Abandoned shopping trolley beside a closed, grey roller shutter, surrounded by fallen autumn leaves.

Photo by Christopher Furlong/Getty


The empty basket

Economics is the language of power and affects us all. What can we do to improve its impoverished menu of ideas?

by Ha-Joon Chang + BIO

Photo by Christopher Furlong/Getty

In 1986, I left my native South Korea and came to Britain to study economics as a graduate student at the University of Cambridge.

Things were difficult. My spoken English was poor. Racism and cultural prejudices were rampant. And the weather was rubbish. But the most difficult thing was the food. Before coming to Britain, I had not realised how bad food can be. Meat was overcooked and under-seasoned. It was difficult to eat, unless accompanied by gravy, which could be very good but also very bad. English mustard, which I fell in love with, became a vital weapon in my struggle to eat dinners. Vegetables were boiled long beyond the point of death to become textureless, and there was only salt around to make them edible. Some British friends would argue valiantly that their food was under-seasoned (err… tasteless?) because the ingredients were so good that you oughtn’t ruin them with fussy things like sauces, which those devious French used because they needed to hide bad meat and old vegetables. Any shred of plausibility of that argument quickly vanished when I visited France at the end of my first year in Cambridge and first tasted real French food.

British food culture of the 1980s was – in a word – conservative; deeply so. The British ate nothing unfamiliar. Food considered foreign was viewed with near-religious scepticism and visceral aversion. Other than completely Anglicised – and generally dire-quality – Chinese, Indian and Italian, you could not get any other national cuisine, unless you travelled to Soho or another sophisticated district in London. British food conservatism was for me epitomised by the now defunct but then-rampant chain, Pizzaland. Realising that pizza could be traumatically ‘foreign’, the menu lured customers with an option to have their pizza served with a baked potato – the culinary equivalent of a security blanket for British people.

As with all discussions of foreignness, of course, this attitude gets pretty absurd when you scrutinise it. The UK’s beloved Christmas dinner consists of turkey (North America), potatoes (Peru or Chile), carrots (Afghanistan) and Brussels sprouts (from, yep, Belgium). But never mind that. Brits then simply didn’t ‘do foreign’.

What a contrast to the British food scene of today – diverse, sophisticated and even experimental. London especially offers everything – cheap yet excellent Turkish doner kebab, eaten at 1am from a van on the street; eye-wateringly expensive Japanese kaiseki dinner; vibrant Spanish tapas bars where you can mix and match things according to your mood and budget; whatever. Flavours span from vibrant, in-your-face Korean levels, to understated but heart-warming Polish. You get to choose between the complexity of Peruvian dishes – with Iberian, Asian and Inca roots – and the simple succulence of Argentinian steak. Most supermarkets and food stores sell ingredients for Italian, Mexican, French, Chinese, Caribbean, Jewish, Greek, Indian, Thai, North African, Japanese, Turkish, Polish and perhaps even Korean cuisines. If you want a more specialist condiment or ingredient, it can likely be found. This in a country where, in the late 1970s, according to an American friend who was then an exchange student, the only place you could score olive oil in Oxford was a pharmacy (for softening ear wax, if you’re wondering).

My theory is that the British people had a collective epiphany sometime in the mid- to late-1990s that their own food sucks, having experienced different – and mostly more exciting – cuisines during their foreign holidays and, more importantly, through the increasingly diverse immigrant communities. Once they did that, they were free to embrace all the cuisines in the world. There is no reason to insist on Indian over Thai, or favour Turkish over Mexican. Everything tasty is fine. The British freedom to consider equally all the choices available has led to it developing perhaps one of the most sophisticated food cultures anywhere.

While my food universe was expanding at lightning speed, the other universe of mine – economics – was, sadly, being sucked into a black hole.

Up to the 1970s, economics was populated by a diverse range of ‘schools’ containing different visions and research methods – classical, Marxist, neoclassical, Keynesian, developmentalist, Austrian, Schumpeterian, institutionalist, and behaviouralist, to name only the most significant. These schools of economics – or different approaches to economics – had (and still have) distinct visions in the sense that they had conflicting moral values and political positions, while understanding the way the economy works in divergent ways. I explain the competing methods of economists in my book Economics: The User’s Guide (2014), in a chapter called ‘Let a Hundred Flowers Bloom – How to “Do” Economics’.

Not only did the different methods coexist but they interacted with each other. Sometimes, the competing schools of economics clashed in a ‘death match’ – the Austrians vs the Marxists in the 1920s and ’30s, or the Keynesians vs the neoclassicals in the 1960s and ’70s. At other times, the interactions were more benign. Through debates and policy experiments tried by different governments around the world, each school was forced to hone its arguments. Different schools borrowed ideas from each other (often without proper acknowledgement). Some economists even tried the fusion of different theories – for example, some economists fused the Keynesian and the Marxist theories and created ‘post-Keynesian’ economics.

