Free trade does not make poor countries richer

A short interview with Cambridge economist Ha-Joon Chang on how free trade has not helped poor countries develop. He contrasts ‘free trade’ with ‘international trade’, illustrating how countries which have become rich nurtured infant industries and engaged strategically with the rest of the world, rather than simply liberalizing markets. Contrary to popular belief, this includes the US and the UK at certain stages in their history.

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One thought on “Free trade does not make poor countries richer

  1. Another felicitous choice for a post. Ha Joon Chang is an author everyone should read. He cuts through some of the idealisations in sternly paradigmatic economics. Reality comes up with what I call “intermediary conditions”, and that is what Chang is writing about: the conditions that actually prevail in real life.

    http://quaesivi.blogspot.de/2016/03/the-paradox-of-freedom-1-austrian.html

    The Wankel rotary engine works perfectly on the level of paradigmatic theory; but reality adds lots of obstacles on a projects way to fruition.

    There is almost something vaguely akin to an uncertainty principle involved in much of economics: you either get a neat theory but miss reality (as in the theory of free trade) in the measure in which your theory is well-rounded or even complete, or you get closer to reality but theoretic completeness diminishes.

    The great sin of almost all economists is that they do not pay attention to this uncertainty principle, but prefer seeking the comfort or honour of belonging to a camp devoted to a neat theory.

    Actually, this is why I really like this blog – its author is eminently aware of intermediary conditions.

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