Customer Reviews

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism

5 star:		(36)
4 star:		(14)
3 star:		(5)
2 star:		(1)
1 star:		(2)

 

 

One of the principle complaints of conservatives is that all education in America is deliberately skewed with a "left-wing" bias from kindergarten to college. And yet the field where this "bias", (if you accept this view) is clearly undone is the field of economic education. Whether you read the business section of the New York Times, the Harvard Business Review or National Public Radio, the actual bias present is really for the neo-classical economic model (AKA, neo-liberal economics) of the laissez-faire variety.

Dr. Chang, a professor of economics at Cambridge and former World Bank researcher, deconstructs in general and in detail many of the prevailing myths of the neo-liberal school of economic development. My favorite chapters were these two:

Chapter 1-The Lexus and the olive tree revisited. In this chapter Dr. Chang explains why he thinks that NYT columnist and author Thomas Friedman is full of crap about the benefits of globalization for ordinary people [pages 19-40].

Chapter 3-My six-year-old son should get a job. Says Chang: "I have a six-year-old son. His name is Jin-Gyu. He lives off me, yet is quite capable of making a living. I pay for his lodging, food, education and health care. But millions of children of his age already have jobs. Daniel Defoe, in the 18th century, thought that children could earn a living from the age of four. Moreover, working might do Jin-Gyu's character a world of good. Right now he lives in an economic bubble with no sense of the value of money. He has zero appreciation of the efforts his mother and I make on his behalf, subsidizing this idle existence and cocooning him from harsh reality. He is over-protected and needs to be exposed to competition, so that he can become a more productive person. Thinking about it, the more competition he is exposed to and the sooner this done, the better it will be for his future development. It will whip him into a mentality that is ready for hard work. I should make him quit school and get a job. Perhaps I could move to a country where child labour is still tolerated, if not legal, to give him more choice in employment" [page 65].

I found this tongue-in-cheek style of criticism of global capitalism both hilarious and enlightening.

There are many more examples of Chang's knowledgeable and funny criticism of neo-liberalism I could list here, but I don't want this review to be a spoiler. So go read Chang's book.

While other books (linked below) have focused on the evils done in our name, this is the first book I have seen that dissects economic history in order to demonstrate the hypocrisy of the current regime that bullies lesser developed countries with the IMF-WTO-World Bank interlocking conditionalities.

The author comes down solidly in favor of protectionism, foreign investment controls, state-owned enterprises, avoidance of privatization, not allowing patents to clash with the public interest, the need to defy the marketplace and respect the role of manufacturing, and the influence of culture (and changing the culture through government direction).

This is a nuanced book that trashes the neo-liberals while speaking truth to power. On any given prescrption, the author will say "it depends" and avoid leaning to one extreme over another.

He touches on democracy as not necessarily good for developement, and corruption not necessarily bad.

Other books that I respect as much as this one:
The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It
The End of Poverty: Economic Possibilities for Our Time
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
Confessions of an Economic Hit Man
The Shock Doctrine: The Rise of Disaster Capitalism
Manufacture of Evil: Ethics, Evolution, and the Industrial System
Open Society: Reforming Global Capitalism
The Pathology of Power - A Challenge to Human Freedom and Safety
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
The Unconquerable World: Power, Nonviolence, and the Will of the People

See also my varied lists.

"Free Trade" has been progressively wrecking America's economy for at least two decades. Meanwhile, economists in our colleges continue, almost without exception, to warn of protectionism while extolling the writings of Adam Smith and David Ricardo - written long before today's gross wage imbalance between Asia and the U.S., instant communications, and fast, economical international transportation. Finally, a Cambridge economist, Ha Joon Chang, brings facts and common sense to the debate - aided considerably by the free-trade ignoring successes of his native country, South Korea - eg. Samsung, and Pohang Iron and Steel. (And then there's Toyota - started out in textiles, was protected by auto tariffs, and now the world's #1 auto manufacturer and teacher of advanced management techniques.)

"Bad Samaritans," as Chalmers Johnson points out, refers to "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 take advantage of others who are in trouble. He also points out that all of today's rich countries (INCLUDING the U.S.) used protection and subsidies to encourage their manufacturing industries - anathema in today's economic orthodoxy and contrary to the WTO, IMF, and World Bank. As a result, third-world nations' growth rates have fallen to less than half of that recorded in the 1960s (1.7 percent instead of 4.5 percent).

