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Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
A rising young star in the field of economics attacks the free-trade orthodoxy of The World Is Flat head-on—a crisp, contrarian history of global capitalism.
One economist has called Ha-Joon Chang "the most exciting thinker our profession has turned out in the past fifteen years." With Bad Samaritans, this provocative scholar bursts into the debate on globalization and economic justice. Using irreverent wit, an engagingly personal style, and a battery of examples, Chang blasts holes in the "World Is Flat" orthodoxy of Thomas Friedman and other liberal economists who argue that only unfettered capitalism and wide-open international trade can lift struggling nations out of poverty. On the contrary, Chang shows, today's economic superpowers—from the U.S. to Britain to his native Korea—all attained prosperity by shameless protectionism and government intervention in industry. We have conveniently forgotten this fact, telling ourselves a fairy tale about the magic of free trade and—via our proxies such as the World Bank, International Monetary Fund, and World Trade Organization—ramming policies that suit ourselves down the throat of the developing world.
Unlike typical economists who construct models of how the marketplace should work, Chang examines the past: what has actually happened. His pungently contrarian history demolishes one pillar after another of free-market mythology. We treat patents and copyrights as sacrosanct—but developed our own industries by studiously copying others' technologies. We insist that centrally planned economies stifle growth—but many developing countries had higher GDP growth before they were pressured into deregulating their economies. Both justice and common sense, Chang argues, demand that we reevaluate the policies we force on nations that are struggling to follow in our footsteps.
One economist has called Ha-Joon Chang "the most exciting thinker our profession has turned out in the past fifteen years." With Bad Samaritans, this provocative scholar bursts into the debate on globalization and economic justice. Using irreverent wit, an engagingly personal style, and a battery of examples, Chang blasts holes in the "World Is Flat" orthodoxy of Thomas Friedman and other liberal economists who argue that only unfettered capitalism and wide-open international trade can lift struggling nations out of poverty. On the contrary, Chang shows, today's economic superpowers—from the U.S. to Britain to his native Korea—all attained prosperity by shameless protectionism and government intervention in industry. We have conveniently forgotten this fact, telling ourselves a fairy tale about the magic of free trade and—via our proxies such as the World Bank, International Monetary Fund, and World Trade Organization—ramming policies that suit ourselves down the throat of the developing world.
Unlike typical economists who construct models of how the marketplace should work, Chang examines the past: what has actually happened. His pungently contrarian history demolishes one pillar after another of free-market mythology. We treat patents and copyrights as sacrosanct—but developed our own industries by studiously copying others' technologies. We insist that centrally planned economies stifle growth—but many developing countries had higher GDP growth before they were pressured into deregulating their economies. Both justice and common sense, Chang argues, demand that we reevaluate the policies we force on nations that are struggling to follow in our footsteps.
288 pages, Hardcover
First published July 5, 2007
About the author
Ha-Joon Chang
29 books1,306 followersHa-Joon Chang is a South Korean institutional economist, specializing in development economics. Currently he is a reader in the Political Economy of Development at the University of Cambridge.
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January 24, 2013
Ha-Joon Chang is not widely known (except by astute Goodreads readers!), even among economists, in the United States, but he is a rock star in his native Korea. He is not mentioned in the index or the bibliography of the recent neo-liberal tract, Why Nations Fail, by Acemoglu and Robinson. But on a recent trip to Busan, the Republic of Korea’s second largest city on the southern coast, I stopped beside Haeundae Beach to take in the scene. I began a conversation quite quickly (in English, my Korean is rudimentary) with two Korean businessmen and somehow, when the conversation came around to the state of the world’s economy, I mentioned that I was reading Chang’s 2007 book, Bad Samaritans. At first the Koreans didn’t recognize the name, but that was because I had used the westernized word order for his name, Ha-Joon Chang. “Oh,” the one guy said, “Chang Ha-Joon! I am reading that book too.”
Chang is currently a professor in the Faculty of Economics at Cambridge University (Cambridge on the Cam). You can find his mini-biography on his blog here: http://hajoonchang.net/my-background/. He is the author of a number of texts (he lists 14 books on his blog) in the economics of development, including the recent work, 23 Things They Don’t Tell You about Capitalism. For a quick summary of these 23 things you might look here: http://www.huffingtonpost.com/ian-fle....
Bad Samaritans, first published in 2007, is a devastating critique of the neo-liberal theory of development. At the end of the prologue Chang lists the following heterodox positions that he will argue:
Free trade reduces freedom of choice for poor countries
Keeping foreign companies out may be good for them in the long run
Investing in a company that is going to make a loss for 17 years (Nokia) may be an excellent proposition
Some of the world’s best firms are owned and run by the state
‘Borrowing’ ideas from more productive foreigners is essential for economic development
Low inflation and government prudence may be harmful for economic development
Free market and democracy are not natural partners
Countries are not poor because their people are lazy; their people are ‘lazy’ because they are poor
The resulting book, while perhaps not as ‘cool’ as the 23 Things book, is full of tongue-in-cheek humor backed up with well-informed factual argument. The book includes examples from development stories around the globe, but especially from his native Korea. The theories of the neo-liberal visionaries are devastatingly criticized in the book, but for the most part he does not attack them by name. Rather, he describes examples of policies implemented by the World Bank and International Monetary Fund (IMF) which have been informed by neo-liberal development theory and points out how these policies have often led to the opposite outcome from what their proponents claim for them. An exception to this rule is Thomas Friedman, neo-liberal journalist, whose book The Lexus and the Olive Grove is isolated for criticism in Chapter 1 as embodying the fictitious history of neo-liberal development theories, as opposed to the real history of less-than expected success or outright failure.
For me the most revealing story in the book comes in the early going in Chapter 2 in which Chang reviews the history of how today’s rich countries became rich. He conclusively shows that this was not by following the free trade policies that have been advocated by the World Bank and IMF to developing countries in the past forty years.
Chang resurrects a long forgotten work in economics by Daniel Defoe, the author of the famous character of Robinson Crusoe. Defoe had a colorful career besides his life as an author of literature. He was a businessman, tax collector, political commentator, and spy for both Tory and Whig governments. He was also an economist. Defoe’s book on economics, A Plan for the English Commerce (1728), tells the story of how the Tudor monarchs, Henry VII and Elizabeth I, used “protectionism, subsidies, distribution of monopoly rights, government-sponsored industrial espionage and other means of government intervention to develop England’s woollen manufacturing industry – Europe’s high-tech industry at the time.” Defoe’s character, Robinson Crusoe, is often used as an example by neo-liberal economists of homo economicus, the rational self-interest seeker who drives the development of free market economies; but Defoe’s actual work on economics shows “that it was not the free market but government protection and subsidies that developed British woollen manufacturing.” This is opposite of the story told by Acemoglu and Robinson. They give credit to the abandonment of protectionism as the spur to Britain’s growth, but it doesn’t occur to them that without that protection, Britain’s growth wouldn’t have gotten off the ground.
After the Napoleonic Wars when the protectionist policies of the Tudors had been able to establish British manufacturers as the most efficient in the world, these manufacturers recognized that free trade was now in their interest. The manufacturers agitated in favor of the abolition of the Corn Laws, that kept low cost grains from being imported to feed the industrial workers of the new Britain. It is at this juncture in the history of the industrial revolution in Britain that David Ricardo, economist, politician, and stock-market player, originated the theories of free trade that are parroted by neo-liberal economists today.
Ricardo’s theory of comparative advantage “argued that trade between two countries makes sense when one country can produce everything more cheaply than another. Although this country is more efficient in producing everything than the other, it can still gain advantage by specializing in things in which it has the greatest cost advantage over its trading partner.” Chang admits that Ricardo’s theory is correct “within its narrow confines.” However, when one country is technologically backward compared to another, “it takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competitions during this period of learning. . . . Ricardo’s theory is, thus seen, for those who accept the status quo but not for those who want to change it.”
A perfect example of this is the United States in the nineteenth century. Adam Smith had argued that the Americans should not develop manufacturing. Thomas Jefferson agreed. But thanks to Alexander Hamilton, who became America’s first Treasury Secretary at the age of 33, a different policy was followed. Hamilton’s Report on the Subject of Manufactures from 1791 presents a rationale for what became the program for development of industry in the United States. The core of this idea was that “a backward country like the US should protect its ‘industries in their infancy’ from foreign competition and nurture them to the point where they could stand on their own feet.” Following the issuing of Hamilton’s report to Congress the average tariff on foreign manufactured goods was raised from 5 percent to 12.5 percent, but this was far short of his recommendations. But after Hamilton’s death (after the famous duel at Weehawken with Aaron Burr) his program was adopted in full. After the War of 1812, the US Congress raised tariffs to an average of 25 percent. Once elected in 1860, Lincoln raised industrial tariffs to the highest levels so far in US history. This was justified by the expenses of the Civil War, but tariffs on manufactured goods remained at the 40 to 50 percent level until the First World War, the highest of any country in the world at the time. How many Americans realize this fact about their history?
And despite (or because of?)having the highest tariffs in the world, the US in the nineteenth century was the fastest growing economy in the world. Free trade economists have argued that this was in spite of protectionism, but Chang points out that the same story has been repeated over and over again in the century that followed; by Germany, Sweden, France, Finland, Austria, Japan, Taiwan, and Korea.
Another example of a cherished neo-liberal policy story in which the facts look much different from the theory is told in his Chapter 7 on financial prudence. Low inflation is gospel for neo-liberalism. “Inflation is bad for growth – this has become one of the most widely accepted economic nostrums of our age.” But during the 1960s and 1970s while Brazil’s average inflation rate was 42 percent per year, it’s (inflation-adjusted) per capita income grew at 4.5 percent per year. During the period when Brazil embraced neo-liberal policies between 1996 and 2005, its inflation rate dropped to 7.5 percent per year, but its per capita growth rate also dropped to an average of 1.5 per cent per year. A similar story played out in Korea, which had inflation rates close to 20 percent in the 1960s and 1970s while its economy was growing at ‘miracle’ inflation-adjusted rates of 7 percent per year. Chang insists that “I am not arguing that all inflation is good. . . . But there is a logical jump between acknowledging the destructive nature of hyperinflation and arguing that the lower the inflation rate, the better.” The inflation rate does not have to be in the 1 -3 percent range for economic growth to occur. The examples of Brazil and Korea show this.
There is much else in this book which debunks long-cherished apparent truths of neo-liberal development economics: the story of Finland’s refusal to permit significant foreign investment in their country; the story of Pohang Iron and Steel Company (POSCO), which grew to be the third largest steel company in the world (in 2008), but started as a state-owned (Korean) enterprise; the story of the economic success of Singapore with its state-owned premier airline and a host of government-linked enterprises in telecom, power, transport, semi-conductors, shipbuilding, engineering, shipping, and banking. All of these stories (and others) are worth reading.
You can hear Chang talking to Amy Goodman in 2009 about Bad Samaritans here: http://www.democracynow.org/2009/3/10.... He comes across as either extremely naive in the ways of US politics or completely deadpan in his reply to Amy’s question that the proper response to the financial crisis of 2008 would have been to nationalize the US banking sector. He gives very reasonable arguments why this should have been done and points out that many countries have had successful growth with essentially public ownership of banking; for example, France. He doesn’t seem to realize how crazy we really are. Apparently he hasn’t been watching Fox News.
Chang is currently a professor in the Faculty of Economics at Cambridge University (Cambridge on the Cam). You can find his mini-biography on his blog here: http://hajoonchang.net/my-background/. He is the author of a number of texts (he lists 14 books on his blog) in the economics of development, including the recent work, 23 Things They Don’t Tell You about Capitalism. For a quick summary of these 23 things you might look here: http://www.huffingtonpost.com/ian-fle....
Bad Samaritans, first published in 2007, is a devastating critique of the neo-liberal theory of development. At the end of the prologue Chang lists the following heterodox positions that he will argue:
Free trade reduces freedom of choice for poor countries
Keeping foreign companies out may be good for them in the long run
Investing in a company that is going to make a loss for 17 years (Nokia) may be an excellent proposition
Some of the world’s best firms are owned and run by the state
‘Borrowing’ ideas from more productive foreigners is essential for economic development
Low inflation and government prudence may be harmful for economic development
Free market and democracy are not natural partners
Countries are not poor because their people are lazy; their people are ‘lazy’ because they are poor
The resulting book, while perhaps not as ‘cool’ as the 23 Things book, is full of tongue-in-cheek humor backed up with well-informed factual argument. The book includes examples from development stories around the globe, but especially from his native Korea. The theories of the neo-liberal visionaries are devastatingly criticized in the book, but for the most part he does not attack them by name. Rather, he describes examples of policies implemented by the World Bank and International Monetary Fund (IMF) which have been informed by neo-liberal development theory and points out how these policies have often led to the opposite outcome from what their proponents claim for them. An exception to this rule is Thomas Friedman, neo-liberal journalist, whose book The Lexus and the Olive Grove is isolated for criticism in Chapter 1 as embodying the fictitious history of neo-liberal development theories, as opposed to the real history of less-than expected success or outright failure.
For me the most revealing story in the book comes in the early going in Chapter 2 in which Chang reviews the history of how today’s rich countries became rich. He conclusively shows that this was not by following the free trade policies that have been advocated by the World Bank and IMF to developing countries in the past forty years.
Chang resurrects a long forgotten work in economics by Daniel Defoe, the author of the famous character of Robinson Crusoe. Defoe had a colorful career besides his life as an author of literature. He was a businessman, tax collector, political commentator, and spy for both Tory and Whig governments. He was also an economist. Defoe’s book on economics, A Plan for the English Commerce (1728), tells the story of how the Tudor monarchs, Henry VII and Elizabeth I, used “protectionism, subsidies, distribution of monopoly rights, government-sponsored industrial espionage and other means of government intervention to develop England’s woollen manufacturing industry – Europe’s high-tech industry at the time.” Defoe’s character, Robinson Crusoe, is often used as an example by neo-liberal economists of homo economicus, the rational self-interest seeker who drives the development of free market economies; but Defoe’s actual work on economics shows “that it was not the free market but government protection and subsidies that developed British woollen manufacturing.” This is opposite of the story told by Acemoglu and Robinson. They give credit to the abandonment of protectionism as the spur to Britain’s growth, but it doesn’t occur to them that without that protection, Britain’s growth wouldn’t have gotten off the ground.
After the Napoleonic Wars when the protectionist policies of the Tudors had been able to establish British manufacturers as the most efficient in the world, these manufacturers recognized that free trade was now in their interest. The manufacturers agitated in favor of the abolition of the Corn Laws, that kept low cost grains from being imported to feed the industrial workers of the new Britain. It is at this juncture in the history of the industrial revolution in Britain that David Ricardo, economist, politician, and stock-market player, originated the theories of free trade that are parroted by neo-liberal economists today.
Ricardo’s theory of comparative advantage “argued that trade between two countries makes sense when one country can produce everything more cheaply than another. Although this country is more efficient in producing everything than the other, it can still gain advantage by specializing in things in which it has the greatest cost advantage over its trading partner.” Chang admits that Ricardo’s theory is correct “within its narrow confines.” However, when one country is technologically backward compared to another, “it takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competitions during this period of learning. . . . Ricardo’s theory is, thus seen, for those who accept the status quo but not for those who want to change it.”
A perfect example of this is the United States in the nineteenth century. Adam Smith had argued that the Americans should not develop manufacturing. Thomas Jefferson agreed. But thanks to Alexander Hamilton, who became America’s first Treasury Secretary at the age of 33, a different policy was followed. Hamilton’s Report on the Subject of Manufactures from 1791 presents a rationale for what became the program for development of industry in the United States. The core of this idea was that “a backward country like the US should protect its ‘industries in their infancy’ from foreign competition and nurture them to the point where they could stand on their own feet.” Following the issuing of Hamilton’s report to Congress the average tariff on foreign manufactured goods was raised from 5 percent to 12.5 percent, but this was far short of his recommendations. But after Hamilton’s death (after the famous duel at Weehawken with Aaron Burr) his program was adopted in full. After the War of 1812, the US Congress raised tariffs to an average of 25 percent. Once elected in 1860, Lincoln raised industrial tariffs to the highest levels so far in US history. This was justified by the expenses of the Civil War, but tariffs on manufactured goods remained at the 40 to 50 percent level until the First World War, the highest of any country in the world at the time. How many Americans realize this fact about their history?
And despite (or because of?)having the highest tariffs in the world, the US in the nineteenth century was the fastest growing economy in the world. Free trade economists have argued that this was in spite of protectionism, but Chang points out that the same story has been repeated over and over again in the century that followed; by Germany, Sweden, France, Finland, Austria, Japan, Taiwan, and Korea.
