Economics: The User's Guide: A Pelican Introduction (Pelican Books)

Ha-joon Changs "Economics: The User's Guide" is the first title in the newly resurrected Pelican imprint. Chang himself is best described as a heterodox economist, firmly outside the mainstream where neoclassical economics (not to mention neoliberalism) is the reigning creed. But given the multiple failings of orthodox economics the heterodox Chang with his cheerful style, wide learning and a clear and concise authorial voice make him the ideal candidate for writing an introductory book on economics. He doesn't dissapoint. The book itself is divided into twelve chapters exploring a range of economic issues including asking what exactly economics is, exploring the role of the state, inequality and poverty, work and unemployment, finance and production. Sixty odd pages are devoted a brief history of capitalism, giving the reader a pretty good understanding of two and a half centuries of capitalisms global progress. It's a brilliant introduction for those who have encountered the economy watching the news, through history or political books, and want to find out what this vitaly important aspect of our lives is about. The further reading guides at the end of each chapter are a valuable resource for those whose interests have been aroused. More seasoned students of economics should find the scope of the book (both intellectually and geographically), and it's easy and succinct style ample reward for the effort spent reading. One quibble I have: important terms (privitisation, capital controls, etc) are printed in bold at the point in the text where they are explained, but the index of the defined terms that ought to be there, allowing easy reference to the definitions, is absent. This is a book which along with his 23 Things They Don't Tell You About Capitalism and Bad Samaritans I'd strongly recommend reading, not least because (as Chang himself notes) a widespread knowledge of economics is essential to understanding our societies and democraticising our political life.

This book sets out to be about economics as defined as the study of the economy. As such, it is not an economics textbook that you might use for a University course, since, as Change explains, most of these courses teach only one kind of economics - the neo-classical school, which is based on the obviously false assumption that all human behaviour is rational. (The really interesting social question is how such an absurd belief system (whose deluded practitioners like to style themselves as scientists) has come to dominate academic economics and to be the prevailing dogma that defines economic policy in most countries.) Chang sets out to describe all the different economic schools, and explain how they ask different kinds of economic questions and use different tools to answer them. That's all interesting, but no complete, because he misses out green economics - no mention of the economic value of ecosystems services for example. Since without these we would all be quickly dead, it's not unreasonable to suggest that their true global value is actually rather greater than the world's GDP and by far the most importance source of real wealth. The other reason I've given this book only a 4 star review is the contents list of the Kindle version, which only shows major sections, not chapters let alone subheadings. This makes it rather hard to skip quickly through the book or to get back to re-read an interesting passage. Overall though a very readable account which will help the intelligent lay person make sense of current affairs from an economic perspective.