As for corruption being incompatible with high growth, Chang points to Zaire vs. Indonesia. Both suffered from murderous corruption, yet the former's living standards fell two-thirds while Indonesia's tripled. The difference was that corruption funds in Zaire fled to Swiss banks, while those in Indonesia remained in the country to help create additional jobs.

"Level playing field" rhetoric is often used to justify WTO and IMF prescriptions. Chang, however, reminds us that this is inconsistent with our practice of segregating sports by size and age, and that it is similarly unrealistic to expect eg. Honduras to compete evenly with the U.S.

Capital markets have a bias towards short-term gains, not risky, large-scale projects with long gestations. This is especially pronounced in the earliest stages of development - thus, government support is kick-starting, not replacing capitalism. In France, Renault, Alcatel, Thomson, etc. used to be SOEs. Brazil's EMBRAER was also, and the state (lower Saxony) is VW's largest shareholder. Taiwan began with key industries owned by the state; even after 1996 privatization the government maintains a controlling stake (average = 35%) and appoints 60% of their directors.

Absent government support in developing economies is akin to becoming frozen in the status quo. Break-out requires government intervention, including subsidies, tariffs, regulation (eg. maintain quality), infrastructure, prohibiting exportation of raw materials, exempting imported raw materials from tariffs, currency controls. IMF, WTO, and World Bank decrees associated with loans have been a disaster.

Communists early-on saw private ownership as not just the source of distributive injustice but also economic inefficiency. Too many capitalists routinely invested in the same things because they did not know their competitors' plans, or overestimated future potential. Communism failed as a system, but that does not demonstrate that SOEs don't work. Conservatives argue that the imbalance of information between principals and agents makes it very difficult to appropriately pay/incentive managers. The 'free-rider' problem also essentially eliminates citizen monitoring. 'Soft budget constraints' (mid-year added subsidies) is another problem impeding SOEs, per conservatives. Change, however, contends these same problems confront private enterprise, with the 'soft-budget' issue becoming 'too big to fail,' and the 'Greenspan put.'

China's TVEs are a hybrid ownership form - owned by local authorities but usually operated as if privately owned by powerful political figures.

SOEs can be ideal where 'natural monopolies' exist - utilities, railroads, communications, etc. where the main cost is that of a distribution network. Assuring equity is another reason - eg. mail service in rural areas. Regulation is an alternative, but not always satisfactory - eg. California's electricity deregulation, England's defacto re-nationalization of rail tracks. Corrupt SOEs are difficult to sell off without even greater corruption (eg. Russia); privatization of natural monopolies without appropriate regulation can bring new problems (eg. Bolivia's 1994 sale of a water company to Bechtel brought a tripling of rates, riots, and re-nationalization). SOE performance can often be improved without privatization by simplifying and prioritizing goals. Simplifying regulation by consolidating agencies is another alternative. Requiring SOEs to export and compete internationally or setting up another SOE for competition also are used. There are no hard and fast answers as to when an SOE is best.

Chang also points out the strong agricultural subsidies in Europe (milk), the U.S. (corn), and Japan (rice). The good news is that these subsidies keep farming viable in those areas and the nations involved more independent; the bad news is that U.S. corn is exported to Mexico - making economic survival impossible for their farmers and driving them to illegal immigration into the U.S.

Free-trade reduction of tariff revenues also plays undermines national budgets in poor countries because they lack efficient tax collection capabilities and tariffs are the easiest taxes to collect. Combined with free-trade-caused damage, the struggling nations are left far less able to fund health care and education for their citizens.

Still another Chang insight is his pointing out that pursuit of copyrights and patents are simply a sophisticated form of protectionism that again works against third-world nations by preventing their starting important new industries (eg. drug manufacture) that boost not only their economy but citizens' health as well. (97% of all patents and the vast majority of copyrights are held by rich countries - these are also a special problem for poor countries wanting textbooks. IMF also insists on enforcement mechanisms, further adding costs to poor nations.) Chang sees the U.S. as the worst offender in this area. Chang asserts that self-development of new technology is difficult in third-world nations, using North and South Korea as examples. North Korea has tried to be self-sufficient (and done poorly), while South Korea has assiduously copied wherever possible and is now an industrial powerhouse.

Chang suggests that third-world countries use tariffs to protect their developing industries. However, he does not propose that the U.S. do likewise - perhaps in his next book. Nonetheless, "Bad Samaritans" punches enough holes in free trade thinking to help others rethink America's self-destructive commitment to it.

