Book Review: Bad Samaritans by Ha-Joon Chang 18 September 2016

In Bad Samaritans, Ha-Joon Chang takes a historical approach in attempting to answer the question, “how do poor countries become rich?” This question lies at the heart of any genuinely motivated development work that seeks social, political and economic freedom for the world’s poor. Our work at Knowledge Pele is motivated by this question, which makes Ha-Joon Chang’s work relevant to shaping our thinking.

Chang attempts to answer this question through interrogating and unpacking how today’s rich countries constructed and managed their economic and industrial policy. He traces the history of the United Kingdom, America, Scandinavian countries, and other more recently industrialized countries, most notably Japan and Chang’s native South Korea. His findings sharply contradict the current neoliberal orthodoxy peddled by rich countries and is instead a searing indictment of the “free trade” policies hypocritically forced upon underdeveloped nations by the governments of rich countries and by Western dominated financial institutions such as the likes of the World Bank and the International Monetary Fund. Chang concludes that "the truth of post -1945 globalisation is almost the polar opposite of the official history" (p. 31).

 

Chang challenges orthodox policy recommendations in various areas. He analyses tariffs, subsidies and protected industries, along with the latter-day notion that they should not be tolerated in the name of free trade. He highlights the destructive tendencies that are birthed by unregulated capital flows and foreign direct investment, and in turn concludes that the benefits they provide are often incidental and modest, being far outweighed by the damage they cause. He examines the idea that the public sector is inferior to the private sphere and finds the evidence of the neoliberal orthodoxy to be wanting.

 

He additionally analyses the concept of intellectual property, and while not against it in principle or even in practice, Chang warns against the dangers of over-protection, and how a scenario has arisen in the developed world where the over-emphasis on property rights has actually led to a stifling of creativity. Creativity is of course critical to sparking economic development and thus, for the developing world, it is important to place the innovation imperative above ‘world-class’ patenting standards.

 

Indeed, Chang posits that an important innovation may often involve the violation of a number of very simple processes that have nonetheless been copyrighted and therefore concludes that poor countries are impeded by international copyrights that rich countries themselves all violated or did not protect during their development.

 

Chang’s conclusions as aforementioned, frequently and consistently go against neoliberal doctrine. He maintains that free trade is in actuality adverse to a poor country’s development and highlights the history of how rich countries used trade barriers of this very nature, such as tariffs and subsidies for key industries liberally. These practices, which are now frowned upon, were crucial to the industrial development of today’s wealthy nations, which paved the way for and allowed them to compete on an international scale. The main takeaway is that the majority of today’s rich countries would not  have the international foothold they do without the measures they now oppose. The question for the developing world is how to negotiate a fair development path in the time of globalisation? Understanding the real economic history of the world as presented by Chang is but one weapon in the arsenal of tools for just development.

 

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