Another example of a cherished neo-liberal policy story in which the facts look much different from the theory is told in his Chapter 7 on financial prudence. Low inflation is gospel for neo-liberalism. “Inflation is bad for growth – this has become one of the most widely accepted economic nostrums of our age.” But during the 1960s and 1970s while Brazil’s average inflation rate was 42 percent per year, it’s (inflation-adjusted) per capita income grew at 4.5 percent per year. During the period when Brazil embraced neo-liberal policies between 1996 and 2005, its inflation rate dropped to 7.5 percent per year, but its per capita growth rate also dropped to an average of 1.5 per cent per year. A similar story played out in Korea, which had inflation rates close to 20 percent in the 1960s and 1970s while its economy was growing at ‘miracle’ inflation-adjusted rates of 7 percent per year. Chang insists that “I am not arguing that all inflation is good. . . . But there is a logical jump between acknowledging the destructive nature of hyperinflation and arguing that the lower the inflation rate, the better.” The inflation rate does not have to be in the 1 -3 percent range for economic growth to occur. The examples of Brazil and Korea show this.
There is much else in this book which debunks long-cherished apparent truths of neo-liberal development economics: the story of Finland’s refusal to permit significant foreign investment in their country; the story of Pohang Iron and Steel Company (POSCO), which grew to be the third largest steel company in the world (in 2008), but started as a state-owned (Korean) enterprise; the story of the economic success of Singapore with its state-owned premier airline and a host of government-linked enterprises in telecom, power, transport, semi-conductors, shipbuilding, engineering, shipping, and banking. All of these stories (and others) are worth reading.
You can hear Chang talking to Amy Goodman in 2009 about Bad Samaritans here: http://www.democracynow.org/2009/3/10.... He comes across as either extremely naive in the ways of US politics or completely deadpan in his reply to Amy’s question that the proper response to the financial crisis of 2008 would have been to nationalize the US banking sector. He gives very reasonable arguments why this should have been done and points out that many countries have had successful growth with essentially public ownership of banking; for example, France. He doesn’t seem to realize how crazy we really are. Apparently he hasn’t been watching Fox News.
October 5, 2023
“Kicking away the ladder” or Enlightened Imperialism?
Preamble:
--Ha-Joon Chang was the first economist I read whose methodology seriously considered real world history (and not just that of the winners!)… Oh, how dismal is mainstream economics?!
--I’ve since explored beyond Chang’s State Capitalism reformist lens, but he remains useful to learn from and challenge.
The Brilliant:
--“Kicking away the ladder”: do-as-we-say, not-as-we-do. Power cannot just sustain on direct violence; it is much more effective using abstraction to achieve manufactured consent. Thus, the brilliant abstractions of the “free market” and “free trade” to hide much of the real-world history:
i) Do-as-we-say: how poor countries were looted (much more can be said about this; after all, colonizers do not go to poor countries; they go to rich countries to plunder) and forced into dependency (i.e. markets “free” for underpaid riches to be plundered; prevented from organizing long-term strategies to become independent).
ii) Not-as-we-do: how rich countries, proclaiming and forcing (one-sided) “free market” and “free trade” on the poor, became rich with different rules: violent destruction of competition + strategic protectionism.
--Thus, this book is a soft, accessible intro to dispel mainstream economics' “free trade”/“free market” propaganda... soft as in holding your hands with that shiny, mainstream credibility (economist at University of Cambridge) while still with one foot within the mainstream paradigm (see later).
--Also excellent is the last chapter (“Lazy Japanese and thieving Germans”) exposing the fallacy of blaming cultural traits forunderdevelopment over-exploitation. I always welcome the clowning of stooges like Francis Fukuyama (The End of History and the Last Man) and Thomas L. Friedman (The World Is Flat: A Brief History of the Twenty-first Century).
The Adequate:
--Note the other side of accessibility:
1) Despite revealing the contradictory history of real-world capitalism, a reformist cannot escape the orbit of this paradigm. At worst, soft criticisms can fortify the walls of the status quo paradigm with its illusion of free, critical thinking (paraphrasing Chomsky: Necessary Illusions: Thought Control in Democratic Societies).
2) More in-depth concepts of “kicking away the ladder” are not explored (esp. the geopolitical economy of imperialism).
…Thus, this is a bridge you must cross and not get stuck on.
--While I question State Capitalism (i.e. real-world capitalism), I can see how Chang's biases given his life experiences living through South Korea’s rapid development from the ravages of Japanese imperialism + proxy civil war (US imperialism *cough, cough*) to an industrialized hi-tech nation (subsidized by US imperialism, see later). His real-world examples from a Development Economics perspective are certainly worth unpacking (trade history, foreign investments, public-private, Intellectual Property, Monetarism/inflation/interest rates, etc.)…
The Bad:
--OK, time to address State Capitalism vs. geopolitical economy (esp. imperialism). For someone who writes quite eloquently about:
i) Status quo bias (e.g. Ricardo’s Comparative Advantage trade theory conveniently assumes countries will stay at their current levels of technology, justifying the benefits of “free trade” while omitting the realities of the need for sovereign development to combat dependency/exploitation), and
ii) Power politics in understanding the wealth/poverty of nations
...remaining so resolute with State Capitalism eventually hits a wall.
--My dream class was “Economic Development” with Jim Glassman, who methodically deconstructs the limitations of the national boundaries around Development economics like Chang's. If colonial “kicking away the ladder” involved relations between countries (geopolitical economy), how can we assume economic development (even if “successful”) is merely within national boundaries (national state polities)? Once we re-apply geopolitical economy, we can no longer “externalize” processes like military destruction/financing/production/alliances.
...Imperialism comes roaring back; was it not State Capitalism that took nationalist “kicking away the ladder” competition to terrifying global-industrial scale, culminating in the 2 greatest wars in human history and the Cold War (which sure wasn't cold for Chang's South Korea)?
--The only solutions in the book (in the last pages) seem to be:
1) “Enlightened” power (with the only example being US post-WWII “Golden Age of Capitalism”)
2) A vague sense of (presumably political) democracy.
…We are still in orbit, ready for the economic crash (The Bubble and Beyond) and existential crisis (Nuclear War and Environmental Catastrophe).
Enlightened whitewashing and delaying crises:
--Chang suggests that the US’s post-WWII Marshall Plan/global plan was “enlightened” power, compared to the age of colonialism's unfair treaties. Firstly, we are to de-prioritize the Truman Doctrine (which was also an economic response to capitalist crisis, see later), the US's laundry list of imperialist global interventions to prevent 20th century decolonization achieving economic independence (including ironically the genocidal war on Korea).
-Washington Bullets: A History of the CIA, Coups, and Assassinations
-The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World
-Killing Hope: U.S. Military and C.I.A. Interventions Since World War II
...In fact, the enlightened US aid often came on the other side of military carnage! Japan's rapid re-industrialization was aided by US military contracts for destroying Korea. Next, South Korea's rapid industrialization was aided by US military contracts for destroying Vietnam/Laos/Cambodia. This is what happens when we apply a geopolitical economy lens to bring context to national development (we return to Glassman: Drums of War, Drums of Development: The Formation of a Pacific Ruling Class and Industrial Transformation in East and Southeast Asia, 1945-1980).
--It's only “enlightened” if you erase the other half of the imperialist arrangement, where countries (Korea/Vietnam/Laos/Cambodia, etc.) received the most intensive, genocidal bombings in human history. See Vijay Prashad (Struggle Makes Us Human: Learning from Movements for Socialism) on the "ideological censorship" of imperialism, with the illustrative case study of North Korea: https://youtu.be/6jKcsHv3c74
...Besides from spatial context (geopolitical), we must add temporal context (geography = space + time) to the post-WWII Golden Age of Capitalism. Capitalist US's “Roaring Twenties” (1920's) burst in the 1929 Great Crash, bringing down the global capitalist economy in the Great Depression. For a deeper Global South perspective beyond Western financial bubbles crashing Western stock markets, we need to consider the falling British global capitalist system (Capital and Imperialism: Theory, History, and the Present).
--The fraction of “enlightened” capitalists could not expand/continue FDR's New Deals response to the Great Depression enough to come close to resolving the depression in the US (let alone reviving the capitalist world) because that would be too close to socialism. Enough of the US capitalist class preferred barbarism (be it endless “free market” austerity thus endless depression, or fascism: see the fascist “Business Plot” against FDR: The Plot to Seize the White House: The Shocking TRUE Story of the Conspiracy to Overthrow F.D.R.).
--Capitalism features volatility (booms/busts, politely called “business cycles”); the creative destruction of unplanned competition disrupts all of society as businesses/workers/communities without warning and with unpredictable speed become obsolete to the needs of private profits. Thus, social dislocation occurs during both booms and busts of capitalism, making it another key feature of capitalism: The Great Transformation: The Political and Economic Origins of Our Time.
--This is perfect fodder for fascism, which takes advantage of capitalism's abstract crises by scapegoating on visible minorities/outcasts:
-Blackshirts and Reds: Rational Fascism and the Overthrow of Communism
-Discourse on Colonialism (fascism as colonial practices coming home)
-And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future
...Luckily for US capitalism, other countries spiraled into fascism and the subsequent imperialist competition ignited the greatest global war in human history (WWII); this provided booming new markets for arming global annihilation, finally a “creative destruction” large enough to wipe away the Great Depression/fall of British Empire's global capitalism.
--Rebuilding foreign markets after the end of WWII to purchase US surplus production was a necessity, since US feared falling back into another depression once the war market ended and the annihilated world could not pay back war debts (for more on US and war debts, see Super Imperialism: The Origin and Fundamentals of U.S. World Dominance).
--Thus, the permanence of the US military industrial complex to keep capitalism's irrational profit-seeking (rather than social needs-fulfilling) factories running; here we return to the Truman Doctrine, where the Cold War scare served to bail out "the near-bankrupt aircraft industry": Harry S. Truman and the War Scare of 1948: A Successful Campaign to Deceive the Nation.
--Furthermore, “economic growth” (GDP, measuring market transactions) is not synonymous with social development (social needs of health/community/environment) and vice versa (see the China vs. India comparison at the bottom of Capitalism: A Ghost Story). The “Golden Age” was not the “Gilded Age” because of improvements in distribution, brought about not by “enlightened” handouts but out of necessity:
i) Rise of the USSR alternative (life expectancy of 23.6 in 1945 war-time to 67.88 in 1965, an unheard of rise; pioneering social policies in public health, welfare, etc.)
ii) Sell capitalism at home through the welfare state compromise: domestic leftist gained popular support from leading the fight against fascism and the overall social mobilization of war.
iii) Sell capitalism abroad given decolonization process of Global South and threat of more Red revolutions.
...Chang, typical for reformists (i.e. within the status quo paradigm), focuses on the volatility of “Finance Capitalism” (i.e. blame post-1970's “Neoliberalism”: A Brief History of Neoliberalism), but what about Chang's Industrial Capitalism (including Military Industrial Complex) and the relationship between Finance and Production?
--Now, let’s consider structural crises. Chang can abstractly suggests 1970's Thatcher/Reagan/Neoliberalism “Financialization” ruined “Golden Age” Industrial Capitalism, but why then? After all, “Golden Age” policies constrained Wall Street Financial speculation (Bretton Woods global plan's capital controls, “financial repression”, etc.). Was it just hubris? Forgetfulness? Welfare state/unionism becoming too unmanageable for capitalism's required inequality? These are pertinent questions if there is any credibility to Chang's revival of State Capitalism “Golden Age” and actually sustaining it (the original post-WWII “Golden Age” barely lasted 2 decades).
...A deeper dive is needed, which I detail in reviews for:
1) Global Capitalism's reliance on imperialism (consider how decolonization's independence would challenge global prices!): the Patnaik power couple's Capital and Imperialism: Theory, History, and the Present
2) Global Capitalism vs. decolonization: Vijay Prashad's The Darker Nations: A People's History of the Third World
3) US surplus recycling: Varoufakis' The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
4) US military spending: Michael Hudson's Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
5) “Neoliberalism” reviving capitalist class power/profits: Harvey's A Brief History of Neoliberalism
…Once we review the above, we see Chang’s capitalist “enlightenment”/“Golden Age”/“democracy” and imperialist militarism/inherent and abstract volatility are 2 sides of the same coin. Meaningful democracy is not periodic and expensive (i.e. bribed) political theater; democracy must be participatory, economic, and anti-imperialist (i.e. you can't let US/NATO assassinate participatory economic democracy such as decolonization's land reformers by fear-mongering communism, then install one-dollar-one-vote electoral “democracy”).
Preamble:
--Ha-Joon Chang was the first economist I read whose methodology seriously considered real world history (and not just that of the winners!)… Oh, how dismal is mainstream economics?!
--I’ve since explored beyond Chang’s State Capitalism reformist lens, but he remains useful to learn from and challenge.
The Brilliant:
--“Kicking away the ladder”: do-as-we-say, not-as-we-do. Power cannot just sustain on direct violence; it is much more effective using abstraction to achieve manufactured consent. Thus, the brilliant abstractions of the “free market” and “free trade” to hide much of the real-world history:
i) Do-as-we-say: how poor countries were looted (much more can be said about this; after all, colonizers do not go to poor countries; they go to rich countries to plunder) and forced into dependency (i.e. markets “free” for underpaid riches to be plundered; prevented from organizing long-term strategies to become independent).
ii) Not-as-we-do: how rich countries, proclaiming and forcing (one-sided) “free market” and “free trade” on the poor, became rich with different rules: violent destruction of competition + strategic protectionism.
--Thus, this book is a soft, accessible intro to dispel mainstream economics' “free trade”/“free market” propaganda... soft as in holding your hands with that shiny, mainstream credibility (economist at University of Cambridge) while still with one foot within the mainstream paradigm (see later).
--Also excellent is the last chapter (“Lazy Japanese and thieving Germans”) exposing the fallacy of blaming cultural traits for
The Adequate:
--Note the other side of accessibility:
1) Despite revealing the contradictory history of real-world capitalism, a reformist cannot escape the orbit of this paradigm. At worst, soft criticisms can fortify the walls of the status quo paradigm with its illusion of free, critical thinking (paraphrasing Chomsky: Necessary Illusions: Thought Control in Democratic Societies).
2) More in-depth concepts of “kicking away the ladder” are not explored (esp. the geopolitical economy of imperialism).
…Thus, this is a bridge you must cross and not get stuck on.
--While I question State Capitalism (i.e. real-world capitalism), I can see how Chang's biases given his life experiences living through South Korea’s rapid development from the ravages of Japanese imperialism + proxy civil war (US imperialism *cough, cough*) to an industrialized hi-tech nation (subsidized by US imperialism, see later). His real-world examples from a Development Economics perspective are certainly worth unpacking (trade history, foreign investments, public-private, Intellectual Property, Monetarism/inflation/interest rates, etc.)…
The Bad:
--OK, time to address State Capitalism vs. geopolitical economy (esp. imperialism). For someone who writes quite eloquently about:
i) Status quo bias (e.g. Ricardo’s Comparative Advantage trade theory conveniently assumes countries will stay at their current levels of technology, justifying the benefits of “free trade” while omitting the realities of the need for sovereign development to combat dependency/exploitation), and
ii) Power politics in understanding the wealth/poverty of nations
...remaining so resolute with State Capitalism eventually hits a wall.
--My dream class was “Economic Development” with Jim Glassman, who methodically deconstructs the limitations of the national boundaries around Development economics like Chang's. If colonial “kicking away the ladder” involved relations between countries (geopolitical economy), how can we assume economic development (even if “successful”) is merely within national boundaries (national state polities)? Once we re-apply geopolitical economy, we can no longer “externalize” processes like military destruction/financing/production/alliances.
...Imperialism comes roaring back; was it not State Capitalism that took nationalist “kicking away the ladder” competition to terrifying global-industrial scale, culminating in the 2 greatest wars in human history and the Cold War (which sure wasn't cold for Chang's South Korea)?
--The only solutions in the book (in the last pages) seem to be:
1) “Enlightened” power (with the only example being US post-WWII “Golden Age of Capitalism”)
2) A vague sense of (presumably political) democracy.
…We are still in orbit, ready for the economic crash (The Bubble and Beyond) and existential crisis (Nuclear War and Environmental Catastrophe).
Enlightened whitewashing and delaying crises:
--Chang suggests that the US’s post-WWII Marshall Plan/global plan was “enlightened” power, compared to the age of colonialism's unfair treaties. Firstly, we are to de-prioritize the Truman Doctrine (which was also an economic response to capitalist crisis, see later), the US's laundry list of imperialist global interventions to prevent 20th century decolonization achieving economic independence (including ironically the genocidal war on Korea).
-Washington Bullets: A History of the CIA, Coups, and Assassinations
-The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World
-Killing Hope: U.S. Military and C.I.A. Interventions Since World War II
...In fact, the enlightened US aid often came on the other side of military carnage! Japan's rapid re-industrialization was aided by US military contracts for destroying Korea. Next, South Korea's rapid industrialization was aided by US military contracts for destroying Vietnam/Laos/Cambodia. This is what happens when we apply a geopolitical economy lens to bring context to national development (we return to Glassman: Drums of War, Drums of Development: The Formation of a Pacific Ruling Class and Industrial Transformation in East and Southeast Asia, 1945-1980).