Ha-Joon Chang(C) demonstrates that the standard neoclassical international trade theory (model) applied by the economists at the World Bank(WB),the International Monetary Fund(IMF),the Import-Export bank,the World Trade Organization(WTO),and advocated by Thomas Friedman, is basically an artificially constructed ,purely mathematical,blackboard and chalk model that generally ignores major,relevant variables and necessary political and social prerequisites,as well as the time it would take to implement these kinds of institutions.The current collapse of Kenya is precisely the type of failure that results from the gross ignorance of the economics profession of the ancient wisdom of Adam Smith.The so-called " miracle" of Kenya was a chimera from the beginning. The absence of these institutions(overlooked,ingeneral,by C) doom the application of the model from the beginning.The theory works only if certain prerequisites are in place .For example,necessary prerequisites are (1) the existence of political,corruption free legal,governmental, and political institutions that enforce contracts impartially and uphold the rule of law, and (2) the existence of an independent,impartial,corruption free judiciary that will apply the law fairly.These necessary prerequisites do not exist in China,India,Africa,Mexico,South America,and Central America.They have evolved and are functioning effectively in the First World countries of the West and Japan.These institutions are barely present in the Second and Third World.These countries can be regarded as "infant" countries.C extends the argument based on the protection of infant industries to the protection of infant countries in chapter 3.The standard free trade prescription can only apply to " grown up"(1st world)countries.
C overlooks,in general,the extremely important policy discussions carried out by Adam Smith on pp.434-439 of the Wealth of Nations that support his overall position (1776;Modern Library (Cannan)edition).Smith (a) supports retaliatory tariffs if there is any probability greater than 0 of changing the policy of the offending country;(b)supports revenue tariffs ; (c)would dismantle protectionist tariffs carefully, in very slow gradations, in order to prevent the collapse of those industries that are being opened up to imported goods,and (d) recognized that a 100% free trade policy is a pipe dream, given the social and political realities of any society.
I recomend this book.C can easily get a full 5 stars from me by explicitly connecting his analysis to the wisdom of Adam Smith.Adam Smith would fire all the economists at the WB ,WTO,and IMF for gross incompetence and negligence.

Critics of free trade tend to fall into two camps, irrational and rational. The irrational camp includes hard core socialists and developed world nationalists such as Lou Dobbs, who have an almost religious belief in certain statist policies as some sort of recipe for broad based prosperity absent much evidence and they simply ignore any evidence that policies such as protectionism may do more harm than good. Ha-Joon Chang falls into the second group. His book is generally quite well written and he regularly acknowledges the trade offs involved in his discussions.

Anyone looking for evidence to raise trade barriers or further regulate markets in the developed world won't find it in this book. Chang is quite critical of "neoliberalism" but he generally seems to suggest low trade barriers on trade and foreign investment are wise in the developed world, or at least he doesn't think they are wrong. His argument is whether such policies are wise in the developing world and he goes on to argue for state-driven development strategies for developing nations.

Some of his arguments are interesting and even persuasive. Chapter 9 ("Lazy Japanese and thieving Germans") provides one of the best rebuttals I have seen of the argument that suggests some cultures are destined to fail. He doesn't say culture doesn't matter; merely that it isn't fixed over time.

Chapter 8 ("Zaire vs. Indonesia") has an interesting discussion of corruption. He suggests corruption is not necessarily incompatible with economic growth and modern China is certainly an example of the argument's validity. Nevertheless, he concludes corruption is worth fighting because it erodes confidence in governing institutions.

Other parts of the book are less compelling. One of his central messages is that proponents of free trade are ignorant of (or at least unwilling to acknowledge) the history of protectionism among now developed world economies. That may be true of the free traders he encounters casually but anyone who is even remotely familiar with the economic and political history of the US and UK would know they employed protectionism in the past.

I can't completely reject the argument that developing nations should engage in some protection of domestic producers, but his discussion of the topic tends to omit two problems. He rarely discusses the downsides of protectionism, such as the fact that if tariffs are used, it raises the prices of consumer goods to citizens, rich and poor alike, of those countries. Second, he admits that industries should not be protected in perpetuity but seems to assume such protections will be phased out at an "appropriate" time. Protected industries and their advocates generally don't want to give up the special privileges they enjoy and are often quite successful at delaying or even preventing the day of reckoning. Developed world agricultural subsidies are a perfect example. It is much easier to prevent a special privilege from being enacted in the first place then to end it once it is in place and has developed a constituency to defend it. At some point the costs of a protection that has outlived its usefulness outweighs whatever initial benefits it might have brought.

