Ha-Joon Chang sounds like an Austrian

[Roban160]

I found this article from a korean economist by the name of Ha-Joon Chang. Chang is a big critic of “neo-liberal” capitalism. He likes to talk about how protectionsm is awesome and how free-markets dont work. I was about to dismiss him as just another noam chomsky type, then I read the latter parts of his article and I had to laugh.

First, lets see his critique of the civil war, sounds a lot like Thomas Dilorenzo and Tom Woods lol.

In this context, it is important to note that the American Civil War was fought on the issue of tariff as much as, if not more, on the issue of slavery. Of the two major issues that divided the North and the South, the South had actually more to fear on the tariff front than on the slavery front.

ROFL YES!

Second, he basically disproves his own point about tarrifs when discussing the Neatherlands and Switzerland.

There were some exceptions like the Netherlands and Switzerland that have maintained free trade since the late 18^th century. However, these were countries that were already on the frontier of technological development by the 18^th centuries and therefore did not need much protection. Also, it should be noted that the Netherlands deployed an impressive range of interventionist measures up till the 17^th century in order to build up its maritime and commercial supremacy. Moreover, Switzerland did not have a patent law until 1907, flying directly against the emphasis that today’s orthodoxy puts on the protection of intellectual property rights (see below). More interestingly, the Netherlands abolished its 1817 patent law in 1869 on the ground that patents are politically-created monopolies inconsistent with its free-market principles – a position that seems to elude most of today’s free-market economists – and did not introduce another patent law until 1912.

Ha! To be fair, his criticism does apply to some free-market economists, but his analysis fully confirms the misesan position. The view that IP laws are a state granted monoplies that are unnessary for research and development.

If you thought that was good, wait to you read this last part

The story is similar in relation to institutional development. In the earlier stages of their development, today’s developed countries did not even have such “basic” institutions as professional civil service, central bank, and patent law. It was only after the Pendleton Act in 1883 that the US federal government started recruiting its employees through a competitive process. The central bank, an institution dear to the heart of today’s free-market economists, did not exist in most of today’s rich countries until the early 20^th century – not least because the free-market economists of the day condemned it as a mechanism for unjustly bailing out imprudent borrowers. The US central bank (the Federal Reserve Board) was set up only in 1913 and the Italian central bank did not even have a note issue monopoly until 1926. Many countries allowed patenting of foreign invention until the late 19^th century. As I mentioned above, Switzerland and the Netherlands refused to introduce a patent law despite international pressure until 1907 and 1912 respectively, thus freely “stole” technologies from abroad. The examples can go on

One important conclusion that emerges from the history of institutional development is that it took the developed countries a long time to develop institutions in their earlier days of development. Institutions typically took decades, and sometimes generations, to develop. Just to give one example, the need for central banking was perceived at least in some circles from at least the 17^th century, but the first “real” central bank, the Bank of England, was instituted only in 1844, some two centuries later.

ROFL! Omg! I love this guy! The Mises institue needs to offer him a job!

Wait. It gets better.

This guys is really opposed to deregulated markets right? Well look at his last observation!

Another important point emerges is that the levels of institutional development in today’s developed countries in the earlier period were much lower than those in today’s developing countries. For example, measured by the (admittedly highly imperfect) income level, in 1820, the UKwas at a somewhat higher level of development than that of Indiatoday, but it did not even have many of the most “basic” institutions that Indiahas today. It did not have universal suffrage (it did not even have universal male suffrage), a central bank, income tax, generalised limited liability, a generalised bankruptcy law, a professional bureaucracy, meaningful securities regulations, and even minimal labour regulations (except for a couple of minimal and hardly-enforced regulations on child labour).

If the policies and institutions that the rich countries are recommending to the poor countries are not the ones that they themselves used when they were developing, what is going on? We can only conclude that the rich countries are trying to kick away the ladder that allowed them to climb where they are. It is no coincidence that economic development has become more difficult during the last two decades when the developed countries started turning on the pressure on the developing countries to adopt the so-called “global standard” policies and institutions.

Wow! So aparently the path to developement is deregulated markets? Who would have thought!

I have to say, this kind of analysis is quite common with these maintstream keynesian types. They don’t seem to understand the concept of the "free-market’. You can’t really blame them I guess. Mainstream free marketeers have done a very good job making fools of themselves

Ha-Joon Chang, "Kicking Away the Ladder"

[Prateek_Sanjay]

The Mises Institute would be terribly mistaken to offer a job to a protectionist, when even non-free-marketers understand that whether goods come from abroad or from home makes absolutely no difference on the total quantum of capital available at home and that industrial development and rise in worker’s wages is limited to the quantum of capital at home.

I have often noticed that protectionist arguments rely on strawmen and never reading books on international trade written by the other side. It’s strange to see Ian Fletcher and Patrick Buchanan “demolish” arguments that nobody made.

[Roban160]

Yes, I know hes a protectionist. I just thought his comments on Central bankng were hilarious, especially since he claims that free-market economists “worship” central banking.

I also love his intellectual property thoughts, he seems absolutley oblivious to the fact that many libertarians are against IP laws.

[cobracarg]

maybe by ‘‘free market economidts’’ he meant neoclassicals from the Chicago School.

[Roban160]

Yup. That would be what most people think of when they say “free-market economics”. Its sad really…