Saturday, February 16, 2008

The Scam Of "Free" Trade

The Lies Behind 'Free Trade'
By Chalmers Johnson

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.....

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