For me it was the crash of ’86. For others it will be the Great Recession. Whenever economic calamity strikes we reach for a textbook to gain an understanding of what just happened, why, and what can be done about it. Three decades down from the awakening of my own curiosity I find there are more questions than answers, and they’re multiplying all the time. One of the virtues of Ha-Joon Chang’s introduction to Economics is that, unlike many of the books and courses I’ve devoured over the years, it makes clear that there is no silver bullet. Some of the people claiming to have the answers are as clueless as the rest of us, and that applies in spades for the uncritical cheerleaders of the neo-liberal consensus who laid the foundations for the current debacle, a process some have traced to 1979 and the election of Thatcher and, in short order, the 1980 election of Reagan. In fact, one of Chang’s bugbears is the laughable concept of the “trickle-down” effect, made “popular” in the Reagan era, where we put even more money in the hands of the rich in the vain hope that they’ll invest it in something that will eventually provide the rest of us with a job and prosperity. Ha! How’s that one working out for ya? Well, looks like most of the people with the money are still investing in the kinds of complex derivatives that got us here in the first place, not in the capital equipment and R&D that would actually be useful. Much of the content of the book deals with fairly basic economic concepts, clearly positioning it as a primer, but for those wishing to know more the Further Reading sections at the end of each chapter are excellent, referencing some of the books I had in mind when reading. Throughout the text new concepts are printed in bold so they’re easy to find if that’s what you need to do. Chang’s aim is, as I interpret it, to democratise economics, and in that he succeeds reasonably well, arming non-economists with sufficient insight to build an informed opinion and begin to challenge the views of the professionals. One of the more useful things for me was the chapter explaining the different schools of economics, and who fits into which. One of my surprises in this was his placing of Paul Krugman in the neoclassical school, when I expected to find him in the Keynesian. However, Chang makes a good point about the essential conservatism of some of Krugman’s thinking, especially when it comes to his views of low-wage factory jobs in the developing world. I do however feel he emphasises the wrong aspect of Schumpeterian thought, the atrophy of capitalism, and doesn’t make enough of the concept of “creative destruction” (it’s not even in the index). But at least it’s in the text, which is more than can be said for inflation, NAIRU and the Philips Curve, a shame given his treatment of unemployment, the other side of these concepts, is so good. He also misses some very straightforward opportunities to introduce the ideas of agency theory, moral hazard and adverse selection (though he does manage principal-agent problem), and the paradox of thrift. Perhaps he was trying to avoid overloading with jargon, and it’s partly true that economists (and other specialists, for that matter) use jargon to obscure rather than clarify, but it’s at least equally true that the use of specialist language can both shorten a conversation and give it focus. Chang’s use of language is generally straightforward, with clear explanations of the ideas with which he deals. Sometimes he makes reference to popular culture in order to make his point, and this works better in some cases, as in the reference to Gordon Gekko in Wall Street, than others, as when he tells us not only that the Hoover Dam appears in a Superman movie but also that the movie stars Christopher Reeve. And much as I like the idea of an explanation of positional goods channelled through Sheldon Cooper of The Big Bang Theory, it becomes overlong when accompanied by a psych evaluation of the character and a rundown of the programme’s dramatis personae. At times like this, attempts to brighten up your subject look too much like an uncle dance in an Ibiza nightclub. Having said all which, he’s right an awful lot more than he’s wrong. Overreliance on a single set of theories and models renders you blinkered; adopting a pluralist approach may not guarantee a correct analysis but may at least make it less wrong. Recent economic thought has concentrated too much on the market at the expense of non-market aspects of the world. Some things – free trade, comparative advantage, foreign direct investment – look great on paper and in static models, but the moment they are injected with a whiff of reality their elegant simplicity looks like starry eyed, rose-tinted idealism or, worse, cynically disingenuous. Apparently “scientific” measures such as the Gini coefficient and GDP, without proper understanding of their underlying strengths and weaknesses, are limited in their ability to tell us anything useful (although maybe it’s a case of their being the worst measures available except for all the others?). And, ultimately, that economics is political, driven by the personal agendas of economists themselves and the people and institutions that finance their work. So back to the beginning. Will it help with an understanding of what went wrong in 2008? Chang very carefully explains what the different types of banks do and are allowed to do. How some of them thought it would be a good idea to take a chance loaning people with poor credit ratings and little or no income enough money to buy themselves a house and bundle up the resultant debts into securities and sell these to other institutions to diversify the risk. How this was supposed to diversify away systemic risk, based on the assessment of some very clever mathematical modelling. And how the securities were ultimately so complicated that the associated contracts ran to hundreds of pages that virtually nobody had the time to read. Admittedly what he doesn’t tell us is what Nate Silver and Felix Martin, amongst others, have told us about the models’ being based on a limited dataset derived mostly from years when economies were booming, but by now most of us have got the idea that the problem was that the lunatics had taken control of the asylum. Read it and weep.

This book is a very clear introduction to economics. If I say it is simple it might give the impression of light weight, but it is not, it's just easy to understand. I knew little about economics when I started but I soon got the basics. This books does something that many books don't. It makes a complex subject penetrable without making it facile. It does not patronise the reader. It assumes little knowledge without assuming no learning. Another thing about this book, which seems rare these days, is that it doesn't take a stand about any particular school of thought, rather it explains the ideas and puts the strengths and weaknesses of each. It also explains where things have gone wrong when one or other idea is taken as a cure for all ills. I actually found myself enjoying some of it because it speaks in plain language. Some of it I found too specific but there are headings so I could just get a gist that helped me to move on to things that I could deal with. All in all a good starter book. Or even a good revision book because it does demolish some orthodox thinking that goes on in economics.

