Ha-Joon Chang takes issue with Thomas Friedman's flat world. Friedman says that developing nations must don a what he calls a Golden Straightjacket in order to join the First World club. This perverse bit of fashion involves neo-liberal policies such as privatizing public industry, deregulation, smaller government, et al. Chang does more than take issue with Friedman, he flat out calls bullshit.
For Chang, Friedman and others who promote such ideas are the bad samaritans of his book's title. They are denizens of rich countries and they use organizations such as the World Trade Organization, International Monetary Fund, and the World Bank to impose the above neo-liberal policies and others as well. However, these people are either ignorant of or ignore the fact that their own countries managed to become industrialized by using distinctly un-neo-liberal policies such as high tariffs and government-owned enterprises.
Examining what he calls "the official history of globalization", Chang shows how it is largely a myth and proceeds to poke holes in it. The official history goes something like this: Britain went all free trade in the 18th century as it was the birthplace of the Industrial Revolution. These policies were such a success that other countries adopted them in the 19th century. (Including the United States.) The world economy started to take a real digger after World War I so governments reverted to protectionist schemes in a panic. After World War II American economic dominance saw things swing back towards the free trade side and by the 1980s they had come into full force.
Chang uses the Opium Wars as an example to show how "military might, rather than market forces" had a defining role in the initial burst of globalization. Furthermore, while rich nations were colonizing the poor ones, they kept the tariffs high at home. What was good for the goose wasn't good for the gander back then. As he says, "virtually all the successful developing countries since the Second World War initially succeeded through nationalistic policies using protection, subsidies, and other forms of government intervention."
I enjoyed the looks back into the history of today's rich nations. Chang discusses how the Tudor monarchs protected Britain's nascent wool industry, for example. We in the U.S. owe Alexander Hamilton a debt for pushing for the development of manufacturing here instead of following Adam Smith's advice to the contrary. Not knowing much about economic history, I was surprised to learn that the U.S. had the highest tariffs on manufacturing imports in the whole world until WWI. Chang says that "Despite being the most protectionist country in the world throughout the 19th century and right up to the 1920s, the US was also the fastest growing." The book looks at the growth of other nations as well such as France, Sweden, Japan, and his native South Korea as well as issues like intellectual property and ethnic stereotypes. This last one begins with the observations of an Australian consultant which concludes that the people he observed were lazy and have a culture that promotes laziness. These were the Japanese in 1915.
Chang's primary message here is that it's foolish for First World neo-liberals to think that a country like, say, Zimbabwe, can rid itself of government intervention in markets and directly compete with the United States. The situation is inherently lopsided. The U.S. didn't throw the doors open and try to compete with Britain mano el mano back in the 19th century; it used protectionism to build its manufacturing industries to the point where they could go toe to toe with the rest of the world and then let them at it. Now that the U.S. is a world power, it's ridiculous to demand of other countries what we ourselves wouldn't and didn't do. I don't think Chang is against the IMF, WB, and WTO on principle, but he does think that they err when they impose neo-liberal policies as a one-size-fits-all solution for developing nations. He wants these organizations and the wealthy nations behind them to tailor programs to suit the individual country.
For someone like me who is knows little about economic history and even less about economics, Bad Samaritans was an enlightening read. There's a lot of history here but Chang assumes the reader to be a typical American, i.e. – don't know much about it, so it's all laid out for us. And there's no formulae demonstrating how the cosine of the derivative of the price of ladies underwear relates to inflation. Chang does discuss some economic concepts but, as with the history, he patiently explains them and provides examples.
The book ends on a note of optimism. Chang says that the majority of bad samaritans aren't greedy or bigoted. For many it's all about following the intellectual path of least resistance. It's much easier to conform to orthodoxy than it is to investigate the history and do the math. Rich countries weren't always bad Samaritans so there's always hope that these people can have their assumptions challenged and their views altered. Let's hope so.
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