Economics until the 1970s was, then, rather like the British food scene today: many different cuisines, each with different strengths and weaknesses, competing for attention; all of them proud of their traditions but obliged to learn from each other; with lots of deliberate and unintentional fusion happening.

This intellectual ‘monocropping’ of economics has narrowed the intellectual gene pool of the subject

Since the 1980s, however, economics has become the British food scene before the 1990s. One tradition – neoclassical economics – is the only item on the menu. Like all other schools, it has its strengths; it also has serious limitations. This ascent of the neoclassical school is a complex story, which can’t be adequately considered here.

If told, the story would have many ingredients. Academic factors – like the merits and demerits of different schools, and the increasing dominance of mathematics as a research tool (which advanced knowledge of particular kind while suppressing others) – have mattered, of course. However, the ascent has also been critically shaped by power politics – both within the economics profession and in the outside world. In terms of professional power politics, the promotion of neoclassical economics by the so-called Nobel Prize in economic sciences (it is not a real Nobel prize but only a prize ‘in memory of Alfred Nobel’, given by Sveriges Riksbank, the Swedish central bank) has played a big role. In terms of power politics beyond the profession, the neoclassical school’s inherent reticence to question the distribution of income, wealth and power underlying any existing socioeconomic order has made it more palatable to the ruling elite. The globalisation of education during the post-Second World War era, in which the disproportionate ‘soft’ cultural power of the United States has been the biggest influence, has played a crucial role in spreading neoclassical economics, which had become dominant in the US first (in the 1960s).

But, whatever the causes, neoclassical economics is today so dominant in most countries (Japan and Brazil, and, to a lesser extent, Italy and Turkey are exceptions) that the term ‘economics’ has – for many – become synonymous with ‘neoclassical economics’. This intellectual ‘monocropping’ has narrowed the intellectual gene pool of the subject. Few neoclassical economists (that is, the vast majority of economists today) even acknowledge the existence, never mind the intellectual merits, of other schools. Those who do, assert the other varieties to be inferior. Some ideas, like those of the Marxist school, they will argue, are ‘not even economics’. It’s claimed that the few useful insights these other schools once possessed – say, for instance, the Schumpeterian school’s idea of innovation, or the idea of limited human rationality from the behaviouralist school – have already been incorporated into the ‘mainstream’ of economics, that is, neoclassical economics. They fail to see that these incorporations are mere ‘bolt-ons’, like the baked potato beside a Pizzaland pizza, rather than genuine fusions – like Peruvian cuisine, with Inca, Spanish, Chinese and Japanese influences, or the dishes by the Korean American chef David Chang (no relation), with American, Korean, Japanese, Chinese and Mexican influences.

I am not saying that neoclassical economics is particularly bad. Like all other schools of economics, it was built to explain particular things on the basis of certain ethical and political premises. So it is very good at some things but very bad at other things. The problem, rather, is the almost total dominance of one school, which has limited the scope of economics and created theoretical biases and blindspots.

In the same way in which the country’s refusal to accept diverse culinary traditions made Britain before the 1990s a place with a boring and unhealthy diet, the dominance of economics by one school has made economics limited in its coverage and narrow in its ethical foundation.

Some readers may legitimately ask: why should I care if a bunch of academics become narrow-minded and engage in intellectual monocropping? However, you should all care, because, like it or not, economics has become the language of power. You cannot change the world without understanding it. In fact, I think that, in a capitalist economy, democracy cannot function effectively without all citizens understanding at least some economics. These days, with the dominance of market-oriented economics, even decisions about non-economic issues (such as health, education, literature or the arts) are dominated by economic logic. I have even met some British people who are trying to justify the monarchy in terms of the tourist revenue it allegedly generates. I am not a monarchist, but how insulting is it for the institution to be defended in that kind of way?

When so many collective decisions are formulated and justified with the help of the dominant economic theory, you don’t really know what you are voting for or against, if you don’t understand at least some economics.

Economics is not like studying, say, the Norse language or trying to identify Earth-like planets hundreds of light-years away. Economics has a direct and massive impact on our lives.

We all know that economic theories affect government policies regarding taxes, welfare spending, interest rates and labour market regulations, which in turn affect our daily material lives by influencing our jobs, working conditions, wages and the repayment burdens on our mortgages or student loans. Economic theories also shape the long-term collective prospects of an economy by influencing policies that determine its abilities to engage in high-productivity industries, to innovate, and to develop in an environmentally sustainable way. But beyond even that: economics doesn’t just influence economic variables, whether personal or collective. It changes who we are.