A great book that comes out very conveniently when economics students and the general public are so dissatisfied by the conventional accounts of economic phenomena provided by the mainstream theory and the doctrinary narrative associated to it. The book is a strong and well supported call far changing the ways economics is explained. A change to a pluralistic approach to the discipline that is urgently needed. Alternative (kowadays called heterodox) approaches should be incorporated to economics instruction from the very beginning, as well as a broadened perspective that relates economics with other social sciences. Not only beginning students should read this book, but more advanced undergraduates as well. They will find a revealing alternative to contrast with the narrow agenda they have found in principles and intermediate mainstream books and courses. The book is so clearly written and relevant that it should also achieve the goal of persuading the general public to get interested on the workings of the economy and to be more demanding on the explanations currently given by experts about phenomena that affects our lives completely. I hope it comes out son translated into Spanish. Jorge Ibarra Universidad Nacional Autónoma de México. Facultad de Economía

I’m convinced that this is the best introduction to economics ever published. Its prose is clear whilst also being appropriately detailed and far from oversimplified. Perhaps the most impressive thing about this book is how lucid it is; it’s hard to put down—which is not something I thought I’d ever say about a >400 page economics treatise! My only gripe with this book is that it is unashamedly left-wing. I mostly agree with the author’s opinions so far, but I’d need a more balanced treatment of the subject to give it five stars. However, anybody who knows of this author should have anticipated his ideological bias (he writes a column for the Guardian). I’m not a formal student of economics, but this book alongside either a more neutral textbook, or a contrasting (right-leaning) academic reading, would be my go to foundational texts.

This is a very readable and informative text. It reminds me somewhat of J K Galbraith. I would have a few personal (technical) nit-picks, but these would have little bearing on my review since the book is a 'users guide' rather than a more targeted, technical economics book. I would strongly recommend this book to non-conforming economists, political scientists, undergraduates and lay-persons. There are 'Further Reading' listings at the end of each chapter - a few are familiar to me, but many are not, so I cannot comment on their usefulness or otherwise. There are two books that are mentioned and which I heartily recommend - JK Galbraith's [1958] 'The Affluent Society' and Thorstein Veblen's [1899] 'Theory of the Leisure Class'. Reading these two - and Chang, i'ts hard to decide at this point whether, in a Political Economic sense, we have actually advanced backwards during the last 120 years or we have simply done several driverless laps around the same 'dismal' circuit.

This book is an essential guide to understand how economics is not just free-markets. There are other schools of thought that analyse our economies and aim to a more comprehensive view of how our societies should work. Give it a try. It will change your perspective.

This is a very good book for people that know nothing about economics … I highly recommend

Ha Joon Chang is the man. There's no doubt about that, and he speaks with a unadorned clarity that is a breathe of fresh air in this age of verbal shenanigans. I recommend this to any fledgeling economist, a layman who wants to know more about the economy, econ majors, really anyone who likes to spend or earn money or create value.

Una explicacion muy interesante y muy critica de los concepto economicos mas importantes. Ilustrados con muchos datos

I bought this book after I read about it on a economics-blog (Makronom.de).I am studying economics in the university but I'm always missing a general view about economics. This issue could be solved bei Ha-Joon Changs book. It starts with an abstract overview about economics. Later he focuses on more sprecific topics like inequality and poverty. I liked the structure of the users guide and the narrative skills of the author. Its interesting and well written.

A couple of years before the 2008 collapse I was hearing radio advertisements for so called "interest only smart (mortgage) loans. I thought that they should have been called "stupid loans" but I figured that the regulators were doing their job and that the bankers were doing due diligence. I was obviously wrong. If only for its sucicnt and stratforward explanation of Asset Backed Securities, Collateralized Debt Obligations and Default Swaps this is a great book. And that is a small part of the book. This is the most fair-minded explanation of the various theories of economics I have ever read. It didn't change my point of view a great deal, but I've always been skeptical of the arguments offered by the right and the left. I do have a greater understanding of the weaknesses of my default positions on economic ishues and the rational behind positions I tend to dismiss.