His discussion of state-owned industry in Chapter 5 also omits certain complications. He ignores the political difficulty in rationalizing a money-losing state owned enterprise. Unions can make demands of a private firm but ultimately they don't have an interest in seeing it go bankrupt. However, there is less of a restraint on union demands in the public sector because the treasury can be seen as a bottomless till. On page 113 he also makes an argument for state ownership of natural monopolies, such as electricity or land line telephones, ignoring the poor performance of many instances when these industries are in state hands.

Chang likes to cite countries that rejected the free market approach, but he is often selective in his examples. Some Asian countries, such as South Korea, China and Japan do appear to have successfully managed state-driven development. However, there are still plenty of others that are less appealing. Many of the far left love to cite Venezuela but much of Venezuela's success is from the oil bonanza, not necessarily wise economic policy. After a decade of increasing state control, nearly half the Venezuelan work force remains employed in the informal economy, devoid of labor protections enjoyed by those in less statist economies; even though Venezuela is flush with oil revenues.

Chang makes some mistakes or dubious statements in a few cases. He associates the Chrysler bailout with the Reagan Administration, when it was actually enacted under President Jimmy Carter. He also makes a reference to the "September 11 bombing of the Word Trade Center" which makes him sound like some nut job conspiracy theorist, although I did a Google search and didn't find any references that associate him the 9/11 conspiracy theories, it was a curious statement just the same.

I gave the book three stars because it is generally well written and acknowledges real world trade offs. I don't find all or even most of his policy prescriptions persuasive but he does make some of the better arguments for state driven development in the underdeveloped nations. Anyone interested is some credible counter arguments should check out Freedom From Want: American Liberalism and the Global Economy or In Defense of Globalization: With a New Afterword

Do not simply cast this book aside as a piece of economic nonsense from the left. Admittedly, the title may not welcome a broad economic audience, however, after the first chapter Chang will have any reader thinking, at the very least, 'you know, that's a damn good point.' By using the most powerful weapon to backup his claims- history- a thought-provoking and necessary criticism of current orthodox, neo-liberal economics is made.

Orthodox assumptions on FDI regulation, currency manipulation, the principal-agent problem, corruption, public enterprise, and, of course, free trade, are challenged and scrutinized. The next time someone says, "all a country needs to do to develop is just open their markets," please include this book in your list of suggested readings that say..."actually, i think it's a bit more complicated."

There are just waaay too many books on economics that precede from faulty premises, with impeccable logic, to faulty conclusions. Many even go into extensive math to "prove" their conclusions, as if the emotional actions of individuals can be simulated by a computer program that assumes all actors always behave in their own rational self-interest.

I'm glad to say that Prof Chang relies here on history, on what has actually happened, rather than on the wishful thinking of free market economists who, having taken David Ricardo on faith, never seem to understand why things don't work out the way they expect. (Though, finally, World Bank economists have begun admitting they haven't actually helped any of the countries they intended to be helped.)

This book is a great antidote for all those, including the economic advisors of at least the last 4 presidents, who associate protectionism with the Great Depression, overlooking the fact that the US has *always* had tariffs and always been protective of its industries that needed protecting (and a number that didn't).

Prof Chang makes in interesting analogy: that asking countries who have just begun creating a product to compete on an equal basis with countries who have decades of experience in that field is like asking children to compete with adults. What these countries need is not a level playing field, but a helping hand. (Much as the Marshall Plan did for Europe after WWII.)

I won't further repeat what's been said in other reviews here, other than to offer the opinion that this is one of the most readable books on economic policy you're likely to find, with a lot of historical research and some excellent insights. Not a perfect book -- I think Prof Chang could have included some data that didn't always make his point, lol -- in this world, nothing is ever perfect -- but it's a must-read for anyone interested in the debate on whether or not globalization should be monitored and regulated.

Neoliberal economics, also known as the Washington Consensus, maintains that a developing country's surest path to economic development requires that it have low or no tariffs, private rather than public ownership of the means of production, balanced budgets, and an openness to foreign investment. Once these policies are put in place the market simply does its work in the efficient distribution of goods and the creation of wealth. These policies are advocated by the IMF, World Bank, WTO, and the wealthy countries that control them. Now Cambridge economist Ha-Joon Chang tells us that not only are these policies unfair, they will hinder the long-term economic development of those countries.