--It's only “enlightened” if you erase the other half of the imperialist arrangement, where countries (Korea/Vietnam/Laos/Cambodia, etc.) received the most intensive, genocidal bombings in human history. See Vijay Prashad (Struggle Makes Us Human: Learning from Movements for Socialism) on the "ideological censorship" of imperialism, with the illustrative case study of North Korea: https://youtu.be/6jKcsHv3c74
...Besides from spatial context (geopolitical), we must add temporal context (geography = space + time) to the post-WWII Golden Age of Capitalism. Capitalist US's “Roaring Twenties” (1920's) burst in the 1929 Great Crash, bringing down the global capitalist economy in the Great Depression. For a deeper Global South perspective beyond Western financial bubbles crashing Western stock markets, we need to consider the falling British global capitalist system (Capital and Imperialism: Theory, History, and the Present).
--The fraction of “enlightened” capitalists could not expand/continue FDR's New Deals response to the Great Depression enough to come close to resolving the depression in the US (let alone reviving the capitalist world) because that would be too close to socialism. Enough of the US capitalist class preferred barbarism (be it endless “free market” austerity thus endless depression, or fascism: see the fascist “Business Plot” against FDR: The Plot to Seize the White House: The Shocking TRUE Story of the Conspiracy to Overthrow F.D.R.).
--Capitalism features volatility (booms/busts, politely called “business cycles”); the creative destruction of unplanned competition disrupts all of society as businesses/workers/communities without warning and with unpredictable speed become obsolete to the needs of private profits. Thus, social dislocation occurs during both booms and busts of capitalism, making it another key feature of capitalism: The Great Transformation: The Political and Economic Origins of Our Time.
--This is perfect fodder for fascism, which takes advantage of capitalism's abstract crises by scapegoating on visible minorities/outcasts:
-Blackshirts and Reds: Rational Fascism and the Overthrow of Communism
-Discourse on Colonialism (fascism as colonial practices coming home)
-And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future
...Luckily for US capitalism, other countries spiraled into fascism and the subsequent imperialist competition ignited the greatest global war in human history (WWII); this provided booming new markets for arming global annihilation, finally a “creative destruction” large enough to wipe away the Great Depression/fall of British Empire's global capitalism.
--Rebuilding foreign markets after the end of WWII to purchase US surplus production was a necessity, since US feared falling back into another depression once the war market ended and the annihilated world could not pay back war debts (for more on US and war debts, see Super Imperialism: The Origin and Fundamentals of U.S. World Dominance).
--Thus, the permanence of the US military industrial complex to keep capitalism's irrational profit-seeking (rather than social needs-fulfilling) factories running; here we return to the Truman Doctrine, where the Cold War scare served to bail out "the near-bankrupt aircraft industry": Harry S. Truman and the War Scare of 1948: A Successful Campaign to Deceive the Nation.
--Furthermore, “economic growth” (GDP, measuring market transactions) is not synonymous with social development (social needs of health/community/environment) and vice versa (see the China vs. India comparison at the bottom of Capitalism: A Ghost Story). The “Golden Age” was not the “Gilded Age” because of improvements in distribution, brought about not by “enlightened” handouts but out of necessity:
i) Rise of the USSR alternative (life expectancy of 23.6 in 1945 war-time to 67.88 in 1965, an unheard of rise; pioneering social policies in public health, welfare, etc.)
ii) Sell capitalism at home through the welfare state compromise: domestic leftist gained popular support from leading the fight against fascism and the overall social mobilization of war.
iii) Sell capitalism abroad given decolonization process of Global South and threat of more Red revolutions.
...Chang, typical for reformists (i.e. within the status quo paradigm), focuses on the volatility of “Finance Capitalism” (i.e. blame post-1970's “Neoliberalism”: A Brief History of Neoliberalism), but what about Chang's Industrial Capitalism (including Military Industrial Complex) and the relationship between Finance and Production?
The real force that pushed history to breakneck velocity […] was not the share market. Share markets were simply not liquid enough to bankroll Edison-sized ambitions. At the turn of the 20th century […] neither the banks nor the share markets could raise the kind of money needed to build all those power stations, grids, factories and distribution networks. To get those vast projects off the ground, what was required was an equivalently-sized network of credit. Hand-in-hand, shareholding and technology led to the creation of shareholder-owned mega banks, willing to lend to the new mega firms by generating a new kind of mega debt. This took the form of vast overdraft facilities for the Thomas Edisons and the Henry Fords of the world. -Yanis Varoufakis, Another Now: Dispatches from an Alternative Present, emphasis addedCapitalism’s Inherent Crises?:
--Now, let’s consider structural crises. Chang can abstractly suggests 1970's Thatcher/Reagan/Neoliberalism “Financialization” ruined “Golden Age” Industrial Capitalism, but why then? After all, “Golden Age” policies constrained Wall Street Financial speculation (Bretton Woods global plan's capital controls, “financial repression”, etc.). Was it just hubris? Forgetfulness? Welfare state/unionism becoming too unmanageable for capitalism's required inequality? These are pertinent questions if there is any credibility to Chang's revival of State Capitalism “Golden Age” and actually sustaining it (the original post-WWII “Golden Age” barely lasted 2 decades).
...A deeper dive is needed, which I detail in reviews for:
1) Global Capitalism's reliance on imperialism (consider how decolonization's independence would challenge global prices!): the Patnaik power couple's Capital and Imperialism: Theory, History, and the Present
2) Global Capitalism vs. decolonization: Vijay Prashad's The Darker Nations: A People's History of the Third World
3) US surplus recycling: Varoufakis' The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
4) US military spending: Michael Hudson's Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
5) “Neoliberalism” reviving capitalist class power/profits: Harvey's A Brief History of Neoliberalism
…Once we review the above, we see Chang’s capitalist “enlightenment”/“Golden Age”/“democracy” and imperialist militarism/inherent and abstract volatility are 2 sides of the same coin. Meaningful democracy is not periodic and expensive (i.e. bribed) political theater; democracy must be participatory, economic, and anti-imperialist (i.e. you can't let US/NATO assassinate participatory economic democracy such as decolonization's land reformers by fear-mongering communism, then install one-dollar-one-vote electoral “democracy”).
February 5, 2018
كل شيء حول هذا الكتاب كان يصدني عن اقتنائه، فضلاً عن قراءته، فالعنوان يوحي بأنه رسالة ماجستير مملة، وكتب الاقتصاد عمومًا لا تستهويني كثيرًا. لكن وجود اسم الشاعر المصري أحمد شافعي على الغلاف كان سببًا قويًا للاطلاع عليه، لأنه مترجم فذ وانتقائي في اختيار ما يترجمه.
مع ذلك لم أسمح لاسم أحمد شافعي أن يخدعني، فبدأت بقراءة الكتاب بسقف منخفض من التوقعات، لأنني كنت أهيئ نفسي مسبقًا للتعثر بمصطلحات اقتصادية أدرك أنني لن أفهمها بسبب جهلي بأساسيات علم الاقتصاد، ولكن الصدمة الأولى بدأت مع الصفحات الأولى، فعوضًا عما يمكن أن تجده في كتب الاقتصاد الأخرى من رطانة لا يفهمها إلا المتخصصين، بدأ المؤلف الكتاب بسرد قصة شخصية بطريقة شيقة جدًا.
تفاءلت، ولكن ليس كثيرًا، وقررت رفع سقف التوقعات أعلى قليلاً، وأكملت القراءة مدركًا في قرارة نفسي بأن المقدمة لم تكن سوى طعمًا سيجرني لاحقًا إلى الغرق في مستنقع من المفاهيم الاقتصادية عندما يبدأ المؤلف بطرح أفكاره بجدية.
وكما توقعت بدأ المؤلف اللعين يتحدث عن التجارة الحرة وتحرير الأسواق والضرائب والاستثمار الأجنبي وحجم الفوائد .. إلخ إلخ ولكن لدهشتي لم أشعر بأنني لا أفهم ما يقوله، بل على العكس من ذلك، شعرت لفرط استمتاعي وقدرتي على استيعاب أفكاره، بأنني اقتصادي بالوراثة وأن جدي الأكبر كان ربما رجل اقتصاد، ولأقطع الشك باليقين سألت والدتي عن أجدادي الأوائل، وكم كانت خيبتي عظيمة عندما أخبرتني بأنهم لم يكونوا سوى صيادي أسماك معدمين. لم أسمح لهذه الحقيقة أن تثير إحباطي، فقررت أن أكمل القراءة وأرفع سقف التوقعات أعلى كثيرًا، حتى وصلت إلى الفصل الذي يناقش فيه المؤلف موضوع حقوق الملكية الفكرية، حيث توقفت قليلاً وأعدت قراءة الفصل مرة أخرى، لا لأنني لم أفهمه لا سمح الله، بل لأنني كنت جاهلاً تمامًا بالخلفية التاريخية لهذا الموضوع المهم، وكنت أعتبر بأن موضوع الملكية الفكرية وحماية الحقوق الفكرية لا تقبل الجدل والنقاش، فإذا بالمؤلف يزعزع مسلماتي ويغرس عشرات الأسئلة حول هذا الموضوع.
مدفوعًا بالفضول الذي أخذ يتراكم في داخلي، قرر�� أخيرًا، أن أهدم سقف التوقعات عن بكرة أبيه وأكمل قراءة الكتاب، ولحسن حظي أنني فعلت ذلك قبل أن أصل إلى الفصل الأخير الذي ناقش فيه المؤلف موضوع الثقافة وعلاقتها بالتنمية الاقتصادية، وهذا برأيي أعظم فصول الكتاب، ولو لم يكن في الكتاب إلا هذا الفصل لكفاه. أطلب ممن سيمر بهذه المراجعة، ويقرر اقتناء الكتاب، أن يتذكر كلامي جيدًا، ففي الفصل الأخير يبدد المؤلف الأكاذيب (وهو عمومًا يفعل ذلك في الكتاب كله) التي يروج لها علماء الاقتصاد والسياسة عندما يربطون تخلف اقتصاديات الدول بثقافات شعوبها، ويبنون على ذلك سلسلة من التعميمات الخاطئة والعنصرية.
انتهيت من قراءة هذا الكتاب في وقت قياسي، وعلى عكس ما توقعت عندما بدأت به، وجدته رائعًا جدًا حيث يطرح ويناقش موضوعات اقتصادية معقدة بطريقة سلسة وسهلة، وبطريقة سيفهمها أي شخص .. حتى لو كان حفيد مجموعة من الصيادين الفقراء مثلي.
مع ذلك لم أسمح لاسم أحمد شافعي أن يخدعني، فبدأت بقراءة الكتاب بسقف منخفض من التوقعات، لأنني كنت أهيئ نفسي مسبقًا للتعثر بمصطلحات اقتصادية أدرك أنني لن أفهمها بسبب جهلي بأساسيات علم الاقتصاد، ولكن الصدمة الأولى بدأت مع الصفحات الأولى، فعوضًا عما يمكن أن تجده في كتب الاقتصاد الأخرى من رطانة لا يفهمها إلا المتخصصين، بدأ المؤلف الكتاب بسرد قصة شخصية بطريقة شيقة جدًا.
تفاءلت، ولكن ليس كثيرًا، وقررت رفع سقف التوقعات أعلى قليلاً، وأكملت القراءة مدركًا في قرارة نفسي بأن المقدمة لم تكن سوى طعمًا سيجرني لاحقًا إلى الغرق في مستنقع من المفاهيم الاقتصادية عندما يبدأ المؤلف بطرح أفكاره بجدية.
وكما توقعت بدأ المؤلف اللعين يتحدث عن التجارة الحرة وتحرير الأسواق والضرائب والاستثمار الأجنبي وحجم الفوائد .. إلخ إلخ ولكن لدهشتي لم أشعر بأنني لا أفهم ما يقوله، بل على العكس من ذلك، شعرت لفرط استمتاعي وقدرتي على استيعاب أفكاره، بأنني اقتصادي بالوراثة وأن جدي الأكبر كان ربما رجل اقتصاد، ولأقطع الشك باليقين سألت والدتي عن أجدادي الأوائل، وكم كانت خيبتي عظيمة عندما أخبرتني بأنهم لم يكونوا سوى صيادي أسماك معدمين. لم أسمح لهذه الحقيقة أن تثير إحباطي، فقررت أن أكمل القراءة وأرفع سقف التوقعات أعلى كثيرًا، حتى وصلت إلى الفصل الذي يناقش فيه المؤلف موضوع حقوق الملكية الفكرية، حيث توقفت قليلاً وأعدت قراءة الفصل مرة أخرى، لا لأنني لم أفهمه لا سمح الله، بل لأنني كنت جاهلاً تمامًا بالخلفية التاريخية لهذا الموضوع المهم، وكنت أعتبر بأن موضوع الملكية الفكرية وحماية الحقوق الفكرية لا تقبل الجدل والنقاش، فإذا بالمؤلف يزعزع مسلماتي ويغرس عشرات الأسئلة حول هذا الموضوع.
مدفوعًا بالفضول الذي أخذ يتراكم في داخلي، قرر�� أخيرًا، أن أهدم سقف التوقعات عن بكرة أبيه وأكمل قراءة الكتاب، ولحسن حظي أنني فعلت ذلك قبل أن أصل إلى الفصل الأخير الذي ناقش فيه المؤلف موضوع الثقافة وعلاقتها بالتنمية الاقتصادية، وهذا برأيي أعظم فصول الكتاب، ولو لم يكن في الكتاب إلا هذا الفصل لكفاه. أطلب ممن سيمر بهذه المراجعة، ويقرر اقتناء الكتاب، أن يتذكر كلامي جيدًا، ففي الفصل الأخير يبدد المؤلف الأكاذيب (وهو عمومًا يفعل ذلك في الكتاب كله) التي يروج لها علماء الاقتصاد والسياسة عندما يربطون تخلف اقتصاديات الدول بثقافات شعوبها، ويبنون على ذلك سلسلة من التعميمات الخاطئة والعنصرية.
انتهيت من قراءة هذا الكتاب في وقت قياسي، وعلى عكس ما توقعت عندما بدأت به، وجدته رائعًا جدًا حيث يطرح ويناقش موضوعات اقتصادية معقدة بطريقة سلسة وسهلة، وبطريقة سيفهمها أي شخص .. حتى لو كان حفيد مجموعة من الصيادين الفقراء مثلي.
September 17, 2018
We all know what a good Samaritan is – someone who, despite the ethnic stereotype associated with them and their racial dislike for people more like us, stops when they see someone in trouble and helps them, regardless of their differences or the personal cost to themselves. This is a book about how developing nations are being ‘helped’ by developed nations – and its message is the exact opposite of the good Samaritan story. That is, rather than those nations being helped to develop, they are being grossly hindered. The author makes no judgement about whether this is being done intentionally or not – or as he says, whether the rich nations are trying to kick away the ladder they themselves have climbed or whether they truly believe that what they propose and impose on developing nations is ‘for their own good’. His point is that what is being imposed on the developing world is the opposite to what was done by the developed world in their development – and that what is being done to the developing world seems virtually designed to keep them poor. As such, we need to change how we relate to these nations and allow them a pathway toward development.
This book provides an interesting counter-narrative about how the developed world became rich, and therefore is very worthwhile even for the economic history lesson it provides.
There’s a really nice bit at the start where he talks about his son and how it wouldn’t matter what incentives he offered him, his son still wouldn’t be able to perform brain surgery right now. His son was at the time 4 or 5. This sounds absurd, except that the standard line used to justify our treatment of developing nations is that economics is the study of incentives and how humans (and nations) respond to them. We assume that if you create the incentive, the response will look after itself. In fact, standard theory suggests that if you don’t force developing nations to enter into direct competition with developed nations, that is, if you don’t remove all protection from developing world economies, then this will prove to be of more harm than good to these economies. This is meant to be for a range of reasons, such as, that these countries will pursue industries they are not suited to, protection will allow their new industries to grow flabby and inefficient, that the economies will just waste their resources on products that could be more efficiently be produced elsewhere – and so on.
He points out that while this is almost certainly true in the first years of the country establishing a new industry, once it has been nurtured – in much the same way that his son is going to be nurtured and protected from harsh competition for the next 10-20 years – the nation will be much better able to stand on its own two feet. That is, it will be better off than if it had followed standard economic theory.
He provides lots of examples of how nations have built their own industries, not least in his native Korea, but also elsewhere too, Japan for instance. He says these early industries never had a competitive advantage over the potential imports from more developed nations, and that Ricardo’s theory of ‘comparative advantage’ would have demanded that they should never have begun building these industries. However, as Korea’s car industry has proven, sticking to your comparative advantage is not the best strategy.
He ends by saying that unless your nation is remarkably blessed in natural resources, you are unlikely to ever become developed until you develop industries. There is talk of being able to skip industrial development and move straight to services, but, as he also explains in one of his other books, it is much harder to improve productivity in service industries than it is in industry proper, and so if there is a choice, productive industry ought to be the one you pick.
