Unfortunately, there’s no way that any of us can get that kind of vast information for every money decision we have to make. Our best actions come when we look at all scenarios and alternative routes. In reality, making completely rational choices requires having every possible detail and taking it into account. The fatal flaw in their ideas is similar and foundational to many of the assumptions of free-market economics. While we want to think we act rationally when it comes to finances, the truth is most of us cannot.
Rather than making it big, however, these two ended up broke. Centering around the idea that people always make rational financial choices, they began applying their theories in the real world. In the late 90s, two economists named Robert Merton and Myron Scholes received the Nobel Prize for their work. If you want to save this summary for later, download the free PDF and read it whenever you want.ĭownload PDF Lesson 1: Your financial choices aren’t rational and businesses take advantage of that, but governmental economic planning can help fix that. Get ready for a crash course on economics! Let’s go! Capitalism isn’t at fault for our problems, but the way we design it is.Although many are afraid of politicians getting their planning into the economy, it’s already happening and doing well.The free-market ideology bases its assumptions on the misguided notion that people make completely rational financial decisions, but government intervention can help.Here are the 3 most interesting lessons I’ve learned about capitalism: More importantly, though, you will get a picture of how we can solve these issues and the better world they may offer everybody. In Ha-Joon Chang’s 23 Things They Don’t Tell You About Capitalism, you’ll learn all about the problems with free-market economics. The good news is that there are other options, but unfortunately, these are ignored by the media and we never hear about them. Other than not being very scientific, it’s based on many false ideas about the way society and the economy work. It prizes little government involvement in the financial world.Īlthough it sounds appealing, there is a lot wrong with this view. This method centers around letting supply and demand govern reign supreme.
If you listen to economic experts in newspapers or on TV, they talk as if there’s only one theory to follow: free-market economics. Listen to the audio of this summary with a free reading.fm account:
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