Ha-Joon Chang
Encyclopedia
Ha-Joon Chang is one of the leading heterodox economists
and institutional economists specialising in development economics
. Currently a Reader in the Political Economy of Development at the University of Cambridge
, Chang is the author of several influential policy books, including 2002's Kicking Away the Ladder: Development Strategy in Historical Perspective.
He has served as a consultant to the World Bank
, the Asian Development Bank
and the European Investment Bank
as well as to Oxfam
and various United Nations
agencies. He is also a fellow at the Center for Economic and Policy Research
in Washington, D.C.
Chang is also known for being an important academic influence on the economist Rafael Correa
, currently President of Ecuador
.
Department of Economics, he trained at the University of Cambridge
. Chang's contribution to heterodox economics
started while studying under Robert Rowthorn
, a leading British Marxist economist, with whom he worked on the elaboration of the theory of industrial policy
which he described as a middle way between central planning and unrestrained free market. His work in this area is part of a broader approach to economics known as institutionalist political economy
which places economic history and socio-political factors at the centre of the evolution of economic practices.
Prize), Chang argued that all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly. The World Trade Organization
, World Bank
and International Monetary Fund
come in for strong criticism from Chang for what he presents as "ladder-kicking" of this type, which he in turn portrays as the fundamental obstacle to poverty alleviation in the developing world. This and other work led to his being awarded the 2005 Wassily Leontief
Prize for Advancing the Frontiers of Economic Thought from the Global Development and Environment Institute
(previous prize-winners include Amartya Sen
, John Kenneth Galbraith
, Herman Daly
, Alice Amsden
and Robert Wade
).
The book's methodology was criticized by Douglas Irwin, Professor of Economics at Dartmouth College and author of a 2011 study of the Smoot-Hawley tariff, writing on the website of the Economic History Association:
In contrast, Stanley Engerman
, Professor of Economic History at Rochester University praised Chang's approach:
Following up on the ideas of Kicking Away the Ladder, Chang published Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in December 2008. Chang countered Irwin´s criticisms by arguing that, while state interventionism sometimes produced economic failures, it had a better record than unregulated free market
economies which very rarely succeeded in producing economic development. He cited evidence that GDP growth in developing countries had been higher prior to external pressures recommending deregulation
and extended his analysis to what he presented as the failures of free trade to induce growth through privatisation and anti-inflation
ary policies. Chang's book won plaudits from Nobel prize winning economist Joseph Stiglitz but was criticised by economist William Easterly
, who said that Chang used selective evidence in his book. Chang responded to Easterly's criticisms, asserting that Easterly misread his argument. Easterly in turn provided a counter-reply.
Chang's latest book is 23 Things They Don't Tell You About Capitalism. Amongst many issues, he controversially claims that "the washing machine has changed society more than the Internet".
Articles and interviews
Heterodox economics
"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
and institutional economists specialising in development economics
Development economics
Development Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...
. Currently a Reader in the Political Economy of Development at the University of Cambridge
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
, Chang is the author of several influential policy books, including 2002's Kicking Away the Ladder: Development Strategy in Historical Perspective.
He has served as a consultant to the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, the Asian Development Bank
Asian Development Bank
The Asian Development Bank is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia...
and the European Investment Bank
European Investment Bank
The European Investment Bank is the European Union's long-term lending institution established in 1958 under the Treaty of Rome. A policy-driven bank, the EIB supports the EU’s priority objectives, especially European integration and the development of economically weak regions...
as well as to Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
and various United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
agencies. He is also a fellow at the Center for Economic and Policy Research
Center for Economic and Policy Research
The Center for Economic and Policy Research is a progressive economic policy think-tank based in Washington, DC, founded in 1999. CEPR works on Social Security, the US housing bubble, developing country economies , and gaps in the social policy fabric of the US economy.According to its own...
in Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
Chang is also known for being an important academic influence on the economist Rafael Correa
Rafael Correa
Rafael Vicente Correa Delgado born is the President of the Republic of Ecuador and was the president pro tempore of the Union of South American Nations. An economist educated in Ecuador, Belgium and the United States, he was elected President in late 2006 and took office in January 2007...
, currently President of Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...
.
Background
After graduating from Seoul National UniversitySeoul National University
Seoul National University , colloquially known in Korean as Seoul-dae , is a national research university in Seoul, Korea, ranked 24th in the world in publications in an analysis of data from the Science Citation Index, 7th in Asia and 42nd in the world by the 2011 QS World University Rankings...