This book provides a very long list of ways in which poor countries are exploited by rich countries – all while they assert they are working in the best interests of the poor countries. I really liked his discussion of time and how comparatively wealthy countries often think people in poor countries deserve to be poor because of their lackadaisical attitude to punctuality. However, as he points out, it is industry that demands strict time keeping and therefore industry produces our obsession with ‘being on time’, rather than the other way around. Rather than this being a reason for poor nations being poor, the lack of punctuality is a symptom of their lack of development. Industrial development cures poor time management.
I liked this book – and I’ve liked all of his books on economics so far.
This book provides an interesting counter-narrative about how the developed world became rich, and therefore is very worthwhile even for the economic history lesson it provides.
There’s a really nice bit at the start where he talks about his son and how it wouldn’t matter what incentives he offered him, his son still wouldn’t be able to perform brain surgery right now. His son was at the time 4 or 5. This sounds absurd, except that the standard line used to justify our treatment of developing nations is that economics is the study of incentives and how humans (and nations) respond to them. We assume that if you create the incentive, the response will look after itself. In fact, standard theory suggests that if you don’t force developing nations to enter into direct competition with developed nations, that is, if you don’t remove all protection from developing world economies, then this will prove to be of more harm than good to these economies. This is meant to be for a range of reasons, such as, that these countries will pursue industries they are not suited to, protection will allow their new industries to grow flabby and inefficient, that the economies will just waste their resources on products that could be more efficiently be produced elsewhere – and so on.
He points out that while this is almost certainly true in the first years of the country establishing a new industry, once it has been nurtured – in much the same way that his son is going to be nurtured and protected from harsh competition for the next 10-20 years – the nation will be much better able to stand on its own two feet. That is, it will be better off than if it had followed standard economic theory.
He provides lots of examples of how nations have built their own industries, not least in his native Korea, but also elsewhere too, Japan for instance. He says these early industries never had a competitive advantage over the potential imports from more developed nations, and that Ricardo’s theory of ‘comparative advantage’ would have demanded that they should never have begun building these industries. However, as Korea’s car industry has proven, sticking to your comparative advantage is not the best strategy.
He ends by saying that unless your nation is remarkably blessed in natural resources, you are unlikely to ever become developed until you develop industries. There is talk of being able to skip industrial development and move straight to services, but, as he also explains in one of his other books, it is much harder to improve productivity in service industries than it is in industry proper, and so if there is a choice, productive industry ought to be the one you pick.
This book provides a very long list of ways in which poor countries are exploited by rich countries – all while they assert they are working in the best interests of the poor countries. I really liked his discussion of time and how comparatively wealthy countries often think people in poor countries deserve to be poor because of their lackadaisical attitude to punctuality. However, as he points out, it is industry that demands strict time keeping and therefore industry produces our obsession with ‘being on time’, rather than the other way around. Rather than this being a reason for poor nations being poor, the lack of punctuality is a symptom of their lack of development. Industrial development cures poor time management.
I liked this book – and I’ve liked all of his books on economics so far.
January 18, 2009
This book outlines in a light narrative what I have suspected for a long time: free trade *can* be good, but applied wholeheartedly and blindly and at the wrong time is mostly destructive.
Fact: The US and Britain and Japan and South Korea built up their industries through pragmatic tariffs and government-sponsored protection/subsidization. NOT through the path of free trade. Almost no country has.
Free trade does *not* make you rich, it's what you want the other countries to do when you are economically more advanced. Do what I say not what I do.
The bad samaritans referred to in the title are those who mistakenly believe that free trade is the only path to improving the economy of third-world nations. They mistake the situation today (e.g. the US promoting free trade) with the past (the US was one of the *most* protected economies when it's industries were young and vulnerable).
Thinking of NZ, we have opened up our borders for the dubious advantage of selling meat and milk so we can buy plasma TVs. How much better at producing meat milk can we really get? At the end of the day it's just food, with a very limited future potential of becoming valuable to our trading partners.
Fact: The US and Britain and Japan and South Korea built up their industries through pragmatic tariffs and government-sponsored protection/subsidization. NOT through the path of free trade. Almost no country has.
Free trade does *not* make you rich, it's what you want the other countries to do when you are economically more advanced. Do what I say not what I do.
The bad samaritans referred to in the title are those who mistakenly believe that free trade is the only path to improving the economy of third-world nations. They mistake the situation today (e.g. the US promoting free trade) with the past (the US was one of the *most* protected economies when it's industries were young and vulnerable).
Thinking of NZ, we have opened up our borders for the dubious advantage of selling meat and milk so we can buy plasma TVs. How much better at producing meat milk can we really get? At the end of the day it's just food, with a very limited future potential of becoming valuable to our trading partners.
January 20, 2018
I think from the title people may assume this book is going to be anti-capitalism and free-trade, but it is not at all. It is a book critiquing neoliberalism and free-trade policies being pushed onto developing nations.
Ha-Joon Chang advocates for capitalism in which the government has more control over the economy.
This book argues that first world countries like the US and UK were protectionist when they were developing, rejecting free trade policies when it would harm their “infant industries” and subsidising those industries. Only when they had advanced manufacturing industries enough to compete globally did these countries open up to free trade.
The author uses his home country Korea as an example of a country which rapidly became rich due to:
• Promoting manufacturing industries with subsidies
• Increasing tariffs on imports to encourage spending within the country
• Copying products from rich countries until their manufacturing became advanced enough
Koreans were discouraged from buying imports, and imports were disincentived by the high tariffs. “The Korean miracle was the result of a clever and pragmatic mixture of market incentives and state direction.”
Developing countries are kept in low-productivity jobs when neoliberal policies are pushed onto them as they do not have the opportunity to grow their industries in the same way.
Ha-Joon Chang also deconstructs some of the common reasons given as to why countries aren’t developing (because neoliberalism cannot be at fault!):
-Corruption-
The chapter comparing corruption in different nations was very interesting. Corruption doesn’t necessarily harm a country’s economy, the key factor being whether the money is staying in the country or being drained out of it. Corruption can be a way for people to bypass lengthy beaurocratic systems when starting a business, so in some ways corruption can actually be beneficial to the economy.
Neoliberal policies which cut government funding also contribute to corruption - public officials are poorer so they are more likely to accept bribes.
-Culture-
Often people say argue developing countries have “cultures” which stop them from growing economically.
The author also deconstructs cultural essentialism about developing nations.
The stereotypes of German and Japanese people in the late 19th century are strikingly similar to the stereotypes of people in developing countries today. Germans were considered a “lazy” people by the British. Japanese people had a reputation for being too “emotional” and “focused on living in the present”. Once these nations became rich, the stereotypes changed.
-Debt-
The focus on not creating debt that began in the Reagan era has also meant that developing countries cannot borrow to kickstart industries or improve education.
After reading this book I discovered that it is banned on South Korean military bases, because it "contains some information that related to anti-government and anti-Americanism."
Ha-Joon Chang advocates for capitalism in which the government has more control over the economy.
This book argues that first world countries like the US and UK were protectionist when they were developing, rejecting free trade policies when it would harm their “infant industries” and subsidising those industries. Only when they had advanced manufacturing industries enough to compete globally did these countries open up to free trade.
The author uses his home country Korea as an example of a country which rapidly became rich due to:
• Promoting manufacturing industries with subsidies
• Increasing tariffs on imports to encourage spending within the country
• Copying products from rich countries until their manufacturing became advanced enough
Koreans were discouraged from buying imports, and imports were disincentived by the high tariffs. “The Korean miracle was the result of a clever and pragmatic mixture of market incentives and state direction.”
Developing countries are kept in low-productivity jobs when neoliberal policies are pushed onto them as they do not have the opportunity to grow their industries in the same way.
Ha-Joon Chang also deconstructs some of the common reasons given as to why countries aren’t developing (because neoliberalism cannot be at fault!):
-Corruption-
The chapter comparing corruption in different nations was very interesting. Corruption doesn’t necessarily harm a country’s economy, the key factor being whether the money is staying in the country or being drained out of it. Corruption can be a way for people to bypass lengthy beaurocratic systems when starting a business, so in some ways corruption can actually be beneficial to the economy.
Neoliberal policies which cut government funding also contribute to corruption - public officials are poorer so they are more likely to accept bribes.
-Culture-
Often people say argue developing countries have “cultures” which stop them from growing economically.
The author also deconstructs cultural essentialism about developing nations.
The stereotypes of German and Japanese people in the late 19th century are strikingly similar to the stereotypes of people in developing countries today. Germans were considered a “lazy” people by the British. Japanese people had a reputation for being too “emotional” and “focused on living in the present”. Once these nations became rich, the stereotypes changed.
-Debt-
The focus on not creating debt that began in the Reagan era has also meant that developing countries cannot borrow to kickstart industries or improve education.
After reading this book I discovered that it is banned on South Korean military bases, because it "contains some information that related to anti-government and anti-Americanism."
December 17, 2011
Amazing when you think how ideological Economics has become. Most of what comes out of the media is Chicago School "Free Market." However, I began to notice that the people with the most intellectual muster, like Princeton's Paul Krugman and Cambridge's Ha-Joon Chang (author of this book) have consistently stood against the tide.
As academics, they "stand outside" the world, and observe. They are also used to searing intellectual debate and precision as they face the peer review process. Which makes their journaled articles which keeps them tenured--and thus their considered opinions--more balanced than studies commissioned for economic think tanks like the well-funded Cato Institute. These institutions fall prey to a "confirmation bias," and see what they want to see.
That said, this book was an eye-opener. I was amazed to realize how true the author's contention is: There really is no such thing as a free market. We have laws which regulate commerce. And the most successful economies in the world have become that way by protectionist policies. This includes the US, Japan, England, and South Korea. Chang goes on to show that the World Bank is relegating poorer nations to poverty by forcing them to accept a "free market" solution using actual data, not ideology. In fact, these policies often stall economic growth, and transfer money to the more powerful countries. In short, like "trickle down" economics and "at-will" employment, the result is a greater concentration of wealth, and a weakening of treating people as "humans."
I like this book well enough, but found the author's Twenty-Three Things They Don't Tell You about Capitalism to be a little better, since it is more comprehensive.
As academics, they "stand outside" the world, and observe. They are also used to searing intellectual debate and precision as they face the peer review process. Which makes their journaled articles which keeps them tenured--and thus their considered opinions--more balanced than studies commissioned for economic think tanks like the well-funded Cato Institute. These institutions fall prey to a "confirmation bias," and see what they want to see.
That said, this book was an eye-opener. I was amazed to realize how true the author's contention is: There really is no such thing as a free market. We have laws which regulate commerce. And the most successful economies in the world have become that way by protectionist policies. This includes the US, Japan, England, and South Korea. Chang goes on to show that the World Bank is relegating poorer nations to poverty by forcing them to accept a "free market" solution using actual data, not ideology. In fact, these policies often stall economic growth, and transfer money to the more powerful countries. In short, like "trickle down" economics and "at-will" employment, the result is a greater concentration of wealth, and a weakening of treating people as "humans."
I like this book well enough, but found the author's Twenty-Three Things They Don't Tell You about Capitalism to be a little better, since it is more comprehensive.
June 7, 2013
Of the 5 books on economics I read since the crash, this one was by far the one that most challenged what I believed. I try to base my life on evidence and not ideologies I've grown to accept without much thought. Of the five books, his was supported with the most evidence. It challenged my notion that free market is always the best; And made me reevaluate when government spending is bad, when it is OK, and when it is best. It also makes me question my support of the World Trade Organization, and whether it's moral for the US to use our Microsoft/Walmart-like power forcing economic policies on other countries in ways that is against their best interest.
Many of the ideas are too new to my thinking for me to embrace them fully. I will have to stew over it for a year or two. My only complaint is that the title of the book, which he continually repeats throughout, seems like an ad homenin that gets in the way of the arguments. Overall, I highly recommend this to all Americans interested in economics or anyone who doesn't question the mantras "free trade is good", "all subsidies are bad", or "government is always the wrong answer".
Ultimately, I think the book would be most useful for people who are leaders in charge of a developing country.
Many of the ideas are too new to my thinking for me to embrace them fully. I will have to stew over it for a year or two. My only complaint is that the title of the book, which he continually repeats throughout, seems like an ad homenin that gets in the way of the arguments. Overall, I highly recommend this to all Americans interested in economics or anyone who doesn't question the mantras "free trade is good", "all subsidies are bad", or "government is always the wrong answer".
Ultimately, I think the book would be most useful for people who are leaders in charge of a developing country.
January 10, 2019
كتاب عظيم ومهم جدا
وعظمته ليست فقط في موضوعه وطريقة معالجته، وإنما أيضا في أسلوب الكاتب المنطقي في العرض والاستنتاج وتقريب الأفكار وضرب الأمثلة
وعظمته ليست فقط في موضوعه وطريقة معالجته، وإنما أيضا في أسلوب الكاتب المنطقي في العرض والاستنتاج وتقريب الأفكار وضرب الأمثلة
August 18, 2013
I actually thought this book would be much better than it was. There is a coherent theoretical argument behind the whole import substitution, infant industries approach to development. I was hoping to see a more interesting/empirical defense of it (and maybe a more nuanced explanation of when/how it can work, and when it doesn't)...because development is ultimately an empirical question about "what works," not what makes sense in theory. Ha-Joon presents a basic version of theoretical argument, but then just does some historical story telling to explain why it is "correct." His argument is basically that all developed countries used protectionist trade policies...therefore, protectionist trade policies cause development.
But, there are also other common factors we could point to, i.e. many other potential variables behind growth/development (accumulation of capital, high savings rates, human capital, rule of law, functioning domestic markets, inclusive/exclusive institutions, exogenous technological developments, luck, etc.). I don't feel like he really addressed any other possible variables in why certain countries have developed rapidly. The economies that he pointed to also focused a lot on better economic policies in other areas, like education, etc. If you believe that another cause was really the key driver of growth in Asia (say rising human capital through education) then one could see development as something that happened unrelated to (or despite) protectionist trade policies (which just redistributed some gains/loses in an inefficient manner). The point being, his argument didn't seem to very effectively address how the policies he likes fit into a broader set of policies (education, health, relatively sound macroeconomic policies, etc.), and why the policies he likes were the decisive factor, and not other variables. Even if this is hard to prove definitively, he could have done a lot more to address it.
Ha-Joon also neglects to really discuss when, how, and why protectionist policies have failed. Many, many countries have tried similar policy recommendation unsuccessfully, but he barely even mentions that there have been failures. He presents his "story" as if only developed countries tried these policies, they worked, and then everyone tried to keep it a secret. Maybe I am wrong about this, but my perception is that import substitution/infant industrial policies have been tried in many places for a long time, and to mixed results. In this respect, he is vulnerable to the same criticism that he makes of his caricature of "neo-liberals," in that he offers panacea, but then doesn't explain why it has failed so often when tried in history. Real insight would have come from explaining when his recommendations do/don't work and why, a more nuanced view on how they should be implemented, etc.
Finally, in the later chapters he really fell into the habit of what seemed like attacking either dated views, or just straw men. His points were probably much stronger in 2008 when the book was published (or years earlier when he began working on it), but at least now a number of his claims about what "neo-liberals" (whoever these people might be) believe, or the IMF believes, seem untrue. Almost nobody mainstream supports 0% inflation targeting policies (my sense is most economist would consider that a very bad idea), deficit spending is not universally opposed (and the IMF regularly publishes "sustainability" analyses of debt/deficits, which would be a weird thing to do if you thought all deficits were unsustainable), etc. He also fails to mention in his tirade that the only time the IMF would even have any leverage on a country's domestic policies...is when that country is asking the IMF to give it money. Some of his points in later chapters are defensible ones that many people would agree with, but when he superficially or inaccurately present the opposing viewpoint (or maybe it is just really dated), it kind of gets at his credibility more than anything.
But, there are also other common factors we could point to, i.e. many other potential variables behind growth/development (accumulation of capital, high savings rates, human capital, rule of law, functioning domestic markets, inclusive/exclusive institutions, exogenous technological developments, luck, etc.). I don't feel like he really addressed any other possible variables in why certain countries have developed rapidly. The economies that he pointed to also focused a lot on better economic policies in other areas, like education, etc. If you believe that another cause was really the key driver of growth in Asia (say rising human capital through education) then one could see development as something that happened unrelated to (or despite) protectionist trade policies (which just redistributed some gains/loses in an inefficient manner). The point being, his argument didn't seem to very effectively address how the policies he likes fit into a broader set of policies (education, health, relatively sound macroeconomic policies, etc.), and why the policies he likes were the decisive factor, and not other variables. Even if this is hard to prove definitively, he could have done a lot more to address it.
Ha-Joon also neglects to really discuss when, how, and why protectionist policies have failed. Many, many countries have tried similar policy recommendation unsuccessfully, but he barely even mentions that there have been failures. He presents his "story" as if only developed countries tried these policies, they worked, and then everyone tried to keep it a secret. Maybe I am wrong about this, but my perception is that import substitution/infant industrial policies have been tried in many places for a long time, and to mixed results. In this respect, he is vulnerable to the same criticism that he makes of his caricature of "neo-liberals," in that he offers panacea, but then doesn't explain why it has failed so often when tried in history. Real insight would have come from explaining when his recommendations do/don't work and why, a more nuanced view on how they should be implemented, etc.