According to Chang, one of neoliberalism's most famous advocates Thomas Friedman got it wrong in his book The Lexus and the Olive Tree. The superefficient factories of Toyota did not arise from neoliberal policies. Ford and GM were evicted from Japan in 1939, and after World War II Toyota received subsidies and protection for about 30 years. The initial launch of Toyota in the US in 1958 was a failure. Chang's point is that some of the most successful companies and countries of the 20th century did not develop according to free-market principles; successful countries protected and nurtured their industries.

Looking back even further, Britain and the US did the same in the 19th and early 20th century. The US was heavily protectionist until the beginning of World War I. The secret history of capitalism is that wealthy countries today are asking developing countries to adopt policies that they themselves never would have accepted.

Chang points out that the growth rates of most developing countries were lower during the neoliberal period (1980-today) than they were during the government interventionist years of the 1960's and 70's. The greatest success story of the neoliberal period was China, which was very cautious and measured in opening its economy to foreign competition. The fact that a communist government can guide a capitalist economy to 10% annual growth rates for more than two decades appears to support Chang's thesis. The system Chang praises seems to work well in East Asia were populations are highly skilled, educated, and organized, and were relatively uncorrupt governments let business take care of business - Japan, Taiwan, and Chang's South Korea are good examples. However, these conditions were not present in Latin America, were there has been a backlash against neoliberalism.

Those who believe in the myth of free trade are either fools or hucksters. But that is not to say that most of the world's countries believe in capitalist economics since it is the most efficient way to distribute goods and create wealth. Capitalism, however, is not necessarily just, therefore the market has to be managed and regulated. The freeness of a market is only a question of degree. (Read William J. Baumol's Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity for more on this topic.) Free trade is a myth. Trade is almost always managed, and for those who believe it is free will find that they have mismanaged it. Witness the US's $700 billion annual trade deficits; only a free-trader will tell that these kinds of deficits are natural and harmless.

Chang believes that "free markets are not good at promoting economic development." This was certainly the case for Chang' native South Korea in the years following the war. South Korea became an economic powerhouse by nurturing certain industries. He advocates a certain kind of protectionism and industrial policy that requires good governance and an educated workforce. Without the latter two, protectionism won't work, it will only further impoverish.

Chang's message goes against the current orthodoxy and will probably not be taken seriously by most of the industrial world's governments and NGO's. However, in light of recent events, when the titans of Wall Street are asking the government for bailouts rather than lower taxes and fewer regulations, it is a timely reminder that untrammelled free trade does not only not solve all of our problems, it can create some as well. This book is an excellent contribution to this discussion.

Ha-Joon Chang categorizes Bad Samaritans as:

1. Opportunists: Those who advocate implementation of destructive policies in poor countries as a condition of bailing them out of financial trouble, with the intent to exploit and prevent them from becoming future competitors.

2. The ideologues: This group is genuinely convinced neo liberal economic policies are necessary to promote economic wealth. They are more difficult to contend with, as "self righteousness is often more stubborn than self interest."

3. Conformists: Neither opportunist, nor ideologue, conformists are just too lazy to challenge the conventional held beliefs that contribute to the economic failure of poor countries. The author's hope is to convince this group in particular, which in his opinion comprises a majority of Bad Samaritans to combat the status quo of neo liberal ideas.

The author's intent is to dissuade Bad Samaritans from advocating and imposing destructive policies towards poor countries through the IMF and the World Bank. These destructive policies are borne out of neo liberal ideas for building and maintaining successful economies, including low inflation, small government, private enterprise, free trade, friendliness towards foreign investment etc. Mr. Chang accuses rich countries of hypocrisy, as most of them practiced virtually everything they now preach against to aid them in their colossal success. This "do as I say, not as I did" attitude has been primarily responsible for the decline of the 3rd world.

While Chang agrees that the co-existence of state protectionism with economic development may not prove cause and effect, he puts the bourdon of proof on free market economists to explain how free trade has helped rich countries get rich when history clearly shows otherwise. Chang uses numerous examples of the checkered pasts of economic titans of today, e.g. the United States, England, South Korea, and to what extent they manipulated markets to their advantage with high tariffs, government interventionism and protectionism, ignorance of intellectual property rights etc. to attain their supreme status. And once on top they kicked the success ladder away, and instead, imposed ill conceived policies on poor countries suitable only for strong, mature economies.

