The Scam Of "Free" Trade

The Lies Behind 'Free Trade'
By Chalmers Johnson
2-12-8

Ha-Joon Chang is a Cambridge economist who specializes in the abject poverty of the Third World and its people, groups, nations, and empires, and their doctrines that are responsible for this condition. He won the Gunnar Myrdal Prize for his book "Kicking Away the Ladder: Development Strategy in Historical Perspective" (2002), and he shared the 2005 Wassily Leontief Prize for his contributions to "Rethinking Development in the 21st Century". The title of his 2002 book comes from the German political economist Friedrich List, who in 1841 criticized Britain for preaching free trade to other countries while having achieved its own economic supremacy through high tariffs and extensive subsidies. He accused the British of "kicking away the ladder" that they had climbed to reach the world's top economic position. Chang's other, more technical books include "The Political Economy of Industrial Policy" (1994) and "Reclaiming Development: An Economic Policy Handbook for Activists and Policymakers" (2004). His new book is a discursive, well-written account of what he calls the "Bad Samaritan", "people in the rich countries who preach free markets and free trade to the poor countries in order to capture larger shares of the latter's markets and preempt the emergence of possible competitors. They are saying 'do as we say, not as we did' and act as Bad Samaritans, taking advantage of others who are in trouble." Bad Samaritans is intended for a literate audience of generalists and eschews the sort of exotica that peppers most economic writing these days - there is not a single simultaneous equation in the book and many of Chang's examples are taken from his own experiences as a South Korean born in 1963. Ha-Joon Chang, "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism" (Bloomsbury Press, 2007) 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 Company), 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. Read more.....