Finally, in the later chapters he really fell into the habit of what seemed like attacking either dated views, or just straw men. His points were probably much stronger in 2008 when the book was published (or years earlier when he began working on it), but at least now a number of his claims about what "neo-liberals" (whoever these people might be) believe, or the IMF believes, seem untrue. Almost nobody mainstream supports 0% inflation targeting policies (my sense is most economist would consider that a very bad idea), deficit spending is not universally opposed (and the IMF regularly publishes "sustainability" analyses of debt/deficits, which would be a weird thing to do if you thought all deficits were unsustainable), etc. He also fails to mention in his tirade that the only time the IMF would even have any leverage on a country's domestic policies...is when that country is asking the IMF to give it money. Some of his points in later chapters are defensible ones that many people would agree with, but when he superficially or inaccurately present the opposing viewpoint (or maybe it is just really dated), it kind of gets at his credibility more than anything.
January 17, 2018
تشير إحدى الدراسات إلى أن البطاطس ربما كانت مسؤولة عن 12% من الزيادة العالمية في عدد السكان خلال الفترة ما بين 1700 إلى 1900 وهذا لاكتشاف العادي الذي حققه الإسبان في البيرو له الفضل بطريقة أو بأخرى لما عليه الاقتصاد في العالم اليوم، لكن اكتشاف البطاطس لم يكن بهذا جمال كما يجب.
(السامريون الأشرار) يشير العنوان إلى السامري الذي أعان الجريح ودله على الطريق كما ذكر في الإنجيل، يعود اليوم بالظهور من جديد لكن على شكل دول ثرية، وبدل أن يشير إلى الطريق بات يمنع المارين من اتخاذه، ويتركهم ينزفون حتى الهلاك.
كتاب السامريون الجدد أو الأشرار هو عن الاقتصاد الدولي الذي يغدق فقرا، كتاب يقوم على هدم الأساطير المحيطة بالاقتصاد الحر الذي يدار من قبل ما يسمى بالليبرالية الحديثة أو النيوليبرالية، ويبدد الوهم القائم على توصيات المنظمات الاقتصادية الكبرى وهي صندوق النقد الدولي ومنظمة التجارة الحرة والبنك الدولي أو الثالوث المدنس كما يسميها المؤلف، وكم هي على درجة من التواطأ في أن الأدوار لن تتبدل بين الدول الغنية والفقيرة وأحدا لن يلحق بالآخر، والاعتقاد الذي غالبا ما كنّا نميل إليه بأن نرى عالم الفقراء باعتباره أرضا للفرص المفقودة بات غير صحيح، وأن هناك لاعبون في نادي الثراء لن يستفيدوا حين يختفي الفقر.
(السامريون الأشرار) يشير العنوان إلى السامري الذي أعان الجريح ودله على الطريق كما ذكر في الإنجيل، يعود اليوم بالظهور من جديد لكن على شكل دول ثرية، وبدل أن يشير إلى الطريق بات يمنع المارين من اتخاذه، ويتركهم ينزفون حتى الهلاك.
كتاب السامريون الجدد أو الأشرار هو عن الاقتصاد الدولي الذي يغدق فقرا، كتاب يقوم على هدم الأساطير المحيطة بالاقتصاد الحر الذي يدار من قبل ما يسمى بالليبرالية الحديثة أو النيوليبرالية، ويبدد الوهم القائم على توصيات المنظمات الاقتصادية الكبرى وهي صندوق النقد الدولي ومنظمة التجارة الحرة والبنك الدولي أو الثالوث المدنس كما يسميها المؤلف، وكم هي على درجة من التواطأ في أن الأدوار لن تتبدل بين الدول الغنية والفقيرة وأحدا لن يلحق بالآخر، والاعتقاد الذي غالبا ما كنّا نميل إليه بأن نرى عالم الفقراء باعتباره أرضا للفرص المفقودة بات غير صحيح، وأن هناك لاعبون في نادي الثراء لن يستفيدوا حين يختفي الفقر.
January 25, 2020
Chang anaakım iktisat dışında bir şeyler söyleyen ve mutlaka okunması gereken bir iktisatçı. Daha önce bir iki makalesini okumuştum ama kitaplarını okumayı ertelemiştim. Chang'a katılmadığım tek nokta iyimserliği.
Efil Yayınevi yayımladığı kitaplarla (hem çeviriler hem de Türkçe yazılmış kitaplar) ekonomi alanındaki Türkçe literatür fakirliğinin giderilmesine önemli bir katkıda bulunuyor. Ancak yayınlarında genel olarak editöryel bir sorun olduğunu düşünüyorum. Bazı kitaplarında çeviri sorunları var (bu kitapta rast gelmedim). Yazım hataları ise fazlasıyla karşılaşabileceğiniz bir problem.
Efil Yayınevi yayımladığı kitaplarla (hem çeviriler hem de Türkçe yazılmış kitaplar) ekonomi alanındaki Türkçe literatür fakirliğinin giderilmesine önemli bir katkıda bulunuyor. Ancak yayınlarında genel olarak editöryel bir sorun olduğunu düşünüyorum. Bazı kitaplarında çeviri sorunları var (bu kitapta rast gelmedim). Yazım hataları ise fazlasıyla karşılaşabileceğiniz bir problem.
April 30, 2020
کتابی بسیار عالی در نقد شیوه ی عمل نظام سرمایه داری جهانی از جانب کسی که به آرمانهایی چون توسعه و تجارت خارجی و... ایمان دارد اما شیوه ی عمل سردمداران و سازمانهای مدعی را مورد نقد قرار میدهد
همچنین برای کسانی که یه افسانه در مورد کره جنوبی ساختن هم خوبه، میتونن با شیوه واقعی تبدیل شدن کره جنوبی به اون چیزی که هست آشنا بشن...
مروری از این کتاب برای سایت سیات پارسی نوشتم که میتونید اینجا بخونید:
https://siasateparsi.com/fa/news/2880
همچنین برای کسانی که یه افسانه در مورد کره جنوبی ساختن هم خوبه، میتونن با شیوه واقعی تبدیل شدن کره جنوبی به اون چیزی که هست آشنا بشن...
مروری از این کتاب برای سایت سیات پارسی نوشتم که میتونید اینجا بخونید:
https://siasateparsi.com/fa/news/2880
January 12, 2021
This is an excellent book that shows how protectionism helped today's rich countries become rich. Chang successfully dismantles the neo-liberalistic lies that a market should be as free as possible in order for nation's to become richer. This is simply not true. There is also an axis of evil consisting of IMF (international monetary fund), the World Bank and the World Trade Organization (WTO) that through recent history has imposed rules on poor countries that have had to borrow money, which have further impoverished them.
Now, I live in a "rich" country, Norway. Sadly, this country's politicians have to a large degree bought into the lies of the Chicago boy's club, neoliberalism. Although not a member of the EU, Norway is a member of EEA, and thus have had rules of free movement of labor and other things imposed. I am derailing a bit here, but, we do NOT live in a post-industrial world of service. We definitely live in a society that thrives on production. Sadly, Norway has dismantled much of its industry, so that, aside from oil, we have very little left. This has been out-competed by cheaper competition abroad and through foreign investment having bought in to and then sold off Norwegian companies. We are also swamped by cheap labor from some EU countries, that erode the wage levels in Norway and the foundation on which society rests. Even in this global pandemic, there has been no restrictions - or even enforced testing - on the free labor movement. So this happens in Norway, which is still, by all definition "rich" (for as long as we have oil and there is a demand for it) - think of what happens to countries who have only fledgling industries which are forced into free trade. Correct, it goes to hell.
The economics of society and the world is a table that we choose to set. In a completely deregulated society, we would - as Chang says - not invest in a child's education, but send them to work when they were six years old. We also need to invest in young industries, in order to reap rewards later, and that means protecting them from competition until they are mature.
Now, I live in a "rich" country, Norway. Sadly, this country's politicians have to a large degree bought into the lies of the Chicago boy's club, neoliberalism. Although not a member of the EU, Norway is a member of EEA, and thus have had rules of free movement of labor and other things imposed. I am derailing a bit here, but, we do NOT live in a post-industrial world of service. We definitely live in a society that thrives on production. Sadly, Norway has dismantled much of its industry, so that, aside from oil, we have very little left. This has been out-competed by cheaper competition abroad and through foreign investment having bought in to and then sold off Norwegian companies. We are also swamped by cheap labor from some EU countries, that erode the wage levels in Norway and the foundation on which society rests. Even in this global pandemic, there has been no restrictions - or even enforced testing - on the free labor movement. So this happens in Norway, which is still, by all definition "rich" (for as long as we have oil and there is a demand for it) - think of what happens to countries who have only fledgling industries which are forced into free trade. Correct, it goes to hell.
The economics of society and the world is a table that we choose to set. In a completely deregulated society, we would - as Chang says - not invest in a child's education, but send them to work when they were six years old. We also need to invest in young industries, in order to reap rewards later, and that means protecting them from competition until they are mature.
February 28, 2022
آقایانِ مترجم نمی فهمم چرا برداشته اند هرجا خوششان آمده را برجسته(بولد) کرده اند در متن و هرجا ناخوشایندشان بوده(اگرچه چند جا) آن پایین برگه با نویسنده مخالفت کرده اند که نه اینجور نیست! شما داری اشتباه می کنی! آن آخرهای کتاب هم ناشر در پانویس آمده از جهاد و اسلام یه مختصر شرحی داده که آقا شما نفهمیده ای اسلام را و بیخود کرده ای در کتابت که من بی اجازه برداشته ام برگردانده ام به پارسی در این باره نوشته ای. من هم این پایین می زنم تو دهانت! حکایتی ست! این شکل از کتاب درآوردن خودش ماجراجویی هم هست انگار
دو دیگر اینکه روس های بی شرف(اکیدن آقا پوتین) دیشب لشگر را روانه کرد سوی شرقِ اوکرائین، لاکردار از امروز صبح مرا یاد عباس میرزا انداخته در این یک ماه برای دومین بار. ترکمانچای و گلستان را به یادم می آورد و این ترکه شکاندن روس ها را به گرده ی ما جهانِ سومی های بیچاره. بعد این پروفسورِ کره ای برای من اینجا نوشته که نولیبرالیسم چنان می کند و چنین می کند و تز داده که اگر کشورهای دارا مدارا کنند با بیچاره ها اوضاع بلکه بهتر بشود، زهی تصور باطل، زهی خیال محال. خلاصه گر تو بهتر می زنی بستان بزن. اوضاع این است که می بینی وقتی دست دولتِ متقلب توی جیبِ کارگرش مدام می رود و می آید بیرون و حتا جیبش را می کشد بیرون تا حتمن ببیند دیگر چیزی داخلش نیست، وقتی شریف ترین شغل میانِ پفیوزی تاریخی دلالی به هر شکلی از آن است. وقتی سارقِ محله با کف و سوت بدرقه می شود برای دزدی هایش و برایش از گوشه و کنار هورا می کشند! چرا یکی دیگر بیاید مراعاتِ تو را بکند که تنها چیزت مساله ی مردم خودت نیست! مردمِ بیچاره ی خودت که گوشت تنِ هم را به دندان گرفته اند و می کنند. نان را می زند توی خون طرف و می گذارد توی دهن بچه اش! پروتئین را باید تامین کند برای نسل آینده ی فرو رفته در گنداب. حالا میان این معرکه دم بزن از اصلاح! به قول هدایت مگر گُه هم اصلاح می شود
پنجم اسپند چهاردهِ صفر صفر
دو دیگر اینکه روس های بی شرف(اکیدن آقا پوتین) دیشب لشگر را روانه کرد سوی شرقِ اوکرائین، لاکردار از امروز صبح مرا یاد عباس میرزا انداخته در این یک ماه برای دومین بار. ترکمانچای و گلستان را به یادم می آورد و این ترکه شکاندن روس ها را به گرده ی ما جهانِ سومی های بیچاره. بعد این پروفسورِ کره ای برای من اینجا نوشته که نولیبرالیسم چنان می کند و چنین می کند و تز داده که اگر کشورهای دارا مدارا کنند با بیچاره ها اوضاع بلکه بهتر بشود، زهی تصور باطل، زهی خیال محال. خلاصه گر تو بهتر می زنی بستان بزن. اوضاع این است که می بینی وقتی دست دولتِ متقلب توی جیبِ کارگرش مدام می رود و می آید بیرون و حتا جیبش را می کشد بیرون تا حتمن ببیند دیگر چیزی داخلش نیست، وقتی شریف ترین شغل میانِ پفیوزی تاریخی دلالی به هر شکلی از آن است. وقتی سارقِ محله با کف و سوت بدرقه می شود برای دزدی هایش و برایش از گوشه و کنار هورا می کشند! چرا یکی دیگر بیاید مراعاتِ تو را بکند که تنها چیزت مساله ی مردم خودت نیست! مردمِ بیچاره ی خودت که گوشت تنِ هم را به دندان گرفته اند و می کنند. نان را می زند توی خون طرف و می گذارد توی دهن بچه اش! پروتئین را باید تامین کند برای نسل آینده ی فرو رفته در گنداب. حالا میان این معرکه دم بزن از اصلاح! به قول هدایت مگر گُه هم اصلاح می شود
پنجم اسپند چهاردهِ صفر صفر
August 15, 2019
I should know better than to read this piece of mainstream economics. Book cover endorsements by: Financial times, Noam Chomsky and Bob Geldof. lol.
This book ‘Bad Samaritans. The guilty secrets of rich nations and the threat to global prosperity’ by Korean popular economist Ha-Joon Chang (Random House, 2008) is essentially another version of Stiglitz, challening neoliberal orthodoxy in development economics in what is commonly referred to as the post-Washington consensus.
These Ivy League, Nobel Prize professors are the intellectual version of the vulgar World Bank and McKinsey technocrats, but of course all within the same broader framework of neoclassical economics. Although many like to refer to themselves as heterodox economists, essentially they are all trying to ‘fix’ capitalism. Good luck, chaps!
I have a whole separate shelf for these lukewarm development economists (on the progressive end within this shelf is Amartya Sen), at the other and less visible side of the room from Marxist, radical political economy which must not be contaminated by these heretics!
Still, it’s an interesting enough summary and critique of some of the mainstream development economics discourses, for those interested in international development, which is killing me with its vulgar free market, free trade and MACROECONOMIC STABILITY obsession. Guys, you’re not economists, you’re propagandists for global capital.
This book ‘Bad Samaritans. The guilty secrets of rich nations and the threat to global prosperity’ by Korean popular economist Ha-Joon Chang (Random House, 2008) is essentially another version of Stiglitz, challening neoliberal orthodoxy in development economics in what is commonly referred to as the post-Washington consensus.
These Ivy League, Nobel Prize professors are the intellectual version of the vulgar World Bank and McKinsey technocrats, but of course all within the same broader framework of neoclassical economics. Although many like to refer to themselves as heterodox economists, essentially they are all trying to ‘fix’ capitalism. Good luck, chaps!
I have a whole separate shelf for these lukewarm development economists (on the progressive end within this shelf is Amartya Sen), at the other and less visible side of the room from Marxist, radical political economy which must not be contaminated by these heretics!
Still, it’s an interesting enough summary and critique of some of the mainstream development economics discourses, for those interested in international development, which is killing me with its vulgar free market, free trade and MACROECONOMIC STABILITY obsession. Guys, you’re not economists, you’re propagandists for global capital.
July 27, 2021
Uzun zamandır okumak istediğim ancak giriş seviyesinde iktisat bilgisine sahip olduğum için anlamamaktan korktuğum bir kitaptı Bad Samaritans. Yazarın sade ve anlaşılır bir dil kullandığını, verdiği örneklerle konuyu aptala anlatır gibi anlattığını ve Emin Akçaoğlu'nun çevirisinin de iyi olduğunu rahatlıkla söyleyebilirim. Eğer böyle bir çekinceniz varsa hiç olmasın.
Kitabın adı İncildeki bir hikayeden geliyor. İsa peygamberin "Komşumuz kimdir?" sorusu üzerine anlattığı bir mesele göre vaktiyle bir gezgini dövüp, soyup yarı ölü şekilde yol kenarında bırakıyorlar. Gezginin yanından önce bir Yahudi rahip, sonra da bir Levi geçiyor ancak ikisi de gezgine yaklaşmıyorlar. Son olarak Yahudilerle birbirlerini pek sevmediği bilinen Samiriyelilerden biri oradan geçerken gezgini fark ediyor, durup adama yardım ediyor, yaralarını sarıyor. Buradan da Good Samaritan (İyi Samiriyeli) kalıbı çıkıyor ortaya. İşte Ha-Joon Chang de komşularına serbest piyasayı, neoklasik ekonomi politikalarını öneren, hatta dayatan günümüzün gelişmiş ülkelerini Kötü Samiriyeliler olarak adlandırıyor.
