing) and at the end of it all you will probably find yourself nodding in agreement that free market capitalism (at least in the most zealous form advocated by the Chicago school of economics) is a total disaster and will continue to be a disaster. Getting it out of policy and practice will be great for humanity as a whole.
I've read a lot of economics over the years and this is one of the few that taught me a lot that I didn't know, for instance, that the Grameen bank could only succeed due to huge subsidies:
has been revealed that the Grameen Bank could initially charge reasonable interest rates only because of the (hushed-up) subsidies it was getting from the Bangladeshi government and international donors. If they are not subsidized, microfinance institutions have to charge interest rates of typically 40–50 per cent for their loans, with rates as high as 80–100 per cent in countries such as Mexico. When, in the late 1990s, it came under pressure to give up the subsidies, the Grameen Bank had to relaunch itself (in 2001) and start charging interest rates of 40–50 per cent. (pg 164)
I can heartily recommend this book. You should get a copy and read it.
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