Contrarian economist Chang blasts holes in the "World Is Flat" theories of Thomas Friedman and other neo-liberal economists who argue that only unfettered capitalism and wide-open international trade can lift struggling nations out of poverty. On the contrary, Chang shows, today's economic superpowers--from the United States to Britain to his native South Korea--all attained prosperity by protectionism and government intervention in industry. We in the wealthy nations have conveniently forgotten this fact, telling ourselves a fairy tale about the magic of free trade and forcing policies that suit ourselves on the developing world. Unlike typical economists who construct models of how economies are supposed to behave, Chang examines the past: what has actually happened. He calls on America to return to its abandoned role, embodied in programs like the Marshall Plan, to offer a helping hand, instead of a closed fist, to countries struggling to follow in our footsteps.--From publisher description.
This book should be required reading for anyone interested in international trade. It won't change the mind of the true believers - who seem to see neoliberalism as some religious faith - but for most people it'll be an interesting and much needed addition to our understanding of trade and development.
If you think economics is dismal and dry, you are correct. But this book overcomes both of those faults.
In this book, Ha-Joon Chang dismisses the neoliberal theoretical approach (and doesn't address the less economically focused leftist one). Instead, he opts for a plan for development based on a reading of history. As a current student of economics, I can vouch for the lack of knowledge of economic history among economists graduating today. This is a very dangerous situation because it makes economists susceptible to believing glib statements about the world that don't have any evidence to back them up. Although in some regards economics is a technical discipline (graphs! statistics! regression analysis!), it is still a social science and is thus founded on untestable principles. For instance, the idea of comparative advantage (look it up on wikipedia!) is wonderfully elegant way of explaining how transactions work to benefit both parties. However, Chang argues, the evidence indicates that there is a flaw in the idea, which makes it less attractive, more complex, but historically more accurate. He also points out many other points of history that are assumed by neoliberals (eg. the US and Great Britain through free trade) but are not supported by historical records (eg. they actually adopted free trade only after getting rich).
The book is written in an engaging style and provides a very interesting history lesson. I found it inspiring and it has further reinforced my belief that economic history is a subject much more important than it is given credit for.