Friday, February 22, 2008

The Secret History of Capitalism


According to the conventional wisdom popularized by Thomas Friedman, countries can grow rich only by means of unfettered capitalism and pure free trade. In his controversial book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, Ha-Joon Chang takes aim at this orthodoxy.

Combining irreverent wit with scholarly rigor, Chang shows that nations like the US that achieved their present wealth by means of economic nationalism now preach an entirely different set of policies to the developing world via the World Bank, International Monetary Fund and World Trade Organization. Chang calls on us not only to re-evaluate the policies we promote to countries seeking to grow rich but also to become reacquainted with our own forgotten economic history.

Ha-Joon Chang has been described by one economist as "the most exciting thinker our profession has turned out in the past fifteen years." He teaches at Cambridge University, where he received his Master's degree and doctorate. A consultant for the Wold Bank, the Asian Development Bank, the UN and other international organizations, he was awarded the Leontief Prize for Advancing the Frontiers of Economic Thought in 2005. His book Kicking Away the Ladder: Development Strategy in Historical Perspective (2002), which received the Myrdal Prize, was acclaimed by the eminent MIT economist Charles Kindleberger as "a provocative critique of mainstream economists' sermons directed to developing countries."

Rough Trade

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, by Ha-Joon Chang, appears to be causing a bit of a stir at the minute. I finished it yesterday. It’s a punchy and confrontational engagement with dominant neo-liberal economic doctrine. His style at times strikes one as an wittily ironic imitation of the Big Idea economist-commentator. Basically, the book shows how rich nations -the US, the UK, Japan- developed their economies via protectionist measures, and how the IMF, the World Bank and the WTO -the tools of rich nations- shaft the world’s poor countries by forcing them to conform to economic policies that prevent them from developing their own economies.

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