Mr. Chang advocates a level playing field; a playing field where poor countries should be allowed to impose high tariffs, ignore intellectual property rights, control foreign investment, implement state owned enterprises, utilize government protection and subsidies etc. to nurture their "infant industries" until they can stand on their own and not be crushed by established global competitors. Therein lies the author's biggest fallacy: To what degree should poor countries be allowed to engage in unfair practices, and who decides when it is time to scale down? Rich countries of today have committed many atrocious acts unrelated to economics that aided their ascent to the top, e.g. pillaging and taking land by force (colonialism). Should poor countries follow in these footsteps too?

What could possibly compel rich countries to contribute to the creation of another South Korea?

Chang does a magnificent job of exposing neo liberal economic ideas as failures, but he preaches to the wrong audience. His critique was scathing, and no one halfway contributing or approving of the prevailing policies towards poor countries is spared his sword. He hopes to change the world by enlightening influential groups he readily trashes. This sounds a bit counterintuitive.

The captive audience here is not the conformists of neo liberal economic ideas as Chang hopes. Instead, poor countries would greatly benefit from studying Chang's ideas of long term economic development. While it is difficult to adopt his ideas of leveling the playing field when they depend on the IMF and World Bank for funding, they should strive to adopt as many of Chang's ideas as possible to minimize the risks of failure.

Bad Samaritans: the Myth of Free Trade and the Secret History of Capitalism - a review

By Ha-Joon Chang
BLOOMSBURY PRESS; 276 PAGES; $26.95

Bad Samaritans, Ha-Joon Chang's new critique of neoliberal economic theory, seems destined for an early remaindering. Despite glowing praise from the likes of Noam Chomsky and Chalmers Johnson, the book has been virtually ignored by the media, even on the left, and the inexplicable decision to place it in the business section of bookstores means that its natural audience is unlikely to trip over it by accident. This is a shame, because Chang has produced a well researched and tightly reasoned work that, as Chomsky puts it, "reveals the yawning gap between standard doctrines concerning economic development and what has really taken place from the origins of the industrial revolution until today."

Chang, an economics professor at Cambridge University, is also the author of Kicking Away the Ladder, a more technically oriented attack on neoliberalism written for professional economists. Bad Samaritans is aimed instead at interested laymen. In it Chang deconstructs the neoliberal agenda simply by going through its recommendations and showing that, in each case, today's rich countries achieved their prosperity by, like George Costanza, "doing the opposite." In the process he points out how the developed "bad Samaritans" are "kicking away the ladder" they themselves ascended to wealth on. The "unholy trinity" of the International Monetary Fund (IMF), World Bank and World Trade Organization combine to push destructive economic policies on developing nations under the guise of helping them. The result is that much of the wealth created in the Third World ends up in the hands of global corporations.

Bad Samaritans relies on Chang's native South Korea for a recurring example of economic growth by doing the opposite. Keep interest rates high to prevent inflation? South Korean inflation averaged almost 20% in the sixties and seventies. Protect intellectual property? South Koreans pirated everything from software to handbags. Open your markets to foreign goods and lower tariff barriers? The South Korean regime propagandized against even smoking foreign cigarettes. The list continues. Yet in spite of such heresy, or as Chang argues, because of it, South Korea advanced from a backward, war-ravaged nation with a per-capita income half that of Ghana to a modern industrial power in less than forty years. Nor is South Korea the only example. Nearly all of today's economic powerhouses, including the US and Great Britain, built their economies using methods that would have gotten them blacklisted by the IMF had it existed.

Chang spends nearly the entire book on this kind of analysis, reaching back as far as the 15th century for examples of economic practices and correlating them with growth and income data pulled from the academic literature. Along the way he throws in relevant personal anecdotes to illustrate his thesis. The result is an entertaining and informative perspective on economic history. Yet his sole focus on the economic picture raises a glaring question, namely, why on earth do developing nations put up with this kind of treatment? If the entire neoliberal program is designed to rob from poor nations to give to rich nations why would any poor nation subscribe to it?

Readers of Naomi Klein and John Perkins, among others, know all too well why. Crippling debt, CIA-sponsored coups and outright invasion by US troops are some of the less savory motivational techniques employed to keep developing countries in line. Yet aside from a brief history of the Opium Wars, Bad Samaritans contains no mention of such coercion. Nonetheless, its compelling economic arguments make it ideal for slapping Thomas Friedman fans upside the head. Particularly as it comes in hardcover...