Chalmers Johnson book review tackles the Myth of Free Trade
Promoted. Originally authored/posted 2008-02-08 16:38:42 -0500.
Chalmers Johnson has an lengthy but very informative review of South Korean economist Ha-Joon Chang’s Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism at truthdig.org
Publisher: Bloomsbury USA
Pub. Date: December 2007
via TruthDig-- from the Publisher:
With irreverent wit, an engagingly personal style, and a battery of real-life examples, Ha-Joon Chang blasts holes in the "World Is Flat" orthodoxy of Thomas Friedman and other neo-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 United States to Britain to his native South Korea - all attained prosperity by shameless protectionism and government intervention in industry. We in the wealthy nations 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 economies are supposed to behave, 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 weaker nations. Bad Samaritans calls on America to return to its abandoned role, embodied in programs like the Marshall Plan, to offer a helping hand, instead of a closed fist, to countries struggling to follow in our footsteps.
From Johnson’s review:
Ha-Joon Chang’s life is conterminous with his country’s advance from being one of the poorest on Earth—with a 1961 yearly income of $82 per person, less than half the $179 per capital income in Ghana at that time—to the manufacturing powerhouse of today, with a 2004 per capita income of $13,980. South Korea did not get there by following the advice of the Bad Samaritans. Chang’s prologue contains a wonderful account of how post-Korean War trade restrictions and governmental supervision fostered such projects as POSCO (Pohang Iron and Steel Co.), which began life as a state-owned enterprise that was refused support from the World Bank in a country without any iron ore or coking coal and with a prohibition on trade with China. Now privatized, POSCO is the world’s third largest steel company. This was also the period in which Samsung subsidized its infant electronics subsidiaries for over a decade with money made in textiles and sugar refining. Today Samsung dominates flat-panel TVs and cell phones in much of East Asia and the world.
With “Bad Samaritans,” Chang has succinctly and comprehensively exposed the chief structures of economic imperialism in the world today. What is now required is the leadership to undermine and dismantle the barriers that keep so much of the world so poor.