Chang'in iddiası şu anki hallerine korumacı ve sürekli devlet müdahalesi içeren politikalarla gelen bu gelişmiş ülkelerin (Amerika, Almanya, İngiltere, Fransa vs.) diğer ülkelere bunun tam zıttı olan neoklasik politikaları, yani serbest piyasayı, özelleştirmeleri, devlet müdahalesinin en aza indirilmesini, fikri mülkiyet haklarının küresel olarak çok sıkı bir şekilde ve uzun sürelerle korunmasını dayatmaları. Aslında bu dayatma kısmı bir iddiadan ziyade gerçek, zira bu ülkeler bunun için Chang'in kutsal olmayan üçlü olarak adlandırdığı ve görünüşte bağımsız olsa da aslında bu ülkeler tarafından yönlendirilen uluslararası organizasyonları (Dünya Ticaret Örgütü, Dünya Bankası, IMF) aktif olarak hala kullanıyorlar. Chang bu iddiasını gelişmiş ülkelerin geçmişlerinde uyguladıkları serbest piyasa karşıtı politikaları ve özellikle de yakın dönemin en büyük ekonomik mucizelerinden biri olarak görünen kendi ülkesi Güney Kore'nin nasıl bu noktaya geldiğini anlatarak güçlendiriyor.
Kitabın ilk bölümleri biraz tekrar içeriyor, Chang uzun sayfalar boyunca serbest piyasadan bahsedince sürekli aynı şeyleri okuyormuşum gibi hissettim. Ama neyse ki sonradan kitabın ele aldığı politikalar çoğaldı. Yabancı yatırımlar, özelliştirmeler ve kamu girişimleri, başta patent olmak üzere fikri mülkiyet hakları ve düşük enflasyon politikası ayrı bölümlerde ayrıntılarıyla anlatılıyor. Gelişmiş ülkelerin daha önce bu konularda ne yaptıkları, şu an diğer ülkelere neyi dayattıkları ve bu dayatılan neoklasik politikaları uygulayan az gelişmiş ülkelerde işlerin nasıl kötü gittiği sayısal verilerle, kanıtlarla açıklanmış. Kitabın son bölümlerinde ise dayatılan politikalar başarısız olunca suçun atıldığı iki olgunun, yolsuzluğun ve kültürel farkların, ekonomik başarısızlıkta düşünüldüğü kadar etkili olmadığını açıklıyor yazar. Bu bölümlerde Chang'in her şeyi örnekler üzerinden ve çoğu zaman da hikayeleştirerek anlatmasını çok sevdim, normalde anlamayacağım birçok şeyi kolaylıkla kavrayabildim bu sayede.
Sanayileşmenin Gizli Tarihi okuduğuma mutlu olduğum bir kitap oldu. Kurgudışı bir kitabı, özellikle de iktisatla alakalı olanını böyle keyifle ve hızla okuyabileceğimi düşünmezdim. En başta da dediğim gibi iktisat bilgim epey zayıf. Ancak hali hazırda öğretim üyelerinin çoğu evrimci iktisat politikalarını savunan, dolayısıyla neoklasik iktisadın pek sevilmediği bir bölümde yüksek lisans yaptığım için bu konularda tamamen tarafsız olduğumu da söyleyemem. Bir de bu kitabı okumadan önce de gelişen ekonomilerde devlet müdahalesinin ve korumacı politikaların çok önemli olduğunu savunan biriydim, yani Chang'in yazdığı şeyler çoğunlukla mevcut fikirlerimi daha da güçlendirdi. Bu kitaba daha eleştirel yaklaşabilecek biri çok farklı şeyler de söyleyebilir. Kitabın bir diğer önemi de anlatılan birçok şeyi kendi ülkemizle rahatlıkla bağdaştırabilmemiz. Türkiye sadece iki dipnotta geçiyor, ancak Chang'in bahsettiği zararlı neoklasik politikaların nasıl sonuçlanabileceğini yıllardır yakından izliyormuşuz aslında. Bir de şöyle bir eleştirim olacak, Chang güzel bir şekilde gelişmekte olan ülkelerin dünya ekonomisini yönlendiren diğer ülkelere karşı çıkmasını öneriyor ancak böyle bir durumda alınacak tepkinin büyüklüğünü ya da küresel bir aforoz etme olduğunda nasıl sonuçlanabileceğini pek göz önüne almıyor. Bu açıdan iyimser bir yaklaşımı var, o da önerilerinin ne kadar uygulanabilir olduğu konusunda biraz şüpheye düşürdü beni.
Çeviri iyi ancak editörlük sorunlu, epey bir yazım yanlışı var kitapta. Gerçi şu an baskısı da yok galiba, yeniden elden geçirilip daha düzgün bir editörlük ve kapakla tekrar karşımıza çıksa ne güzel olur. İktisatla ilgilenin ilgilenmeyin, yanlış ekonomi politikalarının nelere mal olabileceğini görmek ve neler yapılabileceği konusunda en azından beyin fırtınası yapmak istiyorsanız iyi bir bir kitap Sanayileşmenin Gizli Tarihi.
Kitabın adı İncildeki bir hikayeden geliyor. İsa peygamberin "Komşumuz kimdir?" sorusu üzerine anlattığı bir mesele göre vaktiyle bir gezgini dövüp, soyup yarı ölü şekilde yol kenarında bırakıyorlar. Gezginin yanından önce bir Yahudi rahip, sonra da bir Levi geçiyor ancak ikisi de gezgine yaklaşmıyorlar. Son olarak Yahudilerle birbirlerini pek sevmediği bilinen Samiriyelilerden biri oradan geçerken gezgini fark ediyor, durup adama yardım ediyor, yaralarını sarıyor. Buradan da Good Samaritan (İyi Samiriyeli) kalıbı çıkıyor ortaya. İşte Ha-Joon Chang de komşularına serbest piyasayı, neoklasik ekonomi politikalarını öneren, hatta dayatan günümüzün gelişmiş ülkelerini Kötü Samiriyeliler olarak adlandırıyor.
Chang'in iddiası şu anki hallerine korumacı ve sürekli devlet müdahalesi içeren politikalarla gelen bu gelişmiş ülkelerin (Amerika, Almanya, İngiltere, Fransa vs.) diğer ülkelere bunun tam zıttı olan neoklasik politikaları, yani serbest piyasayı, özelleştirmeleri, devlet müdahalesinin en aza indirilmesini, fikri mülkiyet haklarının küresel olarak çok sıkı bir şekilde ve uzun sürelerle korunmasını dayatmaları. Aslında bu dayatma kısmı bir iddiadan ziyade gerçek, zira bu ülkeler bunun için Chang'in kutsal olmayan üçlü olarak adlandırdığı ve görünüşte bağımsız olsa da aslında bu ülkeler tarafından yönlendirilen uluslararası organizasyonları (Dünya Ticaret Örgütü, Dünya Bankası, IMF) aktif olarak hala kullanıyorlar. Chang bu iddiasını gelişmiş ülkelerin geçmişlerinde uyguladıkları serbest piyasa karşıtı politikaları ve özellikle de yakın dönemin en büyük ekonomik mucizelerinden biri olarak görünen kendi ülkesi Güney Kore'nin nasıl bu noktaya geldiğini anlatarak güçlendiriyor.
Kitabın ilk bölümleri biraz tekrar içeriyor, Chang uzun sayfalar boyunca serbest piyasadan bahsedince sürekli aynı şeyleri okuyormuşum gibi hissettim. Ama neyse ki sonradan kitabın ele aldığı politikalar çoğaldı. Yabancı yatırımlar, özelliştirmeler ve kamu girişimleri, başta patent olmak üzere fikri mülkiyet hakları ve düşük enflasyon politikası ayrı bölümlerde ayrıntılarıyla anlatılıyor. Gelişmiş ülkelerin daha önce bu konularda ne yaptıkları, şu an diğer ülkelere neyi dayattıkları ve bu dayatılan neoklasik politikaları uygulayan az gelişmiş ülkelerde işlerin nasıl kötü gittiği sayısal verilerle, kanıtlarla açıklanmış. Kitabın son bölümlerinde ise dayatılan politikalar başarısız olunca suçun atıldığı iki olgunun, yolsuzluğun ve kültürel farkların, ekonomik başarısızlıkta düşünüldüğü kadar etkili olmadığını açıklıyor yazar. Bu bölümlerde Chang'in her şeyi örnekler üzerinden ve çoğu zaman da hikayeleştirerek anlatmasını çok sevdim, normalde anlamayacağım birçok şeyi kolaylıkla kavrayabildim bu sayede.
Sanayileşmenin Gizli Tarihi okuduğuma mutlu olduğum bir kitap oldu. Kurgudışı bir kitabı, özellikle de iktisatla alakalı olanını böyle keyifle ve hızla okuyabileceğimi düşünmezdim. En başta da dediğim gibi iktisat bilgim epey zayıf. Ancak hali hazırda öğretim üyelerinin çoğu evrimci iktisat politikalarını savunan, dolayısıyla neoklasik iktisadın pek sevilmediği bir bölümde yüksek lisans yaptığım için bu konularda tamamen tarafsız olduğumu da söyleyemem. Bir de bu kitabı okumadan önce de gelişen ekonomilerde devlet müdahalesinin ve korumacı politikaların çok önemli olduğunu savunan biriydim, yani Chang'in yazdığı şeyler çoğunlukla mevcut fikirlerimi daha da güçlendirdi. Bu kitaba daha eleştirel yaklaşabilecek biri çok farklı şeyler de söyleyebilir. Kitabın bir diğer önemi de anlatılan birçok şeyi kendi ülkemizle rahatlıkla bağdaştırabilmemiz. Türkiye sadece iki dipnotta geçiyor, ancak Chang'in bahsettiği zararlı neoklasik politikaların nasıl sonuçlanabileceğini yıllardır yakından izliyormuşuz aslında. Bir de şöyle bir eleştirim olacak, Chang güzel bir şekilde gelişmekte olan ülkelerin dünya ekonomisini yönlendiren diğer ülkelere karşı çıkmasını öneriyor ancak böyle bir durumda alınacak tepkinin büyüklüğünü ya da küresel bir aforoz etme olduğunda nasıl sonuçlanabileceğini pek göz önüne almıyor. Bu açıdan iyimser bir yaklaşımı var, o da önerilerinin ne kadar uygulanabilir olduğu konusunda biraz şüpheye düşürdü beni.
Çeviri iyi ancak editörlük sorunlu, epey bir yazım yanlışı var kitapta. Gerçi şu an baskısı da yok galiba, yeniden elden geçirilip daha düzgün bir editörlük ve kapakla tekrar karşımıza çıksa ne güzel olur. İktisatla ilgilenin ilgilenmeyin, yanlış ekonomi politikalarının nelere mal olabileceğini görmek ve neler yapılabileceği konusunda en azından beyin fırtınası yapmak istiyorsanız iyi bir bir kitap Sanayileşmenin Gizli Tarihi.
January 12, 2011
The more I educate myself in economics, the more I am convinced it is a science that can offer no more conclusive answers about public policy than philosophy does about ethics or the nature of the self. The difference being, that when I sit down to a philosophy text, my greatest expectation is that it will be a beautifully articulated series of beliefs that will raise questions I had never pondered, or present the world in a unique light. But I always expect these texts to fall short of their stated goals of explaining the true nature of things.
I read economics, however, because I want to know what policy makers should do to solve serious problems in the world around us. I expect real answers, backed by cogent proof -- preferably in graph form. But unlike other sciences, where great questions are ultimately settled before the community moves on to tackle larger problems, economists have been having the same arguments since the discipline was invented!
The debate that Ha-Joon Chang tackles in his book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism is whether the free trade policies propagated by The World Bank, The International Monetary Fund, and The World Trade Organization are in fact the best policies for developing countries to adopt. "The secret history of capitalism" in the subtitle refers to his belief that wealthy countries of today like American and Britain, didn't, in fact, use free trade to get to the positions they are in now -- they were actually heavily protectionist and interventionist up until recent times, when their dominance had already been established. Chang admits, "The mere co-existence of protectionism and economic development does not prove that the former caused the latter," but that, "Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries when it simply had not existed very much before they became rich."
Chang then turns to the modern day "miracle" economies of Japan and Korea, who have bucked historical trends and grown far more rapidly then economists thought possible. He details how these countries were able to achieve this success through a combination of protectionism and industrial policy. Everybody's favorite bugaboo, China, might as well be lumped into this group as well. This leads me of the most conspicuous contradictions between conventional wisdoms in America today: that free trade and small government are the American way and the only path towards sustained prosperity, and that if we don't get our act together CHINA is going to take over the world. Well, China certainly didn't gain ascendency through small government or free trade. Yet they are developing rapidly, and steadily -- hardly shaken by the global recession that nearly brought (and in the case of Europe may still bring) the developed world to its knees.
Of course, there is much evidence that Chang must ignore in order to create a coherent narrative. The myriad failures of industrial policy outweigh the successes. He chooses to use GDP per capita growth as oppose to GDP growth to measure a country's development - this is fair but certainly a debatable strategy. He glosses over the fact that the policies implemented by Japan and Korea are very difficult to successfully enact without competent and relatively uncorrupt bureaucrats (although he does pose the idea that development is possible even with a lot of corruption).
The most convincing sections of the book come at the end and deal with patent laws and culture, respectively. I am wholly convinced that patent law in western countries have been hijacked by monied interest, and policy in this area is not in the best interest of innovation or the public good. He also does a great job of debunking a popular lay strategy of blaming lack of development on cultural issues, rather than public policy.
Bad Samaritans is another economics book that brought up more questions than it did answers. I think its an important book however, because it does highlight this "secret history of capitalism." Regardless of whether free trade is a policy that will bring greater good to the world, its important that we get our history right. Too many Americans believe that their nation has always been a bastion of free trade policy, and this is simply not true.
I read economics, however, because I want to know what policy makers should do to solve serious problems in the world around us. I expect real answers, backed by cogent proof -- preferably in graph form. But unlike other sciences, where great questions are ultimately settled before the community moves on to tackle larger problems, economists have been having the same arguments since the discipline was invented!
The debate that Ha-Joon Chang tackles in his book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism is whether the free trade policies propagated by The World Bank, The International Monetary Fund, and The World Trade Organization are in fact the best policies for developing countries to adopt. "The secret history of capitalism" in the subtitle refers to his belief that wealthy countries of today like American and Britain, didn't, in fact, use free trade to get to the positions they are in now -- they were actually heavily protectionist and interventionist up until recent times, when their dominance had already been established. Chang admits, "The mere co-existence of protectionism and economic development does not prove that the former caused the latter," but that, "Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries when it simply had not existed very much before they became rich."
Chang then turns to the modern day "miracle" economies of Japan and Korea, who have bucked historical trends and grown far more rapidly then economists thought possible. He details how these countries were able to achieve this success through a combination of protectionism and industrial policy. Everybody's favorite bugaboo, China, might as well be lumped into this group as well. This leads me of the most conspicuous contradictions between conventional wisdoms in America today: that free trade and small government are the American way and the only path towards sustained prosperity, and that if we don't get our act together CHINA is going to take over the world. Well, China certainly didn't gain ascendency through small government or free trade. Yet they are developing rapidly, and steadily -- hardly shaken by the global recession that nearly brought (and in the case of Europe may still bring) the developed world to its knees.
Of course, there is much evidence that Chang must ignore in order to create a coherent narrative. The myriad failures of industrial policy outweigh the successes. He chooses to use GDP per capita growth as oppose to GDP growth to measure a country's development - this is fair but certainly a debatable strategy. He glosses over the fact that the policies implemented by Japan and Korea are very difficult to successfully enact without competent and relatively uncorrupt bureaucrats (although he does pose the idea that development is possible even with a lot of corruption).
The most convincing sections of the book come at the end and deal with patent laws and culture, respectively. I am wholly convinced that patent law in western countries have been hijacked by monied interest, and policy in this area is not in the best interest of innovation or the public good. He also does a great job of debunking a popular lay strategy of blaming lack of development on cultural issues, rather than public policy.
Bad Samaritans is another economics book that brought up more questions than it did answers. I think its an important book however, because it does highlight this "secret history of capitalism." Regardless of whether free trade is a policy that will bring greater good to the world, its important that we get our history right. Too many Americans believe that their nation has always been a bastion of free trade policy, and this is simply not true.
November 22, 2023
Just keep kicking that ladder.
This is an eye-opening must read about the actual forces at play that perpetuate the cycle of global poverty. The neoliberal narrative that drives the technocracy of the central banks, IMF, WTO, World Bank is that broad privatization, austerity and castigating nationalism is the only way to lift developing countries from the chains of bondage. This book makes quick work of the fallacy of this narrative and how it is a myth that maintains rich countries squarely in the driver's seat of wealth and prosperity.