Believing humans to be driven by self-interest will create a society where cooperation is more difficult

Economics shapes us in two ways. First, it creates ideas: different economic theories assume different qualities to be at the essence of human nature, so the prevailing economic theory forms cultural norms about what people see as ‘natural’ and ‘human nature’. The dominance in the last few decades of neoclassical economics, which assumes that human beings are selfish, has normalised self-seeking behaviour. People who act in an altruistic way are derided as ‘suckers’ or are suspected of having some (selfish) ulterior motives. Were behaviouralist or institutionalist economic theories dominant, we would believe that human beings have complex motivations, of which self-seeking is only one of many; in these views, different designs of society can bring out varying motivations and even shape people’s motivations in diverse ways. In other words, economics affects what people see as normal, how people view each other, and what behaviour people exhibit to fit in.

Economics also influences who we are by affecting the way the economy develops and thus the way we live and work, which in turn shapes us. For example, different economic theories offer contrasting views on whether developing countries should promote industrialisation through public policy intervention. Different degrees of industrialisation, in turn, produce a variety of types of individuals. For example, compared with those who live in agrarian societies, people who live in more industrialised countries tend to be better at time-keeping, as their work – and consequently the rest of their lives – is organised according to the clock. Industrialisation also promotes trade union movements by amassing large numbers of workers in factories where they also need to cooperate much more closely with each other than in farms. These movements in turn create centre-Left political parties that push for more egalitarian policies, which may be weakened but do not disappear even when factories disappear, as has happened in most rich countries in the past few decades.

We can go further and assert that economics influences the kind of society we have. First, by shaping individuals differently, varying economic theories make societies of contrasting types. Thus, an economic theory that encourages industrialisation will lead to a society with more forces pushing for more egalitarian policies, as explained above. For another example, an economic theory that believes humans to be (almost) exclusively driven by self-interest will create a society where cooperation is more difficult. Second, different economic theories have different views on where the boundary of the ‘economic sphere’ should lie. So, if an economic theory recommends privatisation of what many consider to be essential services – healthcare, education, water, public transport, electricity and housing, for example – it is recommending that the market logic of ‘one-dollar-one-vote’ should be expanded against the democratic logic of ‘one-person-one-vote’. Finally, economic theories represent contrasting impacts on economic variables, such as inequality (of income or wealth) or economic rights (labour vs capital, consumer vs producer). Differences in these variables, in turn, influence how much conflict exists in society: greater income inequality or fewer labour rights generate not just more clashes between the powerful and those under them but also more conflicts among the less privileged, as they fight over the dwindling piece of pie available to them.

Understood like this, economics affects us in many more fundamental ways than when it is narrowly defined – income, jobs and pensions. That is why it is vital that every citizen needs to learn at least some economics. If we are to reform the economy for the benefit of the majority, make our democracy more effective, and make the world a better place to live for us and for the coming generations, we must ensure some basic economic literacy.

The 2007-08 global financial crisis, and the stagnation and polarisation of the economy that followed it, has been a brutal reminder that we cannot leave our economy to professional economists and other ‘technocrats’. We should all get involved in its management – as active economic citizens.

Of course, there is ‘should’ and there is ‘can’. Many of us are physically too exhausted by our daily struggle for existence and mentally occupied with our own personal and financial affairs. The prospect of making the investments necessary to become an active economic citizen – learning economics and paying attention to what is going on in the economy – may seem daunting.

Being an active economic citizen gets easier over time, once you keep practising it

However, these investments are much easier to make than you might think. Economics is far more accessible than many economists would have you believe. In my book 23 Things They Don’t Tell You About Capitalism (2010), I invited the wrath of some of my professional colleagues by declaring that 95 per cent of economics is common sense – made to look difficult with the use of jargon, mathematics and statistics – while even the remaining 5 per cent can be understood in its essence (if not in full technical details), if explained well.

Once you have some basic understanding of how the economy works, monitoring what is going on becomes a lot less demanding in terms of your time and attention. Like many other things in life – learning to ride a bicycle, learning a new language, or learning to use your new tablet computer – being an active economic citizen gets easier over time, once you overcome the initial difficulties and keep practising it. And you don’t have to do it alone. Talking to your family and friends about everyday economic issues – whether it is jobs, inflation or banking crises – will enhance your knowledge and sharpen your arguments. These days, there are even activist groups that deliver – online and in person – economics education to ordinary citizens.

It is to make this endeavour by ordinary citizens to learn and think about economics more interesting and pleasant that I have brought the stories of food and economics together in my forthcoming book, Edible Economics: A Hungry Economist Explains the World (2023). Please enjoy it.