Tuesday, August 31, 2010

More on fairness in economics: Ha-Joon Chang

Following our blog on economics and fairness yesterday, we thought we should point to another article on a similar theme by Ha-Joon Chang, the Cambridge economist whom Martin Wolf has called "probably the world's most effective critic of globalisation" (and his 2008 book Bad Samaritans is well worth reading.)

He points to some indisputable facts which somehow got overlooked in the growth of ideology over the past four decades.

"After three decades of deregulation and tax cuts for the rich, growth has slowed down, rather than accelerated, in almost all countries. The world economy, which was growing at about 3% in per capita terms in the "bad old days" of widespread regulation and punitive taxation for the rich in the 1960s and 70s, has grown at about half that rate in the last three decades. In Britain, average annual per capita income growth rate was 2.4% in the 60s and the 70s, when the country was allegedly suffering from the "British disease"; but it fell to 1.7% during 1990 to 2009, after it is supposed to have been cured of the disease thanks to Margaret Thatcher's heroic struggle in the 1980s."

Just another reminder of how badly most of the economics profession has fallen.

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