Infant industries cannot compete in a world market. They require tariffs, subsidies and infrastructure investment provided by the government. Alexander Hamilton used protectionist policies that helped America become an economic powerhouse in the first place. Protectionism helps budding countries and economies to flourish before they are ready to compete. What the "Bad Samaritans" of the IMF would have us believe is that protectionism is the root cause of poverty and corruption. If Hamilton were alive today, he'd be banned by the IMF. So we have the world powers denying their own history of how they become the economic giants they are and prohibit developing countries from using the same strategies. And why? The reason is that so that globalized multinationals can continue exploiting poorer countries and keeping wealth away from their own people. Basically... it's a scam.
And deficit spending--oh no! Poor countries can't deficit spend, the IMF decries, that causes inflation and poverty. Yet at the exact same time rich countries constantly employ deficit spending to maintain a private surplus. The hypocrisy is astounding.
But corruption! Sure corruption is a problem in poor countries but--news alert--corruption happens in rich countries, too. We just call it something else: business savvy. Okay, the neolibs say., maybe poor countries are culturally unfit for economic prosperity. The truth is that culture changes with economic prosperity not the other way around. The author reveals numerous historical examples influencing the Japanese and the German.
This book was accessible and phenomenal. Here is truth. Read it.
This is an eye-opening must read about the actual forces at play that perpetuate the cycle of global poverty. The neoliberal narrative that drives the technocracy of the central banks, IMF, WTO, World Bank is that broad privatization, austerity and castigating nationalism is the only way to lift developing countries from the chains of bondage. This book makes quick work of the fallacy of this narrative and how it is a myth that maintains rich countries squarely in the driver's seat of wealth and prosperity.
Infant industries cannot compete in a world market. They require tariffs, subsidies and infrastructure investment provided by the government. Alexander Hamilton used protectionist policies that helped America become an economic powerhouse in the first place. Protectionism helps budding countries and economies to flourish before they are ready to compete. What the "Bad Samaritans" of the IMF would have us believe is that protectionism is the root cause of poverty and corruption. If Hamilton were alive today, he'd be banned by the IMF. So we have the world powers denying their own history of how they become the economic giants they are and prohibit developing countries from using the same strategies. And why? The reason is that so that globalized multinationals can continue exploiting poorer countries and keeping wealth away from their own people. Basically... it's a scam.
And deficit spending--oh no! Poor countries can't deficit spend, the IMF decries, that causes inflation and poverty. Yet at the exact same time rich countries constantly employ deficit spending to maintain a private surplus. The hypocrisy is astounding.
But corruption! Sure corruption is a problem in poor countries but--news alert--corruption happens in rich countries, too. We just call it something else: business savvy. Okay, the neolibs say., maybe poor countries are culturally unfit for economic prosperity. The truth is that culture changes with economic prosperity not the other way around. The author reveals numerous historical examples influencing the Japanese and the German.
This book was accessible and phenomenal. Here is truth. Read it.
April 17, 2024
Historically, trade liberalization has been outcome rather than the cause of economic development.
That's a quintessential from the book I have really enjoyed reading.
Indeed, like most of the people from developing (aka poor economy) countries, I have become conformist with neoliberal BS ideas and accepted it as ultimate truth and only way to become a prosperous country.
Highly recommended to read. I took away one star bcz I disagree with the author's some conclusions based upon historical outcomes of economical policies implemented by Great Britain and the US. Despite that fact, the book is greatly written. Kudos.
August 18, 2016
الكتاب في أول فصوله يستحق أربعة نجوم لاسيما عند حديث المؤلف عن تفاصيل الحياة الصعبة في كوريا الجنوبية بعد الحرب العالمية الثانية وقبل الثورة الاقتصادية والتي كانت تضاهي الحياة الصعبة في خليج ما قبل النفط، والآن صارت كوريا في مصاف الدول المتطورة جداً بفضل تناسيها جراح الماضي وإقبالها على عالم المستقبل بكل اجتهاد فردي وجمعي...
ومن فصول الكتاب الجميلة حديث الكاتب عن الثقافة والتعميم حيث أنصف المجتمعات الإسلامية بعين فاحصة...
ويبدو أن همّ الكاتب الأول هو التحذير من السامريين الجدد الذين يستغلون حاجات الفقراء ليغرقوا دولهم بالديون والوصاية العالمية...
ومن فصول الكتاب الجميلة حديث الكاتب عن الثقافة والتعميم حيث أنصف المجتمعات الإسلامية بعين فاحصة...
ويبدو أن همّ الكاتب الأول هو التحذير من السامريين الجدد الذين يستغلون حاجات الفقراء ليغرقوا دولهم بالديون والوصاية العالمية...
April 8, 2016
يعالج الكتاب المفاهيم الاقتصادية التي تنبني عليها الليبرالية الاقتصادية الحديثة (نيوليبرالية) بترجمة الكتاب. وتكمن أهمية هذه المفاهيم في أنّها الأساس الذي تنبني عليه تعاملات الدول الثرية الحاكمة (التي يسميها الكاتب السامريون الأشرار)، وكذلك فهي لبّ توصيات وقرارات المنظمات الثلاث (صندوق النقد الدولي- منظمة التجارة العالمية- و البنك الدولي) للدول الفقيرة، لكي تلحق في ركب التنمية الحديث.
يُناقش الكتاب هذه المفاهيم بصورة متّزنة، فلا يهاجمها ولا يُنكر فوائدها، ولكنّه يشير إلى أنّها لم تكن سبل الدول الثرية أثناء صعودها للقمّة، كما أنّها تحمل في جنباتها مخاطرها ومتناقضاتها أيضًا، ويضرب أمثلةً عملية حديثة على خلافها.
يستحقّ هذا الكتاب القراءة لأنه يعرض لبعض المسلمات التي انزرعت في عقول الاقتصاديين، بل ووصلت إلى أذهان المثقفين والعامّة، فأضحت حقائق، لا مجرّد توجهات وأفكار.
ولعلّ أهمّ الفصول برأيي- والكتاب في مجمله مهمّ- ذلك الفصل الذي يتحدّث عن علاقة "الثقافة" بالتنمية. (أي ثقافة المجتمع). وهو رسالة علمية تاريخية وبليغة للمحُبِطين والمُحبَطين.
يُناقش الكتاب هذه المفاهيم بصورة متّزنة، فلا يهاجمها ولا يُنكر فوائدها، ولكنّه يشير إلى أنّها لم تكن سبل الدول الثرية أثناء صعودها للقمّة، كما أنّها تحمل في جنباتها مخاطرها ومتناقضاتها أيضًا، ويضرب أمثلةً عملية حديثة على خلافها.
يستحقّ هذا الكتاب القراءة لأنه يعرض لبعض المسلمات التي انزرعت في عقول الاقتصاديين، بل ووصلت إلى أذهان المثقفين والعامّة، فأضحت حقائق، لا مجرّد توجهات وأفكار.
ولعلّ أهمّ الفصول برأيي- والكتاب في مجمله مهمّ- ذلك الفصل الذي يتحدّث عن علاقة "الثقافة" بالتنمية. (أي ثقافة المجتمع). وهو رسالة علمية تاريخية وبليغة للمحُبِطين والمُحبَطين.
February 18, 2019
Despite the fact that he made a mistake on how old Nokia is, the Korean flirting of Finnish economy via a book, the feeling that I got that "piracy might be good" despite all that I find the book realistic enough to give it 4 stars. In fact is pragmatic, it says few truths like how "bad samaritans" can impose gender neutrality in order to obtain loans , even also how much meat one could eat...In any case Im not against totally Freedman, I think the guy was super good - maybe not that ecological as one should have been, at least for a long term thinker. This book can open up your mind, to understand that we cannot apply globalisation to everybody at the sometime and for the same reasons, every country is different and requires different solutions. What has worked for one country MIGHT work for another but at different time on their evolution of the economy.
April 15, 2016
الليبرالية الجديدة اتعلمها الجلاشة في الكتاب دا تقريبا
كل افكار المدرسة بداية من حرية التجارة الخارجية والاستثمار وحقوق الملكية الفكرية والخصخصة والتضخم ودو��(الصندوق والبنك الدوليين ومنظمة التجارة العالمية) تم مناقشتها واعطاء بدائل غير نمطية بناء على معطايت النظريات الاقتصادية بالاضافة الي التجارب الواقعية والتاريخية للدول المتقدمه ذاتها !
كل افكار المدرسة بداية من حرية التجارة الخارجية والاستثمار وحقوق الملكية الفكرية والخصخصة والتضخم ودو��(الصندوق والبنك الدوليين ومنظمة التجارة العالمية) تم مناقشتها واعطاء بدائل غير نمطية بناء على معطايت النظريات الاقتصادية بالاضافة الي التجارب الواقعية والتاريخية للدول المتقدمه ذاتها !
March 6, 2021
10 zvaigznes no 10! ŠAI grāmatai vajadzētu stāvēt uz katra ierēdņa un uzņēmēja rakstāmgalda kalendāra vai plānotāja vietā - lai taptu lasīta un pārlasīta, konspektēta un no galvas iegaumēta katrā brīvā brīdī, kā arī citēta visās attiecīgās sanāksmēs, kurās tiek pieņemti stratēģiski lēmumi. Te nav ne pravietiskas sprediķošanas par to, cik laba demokrātija per se, ne apnicīgas vēsturejas, te ir fakti, analīze un saprātīgi secinājumi. Autors (atšķirībā no daudziem citiem) nevairās saukt lietas to īstajos vārdos un ir viens no retajiem, kas aicina neklausīties modīgu ekonomisko teoriju sirēnu dziesmā, bet labāk stūrēt tālāk no bīstamām klintīm un atvariem. Piebildīšu, ka, lasot plašus apcerējumus a la Jared Diamond, mans lakmusa papīrs, lai pārbaudītu autora kompetenci, parasti ir Japāna - ja tekstā sarakstītas brēcošas muļķības par šo zemi, tad arī pārējais jāuztver piesardzīgi, vai ne? Arī šajā konkrētajā gadījumā tests nostrādā nevainojami - ar tīru sirdsapziņu iesaku šā autora darbus visiem, kas vēlas mazliet vairāk uzzināt par to, kā tad funkcionē ekonomika mūsdienu globalizētajā pasaulē
August 30, 2021
I wasn't expecting this book to be transformation book but it was one of such books I read recently. Glad that I picked this up from a friend's review.
The author grew up in South Korea in the 60s and 70s when it was still developing and described the houses, TVs, foreign products, education system etc. These seemed relatable to my experience growing up in a small town of India in 90s post economic liberalization.
Overall, the book describes how economies generally develop using the history of Britain, the US, The Four Asian Tigers and currently developing or underdeveloped countries. All these had similar patterns. This book cleared my misunderstanding around how the US developed and how the China has been developing which I had mentioned in a comment on Quora. I was completely mistaken!
Key takeaways from the book are generally applicable outside of developmental economics:
1) Any longer term ambitious goals require strategic planning and long term investments even at a huge loss for a few decades. For example, Toyota and Hyundai's constant effort to break into the auto market even though it was a running joke in the US in the beginning and had huge losses. This is why parents invest for 25 years in a child's education to learn high end skills.
2) It is really difficult to identify cause and effects in general and distinguish it from correlation. For example, if the people in underdeveloped countries are poor because of corruption, fraudulent elections, nepotism or laziness or vice-versa. All these were there when the developed countries were developing.
3) It is easy to build any narrative by cherry-picking data and coming with a theory to explain the situation. For example, the inherent punctuality of Britishers and Australians in comparison to Germany and Japan were used to explain why these countries weren’t developed in the early 20th century. Currently, the Islam is used as the explanation for poverty in middle east countries but islam was also there when the middle east was most developed during the golden periods of the Islam.
4) Opinions of experts should be examined carefully because of the above reasons in subjects like economics that are not hard sciences. Experts have inherent biases or conflict of interest. This is true especially if the experts are not providing downsides and counterexamples of their opinions.
It should be noted that the author has a balanced view on their opinions. The book clearly demonstrates the downsides of the opinions if taken to the other extreme.
The author grew up in South Korea in the 60s and 70s when it was still developing and described the houses, TVs, foreign products, education system etc. These seemed relatable to my experience growing up in a small town of India in 90s post economic liberalization.
Overall, the book describes how economies generally develop using the history of Britain, the US, The Four Asian Tigers and currently developing or underdeveloped countries. All these had similar patterns. This book cleared my misunderstanding around how the US developed and how the China has been developing which I had mentioned in a comment on Quora. I was completely mistaken!
Key takeaways from the book are generally applicable outside of developmental economics:
1) Any longer term ambitious goals require strategic planning and long term investments even at a huge loss for a few decades. For example, Toyota and Hyundai's constant effort to break into the auto market even though it was a running joke in the US in the beginning and had huge losses. This is why parents invest for 25 years in a child's education to learn high end skills.
2) It is really difficult to identify cause and effects in general and distinguish it from correlation. For example, if the people in underdeveloped countries are poor because of corruption, fraudulent elections, nepotism or laziness or vice-versa. All these were there when the developed countries were developing.
3) It is easy to build any narrative by cherry-picking data and coming with a theory to explain the situation. For example, the inherent punctuality of Britishers and Australians in comparison to Germany and Japan were used to explain why these countries weren’t developed in the early 20th century. Currently, the Islam is used as the explanation for poverty in middle east countries but islam was also there when the middle east was most developed during the golden periods of the Islam.
4) Opinions of experts should be examined carefully because of the above reasons in subjects like economics that are not hard sciences. Experts have inherent biases or conflict of interest. This is true especially if the experts are not providing downsides and counterexamples of their opinions.
It should be noted that the author has a balanced view on their opinions. The book clearly demonstrates the downsides of the opinions if taken to the other extreme.
May 2, 2016
تحفة! من تلك الكتب التي تجعلك تفهم كيف يسير العالم والأفضل كيف يجب أن يسير العالم وبالأخص الدول النامية إن أرادت التنمية اللإقتصادية..
موضوعات كثيرة فيه تستحق الإهتمام والمراجعة أهمها حماية السوق والملكية الفكرية وظلمها للدول النامية بصورتها الحالية,
أهمية التوجه الصناعي والسياسات "الواعية" طويلة الأمد
الثقافة وتأثيرها على الإقتصاد, الإقتصاد وتأثيره على الثقافة.
قراءة تلك النوعية من الكتب أراه أهمية قصوى لأصحاب الشركات والمشتغلين بالأعمال وقبلهم الساسة وصناع القرار. فضلًا عن القارىء العادي لفهم ومعرفة العالم من حوله فلحسن الحظ الكتاب سلس لغير المتخصصين بالإقتصاد.
موضوعات كثيرة فيه تستحق الإهتمام والمراجعة أهمها حماية السوق والملكية الفكرية وظلمها للدول النامية بصورتها الحالية,
أهمية التوجه الصناعي والسياسات "الواعية" طويلة الأمد
الثقافة وتأثيرها على الإقتصاد, الإقتصاد وتأثيره على الثقافة.
قراءة تلك النوعية من الكتب أراه أهمية قصوى لأصحاب الشركات والمشتغلين بالأعمال وقبلهم الساسة وصناع القرار. فضلًا عن القارىء العادي لفهم ومعرفة العالم من حوله فلحسن الحظ الكتاب سلس لغير المتخصصين بالإقتصاد.
December 15, 2011
“Meat imports are restricted…, which not only benefits local farmers but also inspecting firms… The export of raw rattan is about to be prohibited, which will benefit the rattan industry… Businesses have to give priority to local products…”
These are only some of the arguments put forward by Hal Hill and Monica Wihardja in an op-ed in The Wall Street Journal, ringing alarm bells about anti-reformist forces in the Indonesian Government. They argued that in spite of the upgraded investment ratings and political stability, the economic picture in Indonesia is slowly turning for the worse. That contrary to its liberal face, Indonesia is actually exercising policies favoring domestic production.
I have to admit, I’m a rookie when it comes to economic analysis. But I have this gut feeling that all those supposed evils mentioned by Professor Hill and Ms. Wihardja are not necessarily all that bad. I may be wrong here, but if a policy benefits local industries, shouldn’t that benefit the Indonesian people? And shouldn’t that mean more than the argument about being “reform” or “anti-reform”, whatever those two labels are supposed to mean these days?
These were some of the thoughts that kept on surfacing in my head as I read with much interest Professor Ha-joon Chang’s “Bad Samaritans: The Guilty Secrets of Rich nations and the Threat to Global Prosperity”. Going against the tide prevalent in a world dominated by free trade, comparative advantage, and other neo-liberalist values, Professor Chang’s book is an alternative account on development economics.
An established scholar currently teaching at Cambridge University, Professor Chang provides a fresh look on the state of today’s international economics. Professor Chang argues that while supposedly wanting to bring prosperity to developing countries, the world’s wealthy nations and major financial institutions (the ‘Bad Samaritans’) are in fact enlarging the gap between the developed and developing hemispheres. In May 2011, he was invited by President Yudhoyono to talk in front of the Indonesian Cabinet on lessons learned from the Korean economic development.
