Back By Popular Demand! More Ha-Joon Chang Analogies!
Some analogies are so bad they're stupid; some analogies are so bad they're funny; and-- of course-- some analogies make a lot of sense, and help you to understand something complex in simpler terms . . . and in Ha-Joon Chang's book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, he uses a couple of metaphors to summarize his comprehensive data on free market history: 1) he accuses rich countries of what Friedrich List called "kicking away the ladder," which means that they arrive at economic stability and wealth through complex and strategic protectionism, tariffs, regulation of foreign investment, regulation on imports and exports, and subsidies-- but then once these these nations (and he uses America, Britain, and his home country of North Korea as his prime examples) have reached a position of economic power, they use institutions such as the WTO and the IMF, treaties, embargoes, copyright law, and tariffs to force impoverished nations into adopting extreme free market policies despite the fact that these countries are not ready to compete in a free market . . . and so, the rich nations use the ladder to climb, and then kick it away when poor countries want to use the same method 2) Chang's second metaphor about the irrationality of the current free market ideology centers around his six year old son, Jin-Gyu, who he ironically claims is "living in an economic bubble . . . over-protected," and so he "needs to be exposed to competition" . . . in other words, he should get a job-- he could be a successful shoe-shine boy or street hawker and learn the value of hard work-- but, of course, we don't do this to our children, we protect them for many years from the competitions of the free market until they can develop intellect enough to take part in the competition for the best jobs . . . and he compares this absurdity to how "free trade economists claim that developing country producers need to be exposed to as much competition right now, so that they have the incentive to raise productivity in order to survive . . . protection by contrast, only creates complacency and sloth," and Chang points out that this "infant industry argument," was proposed by the inventor of another great economic metaphor-- Adam Smith-- who claimed that an "invisible hand" guided the free market to efficiency, but even Adam Smith understood that free markets and protectionism need to exist in concert, not opposition.