Sunday, March 05, 2017

How Rich Countries Actually Became Rich - The Myth of Free Trade


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[Through economic nationalism/protectionism first; then demand Free Trade on Others thereafter]

An excellent read. I also found two of his other books similarly very enlightening ones.
1. "Kicking Away the Ladder" (2002)

Ha-Joon Chang (Hangul: 장하준; Hanja: 張夏准; born 7 October 1963) is a South Korean institutional economist specializing in development economics.

Currently a reader in the Political Economy of Development at the University of Cambridge, Chang is the author of several widely discussed policy books, most notably Kicking Away the Ladder: Development Strategy in Historical Perspective (2002).[3][4][5] In 2013 Prospect magazine ranked Chang as one of the top 20 World Thinkers.[6]

He has served as a consultant to the World Bank, the Asian Development Bank, the European Investment Bank, as well as to Oxfam[7] and various United Nations agencies.[8] He is also a fellow at the Center for Economic and Policy Research[9] in Washington, D.C. In addition, Chang serves on the advisory board of Academics Stand Against Poverty (ASAP).

Chang is also known for being an important academic influence on the economist Rafael Correa, currently President of Ecuador. -- WIKIPEDIA

[See also CIA attempt to overthrow Pres. Correa:]

A South Korean acquaintance told me that despite his brilliance, Ha-Joon Chang can not work in South Korea because he does not kowtow to the official line of Globalization.


In essence, the book "BAD SAMARITANS" highlights the historical facts that today's advanced countries got started with protectionism for several generations, for centuries. Only when they have become economically developed and thus powerful that they gradually declared and accepted "free trade."

All these presently strong nations (note they are nations, not like us, we are not even a nation as we natives are not united to put it simply) were not engaged in free trade in their countries formative years. They all, with no exceptions, engaged in PROTECTIONISM for decades, centuries. England, USA, Japan, South Korea, Taiwan, mainland China, etc.

For strong economies or advanced/developed countries that produce a lot of products, i.e. agricultural, industrial, consumer, etc.. the IMF/WB-sponsored WTO Agreements aka "Globalization" (almost absolute free trade) impose rules to all country-signatories that facilitate import/export trades by enforcing the removal of practically ALL protective trade barriers. i.e. tariffs, regulations, etc.

Capital/money/financial flows or transactions among them are simplified; where before they took days or weeks, etc. now with IT, just a touch on the keyboard, so to speak.

And it's not all about economics. People movement is also facilitated, open borders for work, visits, etc. So multiculturalism, multimedia, etc. became the fads and constant features. Anyway, those are the "good" sides/effects. IF you have a lot to offer for trading. Of course, advanced countries dominate, in particular the USA: economically, culturally, politically and militarily.

These NAFTA and TPP are just two (regional) agreements. In fact, NAFTA as a beginning regional agreement on our side in the Americas (and much earlier EEC then for Western Europe) were precedents to what became the WTO-imposed trade agreements or simply "globalization" in 1995. Now, it seems regional and/or bilateral agreements in lieu of WTO/Globalization are coming back given the growing worldwide "discontents" about the latter.

For poor countries like our homeland which was one of the early signatories to the WTO Agreements, with no established, significant/strong industrial and/or agricultural bases, it is like committing national suicide: economically, culturally, technologically, etc. The inherent weaknesses killed all our nascent industries, factory closures, mass layoffs, and our agriculture/farmlands that displaced farm workers, jobless and further driven to poverty, etc. (except corporate farming for export cash crops--domestic/foreign-owned) due to uncontrolled imports of all kinds, cheaper ones, questionable product qualities mostly from mainland China. I can go on and on.

Ergo, the further impoverishment of our native majority. Throw in the uncontrolled loss of our patrimony/natural resources, gold, silver and other minerals. etc. to foreigners alone or in joint-partnership with our few, rich Spanish/Chinese mestizo oligarchs/taipans. Our gains in labor exports! Do we all want to leave our homeland? Of course, a few native Filipinos profit from globalization via their small export businesses.

My take as a native Filipino is that we should have NOT joined WTO, as our country was economically very weak underdeveloped in 1995 when WTO was founded; when the Fidel Ramos regime was in power. But Fidel, Gloria Macapagal-Arroyo  Penoy Aquino, Duterte and much of our business leaders and us so-called educated have been schooled in the American capitalist/free-market economy; which continue to do so in our present educational system.

Under free trade, to repeat: you win if you are strong. If weak, you become weaker. Furthermore, we native Filipinos are NOT nationalistic. We do not seem to understand even the term. We have a colonial mentality that favors foreign products, primarily American as we have been conditioned to; per the 50-year US colonial rule which imposed free-trade between the Philippines and the USA and perpetuated even after "granting" of independence in 1946. via "Bell Trade Act/Parity Right." We native Filipinos and our homeland as poster boys for "neocolonialism" - colonialism without colonial administration and absence of colonial troops, but still a colony in practical reality and cheaper for the former colonizing power (USA)..

Ergo, no long-lasting industrial, capital goods manufacturing; except for a few consumer product-goods, were established and big agricultural lands 25-years leased at P1 per hectare (Del Monte, etc.) for cash agro products like banana, pineapple, etc. were granted. Talk of "Parity Rights." as a precondition to "granting" of Philippine independence in 1946. Sort of political independence, not economic independence. Without the latter, you really do not have the former.

During my graduate school at UP Diliman, I never came across the German economist Friedrich List, who championed protectionism for weak countries. Interesting, I have talked with the few business and economic students here and in Europe and NOBODY knows about List! Even business and economic books do not mention him. I have a book titled "New Ideas from Dead Economists" and he is not even mentioned. Check it out in Eco textbooks. Makes me wonder at times, but we live in a predominantly capitalist world; more aptly now, corporate capitalism (not the small capitalist of Adam Smith or up to the vanished 1970s modern corporations. Sorry, I think I am got too long..


”We gave the Philippines political freedom to enter the world family of nations, but did we give them internal political liberty? More important still, did we grant them economic freedom?” – Harold L. Ickes, longest tenured U.S. Secretary of the Interior (1933-1946)

"...the freedom America gave us in 1946 was freedom in a straitjacket." - Hernando J. Abaya, author of "Betrayal in the Philippines" (1946); “The Untold Philippine Story" (1967), and “Looking Back in Anger” (1992).


See also:

Economist Ha-Joon Chang on "The Myth of Free Trade and the Secret History of Capitalism"

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