Department of Economics, he trained at the University of Cambridge
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
. Chang's contribution to heterodox economics
Heterodox economics
"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
started while studying under Robert Rowthorn
Robert Rowthorn
Robert Rowthorn, known as Bob is Emeritus Professor of Economics at the University of Cambridge and has been elected as a Life Fellow of King’s College.-Life:...
, a leading British Marxist economist, with whom he worked on the elaboration of the theory of industrial policy
Industrial policy
The Industrial Policy plan of a nation, sometimes shortened IP, "denotes a nation's declared, official, total strategic effort to influence sectoral development and, thus, national industry portfolio." These interventionist measures comprise "policies that stimulate specific activities and promote...
which he described as a middle way between central planning and unrestrained free market. His work in this area is part of a broader approach to economics known as institutionalist political economy
Institutionalist political economy
Institutional political economy refers to a body of political economic thought stemming from the works of Thorstein Veblen, John Commons, Wesley Mitchell, John Dewey.-References:******...
which places economic history and socio-political factors at the centre of the evolution of economic practices.
Writing
In his book Kicking Away the Ladder (which won the European Association for Evolutionary Political Economy's 2003 Gunnar MyrdalGunnar Myrdal
Karl Gunnar Myrdal was a Swedish Nobel Laureate economist, sociologist, and politician. In 1974, he received the Nobel Memorial Prize in Economic Sciences with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...
Prize), Chang argued that all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly. The World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
, World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
and International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
come in for strong criticism from Chang for what he presents as "ladder-kicking" of this type, which he in turn portrays as the fundamental obstacle to poverty alleviation in the developing world. This and other work led to his being awarded the 2005 Wassily Leontief
Wassily Leontief
Wassily Wassilyovich Leontief , was a Russian-American economist notable for his research on how changes in one economic sector may have an effect on other sectors. Leontief won the Nobel Committee's Nobel Memorial Prize in Economic Sciences in 1973, and three of his doctoral students have also...
Prize for Advancing the Frontiers of Economic Thought from the Global Development and Environment Institute
Global Development and Environment Institute
The Global Development And Environment Institute is a research center at Tufts University founded in 1993. GDAE works to promote a better understanding of how societies can pursue their economic and community goals in an environmentally and socially sustainable manner...
(previous prize-winners include Amartya Sen
Amartya Sen
Amartya Sen, CH is an Indian economist who was awarded the 1998 Nobel Prize in Economic Sciences for his contributions to welfare economics and social choice theory, and for his interest in the problems of society's poorest members...
, John Kenneth Galbraith
John Kenneth Galbraith
John Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...
, Herman Daly
Herman Daly
Herman Daly is an American ecological economist and professor at the School of Public Policy of University of Maryland, College Park in the United States....
, Alice Amsden
Alice Amsden
Alice Amsden is researcher in the field of heterodox political economy. She is currently the Barton L. Weller Professor of Political Economics at MIT, in the Department of Urban Studies and Planning and Researcher at MIT Center for International Studies...
and Robert Wade
Robert Wade
Robert, Bob or Bobby Wade may refer to:*Robert Wade , screenwriter who has worked on several James Bond films*Bob Wade , American college basketball coach and football player...
).
The book's methodology was criticized by Douglas Irwin, Professor of Economics at Dartmouth College and author of a 2011 study of the Smoot-Hawley tariff, writing on the website of the Economic History Association:
Chang only looks at countries that developed during the nineteenth century and a small number of the policies they pursued. He did not examine countries that failed to develop in the nineteenth century and see if they pursued the same heterodox policies only more intensively. This is a poor scientific and historical method. Suppose a doctor studied people with long lives and found that some smoked tobacco, but did not study people with shorter lives to see if smoking was even more prevalent. Any conclusions drawn only from the observed relationship would be quite misleading.
In contrast, Stanley Engerman
Stanley Engerman
Stanley Lewis Engerman is an economist and economic historian at the University of Rochester. He received his Ph.D. in economics in 1962 from Johns Hopkins University. Engerman is known for his quantitative historical work along with Nobel prize winning economist Robert Fogel...
