What better place to start in order to get a handle on the ever expanding bubble that is the English Premier League than Ha-Joon Chang’s smart little indictment of free-market capitalism. This book is tailor-made for understanding just why the EPL might be heading for one almighty implosion. Portsmouth FC might very well be just the tip of the iceberg. If ever there was an industry that had all the hallmarks of the free-market model, it is the EPL, complete with unsustainable mountains of debt, extreme light touch regulation bordering on zero regulation, and a business model that puts immediate profit gratification well ahead of any long term R&D and investment in the future.

Ha-Joon Chang presents a very convincing case against free-market capitalism, but I have to confess that, in my case, it took very little convincing. What I really got from the book was a reaffirmation from a leading academic of what I already suspected: that the free-market model, so admired by the IMF, World Bank and leading western governments, is nothing but a scam and a dud.

Chang systematically demystifies and unravels the golden tenets of the free-marketeers step by step. What the reader is left with by the end of the text, is a strongly substantiated view that the so called free-market is, in fact, no such thing; it being, in reality, a highly protected system, fully subsidized by friendly government legislation, and to the extent that the free-market is allowed to operate, one that clearly fails to deliver the goods. Everywhere the statistics seem to show that, left to its own devices, the free-market will under-perform against a government regulated model, primarily for the reason that free-marketers are all about maximizing immediate shareholder profits with little or no regard to long term investment. The failed global banking system personifies the problem. The EPL is yet another perfect example; successful in the short term at club level but highly mediocre when it comes to international competition.

Chang is no socialist in the Marxist sense of the word. In his own words he tells us that; My criticism is of free-market capitalism, and not of all kinds of capitalism. What Chang is after is a fairer, more rational, more humane capitalism. Chang argues:

The profit motive is still the most powerful and effective fuel to power our economy and we should exploit it to the full. But we must remember that letting it loose without any restraint is not the best way to make the most of it, as we have learned at great cost over the last three decades.

Pleading for a more regulated capitalism, Chang adds:

Likewise, the market is an exceptionally effective mechanism for coordinating complex economic activities across numerous economic agents, but it is no more than that a mechanism, a machine. And like all machines, it needs careful regulation and steering. P253

In a real sense this excellent little book finishes where it might usefully start, because it is this very question of the extent that it is possible to regulate capitalism that is the really interesting bit. In one sense, the debate regarding the so called free-market has been judged by events themselves. The free-marketeers have been totally discredited to the point where even right-wing Tory governments are calling for the regulation and even the dismantling of the big banks. Just today, global legislation has been passed ordering the banks to carry greater reserves of liquidity in order to prevent a repeat of the 2008 financial crash. No, the real question of concern is not whether the free-market works but whether capitalism can ever be sufficiently regulated to tame its more selfish short term aspirations. Or to put it another way, if we were able to sufficiently regulate global capitalism to prevent it operating for short term gain for a handful of big shareholders, would it actually be capitalism at all?

Three basic premises of the Marxist economic model that, I believe, have resolutely stood the test of time are as follows; capital inevitably moves to the highest point of return; capitalism will inevitably morph into monopoly capitalism, and thirdly, capitalism is inherently prone to crises. All three of these tendencies seem irrefutable in the light of the past one hundred and fifty years, and their intensity seems to be increasing rather than decreasing with time. Had it not been for gigantic bailouts by governments around the world, we would surely be in the midst of a second great depression. It is salient to remember that it was not some quasi-socialist administration that was forced to rescue the capitalist financial system but rather the religiously pro free-market Bush government that was forced to bail out corporate America. The only conclusion we can come to; the corporations that dominate global trade are now too big to fail.

Nothing has been decided. The banks are still acting like casinos. Governments of all persuasions are still tinkering with light touch regulation, and world indebtedness is perilously high. Needless to say, low income families around the globe are paying the price. No change there then. Street demonstrations and strikes are back on the agenda, east and west, north and south. There is another Marxist premise that also seems to hold true throughout the centuries; working people pay the price but they don’t always take it lying down.

My question to Chang is this; if governments, who have long subsidized capitalist enterprise with infrastructure, education and R&D expenditure, along with selective tariffs, immigration controls and a tax friendly environment, are now forced to bail out huge industrial and financial corporations on a regular basis to prevent further meltdowns, is monopoly capitalism now morphing into something else?

The Chinese Communist Party calls its economic system, socialism with Chinese characteristics, whatever that may mean. What we do know is that it is highly successful, notwithstanding its grim labour and political conditions, in comparison to its competitors. What should America now call its economic system; capitalism with socialist characteristics or perhaps, socialism with western characteristics?

Either way it seems there is more than just a quantitative change taking place. And if there is a qualitative change afoot, what exactly is it a change to?

All this leaves the EPL and all professional sport in a dilemma. If the governing bodies are prepared only to tip-toe around the edge of the problem, sooner or later the bubble must burst. If however, Uefa and the national bodies do move to cap wages and limit private ownership, the EPL will burst asunder anyway. Can you imagine our footballing superstars hanging around for a 50% pay cut?

I suppose the best expression to sum things up on both the sporting and economic fronts is the old Marxist favourite, boom and bust, the very phenomena that our erstwhile Labour Prime Minister had declared, somewhat prematurely, had been eradicated for all time. Fool!