Of course, we’ve heard criticisms of liberal trade policies from many camps. But it’s always enlightening to learn more about them from a well established economist, and not some leftist demonstrator on the street, aggressively chanting the evils of globalization, wearing baklavas, fist punching in the air. It’s also stimulating to digest these well-researched, well-written criticisms not from a narrow, ultra-nationalist perspective, which is often regressive, thus resulting in isolationism and fear of the outside world.
Professor Chang suggests the need for people, particularly policymakers, in the developing world to carefully reconsider the tune of neo-liberalism that we’ve become used to listening. A tune which has been played so often, and so intense, that it has become entrenched in our minds as “the truth”. How the world today is so much engulfed in the unchallenged virtues of free trade and globalization. A condition in which any alternative tune proposed would be regarded simply as “backward”, or “anti-reformist”.
The book induces the reader to question the supposed superiority of notions such as comparative advantage and tariff reductions, particularly vis-à-vis the interests of developing countries. It forces us to reconsider the values of “infant industry theory” (developed by none other than Alexander Hamilton, the initiator of America’s industrialization and economic development in the 1800s) and the private vs. public enterprise argument (which overemphasizes on the ineffectiveness and inefficiency of public enterprises, while failing to consider similar conditions plaguing the private sector). It even delves into a discussion on corruption, and whether it destroys a national economy as much as the ‘Bad Samaritans’ would like us to believe.
Professor Chang does not one-sidedly criticize globalization, for this is exactly what many critics have often been guilty of. He gives credit where credit is due, describing that free trade is indeed beneficial for countries whose industries and comparative advantage have evolved. But for many developing countries, lacking in industrial capacity and relying too much on natural resources export, free trade only condemns them to a life of a second-class citizen in today’s international community.
In particular, Professor Chang criticizes the double standard eschewed by many developed, western countries. “Virtually all successful economies, developed or developing, got to where they are through selective, strategic integration with the world economy, rather than through unconditional global integration”. The United States was the most protectionist country up until the end of the Second World War, when their industrial supremacy had become unchallenged. So was Japan, when it strengthened its industrial base, at a time when its biggest export item was silk. And Korea did it too, when in the 1960s it fueled funds into its steel industry, which at the time, was completely non-existent.
We then ask the question, why are we being labeled as anti-reform when we try to emulate exactly all models of economic success since the time of Henry VII’s England? Are Indonesians today genuinely happy about being where they are in terms of economic growth, in particular economic production? Are we liberalizing our economy for want or for need? Or are we simply being bullied around by the developed world?
In the words of Professor Chang, “free market economists would argue, Mozambicans should be realistic and not mess around with things like cars (let alone hydrogen fuel cells!); instead they should just concentrate what they are already (at least ‘comparatively’) good at – growing cashew nuts”. We need to change this perspective, because if Japan had stayed with what it was good at (i.e. making silk), then we’d be deprived of the Hondas, Toyotas, and Suzukis roaming our streets today.
These are some thoughts worth considering, especially if we are prone to accepting opinions such as Professor Hill and Ms Wihardja’s as the norm. Have we accepted unconditional trade liberalization as common sense, thus labeling alternative perspectives as regressive and backward? If so, then maybe it is time for us to question, and even challenge such norms and common sense.
These are only some of the arguments put forward by Hal Hill and Monica Wihardja in an op-ed in The Wall Street Journal, ringing alarm bells about anti-reformist forces in the Indonesian Government. They argued that in spite of the upgraded investment ratings and political stability, the economic picture in Indonesia is slowly turning for the worse. That contrary to its liberal face, Indonesia is actually exercising policies favoring domestic production.
I have to admit, I’m a rookie when it comes to economic analysis. But I have this gut feeling that all those supposed evils mentioned by Professor Hill and Ms. Wihardja are not necessarily all that bad. I may be wrong here, but if a policy benefits local industries, shouldn’t that benefit the Indonesian people? And shouldn’t that mean more than the argument about being “reform” or “anti-reform”, whatever those two labels are supposed to mean these days?
These were some of the thoughts that kept on surfacing in my head as I read with much interest Professor Ha-joon Chang’s “Bad Samaritans: The Guilty Secrets of Rich nations and the Threat to Global Prosperity”. Going against the tide prevalent in a world dominated by free trade, comparative advantage, and other neo-liberalist values, Professor Chang’s book is an alternative account on development economics.
An established scholar currently teaching at Cambridge University, Professor Chang provides a fresh look on the state of today’s international economics. Professor Chang argues that while supposedly wanting to bring prosperity to developing countries, the world’s wealthy nations and major financial institutions (the ‘Bad Samaritans’) are in fact enlarging the gap between the developed and developing hemispheres. In May 2011, he was invited by President Yudhoyono to talk in front of the Indonesian Cabinet on lessons learned from the Korean economic development.
Of course, we’ve heard criticisms of liberal trade policies from many camps. But it’s always enlightening to learn more about them from a well established economist, and not some leftist demonstrator on the street, aggressively chanting the evils of globalization, wearing baklavas, fist punching in the air. It’s also stimulating to digest these well-researched, well-written criticisms not from a narrow, ultra-nationalist perspective, which is often regressive, thus resulting in isolationism and fear of the outside world.
Professor Chang suggests the need for people, particularly policymakers, in the developing world to carefully reconsider the tune of neo-liberalism that we’ve become used to listening. A tune which has been played so often, and so intense, that it has become entrenched in our minds as “the truth”. How the world today is so much engulfed in the unchallenged virtues of free trade and globalization. A condition in which any alternative tune proposed would be regarded simply as “backward”, or “anti-reformist”.
The book induces the reader to question the supposed superiority of notions such as comparative advantage and tariff reductions, particularly vis-à-vis the interests of developing countries. It forces us to reconsider the values of “infant industry theory” (developed by none other than Alexander Hamilton, the initiator of America’s industrialization and economic development in the 1800s) and the private vs. public enterprise argument (which overemphasizes on the ineffectiveness and inefficiency of public enterprises, while failing to consider similar conditions plaguing the private sector). It even delves into a discussion on corruption, and whether it destroys a national economy as much as the ‘Bad Samaritans’ would like us to believe.
Professor Chang does not one-sidedly criticize globalization, for this is exactly what many critics have often been guilty of. He gives credit where credit is due, describing that free trade is indeed beneficial for countries whose industries and comparative advantage have evolved. But for many developing countries, lacking in industrial capacity and relying too much on natural resources export, free trade only condemns them to a life of a second-class citizen in today’s international community.
In particular, Professor Chang criticizes the double standard eschewed by many developed, western countries. “Virtually all successful economies, developed or developing, got to where they are through selective, strategic integration with the world economy, rather than through unconditional global integration”. The United States was the most protectionist country up until the end of the Second World War, when their industrial supremacy had become unchallenged. So was Japan, when it strengthened its industrial base, at a time when its biggest export item was silk. And Korea did it too, when in the 1960s it fueled funds into its steel industry, which at the time, was completely non-existent.
We then ask the question, why are we being labeled as anti-reform when we try to emulate exactly all models of economic success since the time of Henry VII’s England? Are Indonesians today genuinely happy about being where they are in terms of economic growth, in particular economic production? Are we liberalizing our economy for want or for need? Or are we simply being bullied around by the developed world?
In the words of Professor Chang, “free market economists would argue, Mozambicans should be realistic and not mess around with things like cars (let alone hydrogen fuel cells!); instead they should just concentrate what they are already (at least ‘comparatively’) good at – growing cashew nuts”. We need to change this perspective, because if Japan had stayed with what it was good at (i.e. making silk), then we’d be deprived of the Hondas, Toyotas, and Suzukis roaming our streets today.
These are some thoughts worth considering, especially if we are prone to accepting opinions such as Professor Hill and Ms Wihardja’s as the norm. Have we accepted unconditional trade liberalization as common sense, thus labeling alternative perspectives as regressive and backward? If so, then maybe it is time for us to question, and even challenge such norms and common sense.
September 7, 2015
Subtitle: The Myth of Free Trade and the Secret History of Capitalism. Ha-Joon Chang, the author, says he told Joseph Stiglitz (Nobel prize-winning economist) that he felt privileged to have been born in South Korea in 1963, when it was about as underdeveloped as Vietnam is today. South Koreans born even 20 years later have no memory of South Korea as a poor nation (although of course there are still poor South Koreans today, as there are still poor in every country of any size). The topic Chang addresses is, what did South Korea do right that (for example) Mexico didn't, that allowed them to develop so well and so fast?
The short answer is, they essentially ignored what mainstream economics says to do, and instead copied what the UK and the US actually did when they were in the same position.
I am simplifying, of course. Not every recommendation of mainstream economics is incorrect. However, it is worth noting that in the areas where the IMF and World Bank told nations like South Korea and Malaysia what to do, that they ignored their advice, very little has changed. That is, the results have pretty convincingly demonstrated that mainstream advice to developing nations on how to improve their economies has been demonstrated to be false.
In a field like physics or chemistry, if the consensus model appears to be incorrect, in whole or in large parts, then there is a rush to change the model to improve this. Nothing of the sort has happened with economics, largely because the incentives for the working physicist or chemist (to be the richly rewarded inventor of the new model that fixes the problem) are different than the incentives of the working economist (who is often paid to be more or less a spin-master for the status quo).
Some of the stuff in Bad Samaritans seems like shooting fish in a barrel. After seeing the rise of industrialized economies in Asia, that used high tariff walls and government sponsorship of new industries until they became competitive, do we really need to have pointed out that this is a better way to get rich (or at least less poor) than opening up your borders to far more technologically advanced economies? I mean Japan, South Korea, Taiwan, Singapore, they all did this. Nations in Latin America that tried to follow the IMF/WB advice did not find that it worked out well. Except Brazil, that more or less started to do well once they started bargaining harder at the WTO, often in collaboration with Russia, India, and China (none of whom ever took the IMF/WB advice much to heart).
But, since mainstream economists of both right and left are still more or less pushing free trade between the Third World and the advanced economies, I guess it's still necessary to shoot the fish in this barrel, and Chang does a good job of refuting the globalization ideology. A focus on inflation over unemployment, an emphasis on strong intellectual property laws, no support for developing industries, they all get a chapter (and a bullet to the head).
I do have some quibbles. He doesn't talk much about when free trade is a good idea, for example when nations such as France and Germany (at about the same level of development) or the different nations of Latin America (which have significantly different levels of development but are closer to each other than they are to the U.S.). Or, perhaps Chang doesn't think Argentina and Brazil should be making free trade agreements with each other? We don't find out.
Which brings me to the primary quibble I have with this book, which is that it is primarily aimed at convincing would-be do-gooders (the so-called bad samaritans of the title) that they should be adopting different policies towards the Third World than they are. Little is said to Third World countries about what they should do, given the way the First World is currently acting (and realistically can be expected to continue to act). If faced with the prospect of World Bank loans that have thick strings attached, when should they turn down the loan? Chang doesn't say, he just says the World Bank shouldn't attach those strings.
There's a considerable body of evidence that says that the UK was protectionist until they became top dog, and then became an advocate of free trade. The US was in its turn protectionist (using stiff tariff walls to keep out cheaper UK manufactured goods) until they were top dog, and then they in turn began to advocate free trade. China has adopted similar policies (sometimes using subsidies or cheap loans instead of tariffs), and if current trends continue they can be expected to switch and become the chief advocates of free trade in ten years. But, what if you're not as big as the U.S. or China?
Chang also does a good job of outlining the history of intellectual property laws (short story: whoever is ahead, wants strong ones, everyone else isn't so sure, including the U.S. back in the day). But exactly what he is advocating, aside from "not so strong", is not clear. In practice most Asian tigers pretended to have IP enforcement, but didn't really, until they got rich enough to have lots of IP of their own that they wanted protected. Perhaps Chang's vagueness is because what he is really advocating is a calculated vagueness on the issue, and he is demonstrating by example?
In the end, Chang does a good job of exposing how and why the current advice to developing countries is aimed more at serving the aims of the ones giving the advice, than the ones being advised. But, realistically, this can be expected to continue. What should the ones receiving the advice do instead, since they cannot expect to see a change in policy at the IMF/World Bank? Perhaps that is for the next book.
By the time that comes out, perhaps we will be ready for a few chapters on how a formerly preeminent manufacturing power can regain their position, as well.
The short answer is, they essentially ignored what mainstream economics says to do, and instead copied what the UK and the US actually did when they were in the same position.
I am simplifying, of course. Not every recommendation of mainstream economics is incorrect. However, it is worth noting that in the areas where the IMF and World Bank told nations like South Korea and Malaysia what to do, that they ignored their advice, very little has changed. That is, the results have pretty convincingly demonstrated that mainstream advice to developing nations on how to improve their economies has been demonstrated to be false.
In a field like physics or chemistry, if the consensus model appears to be incorrect, in whole or in large parts, then there is a rush to change the model to improve this. Nothing of the sort has happened with economics, largely because the incentives for the working physicist or chemist (to be the richly rewarded inventor of the new model that fixes the problem) are different than the incentives of the working economist (who is often paid to be more or less a spin-master for the status quo).
Some of the stuff in Bad Samaritans seems like shooting fish in a barrel. After seeing the rise of industrialized economies in Asia, that used high tariff walls and government sponsorship of new industries until they became competitive, do we really need to have pointed out that this is a better way to get rich (or at least less poor) than opening up your borders to far more technologically advanced economies? I mean Japan, South Korea, Taiwan, Singapore, they all did this. Nations in Latin America that tried to follow the IMF/WB advice did not find that it worked out well. Except Brazil, that more or less started to do well once they started bargaining harder at the WTO, often in collaboration with Russia, India, and China (none of whom ever took the IMF/WB advice much to heart).
But, since mainstream economists of both right and left are still more or less pushing free trade between the Third World and the advanced economies, I guess it's still necessary to shoot the fish in this barrel, and Chang does a good job of refuting the globalization ideology. A focus on inflation over unemployment, an emphasis on strong intellectual property laws, no support for developing industries, they all get a chapter (and a bullet to the head).
I do have some quibbles. He doesn't talk much about when free trade is a good idea, for example when nations such as France and Germany (at about the same level of development) or the different nations of Latin America (which have significantly different levels of development but are closer to each other than they are to the U.S.). Or, perhaps Chang doesn't think Argentina and Brazil should be making free trade agreements with each other? We don't find out.
Which brings me to the primary quibble I have with this book, which is that it is primarily aimed at convincing would-be do-gooders (the so-called bad samaritans of the title) that they should be adopting different policies towards the Third World than they are. Little is said to Third World countries about what they should do, given the way the First World is currently acting (and realistically can be expected to continue to act). If faced with the prospect of World Bank loans that have thick strings attached, when should they turn down the loan? Chang doesn't say, he just says the World Bank shouldn't attach those strings.
There's a considerable body of evidence that says that the UK was protectionist until they became top dog, and then became an advocate of free trade. The US was in its turn protectionist (using stiff tariff walls to keep out cheaper UK manufactured goods) until they were top dog, and then they in turn began to advocate free trade. China has adopted similar policies (sometimes using subsidies or cheap loans instead of tariffs), and if current trends continue they can be expected to switch and become the chief advocates of free trade in ten years. But, what if you're not as big as the U.S. or China?
Chang also does a good job of outlining the history of intellectual property laws (short story: whoever is ahead, wants strong ones, everyone else isn't so sure, including the U.S. back in the day). But exactly what he is advocating, aside from "not so strong", is not clear. In practice most Asian tigers pretended to have IP enforcement, but didn't really, until they got rich enough to have lots of IP of their own that they wanted protected. Perhaps Chang's vagueness is because what he is really advocating is a calculated vagueness on the issue, and he is demonstrating by example?
In the end, Chang does a good job of exposing how and why the current advice to developing countries is aimed more at serving the aims of the ones giving the advice, than the ones being advised. But, realistically, this can be expected to continue. What should the ones receiving the advice do instead, since they cannot expect to see a change in policy at the IMF/World Bank? Perhaps that is for the next book.
By the time that comes out, perhaps we will be ready for a few chapters on how a formerly preeminent manufacturing power can regain their position, as well.
June 17, 2023
4.5 stars
Super insightful. Ha-Joon Chang overturns neoliberal ideology solidly and with a practical bent as well, referring to most Bad Samaritans (of today) as just “doing the easiest thing” instead of necessarily having ill will. The book is so full of historical examples that I often had to slow down to really process the vast amounts of macroeconomic history he was discussing. At times I felt quite left behind by my lack of macroeconomics intuition, but by the end of the book the takeaways were abundantly clear anyways.
Super insightful. Ha-Joon Chang overturns neoliberal ideology solidly and with a practical bent as well, referring to most Bad Samaritans (of today) as just “doing the easiest thing” instead of necessarily having ill will. The book is so full of historical examples that I often had to slow down to really process the vast amounts of macroeconomic history he was discussing. At times I felt quite left behind by my lack of macroeconomics intuition, but by the end of the book the takeaways were abundantly clear anyways.
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