, Professor of Economic History at Rochester University praised Chang's approach:
Ha-Joon Chang has examined a large body of historical material to reach some very interesting and important conclusions about institutions and economic development. Not only is the historical
picture re-examined, but Chang uses this to argue the need for a changing attitude to the institutions desired in today's developing nations. Both as historical reinterpretation and policy advocacy, "Kicking Away the Ladder?" deserves a wide audience among economists, historians, and members of the policy establishment.
Following up on the ideas of Kicking Away the Ladder, Chang published Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in December 2008. Chang countered Irwin´s criticisms by arguing that, while state interventionism sometimes produced economic failures, it had a better record than unregulated free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
economies which very rarely succeeded in producing economic development. He cited evidence that GDP growth in developing countries had been higher prior to external pressures recommending deregulation
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
and extended his analysis to what he presented as the failures of free trade to induce growth through privatisation and anti-inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
ary policies. Chang's book won plaudits from Nobel prize winning economist Joseph Stiglitz but was criticised by economist William Easterly
William Easterly
William Russell Easterly is an American economist, specializing in economic growth and foreign aid. He is a Professor of Economics at New York University, joint with Africa House, and Co-Director of NYU’s Development Research Institute. He is also a nonresident senior fellow at the Brookings...
, who said that Chang used selective evidence in his book. Chang responded to Easterly's criticisms, asserting that Easterly misread his argument. Easterly in turn provided a counter-reply.
Chang's latest book is 23 Things They Don't Tell You About Capitalism. Amongst many issues, he controversially claims that "the washing machine has changed society more than the Internet".
See also
- CapitalismCapitalismCapitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
- Criticism of capitalism
- Modern Monetary TheoryChartalismChartalism is a descriptive economic theory that details the procedures and consequences of using government-issued tokens as the unit of money. The name derives from the Latin charta, in the sense of a token or ticket...
External links
- Ha-Joon Chang official website
- Profile at the University of CambridgeUniversity of CambridgeThe University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
- Column archive at The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
- Foreign Investment Regulation in Historical Perspective Lessons for the Proposed WTO Investment Agreement, Ha-Joon Chang, Global PolicyGlobal PolicyGlobal Policy is a peer-reviewed academic journal based at the London School of Economics and Political Science focusing on the "point where ideas and policy meet", published in association with Wiley-Blackwell....
, March 2003 - Kicking Away the Ladder: The "Real" History of Free Trade, Ha-Joon Chang, Foreign PolicyForeign PolicyForeign Policy is a bimonthly American magazine founded in 1970 by Samuel P. Huntington and Warren Demian Manshel.Originally, the magazine was a quarterly...
, 30 December 2003
Articles and interviews
- Two countries, one booming, one struggling: which one followed the free-trade route? A look at Vietnam and Mexico exposes the myth of market liberalisation, Larry Elliott, The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
, 12 December 2005 - "Why the World Isn't Flat" video of Ha-Joon Chang lecture for the New America FoundationNew America FoundationThe New America Foundation is a non-profit public policy institute and think tank with offices in Washington, D.C. and Sacramento, CA. It was founded in 1999 by Ted Halstead, Sherle Schwenninger, Michael Lind and Walter Russell Mead....
, 4 February 2008 - Korea Society Podcast: Ha-Joon Chang Discusses Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, 28 May 2008
- "Economist Ha-Joon Chang on 'The Myth of Free Trade and the Secret History of Capitalism'" Ha-Joon Chang interviewed on Democracy Now!Democracy Now!Democracy Now! and its staff have received several journalism awards, including the Gracie Award from American Women in Radio & Television; the George Polk Award for its 1998 radio documentary Drilling and Killing: Chevron and Nigeria's Oil Dictatorship, on the Chevron Corporation and the deaths of...
, 10 March 2009 (video, audio, and print transcript) - RSA Events Podcast: Ha-Joon Chang talks about his book 23 Things They Don't Tell You About Capitalism, 2 September 2010
- Ha-Joon Chang on the G20 Summit, Currency Wars and Why the Free Market is a "Myth" - video interview by Democracy Now!Democracy Now!Democracy Now! and its staff have received several journalism awards, including the Gracie Award from American Women in Radio & Television; the George Polk Award for its 1998 radio documentary Drilling and Killing: Chevron and Nigeria's Oil Dictatorship, on the Chevron Corporation and the deaths of...
, 12 November 2010 - Why there is no such thing called a 'Free Market', Ha-Joon Chang, Truthout, 7 June 2011