[D66] A Critical Analysis for Abolishing Capitalism

[René Oudeweg]

A Critical Analysis for Abolishing Capitalism

Ha-Joon Chang’s 23 Things They Don’t Tell You About Capitalism does not 
advocate abolishing capitalism—but it does reveal deep structural 
contradictions within free-market ideology. When extended, these 
contradictions form a coherent case that capitalism may be fundamentally 
unfit for meeting modern economic, social, and ecological needs. This 
analysis uses Chang’s own critiques—historical protectionism, the myth 
of the free market, the failures of corporate governance, irrationality 
of consumers, and the dangers of inequality—to argue that capitalism, 
even with reforms, may be insufficient.

1. If all markets are constructed, then capitalism has no “natural” 
claim to legitimacy

Chang’s first chapter debunks the idea of a “free market.” Markets 
always operate within rules—labor laws, trade policies, intellectual 
property rights, and ownership structures—that reflect political choices.

Implication for abolition:
If markets are not natural but designed, then capitalism is not 
inevitable. The rules that produce capitalist outcomes—private ownership 
of production, profit maximization, wage labor—are choices, not 
universal truths. A different set of rules could produce a 
non-capitalist system built around democratic ownership, 
solidarity-based coordination, or public provision of core goods.

2. Successful economies have never relied on free-market capitalism

Chang shows that every rich nation used heavy regulation, industrial 
planning, tariffs, and state intervention—not laissez-faire 
capitalism—to develop.

Implication for abolition:
If capitalism’s origin story is false, its legitimacy is weakened. The 
fact that state-guided development outperforms free-market orthodoxy 
suggests that what drives prosperity is collective, coordinated economic 
strategy, not unregulated competition. Extending this logic further, a 
post-capitalist system could institutionalize democratic planning and 
public investment as core principles rather than exceptions.

3. Capitalism depends on the myth of rational individuals—but people 
aren’t rational

Chang argues that consumers and investors are emotional, ill-informed, 
and subject to biases. Markets therefore do not self-correct toward 
optimal outcomes.

Implication for abolition:
A system built on the assumption of perfect rationality cannot reliably 
produce good outcomes when real people do not think or act that way. 
Democratic planning, deliberative institutions, and collective 
decision-making may handle complexity better than markets premised on 
unrealistic psychological assumptions.

4. Corporations are not efficient; their structure produces short-termism

Chang criticizes modern corporate governance for rewarding executives 
who prioritize short-term shareholder returns over innovation, wages, 
and long-term stability.

Implication for abolition:
If corporations are structurally driven toward short-termism and 
rent-seeking, merely regulating them may not be enough. Alternative 
ownership models—worker cooperatives, public utilities, community-owned 
enterprises—may align economic decision-making with long-term social 
well-being in a way capitalist firms cannot.

5. Inequality is harmful, not necessary

Chang dismantles the idea that inequality drives growth. High inequality 
suppresses demand, undermines social cohesion, and limits economic mobility.

Implication for abolition:
If inequality is not a productive force, then capitalism’s tendency to 
generate extreme wealth concentration is a systemic flaw, not an 
unfortunate side effect. A post-capitalist model focused on shared 
ownership and egalitarian distribution could better support stable, 
inclusive growth.

6. Capitalism does not maximize freedom—it restricts it

Chang argues that markets constrain choices through pricing, employer 
power, and structural inequality. The “freedom of the market” often 
means freedom for the wealthy to shape the system.

Implication for abolition:
If capitalism limits substantive freedom—access to housing, healthcare, 
education, security—then a system organized around universal basic 
services, democratic control of key industries, and social provisioning 
may better support meaningful liberty.

7. The financial sector is destabilizing and unproductive

Chang shows that oversized financial sectors produce volatility and 
contribute little to real economic activity.

Implication for abolition:
A system that structurally rewards speculation over productive 
investment is prone to crisis. Moving key financial functions into 
democratic public institutions could prevent recurring instability 
inherent in financialized capitalism.

8. Capitalism’s core promises are achievable—but not under capitalist rules

Chang’s book hints that many goals associated with 
capitalism—innovation, prosperity, efficiency—are achieved not by free 
markets but through:

public investment

collective decision-making

strong regulation

strategic planning

social welfare systems

Implication for abolition:
If capitalism depends on non-capitalist mechanisms to function, a 
logical next step is to build an economic system that fully embraces 
those mechanisms rather than treating them as exceptions.

Conclusion: Why Chang’s Critique Points Beyond Capitalism

Ha-Joon Chang does not call for abolishing capitalism, but his evidence 
strongly suggests:

Markets are political constructions, not natural laws.

Free-market principles are historically false.

Corporations are structurally flawed.

Inequality is economically harmful.

Human behavior contradicts market theory.

The financial sector destabilizes society.

Government and collective action—not markets—drive real prosperity.

Taken together, these points imply that capitalism is neither inevitable 
nor optimal. A democratic, collectively owned, post-capitalist economy 
may better meet contemporary challenges—inequality, ecological crisis, 
financial instability—than a system built around profit maximization and 
private ownership.